Verizon Communications Inc. would seem to be a prime candidate to snap up a luxury suite at the $440 million ballpark being planned for Washington's Major League Baseball team.
The telecommunications giant already leases suites at MCI Center, where the Washington Wizards basketball team and Washington Capitals hockey team play; at Oriole Park at Camden Yards, home of the Baltimore Orioles; and M&T Bank Stadium, where the Baltimore Ravens are based. Verizon also holds a block of tickets for Redskins games at FedEx Field.
But Verizon isn't ready to commit to leasing a luxury suite at the planned baseball stadium, which is scheduled to open in 2008.
"A lot will depend on our budget," said Sandy Arnette, a Verizon spokeswoman. "We'll cross that bridge when we come to it."
The same goes for buying premium seats at Robert F. Kennedy Memorial Stadium, where the baseball team will begin playing next season. "We'd have to look at the cost," Arnette said.
Like many companies, Arnette said, Verizon doesn't have a limitless budget when it comes to buying premium sports tickets or leasing luxury suites, also known as skyboxes, which generally are used as a perk for employees and to entertain current and prospective clients.
And with a new sports team coming to town, the question arises: How many $100,000- to $200,000-a-year luxury suites does a telecommunications company, law firm or lobbying group really need -- or can it afford? Some corporate executives already are expressing a sense of skybox fatigue and say they wonder if current investments in tickets to entertainment venues are worth the price.
Dulles-based America Online Inc., for example, did not renew leases at MCI Center and FedEx Field a few years back, company spokesman Nicholas Graham said. "We don't have a skybox presence anymore because we found that supporting local sports teams around here would be better served through philanthropic efforts as well as sponsorships and marketing efforts," he said. "We found that yielded very positive benefits for us."
Robert L. Johnson, founder and chief executive of District-based Black Entertainment Television and owner of the National Basketball Association's Charlotte Bobcats, predicted a few companies will maintain tickets at all the locations. But others, he said, "will have to make choices. And the choices will come in the form of: 'I will get a box here, I'm going to get [individual] seats there' -- those kinds of trade-offs."
BET leases luxury suites at MCI Center and FedEx Field. Johnson said BET hasn't decided whether to lease a suite at the new stadium, but he seemed to be leaning against it. "I think we pay 250, maybe 300, at the Wizards and 215, 220 at the Redskins," Johnson said, referring to hundreds of thousands of dollars. "Then you add another 200 on top of that and you're getting closer to $1 million just on suites.
"We'd certainly look at it and consider it. But we wouldn't rush to make a decision. From our standpoint, we don't have a lot of clients who come to town to do business with us. Most of our clients are cable operators outside of the city. So we would look at it and say: We've got a lot of employees and this is a perk."
Johnson said he doubts BET employees would have time to attend many baseball games, anyway. "They are not going to be able to take off work for a Tuesday doubleheader," he said with a laugh.
The D.C. Sports and Entertainment Commission plans to spend at least $13 million to renovate RFK Stadium by Opening Day in April. The upgrade won't include luxury suites, said Mark H. Tuohey, the commission's chairman. But the team's eventual owner -- to be determined by Major League Baseball through a bidding process -- could pay to upgrade seats on the ballpark's mezzanine level, he said.
Winston Lord, executive director of Washington Baseball Club LLC, the early favorite to win the team, said his group has not ruled out adding new luxury seating at RFK Stadium. "Absolutely, we're looking at all ways to address this," he said, declining to offer specifics. The group is headed by several wealthy local investors, including James V. Kimsey, the co-founder of AOL.
"With this new baseball team, there's an argument to be made that in one fell swoop the Washington market has become oversaturated with skyboxes and club seats," said Marc S. Ganis, president of SportsCorp Ltd., a Chicago-based consultant. "It's not just the professional sports teams that have suites in the Washington area. You have to throw in the University of Maryland with its new Comcast Center. So I think now quite a few companies are going to have to start choosing. With the Orioles, Ravens, Redskins, the teams at the MCI Center and now a new baseball team, there is a finite market for these things."
Matt Williams, a spokesman for Washington Sports & Entertainment, which owns the MCI Center and the Wizards, agreed. "The new baseball team is going to make it more of a challenge for some companies to buy suites," he said.
Williams added that the MCI Center, which leases suites on a year-round basis, appeals to a wider clientele than sports fans.
"Our suite holders want a more broad range of events. They also get to see concerts, family shows, WNBA [women's basketball], Georgetown basketball -- as opposed to the hard-core baseball fan," he said.
While it's too early to say who the winners and losers will be -- Washington's baseball team doesn't yet have an owner, after all, much less a marketing plan -- here's a telling comparison: The Redskins have leased all of their 243 luxury suites, priced from about $70,000 to $200,000 a season, according to club spokesman Karl Swanson. But suites are available for lease at MCI Center and at Oriole Park, spokesmen at those facilities said.
The Orioles, for one, say they are concerned. "Any time a new facility opens, that spreads the available marketing dollars a little thinner," said Bill Stetka, an Orioles spokesman. Orioles owner Peter G. Angelos is negotiating a broad package of financial guarantees from Major League Baseball to compensate him for the new competition.
The Orioles have 72 luxury suites, holding from 10 to 18 people each. Stetka said he did not know how many have been leased.
"It's going to be a much tougher sell for the Orioles," said Ganis, the sports marketing consultant. "The Orioles' ballpark was until recently the newest [major sports] facility in the region. But it will be the oldest" once the District's new ballpark is built.
Graham, the AOL spokesman, said it's too early to know whether the company will buy premium tickets for the new baseball team. "We'll cross that base when we come to it," he said.
Lord, the executive director of Washington Baseball Club, said some companies already have expressed interest in buying suites and club seats.
"Just based on our contacts in this community, we are very, very confident that we are going to sell out the suites and the club seats," he said. "A lot of this will be us leveraging our relationships. I mean, we know the people to sell them to. Say there are 70 suites. The first 40 I could do in my sleep. It's the last 30 that are sometimes more difficult."
A rival group that may bid for ownership, led by New York real estate investor Mark Broxmeyer, seems more cautious. The group is being advised by Sal Galatioto, who heads the Lehman Brothers financial firm's New York-based sports finance group. Galatioto advised Daniel Snyder during his purchase of the Redskins.
Asked whether the Washington market has an appetite for more luxury suites, Galatioto said: "That's the $64,000 question, right? Or for the sports teams the multimillion-dollar question. Certainly, Washington-Baltimore as a metropolitan area has a fairly robust economy. But like all other economies it's affected by where the overall economic health of the United States is. So if we don't have a recession. . . .
"Look, personally, do I think Washington is a market that can support baseball? If done correctly, yes, I think it can. But you have to do some work, figuring out what the demand is."
One challenge, he said, is that Washington hasn't had a Major League Baseball franchise since 1971, when the Senators left town.
"That was a completely different world back then," Galatioto said. "I mean, that was a time when nobody even knew what skyboxes were."