Charlotte taxpayers now only being asked to spend $100m on a private MLS stadium, maybe

Great news, everybody! Mecklenburg County, where Charlotte is located, is now only being asked to spend $100 million on a soccer stadium for which the nonexistent team’s owner has only offered to put up $50 million, instead of being asked to spend $113 million:

Commissioners, meeting in closed session Wednesday night, were told the county and the city would each be asked to pay $43.75 million toward a $175 million stadium. That’s down from the $50 million each that was sought in the initial proposal in early January.

The report in the Charlotte Observer leaves out $13 million in land costs that county taxpayers would cover, bringing the total to $100.5 million. It also doesn’t explain who’d pay the additional $25 million that the stadium would now be expected to build since this was first proposed, if those are real costs and not just other stuff larded in to make it look like the public portion is a smaller share of the whole nut.
Also not mentioned is what the team’s lease would be like — except that “team owners would control [the stadium] in much the way the NBA’s Charlotte Hornets do the city-owned Spectrum Center” — so it’s entirely possible that this $12.5 million cut in county spending would be offset by $12.5 million more towards future renovations, or something. The Mecklenburg county commission is expected to vote on this plan next Thursday at a private retreat, after holding just a single public forum at 3 pm next Tuesday, when surely lots of folks will be free to testify about this proposal that doesn’t appear to be even mentioned on the commission’s website.
One commissioner critical of the plan, Pat Cotham, remarked, “I’m struggling with this rushed process. Rushed deals of any sort are not good deals, because you need to have time to vet things.” Crazy talk! In America, we vote on stadium deals first, and figure out the details later, and nothing’s gone wrong yet, right?

Washington Post doesn’t understand basic stadium economics, free agent spending, Twitter

If you read this site at all regularly, you should already be familiar with Betteridge’s Law of Headlines. So you know what to do when you see this in the Washington Post:

Could the Nationals’ spring training project be affecting their offseason spending?

The genesis of this story appears to be that Jim Bowden, former GM of the Washington Nationals who is now an ESPN analyst, tweeted that the team may hold off on signing free agents this winter because they “are way over budget on [their] Spring Training Complex, making [their] decision difficult.” A Nats spokesperson immediately countered that “one has nothing to do with the other,” but still, Washington Post story.

Basing an entire article on one stray remark from a guy paid to come up with bulk-size opinions on camera is bad enough, but this report also displays a stunning failure to understand the concept of sunk costs. Think of it this way: You’re about to buy a new computer because you’ve determined it will increase your productivity and allow you to earn enough money that it will pay for itself. Then you find out that your roof has a leak, and you need to spend more than you thought to repair it. Unless you’re short on cash — which is unlikely since you have a net worth of $5.4 billion — you’d be foolish to skimp on one investment just because another cost arose that you’ll need to pay regardless.

For the Nationals to cut back on free agent spending because their spring training complex is running over budget, in other words, they’d have to be incredibly stupid. Which isn’t to say it’s impossible — teams all the time set “budgets” for payroll based on little more than how much the next guy is spending, even though player salaries are sunk costs as well once you’ve signed them. But taking it this seriously is a sign that the Post not only is jumping to write articles based on off-handed tweets, but has a serious misunderstanding of economics. Good thing there isn’t anything happening soon that’s likely to exploit those weaknesses.

Warriors break ground on privately funded SF arena, only travesty is the entertainment

The Golden State Warriors held their long, long-awaited groundbreaking on their new San Francisco arena this week, which presumably means they’re actually going to build this thing. The event was not without its awkward weirdness, though:

Oooookay. That’s got to be the worst of it, though, right?

Man.

Anyway, the Warriors arena is still being built with $1 billion in private funding, because ownership decided it could make more money by having an arena closer to its wealthier fan base (and to give San Francisco its first arena for hosting concerts and such), which while slightly icky if you consider the whole “San Francisco is for richies while less-richies have to go live in the East Bay” thing is at least the way that matters should work in a world without public subsidies to chase after. And at least East Bay residents can still get to games easily enough — which is good, because it meant at least the Warriors avoided the embarrassment of having a fan from their former city interrupt their welcome-to-their-new-city event, like some other relocating California teams I could name.

