Wednesday, October 5, 2011

What the Mercedes-Benz Superdome deal really means for Louisiana

Posted By on Wed, Oct 5, 2011 at 2:13 PM

The new-look 50-yard line inside the Mercedes-Benz Superdome

Ever since it was discovered that the New Orleans Saints would be selling the naming rights for the Superdome, there's been plenty of griping and joking about about what the stadium's name should be, with some fans (predictably) not wanting any change at all.

Well, "the worst kept secret in Louisiana" (as Governor Bobby Jindal put it) was officially announced yesterday and we all know now for sure that the New Orleans Saints agreed to a 10-year deal in which their stadium will be named the Mercedes-Benz Superdome.

Along with Jindal, people in attendance at the ceremony included: Saints owner Tom Benson and his daughtergranddaughter Rita Benson Leblanc; Mercedes-Benz North America CEO Ernst Lieb and a slew of Mercedes executives; New Orleans Saints players Drew Brees, Jonathan Vilma and Will Smith, head coach Sean Payton and General Manager Mickey Loomis; New Orleans Mayor Mitch Landrieu and a gaggle of local and state politicians; and well over two dozen reporters, cameramen and video crews.

There was a lot of pomp with a stage and podium set up right in front of the north endzone with a giant Mercedes-Benz logo emblazoned on the tarp behind the field goal posts and just a few feet away from a cream-colored 2012 Mercedes-Benz SLS AMG ("the ultimate mid-life crisis car," Payton joked with a few photographers snapping pictures of the car).

Jindal spoke first and, like he was delivering a stump speech on the campaign trail, did his best to sell the crowd on the notion that this partnership is not only great for the Saints and Mercedes-Benz, but also great for the state of Louisiana and its taxpayers. He talked about how Mercedes-Benz is a world-class organization and how their partnership with the Saints was a symbol that Louisiana "stand[s] for excellence."

Gov. Bobby Jindal speaks at the official unveiling of the Mercedes-Benz Superdome

No doubt this is an excellent deal for Mercedes Benz and the Saints. The Superdome is the home of this college football season's BCS National Championship, the 2013 NCAA Men's Basketball Final Four, the 2013 Super Bowl and countless other yearly events like the Sugar Bowl, Essence Fest, the Louisiana high school football championships. Every time the stadium is mentioned on television, on the radio, in a news report, blog post or press release pertaining to any event held there, the Mercedes-Benz name will be mentioned (there's also the possibility brought up by Lieb that, should the Mercedes-Benz logo be painted on the roof of the stadium, the brand could be seen from space).

In exchange, the Saints get somewhere around $20 million a year (although the terms are still undisclosed) and bragging rights that they are the only professional sports team with a stadium naming-rights deal with the German luxury automaker (though it's the third such deal Mercedes-Benz has negotiated worldwide, the first being the naming rights to a 78-year old soccer stadium once named after Adolf Hitler).

But while Jindal went on and on about how "tremendous" this is for Louisiana — during the question and answer session after the announcement was made, Jindal spent three straight minutes talking about what a great deal this is for taxpayers — it's hard to reconcile that with the fact that the Saints just scored a multi-million dollar deal on a state-owned stadium in which they play less than a dozen times a year.

Jindal's big selling point was that this would surely eliminate the $20 million state subsidies paid to the Saints, but he neglected to point out that is the only such deal in the country between a state and an NFL team. Jindal talked about how, during the aftermath of Hurricane Katrina, the eyes of the world were on the Superdome and how much the Saints meant to residents during the city's recovery. No mention was made of how Tom Benson had reportedly considered to move the team permanently to San Antonio and used this as leverage to take more taxpayer money and to pull off a questionable real-estate deal next to the stadium.

Considering what really happened between the Saints and Louisiana in the aftermath of Katrina, it was hard not to feel a bit sick to your stomach every time Jindal, Benson or Lieb talked about how this moment served as some sort of symbol that the stadium - and thus New Orleans and Louisiana - has made a complete recovery since the storm. As Lieb said during his question and answer session with reporters, even people who didn't live in the United States can't forget what is was like to see pictures of the Superdome and New Orleans after the storm (enough so that international news outlets are making the connection in their reports on the naming rights deal).

Of course, all that is in the past. The stadium has since been repaired and renovated (again, at taxpayer expense) and the Saints have since won a Super Bowl. And, to be fair, it is an encouraging sign for New Orleans' economy that a German luxury automaker is willing to make a ten-year investment on naming one of the city's most iconic buildings. As for Louisiana in general, Jindal did say that the state will audit the deal and that taxpayer subsidies to the Saints were expected to end for the foreseeable future. If this is the case, then technically speaking the Saints aren't making money of this deal because it's just replacing the tax-payer money they were receiving. It's also great news that the money Louisiana is saving will be going back into the state's general fund, and thus be available to state education, infrastructure and other public works projects.

But, once again, you have to question why the Saints received that money in the first place and that it's still a state-owned stadium. It should also be noted that Benson will also be making money off this deal as the owner of several Mercedes-Benz dealerships when people in New Orleans who hear "Mercedes-Benz Superdome" use that as reasoning to buy the car and then can conveniently do so at a dealership owned by Benson (perhaps not coincidentally, Benson proudly noted that he'd gone from selling five cars a month to 105 since he opened his dealership).

Really, the most telling comments about what this deal really means came from Lieb. When I asked him if Mercedes-Benz took into consideration the Saints' state subsidies, he said not at all. Lieb said that Mercedes-Benz looked at the deal strictly in business terms and how it would help the car company's brand and add to the its portfolio.

"The deal was between the New Orleans Saints and Mercedes-Benz," he said. "Whatever happened behind that was not really our concern."

Earlier, Lieb talked about Mercedes' growing brand in the U.S., and how they've become one of the highest-selling luxury automakers in the world by expanding their market into commercial vans and lower-priced models starting in the $30,000 range. It's curious, then, why the car the company chose to show off on the Superdome field is worth more than the median household value of a home in New Orleans.

Curious, unless you consider the fact that, on the whole, this deal doesn't change anything for the common resident of New Orleans or Louisiana as much as it just benefits Mercedes-Benz, the Saints and any politician who wants to frame the privately-negotiated corporate deal as a reason to vote for them.

From left: Tom Benson, owner of the New Orleans Saints, Ernst Lieb, president and CEO of Mercedes-Benz USA, Stephen Cannon, Vice President of Marketing for Mercedes-Benz USA and Louisiana Governor Bobby Jindal hold up a pair of Saints jerseys after announcing the Mercedes-Benz Superdome naming rights deal
  • Photograph by Jonathan Bachman
  • From left: Tom Benson, owner of the New Orleans Saints, Ernst Lieb, president and CEO of Mercedes-Benz USA, Stephen Cannon, Vice President of Marketing for Mercedes-Benz USA and Louisiana Governor Bobby Jindal hold up a pair of Saints jerseys after announcing the Mercedes-Benz Superdome naming rights deal

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