Broward mayor seeks analysis of costs of letting Panthers leave, ignoring 14 years left on lease

Well, now, this is interesting, kind of:

You might not be able to tell from her @bestmom39 handle, but Barbara Sharief is mayor of Broward County, and she here seems to be indicating that she’s asking an economic consultant to do a cost/benefit analysis of letting the Florida Panthers move out of the county rather than giving them $80 million. How much the Panthers’ presence is worth to Broward is a reasonable analysis to ask for — though given that the Panthers’ lease isn’t up until 2028, and Panthers owner Vincent Viola isn’t actually promising to stay any longer that I can tell in exchange for the $80 million, it’s worth wondering if maybe Sharief is asking the wrong question.

Red Wings promise to build “deconstructed” arena with public’s $300 million

The Detroit Red Wings issued renderings of their planned $450 million arena yesterday, and it’s … kind of interesting-looking, I guess?

Those buildings surrounding the arena are actually part of the arena, with the space between that and the arena structure proper being the concessions concourses. (Another rendering shows what appear to be glass roofs over the concourses, maybe?) The Red Wings are calling this a “deconstructed” design, and it’s something interesting to try, anyway, if only because it would make the arena a bit less monolithic from the outside. (Setting the arena floor 32 feet below ground level would help, too.)

It’s still not necessarily worth spending $300 million in public money and free land on, of course. But since that’s now water under the bridge, at least it’ll be nice if they can avoid a major public eyesore.

A’s lease squabble continues to transition into A’s-Raiders land squabble

The Oakland A’s lease copyediting controversy goes on, now with Oakland’s city attorney making still more “minor” changes to the document, and Alameda County officials charging that they’re anything but minor:

“The city attorney interpreted that to mean that she could go back and insert changes to the language that she had been attempting to get the A’s to agree to for weeks but they had rejected repeatedly,” Streeter said. “This is the kind of thing that we are now going to have to smooth over.”

This is all completely hilarious, but it’s the kind of thing that nobody is likely to blow up the entire lease talks over at this point. Even Streeter said Friday that a final agreement should be in place within “a day or so.”

Marginally bigger news is that A’s owner Lew Wolff has ramped up his battle with the Raiders over the Coliseum site by sending Oakland city administrator Henry Gardner a letter that, in the midst of much sniping at “mean spirited persons” who would criticize his new lease extension or his good faith, declares that once the lease extension is settled, he’ll explore “looking into the bond costs and JPA operating costs to determine if we can present an offer that would vastly reduce or even eliminate the annual City/County subsidy and allow us to develop and control our own destiny.” And Wolff adds that he has “not once said or assumed that the desired new A’s ballpark would rely on or seek public funding” — calling this a “total distortion” put forward by “some parties.”

At the risk of being cut off Wolff’s Christmas card list, this isn’t actually much of a promise: “Looking into” building a stadium while paying off the existing Coliseum bonds isn’t the same as actually doing so, and it’s been clear for a while that any subsidies Wolff would require would likely be in the form of free land and tax breaks, which sports team owners generally don’t count as “public funding,” even though it is. Really, we have no idea — and for all we know Wolff has no idea — what kind of financing and development plan an A’s stadium would require, so it’s impossible to say what kind of deal it would be for Oakland, either compared to giving the Raiders’ Coliseum City partners the rights to the Coliseum site, or compared to not handing it over to either team.

In any event, though, given the amount of verbiage in Wolff’s letter disparaging the city’s exclusive negotiations with the Coliseum City group over the site, it looks like he’s preparing to move on from fighting with Oakland over the lease to fighting with Raiders owner Mark Davis over the land, as expected. If they play their cards right, Oakland and Alameda officials could turn this into a nice bidding war for the site — though given recent events, it might be a bit much to expect those guys to even hold their cards without dropping them all over the floor.

Goodell floats Raiders move to Santa Clara, but 49ers fans’ PSL rights could be stumbling block

The San Francisco 49ers‘ new Santa Clara stadium had its ribbon-cutting yesterday, and according to Levi’s CEO Chip Bergh, whose company bought the naming rights to the place, it is “the most amazing stadium on the face of the planet.” Though, according to SF Gate’s Ann Killion, all NFL stadiums “are big, impersonal, infrequently used and tend to be the same, depending on what era they were built in,” so maybe Bergh is grading on a curve here.

