Claude Brochu agreed yesterday to step down as president and managing partner of the Expos if local investors come forward with a proposal to buy him out, inject new money into the club and sell government on the merits of helping fund construction of a new stadium downtown.
"If there is no stadium, I can assure you that we'll sell to the States," Jacques Menard, chairman of the Expos, told a packed press conference.
Representatives of the club's 14-member ownership consortium met privately for three hours yesterday to hammer out terms and conditions of an agreement that technically leaves Brochu in place, but gives his fellow owners a 150-day window of opportunity to come up with a deal that would result in a new ownership consortium without Brochu.
"According to this agreement," said Brochu, reading from a statement, "the club will not be put up for sale for the time being. However, the owners who wish to do so will have 150 days to submit proposals relevant to the construction of a new ball park and an infusion of new capital into the partnership for the purposes of the club in which I hold an interest. É After the 150-day period, it will be up to the partnership to review the proposals, which will also have to meet the approval of major-league baseball. I will not be part of any new consortium. É When the time comes, I'll step down."
The 150-day provision creates a new deadline of next March 5 for deciding the fate of the franchise. Brochu is the fourth-largest shareholder in the consortium, with a 7.6-per-cent share. Raymond Bachand, president of the Quebec Federation of Labour's Solidarity Fund, which owns 10.1 per cent of the Expos, told reporters after the press conference that a minimum of $50 million to $75 million will be required to buy out Brochu and absorb the accumulated and anticipated operating losses while a new stadium is built.
"If there are no new investors, then obviously we can't continue," said Mark Routtenberg, president of Guess Jeans, who holds a 2.9-per-cent share. Routtenberg said the owners are scouting for a "lead investor who will probably want to be general partner as well." He said every member of the consortium "has had people come up to them to say they want to put in some money," and that the owners are now collectively trying to establish just how serious these overtures really are.
"But it's not like there's a white knight out there waiting in the wings," he said. "The white knight in all this is government." Menard said the consortium plans to create a new working group in the coming days that will be mandated to come up with a plan to relaunch the whole stadium project. He said the group will study suggestions - from Montreal Mayor Pierre Bourque, among others - that the Expos ask architects to come up with blueprints for a new, less expensive downtown stadium.
He also said the group will look at possible new sources of private financing, as well as new ideas on how to get governments to see public financing as ultimately in Montreal's higher interests. The original architectural blueprints, presented in June 1997, provided for a 35,000-seat stadium projected to cost $250 million. The design called for a giant rain umbrella suspended over the playing field. Bourque is urging the Expos to scrap the umbrella idea, and design a ball park that would cost only $150 million. Baltimore's Camden Yards ball park, the model for the new wave of retro-style downtown ball parks, was built in the early 1990s at a cost of $230 million U.S. But land costs accounted for $100 million of the bill, and the Expos wouldn't have to pay anywhere near that. The federal government, which owns the land two blocks south of the Molson Centre on which the Expos are proposing to build a new stadium, has indicated it would be willing to sell for a nominal price.
The Expos say they need a new downtown stadium to survive in Montreal. In the east-end Olympic Stadium, they generate only 20 per cent of in-stadium revenues generated by the average major-league baseball franchise. Two-thirds of all Expos revenue this year came from various revenue-sharing agreements, and that is projected to rise next year to three-quarters of all revenue. The Expos have the smallest revenue base in baseball, and major-league baseball has told the club it won't provide heavy subsidies forever.
At yesterday's press conference, Brochu read from a bilingual statement, then left without fielding questions from reporters. His voice was hoarse at first, but he was calm and composed. Menard followed with a bilingual statement of his own, then opened up the press conference to 30 minutes of questioning. Later, some owners spoke to reporters in small groups.
"Claude Brochu has stated very clearly," Menard said, "that he is willing to work with us constructively to facilitate a process, and that if all progresses successfully, he would be willing to relinquish his position as general partner."
When Brochu unveiled the stadium project in June last year, he proposed a financing plan that called for $100 million to be raised privately through the sale of luxury boxes and personal seat licenses. The other $150 million, he said, would have to come from governments. Seat- license schemes have fared better in football than baseball south of the border. Still, the Brochu plan, which targeted the corporate community but not the average fan, managed to raise $40 million in private funding by last spring, a respectable showing compared with similar license plans in the United States.
But other owners in the Expos consortium felt Brochu erred in not launching a much broader marketing effort early on. When license sales stalled in spring at 4,500, these owners grew restless. As passive partners in the limited partnership that is the consortium, they were legally obliged to let Brochu call all the shots. Their frustration produced bitter infighting, leading ultimately to Brochu's qualified announcement yesterday.
Premier Lucien Bouchard hailed the announcement as "good news'' that "renews our hope in the project'' of a downtown ball park. Speaking to reporters in Montreal at a reception for visiting Irish President Mary McAleese, he said he was pleased that the business community had heeded his suggestion to draft a new financing proposal, and said he thought "five months was just the right (amount of) time.''
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