S.D., L.A moving companies lining up to refuse to haul Chargers’ stuff north

Chargers owner Dean Spanos’s grudging “I’d love to stay, I must be going” announcement that he was moving the team from San Diego to Los Angeles was sad enough, especially with the logo uproar and public message to stay home from one of L.A.’s top sports columnists that immediately followed. So what could he possibly do for an encore? Oh, how about not being able to find anyone to rent him a moving van:

[Ryan Charles of HireAHelper.com] said that more than 25 San Diego-based [moving] companies and 10 from the L.A. area have united via the wewontmoveyouchargers.com website to pledge not to participate in what Charles admitted would be a very lucrative series of jobs.

“We’re continuing to add more companies every hour,” Charles said. “We’re still actively calling companies, and companies are signing themselves up through the link on that site. So yeah, I think it’s definitely had an impact.”

It’s always possible that one day the Chargers will be ensconced in their new stadium, and they will win games again, and they will compete with the Rams for the hearts of L.A. football fans, who will actually be proven to exist (except in the sense of football fans who live in L.A., vs. fans of L.A. football). But this definitely isn’t getting off to a good start.

Raiders to file papers to move to Vegas, it is said (by someone [we can’t tell you who])

So on Saturday morning (updated again on Sunday), NFL.com’s Ian Rapoport had this to report:

The Raiders will file relocation papers to move from Oakland to Las Vegas, according to sources familiar with their thinking. … The stunning move, one that should be made official in the coming days, is expected to add a new city to the NFL’s ever-changing landscape. The Raiders would need 24 votes from the league’s owners to formally make the move, a vote that will come this spring…

As for the support from the room of owners, it’s described as making progress and gathering momentum. There isn’t nearly the opposition some anticipated originally. And it continues to build, with some of the most prominent owners vocally in favor of it.

Number of named sources cited: zero. Citations are to “sources familiar with [the Raiders’] thinking,” “sources,” and that passive-voice “it’s described as.” So what we know for sure is that somebody wants the world to know (or think) that the Raiders are all set to move to Las Vegas, and that the NFL is set to approve it.

Anyway, we’ve known for a long while that Davis wants to move to Las Vegas, or at least that he says he wants to. (Notwithstanding that he still doesn’t know who he’s going to build a stadium there with, after getting $750 million in public money to help with the costs.) Does this mean the move could be official in another couple of months? That this is an attempt to shake down Oakland, or even once-and-maybe-future Davis stadium partner Sheldon Adelson, for a more Davis-friendly deal? What kind of relocation fee would Davis have to pay for moving from an old stadium in a large market into a new stadium in a fairly small one? All good questions to ask Rapoport’s sources — here, go to it.

Charlotte MLS backers asking for $113m in public cash for stadium, isn’t this where we came in?

So, let’s see, anything else been going on while we’ve all been focused on where the San Diego Chargers and Oakland Raiders were going to end up? How about Charlotte, North Carolina being asked for $113 million for a soccer stadium for a team that doesn’t exist yet?

A proposal presented to Mecklenburg County commissioners in closed session last week calls for the city and county to each spend $50 million toward a $150 million stadium in Elizabeth just outside of uptown. The local ownership group of Bruton Smith, the billionaire race track owner, and his son, Marcus, CEO of Speedway Motorsports, would spend $50 million for the stadium.

The county would also demolish Memorial Stadium and the Grady Cole Center to make room for the stadium. The county would also provide the land – assessed at $12.9 million – for the new stadium.

That’s about equally as bad as the historically awful St. Louis soccer stadium proposal that that city mercifully killed earlier this week. If this is the new baseline ask for would-be MLS owners, we could be seeing the gradual end to the days when public subsidies in that league were generally lower than in other sports. (Though if cities keep saying no to them, maybe it’ll just be an indication that no matter if lots of kids are playing soccer now, that still hasn’t translated into the public or politicians feeling like landing an MLS franchise bestows that major “major league” feeling.) Already the Charlotte Observer has raised its eyebrows at the cost, and Charlotte Magazine contributing editor Greg Lecour has urged the city and county to drive a way harder bargain. Though it’s way more likely that MLS just packs up and tries its shtick on the next city down the road. How’s that legislation to end the Economic War Among the States going?