In any event, the stadium opening was slightly overshadowed by NFL commissioner Roger Goodell’s suggestion that the Oakland Raiders might want to consider moving in there as well if stadium talks in Oakland go poorly:

“They have to make that determination, whether they’re in a new stadium in Oakland or whether they feel that it’s best to join this stadium,” Goodell said, according to the Bay Area Sports Guy, who tweeted the commissioner’s remarks. “We’re working on that, and that’s one of the decisions they’ll have to make.”

Rattling move-threat sabers is, needless to say, Goodell’s job. And the 49ers owners have been open to renting to the Raiders if need be. Yet as the San Jose Mercury News’ Tim Kawakami points out, there could be a major stumbling block to the Raiders and 49ers sharing digs: the stadium builders licenses (aka personal seat licenses) that the 49ers sold, for anywhere from $2,000 to $80,000 per seat, to raise $500 million toward construction.

Part of the agreement is that SBL-holders have first dibs on most other events at the stadium…. There is no way the Raiders would agree to 49ers SBL-holders getting first look at their tickets.

Even if they did, the 49ers wouldn’t want to share any % of their precious SBL cash with the Raiders.

That’s a problem on two counts. First off, since SBLs have already been sold, the Raiders would be missing out on a source of cash that the team could otherwise collect at its own new stadium. On top of that, though, if the Raiders then sold tickets without requiring their own PSL purchases, 49ers seat license holders could scream bloody murder about being forced to put up tens of thousands of dollars for seats while Raiders fans paid nothing, and even potentially file lawsuits over the inequity. Kawakami says NFL sources have “muttered” about this problem previously, and that “nobody has a good answer for it, not practically.”

Kawakami doesn’t mention it, but this is a potential stumbling block with any proposed move of the A’s to San Francisco’s AT&T Park, which the Giants similarly sold PSLs, though only on the 15,000 priciest seats. Giants “charter seat license” holders likewise have dibs on buying tickets to other events at the stadium, which could cause major problems in the event of an A’s move. Not that the A’s are likely to move, or the Giants to okay it without usurious lease terms, but it’s an important reminder that there’s more to relocating a team than just saying, “Hey, look, that stadium is empty part of the time, let’s set up there!”

UPDATE: A 49ers SBL holder has posted language that seems to indicate that the 49ers accounted for this problem by omitting “other NFL games” from SBL rights — see comments.

Miami celebrates subsidizing suddenly-crappy Heat by laying off librarians, cops

Now here’s a lede, courtesy of Bloomberg News:

Last month, Miami politicians approved a $19 million subsidy for the professional basketball arena. Six weeks later, they turned to a grimmer task: deciding how many police and librarians to fire.

It’s not quite fair to blame Miami-Dade County’s $64 million budget hole, which could require 700 layoffs, on the Heat arena subsidy deal, since that’s only costing the county $19 million in subsidies over 20 years (and more like $6 million in present value). Still, it’s not helping any, and does point up not only that it’s easier to get public money if you’re a rich guy with a sports team than if you’re actually working for the public, but that sports subsidies can often paint future elected officials into a budget corner. As Holy Cross sports economist Victor Matheson tells Bloomberg:

“You can’t stop your debt payments without actually declaring bankruptcy,” he said. “But you can cut the number of police officers and teachers and librarians and firefighters.”

But at least Miami fans can now rest easy that they can keep watching LeBron James for another, um, whoops. Heat owner Micky Arison sure timed that subsidy demand right, didn’t he?

Oakland council fixes dumb typos in A’s lease, everybody threatens to freak out again

The Oakland city council approved the new Oakland A’s lease yesterday … or approved a lease, anyway. The council made a few “procedural” changes to the lease that was approved by the Coliseum Authority earlier in the month, leading team president Michael Crowley to pronounce himself “caught by surprise” and “disappointed” that the council had changed the lease terms, and refuse to commit to signing the revised lease until he’d had a chance to review the new lease.

So what are these changes? Newballpark.org ran them down late last night, and here are the main ones:

  • Clarifying that if A’s owner Lew Wolff chooses to terminate the lease by announcing it in the middle of the year, the termination goes into effect following the second full year after the termination. (So if he terminates in mid-2016, the A’s are locked in through 2018.)
  • Fixing a typo that indicated a developer payment as being both $10 million and $20 million.
  • Clauses clarifying what happens if the team is sold, or if the Coliseum Authority defaults on its part of the deal.

