WASHINGTON (AP) - A group critical of the BCS is challenging the legality of a contract that calls for the Fiesta Bowl to receive more than $8 million over 20 years from an Arizona visitors bureau, and for the bowl to require teams and their affiliated groups to stay at specific hotels.
Playoff PAC calls this a “kickback,” and has filed a complaint with the attorneys general of nines states seeking investigations. Bowl officials say the accusations are off base, and that the contract is not only legal but advantageous to the schools.
“We believe that this arrangement may violate Connecticut’s prohibition on ’receiving kickbacks,’” the PAC’s co-founder, Matthew Sanderson, wrote in a complaint filed with state Attorney General George Jepsen, obtained by The Associated Press. UConn lost this year’s Fiesta Bowl to Oklahoma and also lost money on the game. In the complaint, Sanderson noted UConn spent $460,000 in hotel lodging and meals.
The PAC also filed complaints with Oklahoma, Idaho, West Virginia, Ohio, Texas, Oregon, Alabama and Florida, the other states with public schools that have played in the top-tier bowl game in recent years.
The PAC, which was formed to push for a college football playoff system, maintains that the contract squeezes schools by forcing them to fill a minimum number of rooms at high-end places. Fiesta Bowl chairman Duane Woods counters that the arrangement benefits schools by locking up large blocks of rooms at below-market rates.
The Fiesta Bowl signed the “Hospitality and Promotional Agreement” with the Scottsdale Convention & Visitor Bureau in August 2006. The visitors bureau is a nonprofit, private company that has contracts with the City of Scottsdale and Town of Paradise Valley to market the area, and its primary funding source is a bed tax collected by Scottsdale resorts and hotels, according to the group’s website. The Fiesta Bowl is a tax-exempt charity that is one of four premier postseason college football games that also rotate hosting the BCS title game, along with the Sugar, Rose and Orange Bowls.
The contract calls for the bureau to pay the bowl between $210,000 and $442,000 a year for 20 Fiesta Bowls starting in 2007, and between $210,000 and $393,000 for the five national championship games the bowl is hosting during the 20-year period. The total comes to $8.2 million in cash and $300,000 in in-kind police services.
In return, the bowl requires teams and their groups to spend a majority of their stay lodging in Scottsdale and Paradise Valley, and the bowl also provides the visitors bureau with promotion such as advertising, and hospitality such as a stadium suite and tickets to games and parties.
The general terms of the deal have been known for years. The city of Scottsdale announced them in a 2006 news release, and they have been mentioned in several news stories.
But Playoff PAC is casting a critical eye on the contract, especially when looked at in conjunction with game agreements the Fiesta Bowl signs with schools for each game. The game agreement with UConn, for example _ which the PAC obtained through a public records request _ spells out in detail exactly how many rooms the school must pay for, where, at what rate, and for how many nights.
That agreement includes these requirements for lodging:
_ 150 rooms for the team, for a minimum of six nights, and 125 rooms for the official party, minimum of three nights, at the Fairmont Scottsdale resort, at a rate of $198 and up;
_ 125 rooms for the band, minimum three nights, at Chaparral Suites, $139;
_ 75 “additional rooms for institution,” minimum three nights, Westin Kierland Resort & Spa, $225 and up; and,
_ Conference personnel, 15 rooms, minimum three nights, the Phoenician, $259.42. (The Fiesta Bowl says that the conference can reduce that block as long it provides the bowl with ample notice, and that the bowl is responsible for these rooms.)
The terms and rates were identical for Oklahoma, but most of the hotels were different.
In its complaint, Playoff PAC says the deal prevents schools from selecting their own hotel rooms, and “leveraging their large volume of room rentals to aggressively pursue discounts.”
In an emailed statement to the AP, Fiesta Bowl chairman Woods called that argument a “fallacy.”
Given the small lead time between team selection and the game, the tourist season, the need to secure a large number of rooms and the ability of ticket brokers to buy hotel rooms, “it is simply erroneous to believe that the teams would be able to negotiate better rates for all the rooms they would need at one hotel,” he said.
“The contract in question benefits participating schools by guaranteeing large blocks of rooms at the lowest possible rates, which are well below market rates,” he said. “… So without this type of agreement between the Fiesta Bowl and the SCVB, schools would find it nearly impossible to get blocks of rooms, let alone at the reduced cost they currently pay.”
Woods said the Fiesta Bowl uses the money it receives from the visitors bureau to pay for practice facilities, event spaces, hosting, promotions, security, transportation, cross-marketing, and to subsidize the media lodging, among other things.
Andrew Zimbalist, an economic professor at Smith College with an expertise in sports economics, said that the arrangement raises antitrust concerns.
“This is an anticompetitive tying arrangement, that requires consumers to end up of having less choice and spend more money,” he said. “There’s an intermediary that is siphoning off revenue from the producers, which are the schools.”
Woods dismissed Zimbalist as a “staunch anti-BCS advocate” who doesn’t understand the demand for Arizona hotel rooms in December and January.
Messages left with the Scottsdale Convention & Visitor Bureau were not immediately returned Friday.
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