Raiders could have new evil billionaire to partner with on Vegas stadium

Wednesday’s NFL meeting about the Oakland Raiders‘ possible relocation to Las Vegas was a big bust as far as actual news goes, with the exception of Pittsburgh Steelers owner Art Rooney II’s cryptic statement that “the Raiders are looking at this potentially going without Mr. Adelson.” We now have some indication of what that was all about, though, as a Las Vegas stadium authority consultant reported yesterday that Raiders owner Mark Davis thinks he has another option for raising money if he can’t come to an agreement with casino baron Sheldon Adelson:

“The team’s presentation highlighted its research that the Las Vegas market can support the team, that bringing the NFL to the market aligns with the league’s strategic goals and that Goldman Sachs is committed to financing the project with or without a third party,” [Jeremy Aguero of Applied Analysis] said.

“The Raiders told the committees that there is no deal in place yet with the Adelson family and that the team is pursuing approval with no third-party involvement,” Aguero said. “However, if an accord with the Adelson family is reached later, the team would bring that back for league approval.”

This makes sense: If building a Las Vegas stadium (with $750 million of it paid for by taxpayers) is a good deal for Adelson, it’s likely to be a good one for Goldman Sachs as well. Though it’s important to note that Goldman would only be the financier here — Davis would have to borrow the money and repay it later. Still, if he’d rather make annual loan payments than share revenues and potentially team ownership with Adelson, sure, go for the vampire squid, or at least pursue it as an option so you have some leverage with your prospective partner.

The big question is whether that $750 million is still on the table if Adelson is no longer involved. I’ve looked at all the reports on the legislation and been unable to tell whether the money is contingent on it going to Adelson, or if it’s just free-floating money that can go to anyone looking to build an NFL stadium. It would certainly be ironic if Adelson ended up putting in all this lobbying effort, including buying the local newspaper, only to get shoved unceremoniously aside. Though if you believe the scuttlebutt that Adelson only did this to block hotel tax money from going to a convention center that would compete with his, maybe he won’t care so much, especially after the convention center got its money anyway.

And yes, all this is a dumb way to decide which cities get pro sports franchises. In case you were wondering.

Chargers announce move to Los Angeles, all that’s left is deciding who to be the most mad at

So the San Diego Chargers are moving to Los Angeles, owner Dean Spanos having dropped the other shoe yesterday by releasing this statement and changing their logo before announcing it wasn’t really their new logo after everyone, even the Tampa Bay Lightning social media director, made fun of them. Normally a relocation like this would require a vote of NFL owners to make official, but the league already gave Spanos a “good for one move to Inglewood” coupon last January, so this is a done deal.

There are many, many, many feels that one can have about this, depending on one’s perspective, so why doesn’t one sit down with us and run through them to see how reasonable one is being?