As Newballpark.org notes, these are all really minor changes, and nothing that Wolff would have cause to reject. The de-typoed lease does have to now go back to the Coliseum Authority for a re-vote, though (as well as to the Alameda County Board of Supervisors, which was always going to have to vote on this), so maybe Crowley was just disappointed that things are going to drag on an extra week or two? All signs point to things still getting worked out, but it wouldn’t be a week in Oakland without somebody pointing fingers angrily at somebody about something.

 

Cuyahoga exec: We never said LeBron was worth $500m/year

I was traveling much of yesterday, but in the afternoon I received an email from Richard Luchette, the press spokesperson for Cuyahoga County Executive Ed FitzGerald. Luchette said that, contrary to widespread media reports, FitzGerald’s office never meant to imply that LeBron James’ return to Cleveland would add $500 million to the local economy. Rather, he said, the estimated economic benefit of LeBron’s return will be more like $53 million, bringing the team’s total impact to $500 million.

It looks like the blame here mostly goes to some terrible reporting in the initial story by Bloomberg News, which cited FitzGerald’s economic development director Nathan Kelly as saying (in its paraphrase) that “a more robust Cavaliers with James playing increases the total economic impact to about $500 million a year with direct and indirect spending,” but in its lede interpreted this as meaning “the return of the star forward to his hometown Cleveland Cavaliers will have a $500 million a year impact on the local economy” — and doubled down on the wrong with a headline stating “LeBron James’s Return to Bring Cleveland $500 Million a Year.” Though Kelly certainly could have been clearer — I haven’t been able to find a direct quote of how he brought up the $500 million figure in Monday’s press conference — and taking two days to clarify a misstatement that was all over the Internet on Monday wasn’t great work on FitzGerald’s part either.

In any event, $500 million in total annual economic impact for the Cavs is still pretty implausible: The team currently only sells $30 million worth of tickets, remember, and much of that spending would take place elsewhere in Cuyahoga County even if the Cavs played entirely before empty seats. Even if you add in spending on concessions, LeBron souvenir jerseys, hotels for fans who travel from out of town just to see Cavs games (do such people really exist?), and a multiplier for all the money that LeBron-souvenir-jersey vendors will go out and spend at local stores, it’s hard to see getting anywhere near $500 million. I’m still hopeful that Kelly will get back to me with his calculations, though, so stay tuned.

In any event, this is a great cautionary tale about economic impact statements: You can make “economic activity” numbers say just about anything you want them to, and then the press will get it wrong anyway. But at least FitzGerald got on the telly.

Ohio official says LeBron’s return worth $500m, or $50m, or something with a “5″ in it, anyway

Early yesterday, the office of Cuyahoga County Executive (and Ohio gubernatorial candidate) Ed FitzGerald, he of the “win tax,” announced that FitzGerald would be giving an afternoon press conference on just how much money LeBron James’ return to Cleveland would mean to the local economy. FitzGerald had previously claimed that county ticket tax receipts measurably went down when LeBron left four years ago — not too much of a surprise, since people stopped going to Cavs games and presumably did something else not subject to the ticket tax — so the only question was how huge a number FitzGerald was going to come up with.

The answer: $500 million. Per year.

That certainly sounds crazy, but let’s do some rough math and figure out just how crazy. The Cavs had about $145 million in total revenue last year, about $30 million of it via gate receipts, the rest from concessions, cable fees, and so on. Let’s assume that every single Cleveland fan were to double their spending as a result of LeBron’s return — buying twice as many tickets, twice as many hot dogs, twice as many cable contracts. Let’s further assume that 100% of that money would otherwise have been spent outside of Cuyahoga County if not for LeBron, because we all know how many attractions there are in the distant Cleveland suburbs. And then let’s apply a multiplier of 2x, just for the hell of it, under the assumption that all money spent on Cavs games is recirculated in the local economy, because surely NBA players cash their paychecks and immediately spend them at the local Dave’s.

This would get us a yearly impact of $290 million. Still not half a billion.

Or to look at it another way: Last year the Cavs sold 710,000 tickets, and had 132,000 go unsold. Even if the team were, let’s say, to double ticket prices next year, each of those 132,000 new attendees would have to spend $3560 apiece on their visit to a game in order to generate $500 million in economic activity.

