by Dennis Freeland
fficially it
is document D1039. It runs 60 pages and covers everything from property
insurance and utility payments to scoreboards and public address systems.
It is the lease between the Memphis Park Commission and Memphis Pro Football,
Inc. It was signed on December 6, 1991, by William Wolbrecht and Bob Brame,
then the chairman and director respectively of the park commission; and
by William Dunavant, president of Memphis Pro Football, Inc. Mayor Richard
C. Hackett completed the deal with his signature three days later.
December 1991 was a time of transition in Memphis. Hackett had weeks earlier and by the narrowest of margins lost a historic election that would propel school superintendent Willie Herenton into the top job at city hall. Dunavant, a wealthy cotton merchant, had recently taken over the decades-long push for an NFL team from FedEx chairman Fred Smith, and was anxious to make the financial numbers work in an ever-changing expansion contest which would ultimately come down to Memphis, Baltimore, Charlotte, Jacksonville, and St. Louis.
Dunavant and his group, which included Paul Tudor Jones and former Green Bay Packer great Willie Davis, among others, knew that they had to maximize the amount of income generated by Liberty Bowl Memorial Stadium, a no-frills arena built in 1964 and expanded in 1987. The stadium lease, which provided Memphis Pro Football, Inc. with all parking, concession, and skybox revenue, was supposed to be the final ingredient in the hunt for an NFL team. At least that is what the principals who signed the document thought on December 6, 1991.
Ultimately Memphis Pro Football, Inc. failed. In 1993, the NFL awarded expansion teams to Charlotte and Jacksonville. Both cities had committed to build state-of-the-art football stadiums capable of generating millions more per game than the Liberty Bowl, even with the generous 1991 lease. In the end the NFL rejected Memphis, not because the owners disliked Elvis or barbecue, but because the Memphis stadium couldn't provide them with the financial guarantees of the facilities in Jacksonville and Charlotte. Visiting teams get 40 percent of gross revenues at NFL games. The cities selected had more money to offer.
The stadium lease, effectively a 30-year deal irrespective of Memphis' success or failure in the NFL chase, came back into play last year when Dunavant reassigned the contract to Smith, who used it to secure an expansion team in the Canadian Football League. After that venture failed, Smith maintained the lease but gave the right to lease skyboxes back to the Memphis Park Commission. Those leases generated hundreds of thousands of dollars for the commission last year. The gesture deflected some criticism that had come Smith's way when he failed to return the lease to the city after his CFL team folded. "The park commission has to raise a substantial part of its budget each year," says commission chairman John Malmo. "The skybox lease was found money last year, and it really helped us."
At 2:58 p.m. on Wednesday, May 14th, by unanimous vote of the Memphis Sports Authority, the city finally obtained an NFL football team for the Liberty Bowl. The 1991 lease is about to be reassigned once again. In order for the sports authority to receive a sales-tax rebate from NFL games played at the Liberty Bowl in 1997 and '98, it has to be the body that leases the stadium to the Tennessee Oilers.
After its historic vote last week, members of the sports authority seemed unaware of the complexity of the stadium lease. None that we talked with could say for certain what would happen to the lease after the Oilers move to Nashville. Even this week, just days before the Sunday, May 25th, deadline imposed on the deal by the Oilers, no one we spoke with seemed certain about the lease's future.
"We have been told that it was going to be given back to the park commission," says Malmo.
"The lease will be amended in such a fashion that it ends when the Oilers leave Memphis," says Robert L. Cox, the attorney representing Smith. "It will also address that the Oilers are not interested in controlling skyboxes for college games. It will then be assigned to the sports authority who will sublet to the Oilers."
Both Cox and John Ryder, attorney for the authority, say that there are various ways in which the reassignment can be facilitated. Ryder says the sports authority would be the lessor and the Oilers the lessee. Others claim that as the owner of the facility, the park commission will always be the lessor. The sports authority might want to keep the lease in case it is able to wrangle an exhibition game or two from the Oilers, and thereby generate more sales-tax revenue.
Obviously the 1991 lease was written with the intention that Memphis Pro Football, Inc. would permanently operate an NFL team at the stadium. But the contract was written in such broad language that the lease did not expire following the awarding of expansion teams in 1993. Further, the lease did not stipulate that it was only for National Football League teams. Thus the CFL expansion team qualified to use the lease under the broad definition of "professional" football. Finally, the lease gave Memphis Pro Football, Inc. the right to reassign the contract without park commission approval. That's how the lease went from Dunavant to Smith to the sports authority.
Steve Ehrhart, Dunavant's top assistant in the football pursuit, says the reassignment clause was included in the lease to protect the partners in Memphis Pro Football, Inc. He says the Cincinnati Bengals were making inquiries about relocating to Memphis at that time and the MPF partners didn't want their work and expenses to go unrewarded.
Maybe the lease made sense in 1991. The city was desperate to land an NFL team. Only four years earlier the Hackett administration had pushed through a $19.5 million expansion of the stadium, a face-lift that included the 40 skyboxes on the east side of the facility. That's 160 fewer than the stadium in Charlotte.
The 1991 lease, like the 1987 facelift, proved to be too little too late. Nothing short of a new stadium could have won the NFL race for Memphis.
Sixty pages of excruciating legalese. Sixty pages outlining every detail of how an NFL team would function in a city-owned football stadium. The lease only failed in two areas: It didn't provide an NFL team, and it didn't provide a mechanism for the city to regain control of the stadium. Perhaps there is a lesson here for our new sports authority.
We shall see.