  • Rot in hell, Dean Spanos, for taking a team away from the fans who’ve supported it for a half-century! Spanos is definitely screwing over Chargers fans (who have responded by dumping their team gear outside the Chargers office and throwing eggs at the windows, and even trying to set fire to a team flag) in an attempt to make more money. Whether this makes him a greedy asshole or a savvy self-interested businessman is, wait, what’s the difference again?
  • Dean Spanos is an idiot for choosing to pay a relocation fee and be Stan Kroenke’s second fiddle in L.A. rather than working something out in San Diego! VERDICT: unproven. Yes, the relocation fee (reportedly $550 million payable over 10 years, which in present value is worth more like $425 million) is a lot, and Spanos is going to need to choose between either paying Rams owner Stan Kroenke a whole lot of rent (or shared revenues, which amount to the same thing) or putting up half the construction cost of the new Inglewood stadium up front, either of which is going to be really expensive. Maybe he thinks he can earn it back from increased revenue in a bigger market (though the NFL is limited in that regard since there are no local TV deals), maybe he was just pissy that San Diego voters didn’t want to give him $1.15 billion. Or maybe he’s an idiot.
  • Dean Spanos is an evil genius, now he can sell the Chargers for twice what he was going to get for them in San Diego! This is wisdom so conventional that people feel authorized to tweet about it like it’s true, but like all franchise value claims, it’s really just guesswork: Nobody knows how much more some theoretical billionaire would be willing to pay for the Los Angeles Chargers than for the San Diego Chargers, especially not until we see how popular they’ll be sharing that market with the Rams, and with that unfriendly lease that will saddle them with uncounted future costs. Only Spanos’s bean counters know for sure, and while it’s a fair bet that he’ll come out ahead since otherwise he wouldn’t be doing this (though see above re: pissy and/or idiot), it’s probably not going to be a double-your-money deal.
  • The NFL is going to regret this, nobody in L.A. wants to watch the dumb old Rams and Chargers! Certainly the Rams’ first season in L.A. wasn’t a raging success, with fans coming disguised as empty seats and TV ratings down relative to when L.A. football viewers were watching other cities’ teams. But the Rams and Chargers aren’t going to be pathetic excuses for football teams forever (probably), so maybe things will improve, and this won’t end up being a giant embarrassment for the league. Though that wouldn’t be any fun at all.
  • This is all San Diego’s fault for refusing to give Spanos a new stadium! To football fans’ credit, this viewpoint mostly seems to be limited to NFL commissioner Roger Goodell, who released a “Hey, we tried” statement following the announcement of the Chargers’ move. There were plenty of city officials willing to talk to Spanos about a new or renovated stadium (though they were limited in how much public money they were willing to/able to provide for one), but between the owner’s demand that the city fork over the lion’s share of the costs and the time limit on the relocation clause that meant Spanos had to move to L.A. now if he ever wanted to, there wasn’t time to work on that.
  • Wait, the Chargers are going to play in a soccer stadium for two years?! Yup. On the bright side, see above about nobody wanting to see the team play right now anyway.
  • At least San Diego taxpayers can still watch the team on TV if they want, without having to pay $1.15 billion in tax money as well! Also yup.
  • Sports is a festering cesspool of greed and extortion, less about putting out a good product than about an arms race among owners to build opulent stadiums with other people’s money! Well, duh.

If there’s a silver lining for wannabe haters, it’s that unlike in the typical stadium controversy, this looks set to be a tragedy in the Shakespearean sense, where all the major players end up dead on the battlefield thanks to hubris or stupidity or what have you. The San Diego Chargers may be dead, but San Diego Chargers schadenfreude is just beginning.

Seattle calls for applicants to redo Key Arena with no public cash, may actually get bites

This may go absolutely nowhere in the end, but the city of Seattle is certainly giving it the old college to see if it’s feasible to renovate Key Arena instead of building a whole new one, issuing a request for proposals for private developers to do so with no public money:

Under terms of the 25-page document, the city would maintain ownership of KeyArena, and any developer with an accepted proposal would pay a rental fee and assume all costs for maintenance and arena operations. The developer could sell naming rights for the upgraded venue as well as sponsorships and gain additional revenues via ticket sales and other routes.

“The assumption is that the city would be leasing the facility to the entity that would invest in it,’’ said Ben Noble, city budget director.

This sounds like exactly the sort of deal that private developers would turn up their noses at — you want us to put how much of our own money into renovating an existing arena and pay a rental fee and operating costs on top, what? — and yet two entertainment companies, AEG and Oak View Group (run by former AEG honcho Tim Leiweke), have said they’d be interested in bidding. So, if you’re the Seattle city council, why the hell not?

At worst, this will give the city more leverage to demand concessions from would-be arena developer Chris Hansen, which has already worked once. At best, just maybe they get AEG and Oak View into a bidding war for the rights to operate an arena in Seattle, which while not lucrative on the surface may matter a whole lot in the ongoing battle for arena management market share. Either way, it’s exploring your options rather than bidding against yourself, so preliminary kudos to the Seattle council for doing the right thing on that front.

NFL meets to discuss Raiders, Chargers moves, doesn’t decide squat because why rush into things?

The NFL’s stadium and finance committees met yesterday as promised, and while nothing really was decided about either the Oakland Raiders‘ possible move to Las Vegas or the San Diego Chargers‘ possible move to Los Angeles, we have some hints of where things are headed. And as befits a league run by a bunch of rich guy who decide things by arguing about who has the biggest balls, the outcome looks to combine one helping of naked avarice with two of farcical train wreck.