Fortunately — or unfortunately, depending on your perspective — it’s not clear that FitzGerald himself believes that $500 million figure. Sure, his deputy chief of staff, Nate Kelly, said it at yesterday’s press conference, but the actual figures mentioned by his staff were far lower. (I’ve requested a spreadsheet or any kind of document at all detailing the economic impact data, but I’m still awaiting a promised call back from FitzGerald’s economic development aide.) From the summary published in today’s Cleveland Plain Dealer:

  • Cuyahoga County will collect about another $3.5 million in ticket taxes this year. The ticket tax rate is 8%, so that would imply an additional $43.75 million in ticket sales, which if they jack up prices to $60 a pop and go deep into the playoffs … sure, maybe.
  • Cavs fans will spend an additional $34 million a year, and the Cavs’ overall economic output would rise by $53 million. Again, that’s not unreasonable, though at least some of this spending would be cannibalized from money that would otherwise be spent on other things in Cuyahoga County, something FitzGerald’s office didn’t attempt to account for.

And … that’s it? That’s not anything close to $500 million a year, and probably not that close to $50 million a year either. The Plain Dealer called Kelly’s half-billion-a-year claim “a much more aggressive interpretation of the data,” which is a nice way of saying “we have no clue why that came out of his mouth.”

Meanwhile, the source of these numbers is in dispute as well: The initial Bloomberg News report said they came from “calculations by the Cuyahoga County Fiscal Office,” but the Plain Dealer reports that FitzGerald said his office worked with the tourism agency Positively Cleveland, drawing on a dubious study commissioned by the team in the heat of last winter’s sin tax extension battle.

In other words, this is a big-ass mess, and there’s no reason to take any of these numbers the slightest bit seriously. Yet the headlines have been written, and you know that the next time some sports team owner is looking for cash to subsidize a new arena, or tax breaks to boost his profits at an old arena, or the purchase of a new point guard, someone will point to this and say, “Keep in mind that even a single player like LeBron James can be worth $500 million a year to a local economy.” (We already went through this with the last NBA superduperstar, don’t forget.) Zombie ideas can be a dangerous thing.

Buffalo Bills stadium report delayed, because writing is hard!

A New York state-commissioned report on the future home of the Buffalo Bills that was expected to arrive Friday didn’t, with the Associated Press citing “a person familiar with” the consulting firm blaming “the large volume of information.” Yeah, I’ve used that excuse too.

While we wait for the report, though, it looks like Buffalo elected officials are increasingly declining to take the Buffalo News’s bait that a new stadium is inevitable, and it’s just a matter of where to put it:

County Executive Mark Poloncarz tells 2 On Your Side his preference is at this point is a renovation of Ralph Wilson Stadium.

“I’ve said all along the one thing we cannot do is take off the table Ralph Wilson Stadium. We’re investing $130 million there, one of the reasons it was done was not only to make it good for the next five to ten years, but many years thereafter. After the investments we’re doing now it’s going to be a different stadium and when people go there this fall they’re going to realize that it’s still very viable to have the Ralph as the home of the Bills,” said Poloncarz.

We also asked Mayor Byron Brown about whether he thinks a new stadium is needed to keep the team in Western New York.

“I’m not sure about that,” said Brown. “I certainly want to see the team stay in this community for the long term and if a new stadium is needed, if a new stadium is required, I think it makes sense for us to accomplish that.”

It’s probably too soon to call this a major shift — even politicians who want to build new stadiums often say they’ll look at renovation, if only so they can reject it later — but taken along with Gov. Andrew Cuomo’s subtle rhetorical shifts, it looks like Buffalo elected officials are at least realizing that building a whole new stadium for a team that just got a renovated one is going to be a hard sell. We’ll see what they say once they get a look at the clear plastic binder.

Hartford mayor scraps $60m bond sale for Double-A team, instead proposes “public-private” mumble mumble something

Faced with many many people very unhappy with his plan to sell $60 million worth of bonds to build a stadium for the New Britain Rock Cats, Hartford Mayor Pedro Segarra accounced on Friday that he was scrapping the bond sale and replacing it with, um, splunge:

The council is expected to see a new resolution for the stadium at its Aug. 11 meeting, Segarra said. That plan would be contingent on the “public-private partnership” that has yet to be determined; proposals from developers are due Aug. 1.

From the sound of it, Segarra is now hoping that accompanying housing and retail development will somehow generate enough money to pay for the ballpark, though whether that’s “private developers are so desperate to build housing in downtown Hartford that they’ll fund a stadium just to get to do it” or “enh, let’s just kick in a bunch of property tax revenues to pay off the stadium bonds and call that ‘private’,” who the hell knows. It’d be nice to think that we’ll actually learn what the proposal is before the August 11 meeting — you know, so that people can actually comment on it — but don’t hold your breath.

pirmind.com