by Mike Sharkey
Staff Writer
If the Jacksonville Jaguars can find a title sponsor for Jacksonville Municipal Stadium, the way the team and the City share the revenue from that agreement will change.
This week, City Council approved the ninth amendment to the lease between the team and the City. Under the amendment, the Jaguars and the City will pool all naming rights and signage rights revenues with exceptions to advertising and signage rights granted to other parties under the current stadium lease agreement. Those exceptions include the Florida-Georgia game, the Gator Bowl and the Greater Jacksonville Agricultural Fair.
The new agreement gives the team 75 percent of the revenue generated through a stadium naming rights sponsor and the advertising revenue from that sponsor. The City will get 25 percent. All commissions, fees and expenses generated by a third party naming rights partner will be split in the same manner.
The previous lease granted the team 100 percent of all advertising revenue while the team and the City split naming rights revenue evenly.
According to Adam Hollingsworth, Mayor John Peyton’s chief of staff, the lease agreement “substantially improves the ability of the Jaguar organization to secure even greater revenue for the City through (the) sale of high-profile naming rights.” He also said the amendment will ensure the team’s “continued viability” in the city.
“The value of the Jacksonville Jaguars to the Jacksonville community and to our economic prosperity cannot be overestimated,” said Hollingsworth., adding it is critical for the City to work with the team “to maintain the viability of this exciting but small-market franchise.”
Jaguars Senior Vice President, Stadium Operations and CFO Bill Prescott could not be reached for comment. However, he recently said the team would like to have a stadium naming rights sponsor by the time the 2009-10 season starts. Given the current economic climate in the United States and abroad, Prescott said it will take some time and work to find a company willing to put their name on the stadium. He said once companies post midyear fiscal reports, many will have a better grasp on their ability to sign a long-term naming rights deal.
During the most recent Council Finance Committee, Council Auditor Kirk Sherman asked if the current lease between the City and the team could be condensed into one document. Right now, he says, the lease is 10 documents that include 318 pages. Sherman said such a document would make it much easier for the auditors in his office to find line-items in the lease.
Peggy Sidman of the Office of General Counsel said such a document could be created, but it wouldn’t be signed by either party.
Paul Harden, an attorney who represents the team, questioned the value of a working document. He said there could be confusion created.
“If you do not ask the football team to sign it, I have no objection,” said Harden. “If you redid the document, you open lots of cans of worms you don’t want to open.”
Sherman said the current lease and its nine Amendments already create problems for his office and the addition of amendments will become more problematic.
“I don’t know how anyone other than the attorneys makes sense of this,” said Sherman. “Neither side (the team or OGC) wants to consolidate (the document). Do we get to the point one day where we have 25 amendments? If we do, I cannot guarantee we will catch everything.”
The history of the amendments
Since the City and the Jaguars signed the initial lease agreement Sept. 7, 1993, the contract that covers every facet of the agreement has been amended nine times, with one amendment modified and a 1997 naming rights agreement. The following is a condensed version of those amendments.
• Initial lease, Sept. 7, 1993 — Authorized the City to enter into a long-term lease of the stadium with Touchdown Jacksonville, Inc. in an effort to obtain an NFL franchise. The base amount of the lease was $121 million.
• Amendment 1, March 15, 1995 — Changed Touchdown Jacksonville to Jacksonville Jaguars, Ltd. (JJL) and increased the base amount of the contract to $124.55 million due to upgrades to the stadium. JJL agreed to pay $10.35 million in supplemental rent.
• Amendment 2, July 30, 1996 — Increased the supplemental rent by $2 million to $12.35 million.
• Amendment 3, Feb. 27, 1997 — Increased the supplemental rent by $7.65 million, stadium plan is amended to conform to the final as-built construction plans.
• Amendment 4, April 25, 1997 — Changed ticket surcharge reference to “ticket user fee” and increased the fee. Also, a lease rent schedule was adopted.
• Stadium naming agreement, June 3, 1997 — Addressed the naming of the stadium and distribution of revenues from the naming rights.
• Amendment 5, Sept. 6, 2002 — Term of the lease was extended five years and construction improvements were approved. The total of those improvements was estimated at $40 million. The City’s share was $11.9 million, of which $7 million was previously appropriated for Florida-Georgia improvements. JJL contributed $28.1 million, of which $12.9 million was anticipated to come from Super Bowl revenues.
• Modification to Amendment 5, Dec. 17, 2002 — Scope of work to stadium was reduced, resulting in a savings of $786,088 for the City and $4.45 million for JJL.
• Amendment 6, June 20, 2003 — Practice fields relocated, East and West plazas established, entertainment zone construction approved, all at a cost of $12.2 million.
• Amendment 7, June 2004 — Approved maintenance and repairs to public areas of stadium, remodeled existing clubs and suites, replaced electronic scoreboard with a Jumbotron and repairs to the parking lots. Appropriated $13 million from the City’s General Capital Projects Fund as a loan to the Sports Complex Trust Fund ($8 million) and increased JJL’s supplemental rent by $5 million.
• Amendment 8, Jan. 11, 2006 — Primarily addressed revenue and signage issues and a reduction of the JJL supplemental rent by $8.6 million.
• Amendment 9, Jan. 27, 2009 — Addressed naming rights for the stadium and terms of revenue sharing between JJL and the City. Also provided the City with 10 complementary club seats for games to be used as marketing tools.
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