Sweetened Magic arena offer no slam-dunk with officials

David Damron and Mark Schlueb | Sentinel Staff Writers

April 18, 2007

With pressure mounting to pay more of the cost of a new arena, the Orlando Magic have sweetened their offer -- and the biggest beneficiary may be the Orlando Predators football team.

Orange County commissioners have said they may not approve the financing plan for the proposed $480 million arena unless the city's NBA franchise puts more money on the table. Magic executives now say they have listened and made concessions at the negotiating table that could cost the team up to $29.6 million in future profits and expenses.

But most of that lost profit -- an estimated $17.5 million -- will go to the arena's other major tenant, the Arena Football League's Orlando Predators, rather than taxpayers. The Magic have agreed to share luxury-suite and advertising space with the Predators that the basketball franchise would otherwise control in the new arena.

A couple of commissioners say the offer still may not be good enough, and county negotiators aren't impressed.

"I'm still undecided on how I will vote on this," Orange County Commissioner Teresa Jacobs said. "And nothing that I understand about the revised commitments the Magic have made changes that."

County Commissioner Bill Segal and other county negotiators say what the Magic call "concessions" are mostly offers the team made upfront, and the Magic compromise to make room for the Predators may not save taxpayer money.

Concessions -- or not?

"I would disagree that these are concessions," Deputy Orange County Administrator Sharon Donoghue said.

The Magic's original offer included a $50 million cash contribution and up to $70 million in various long-term lease, donation and revenue payments. The team also must cover construction overruns. But some Orange County politicians complained it wasn't enough.

Team leaders argue that their latest offer to the Predators goes beyond their original financing proposal, which was unprecedented for a National Basketball Association franchise in comparable markets.

"We're doing things no team has ever done," Magic Chief Operating Officer Alex Martins said.

The Magic's latest offer comes as talks continue, so it may not be a final deal.

The Magic agreed to give the Predators year-round rights to two of the new arena's 50 or so suites and revenues from other suites on football-game days. For all other nongame events, including concerts, the Magic keep all revenues from the top-level seats. City officials also have offered the football team a third suite in space that's controlled by the city and designated for future expansion.

The NBA team also will make room for Predators advertisers and allow the football team to collect concession revenues on their game days.

The Predators franchise started in 1991, and the team plays eight or nine home games, depending on whether it makes the playoffs. Predators owners are negotiating with Orlando Mayor Buddy Dyer to lock the team into the proposed arena; talks are focusing on whether the football team will get a practice field.

Predators executives have offered $16.8 million toward arena-construction costs. But in exchange, they wanted a bigger cut of the revenue from premium seats, advertising, concessions and other sources.

City officials had been negotiating a lease with the Magic that gave the NBA team most of that revenue. They weren't interested in including the Predators, considered a secondary tenant.

"You have several people trying to get the same pot of money out of the venue," Centroplex Director Allen Johnson said. "There wasn't enough room for another set of hands."

City officials are negotiating a long-term lease with the Predators. Ron Howse, the Predators' majority owner, would not comment on the Magic's offer of suites.

"The city is trying to work through a tough situation," he said.

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Sweetened Magic arena offer no slam-dunk with officials

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