After Further Review

With last week's tedious Pro Bowl, the National Football League closed another winning season, once again raking in more than $4 billion in revenue as a—no kidding—tax-exempt, nonprofit corporation. Likewise, the league's wealthiest owner, Paul Allen, could look back on his first for-profit year at Seahawks Stadium and say that, despite the Hawks' 7-9 record, he also won big. In particular, the taxpayers' "partner," as he called himself, in the new $430 million stadium was able to pay most of his $130 million stadium contribution without dipping into his own pocket. To fund most of his portion, he relied on income from seat-licensing sales—the one-time purchase of a seat location by a season-ticket holder—and a semisecret $63 million loan from the NFL. The NFL's loan—more like a gift at 3.5 percent interest—was conditioned on Allen successfully enlisting taxpayers to pay most of the stadium tab ($591 million with interest) and required that he raise ticket prices to help pay back the loan. Allen receives all proceeds from the stadium's operations. In essence, fans quietly paid most of Allen's end of the stadium deal.

It's unclear if Allen knew of or arranged for the loan before or after the 1997 election in which voters authorized the stadium deal. A spokesperson for his stadium firm, First & Goal, confirms the loan but would not provide details, calling it "a private arrangement between the Seahawks and the NFL," adding, "it wasn't ever really talked about [publicly] as part of the project budget." The NFL approved the loan in 1999 or earlier, according to league documents that first surfaced in a 2001 lawsuit over an unrelated stadium deal in Los Angeles. Asked last week if they were aware of Allen's loan/gift, Gov. Gary Locke would not say, insisting the source of the money didn't matter; King County Executive Ron Sims would not comment; and a spokesperson for the Public Stadium Authority, which oversees Allen's stadium operations, says the PSA was unaware of the loan.

During the stadium campaign, Allen was praised for contributing his personal funds, which constituted about a fourth of the advertised price tag. (The stadium is actually costing taxpayers about a billion dollars: $300 million for construction, $291 million in interest, $37 million in sales-tax deferment for Allen, $205 million to pay off Kingdome debt with interest, and $168 million to build stadium freeway-access improvements.) Allen's portion could already be paid off, while taxpayers are on the hook for 25 years. Budget-strapped state and county governments, meanwhile, are slashing funding, unable to tap lottery sales, the hotel-motel tax, parking revenue, and ticket taxes that were eaten up by the stadium's costs, along with $101 million in King County sales tax diverted to the stadium that would have gone to the state's general fund to help pay for education and law enforcement. But the governor, who recently said public officials in these hard times must "live within our means," has no regrets. "We feel Mr. Allen has met [his financial] commitments and more," says Locke spokesperson Kirsten Kendrick, "because he paid for cost overruns that were not originally in the bill or finance plan. He also kept his commitment to contribute $10 million to construction of playfields around the state." Allen had agreed to those up front.

THANKS ALSO TO the new stadium, which Allen insisted be approved before he would buy the Seahawks, the entertainment, real-estate, and high-tech mogul has added millions to his personal wealth, estimated at $21 billion. The value of the football franchise he bought for $200 million has possibly tripled and, like the 31 other teams in the exclusive NFL club, its worth is climbing inexorably toward a billion dollars. (The new Houston franchise cost $700 million in 1999, and the existing Atlanta team went for $545 million last year, despite the Falcons' average attendance of 52,000, about 11,000 less than that of the Seahawks.) As Allen may have known in 1997, new stadiums have become the equity necessary to gain or retain a franchise in the NFL and share in the league's $18 billion network-TV contract. The NFL in recent years handed out $891 million in loans toward new stadiums in 10 cities, including Seattle. The money is used to leverage billions more from taxpayers facing the threatened loss of their teams. In a candid moment, NFL Commissioner Paul Tagliabue told BusinessWeek last month that the stadium program has "been the biggest transformation in the balance sheet of the NFL since I've been commissioner."

With the Seahawks' new home now safely in place and chunks of the Kingdome making up parts of its foundation, Allen also no longer has to worry about repercussions from the messy back story of the stadium deal, revealed in documents recently unearthed by Seattle businessman Armen Yousoufian. In December, the 56-year-old University District hotelier, assisted by dogged attorneys David Balint and Michael Brannan, won a landmark public-disclosure case against King County for stonewalling his efforts to obtain and review stadium studies, agreements, memos, and planning documents. For its five years of stalling, the county may have to pay Yousoufian up to $500,000 in penalties, and Yousoufian gleefully notes, "They picked on the wrong Armenian!" Yousoufian has found what he calls a paper trail of how the stadium deal was engineered. For example, voters were promised 72,000 seats, which Allen claimed were necessary if he was to make money and if the Super Bowl was to be held in Seattle. (Two weeks ago, the NFL said that wintertime Super Bowls at any of its northern, open-stadium cities are not on the radar; they're looking for a warm, domed stadium like Detroit's new 64,000-seat Ford Field.)