DEPARTMENT: Convention & Sports Facilities
DEPARTMENT HEAD: Michael J. Sawaya
COUNCIL DISTRICTS IMPACTED: City Wide, Council District 2
SUBJECT:
AFL License Agreement for the San Antonio Talon's 2014 Season
SUMMARY:
This Ordinance authorizes a License Agreement with AFL Talons, LLC, to host the Arena Football League Talons games in the Alamodome. The initial term of the agreement is for one season (March to August), with two one-year renewal options.
BACKGROUND INFORMATION:
The City originally negotiated an agreement with Gameplan Wealth Acquisition Partners, LLC, previous owners of the San Antonio Talons Arena Football League (AFL) team, to play its home football games in the Alamodome. Jason Lohe, CEO of Revolutionary Sports, Inc. and Gameplan Wealth Acquisition Partners, LLC, purchased the Tulsa Talons team at the end of the 2011 AFL season, moved the team to San Antonio, and changed the name to the San Antonio Talons.
Subsequently, a two-year agreement to play in the Alamodome was signed. The original ownership group included Lohe and several San Francisco Bay Area investors, Paul Ross (former principal owner in the Tulsa Talons) and local investor David Lynd, COO at the Lynd Company. The Lynd Company is a professional property management company, and one of the nation's leading apartment providers.
In early March 2012, David Lynd, CEO of newly-formed Lynd Sports Group dba LS Talons SA, LLC, bought majority interest in the team and took over all business operations of the Talons. Under this ownership, the Agreement was amended three times in May and November of 2012 and in October of 2013.
ISSUE:
Due to personal challenges, LS Talons SA, LLC was not able to fulfill its commitments under the existing License Agreement. As such, the Arena Football League has taken over the team, requiring a new License Agreement for the 2014 season and beyond.
Key terms of the new License Agreement include:
· One-year term for 2014 (March - August), with two one-year renewal options for the 2015 and 2016 seasons
· City receives facility rental of $15,500 per game - plus $1 per ticket sold in excess of 10,000 tickets per game for use of the Plaza/Club level
· Facility rental includes event staffing, service costs (ushers, cleaning, utilities), and conversion costs to Modified North Arena configuration.
· City receives all food & beverage commissions*
· City receives all parking revenues
· City shall contribute an amount equal to the games net parking revenues towards event marketing*
· City receives 10% of net merchandise sales
· Licensee receives office space during term of License Agreement without rent and pay all telecommunications costs
*Rebates related to event marketing and food & beverage commissions will be effective after City recoups $74,000 in revenues.
These terms are consistent with those approved by City Council in the Third Amendment of the original License Agreement.
ALTERNATIVES:
Alternatives include directing staff to renegotiate the terms of the License Agreement, or not authorizing the License Agreement. Either option would result in the Talon's inability to play a 2014 season which is scheduled to begin on March 15th.
FISCAL IMPACT:
This amended License Agreement is expected to generate approximately $240,000 in net revenue to the City for FY 2014, based on estimated annual attendance of 52,000.
RECOMMENDATION:
Staff recommends approval of the License Agreement with AFL Talons, LLC, to host the Arena Football League Talons games at the Alamodome.