Yesterday’s joint meeting was apparently mostly focused on the Raiders, with league VP Eric Grubman later telling the L.A. Daily News’s Vincent Bonsignore that team owner Mark Davis has made “impressive” progress on a stadium deal there. Which, yeah, we noticed, but has the NFL made any progress on deciding whether to approve the move?

Okay. Has Davis at least made up his mind about whether to take Vegas’s $750 million subsidy offer and go in with billionaire Sheldon Adelson on a stadium there?

Okay! So no news at all, really, other than “check back later.”

There are still two big unknowns in the Raiders-to-Vegas potential move: First off, the NFL needs to decide on what relocation fee Davis would be charged, which the league still hasn’t discussed, though they have hired the same consulting firm that picked $550 million out of a hat for the Rams‘ move to L.A. to figure it out. And second, Davis has to hash out a deal with Adelson on how to split revenues and costs, which they apparently still haven’t been able to put their heads together on. Adelson no doubt thinks he has Davis over a barrel since he has few other options for getting ahold of $750 million in public stadium cash, which is probably why the NFL deployed Pittsburgh Steelers owner Art Rooney II to say this yesterday:

“I think the Raiders are looking at this potentially going without Mr. Adelson,’’ Rooney, chairman of the league’s stadium committee and one of the NFL’s most influential owners, told reporters in New York after league meetings on relocation and stadium issues.

Davis told the Review-Journal, “I have nothing to say right now.”

That sort of could make sense, maybe: If a Vegas stadium is viable for Adelson, then it’d be viable for some other developer as well, and Davis is the one with the rare commodity in an NFL team. Or he (or Rooney) could just be trying to drive a hard bargain with Adelson to get more money flowing into team/league coffers. Davis has until February 15 to decide on whether to file for relocation, and the NFL could always decide to extend that deadline if they want, so that leaves plenty of time for haggling.

On the Chargers front, meanwhile, the reason for the stasis is way more hilarious: It looks like team owner Dean Spanos doesn’t really want to move to L.A., and the other NFL owners don’t really want him to move to L.A., but the two sides are engaged in a massive game of chicken to decide whether the league will pay him to stay put. Per CBS Sports’ Jason La Canfora and his patented unnamed sources (though other outlets are reporting similar things):

There are some grave concerns among owners and the league office about the potential of having two teams in Los Angeles — the Chargers can exercise an option to move to L.A. next week, and sources said at this point they have no reason not to — and any subsidy offered to Chargers owner Dean Spanos would be born of those economic fears more than anything else…

The Rams have had a rough first season in Los Angeles and are already engaged in a coaching search, and the ratings in that market were not what some might have hoped for, as well. … Spanos has resisted leaving in the past and has his own concerns about the deal brokered with the Rams, one that would essentially make the Chargers a tenant to Rams owner Stan Kroenke at the stadium in construction scheduled to open in 2019, and there is sense among other owners that even a weak deal to stay in San Diego could carry the day.

There’s a lot to unpack there, but basically, if we believe La Canfora or whoever’s feeding him this stuff, Spanos doesn’t really like the deal being offered by Kroenke to move to L.A., but is trying to use the threat of taking it to extract some cash from the league to help him pay for a new stadium in San Diego. And the NFL can’t do much about it, as it already gave Spanos an option to move to L.A. last year when it approved the Rams move, and set the relocation fee to boot, meaning it can’t throw any roadblocks in the way of a Chargers move, just offer Spanos bribes not to go through with it.

Spanos’ option expires on Tuesday, which means something has to give really really soon. (He’s reportedly called a team staff meeting for this morning to discuss an undisclosed matter, which is presumably that he’s set to announce a move.) So, of course, yesterday’s meeting steadfastly avoided talking about the Chargers at all:

Just like the Rams decision did, it looks like this one is going to go down to the wire, and be decided by something stupid like egos or which NFL owners are Facebook friends. Both teams moving is still a likely scenario, but at this point I really wouldn’t rule anything out.