After Abramoff, Nats Fear It's Out With the Hill Crowd
Tuesday, March 28, 2006
The Washington Nationals were a big hit on Capitol Hill last year. The return of a professional baseball team to the city after 33 years provided a new venue for lobbyists to entertain members of Congress and their staff at RFK Stadium, just 20 blocks east of the Capitol.
But with the start of the new season a week away, Nationals executives fear their popularity among the federal elite might decline. They are concerned that a significant piece of their business could be affected in the aftermath of the Jack Abramoff bribery and corruption scandal, which is leading many lobbyists and elected officials to reconsider how and where they do business.
Although congressional efforts to crack down on the lobbying industry have flagged since Abramoff's guilty plea in January, an emerging bill in the Senate would effectively prohibit members of Congress from accepting tickets to major D.C. area professional sporting events from registered lobbyists.
Nationals President Tony Tavares said the team already has had some "push back" from lobbyists who were ticket holders a year ago, and it has led to the cancellation of ticket plans for about 100 prime seats at RFK.
Officials from the Washington Wizards and Washington Capitals expressed similar concern, although they say they won't be able to fully judge the effect until seats at Verizon Center come up for renewal. Even the Washington Redskins, who routinely sell out 91,665-seat FedEx Field, might not be immune.
"Washington, D.C., thrives on the lobbying business," Tavares said. "It's been part of the landscape here for a long, long time. And it's pretty important to our team and our new stadium."
Even if Congress does nothing, several lobbyists said the Abramoff affair will cut down on the number of tickets available on Capitol Hill.
"It will have a chilling effect," said Gregory Gill, executive vice president and general counsel of Cassidy & Associates, a prominent lobbying firm. "We have Nationals, Capitals and Wizards tickets. There are times I have given tickets to Hill staffers. Will I do that any more? No. What's the point of having them if we can't entertain Hill staffers or members?" He said the firm has decided to cancel its tickets at Verizon Center.
"A lot of people do a lot of business at sports and entertainment events," said Thomas H. Boggs, chairman of Patton Boggs LLP, a top lobbying firm that shares a suite at FedEx Field with businessman Ray Schoenke, a former Washington Redskins guard who ran unsuccessfully for governor of Maryland in 1998. "The people who will do it, it will have an effect on considerably. Members of Congress and their staff will be reluctant to accept tickets to sporting events."
House and Senate rules currently allow a lawmaker and a member of his or her staff to accept a ticket to a sports or cultural event as long as the value on the ticket does not exceed $49.99, with an annual limit of no more than $100 in tickets from one source. In response to the Abramoff scandals, the House and Senate are considering a number of proposals that range from leaving the limits unchanged to a ban on accepting any sports or entertainment ticket from a lobbyist.
Although Washington's business community is much more diverse than it was even a decade ago, lobbying is still a huge part of the city's culture. Verizon Center and FedEx Field -- with their rings of luxury suites and club seats -- were designed to maximize income from the money lobbyists, corporations and other organizations spend to entertain politicians and executive branch officials.
Verizon Center earns between $165,000 and $265,000 per year on each of its 114 suites. One of the 244 or so luxury suites at FedEx Field can cost up to $200,000 a season.
The Nationals say they will go ahead with their plan to include 78 luxury suites at their new 41,000-seat ballpark on the Anacostia River because they are confident they can make up the difference from any lost business from lobbyists. "Lobbying is just one small part of the commercial population that is out there," Tavares said. "There are other parts of the D.C. economy that can fill the demand."
It's difficult to put an exact dollar amount on the income teams generate from lobbyists, but "I think it's a big percentage," said Stu Van Scoyoc, president of Van Scoyoc Associates Inc., the largest independent lobbying firm in the city.
It was enough to cause sports entrepreneur Abe Pollin, who owns the Wizards and built a downtown arena in 1997, to get a ruling from the Senate Ethics Committee nearly a decade ago that allowed senators and Senate staff to accept tickets priced under $50 from corporations and lobbyists. Accordingly, Pollin priced the "fair value" listed on the face of its club level tickets at $48, just under the $49.99 limit.
Some lobbyists, like Van Scoyoc, say it is too early to say whether they will hold onto their seats. These days, Van Scoyoc said, his Verizon Center suite is reserved only for friends, private clients, his employees and others, but not federal officials.
"The whole thing is in question at the moment," Van Scoyoc said. "Even though they haven't changed the rules, as a practical matter people don't want anything to do with it. Many offices have taken the position that they are not letting their people accept anything from these [lobbying] firms."
Rob Jennings, president of American Event Consulting Inc., which organizes fundraisers for Republicans and staged several at RFK Stadium last year, said sports tickets are a great way to entertain clients and potential clients, "but if you're using it to give to Hill staffers, then the lobbyists I have talked to have been scared away from that."
The Nationals, who are owned by Major League Baseball but are for sale at $450 million, priced hundreds of prime infield box seats under $50 at RFK last season, in part to stay under the gift ban limit, according to a team source. Tavares said the Abramoff scandals have resulted in the cancellation of around 100 of those seats this season.
"We have had people call from lobbying firms and indicate they are hesitant to move forward with their season ticket purchases, asking for more time, which we can't give them," Tavares said. "There could be more of a measurable impact, but we won't know until they pass the new rules."
One person who is leading a group of investors trying to buy the Nationals said that any legislation that affects the number of tickets purchased by lobbying firms and corporations was a concern. But this person, who spoke on the condition he not be identified for fear of hurting his group's chances, said he didn't think it would have a major impact on the team's finances because of the overall wealth and number of people in the Washington area.
"It definitely could impact sales of suites and premium seats," said another bidder, who requested anonymity for fear of offending baseball and losing his chance to buy the team. "We would have to make it up elsewhere."
David Cope of D.C. Sports & Sponsorship Sales LLC, who has worked in marketing and sales for all six major professional sports teams in the Baltimore-Washington region, said the teams will have to find ways to make up for losses in sales if new legislations tightens the rules on sports tickets.
"The teams are probably experiencing attrition from certain companies and organizations who would be affected by the lobbying legislation," Cope said. "But I'm sure they are focusing on industries and categories to replace those sales."