Bengals miraculously agree to pay for a small cut of Bengals things

The Cincinnati Bengals lease is a bit legendary in some quarters, being that it contains one of those “state of the art” clauses that requires Hamilton County to provide any upgrades that other NFL teams have already gotten, specifically mentioning such imaginary enhancements as “stadium self-cleaning machines” and a “holographic replay system.” So it’s big news, kind of, that the Bengals owners and the county have cut a deal on a revision of the lease.

The prompt for the new lease had nothing to do with the team’s ridiculous guarantees — they’re not negotiating those away so fast — but rather that Hamilton County is looking to build a new mixed-use development that would include a General Electric building and apartment towers near Paul Brown Stadium, and this would exceed the height limits in the Bengals’ deal. So the county offered a swap: increased height limits for a list of items that the Bengals execs neglected to get the first time:

  • $7.5 million toward a new scoreboard that’s already required by the state-of-the-art clause.
  • $3 million in public funding for part of the $3.5 million cost of installing Wi-Fi at the stadium.
  • Permission to add an expanded weight room for an MLS franchise, if Cincinnati ever gets one.
  • The right to hold one game a year in London if the Bengals so choose.

Given the Bengals’ old lease, none of this is actually so bad — really, getting the team to pay anything toward stadium improvements at this point is a plus for the public. County commissioner Todd Portune, who’s been one of the Bengals’ biggest critics, called it “a new era in our relationship,” so maybe it really is possible to get team owners to kick in money for things that will benefit them just by sitting across the table and shaming them. So long as, you know, it’s only a little part of the money.

Privately funded MGM-AEG arena in Vegas actually breaking ground in May

It looks like one of Las Vegas’s umpteen proposed sports venues is actually going to get built, as AEG and MGM have announced a May 1 groundbreaking for their $350 million 20,000-seat arena on the Strip. The Las Vegas Review-Journal reports that the building wil be built to “NBA and NHL specifications” but will at least at the beginning rely on “programming such as concerts, MMA fight shows, sports events, award shows and boxing matches.”

The AEG-MGM arena is also being built entirely with private money — so far as I can tell, the developers never even tried to get public subsidies — which just goes to show that 1) in certain circumstances, privately funded arenas can work, and 2) those certain circumstances are largely “be in Las Vegas.” Trying to pay off arena construction entirely with revenues from concerts and the like is usually impossible unless you can guarantee 200 or so nights a year of activity — but apparently AEG and MGM think that’s doable in the bizarro world that is the Vegas tourist economy. Either that, or MGM so desperately wants to beat all its competitors to the punch to get a new arena built, it’s willing to treat it as a loss leader for the rest of its casino/hotel/murder mystery business.

Either way, Vegas will now have a new arena to dangle in front of the NBA and NHL for a new team, though we’ve seen how well that’s worked for Kansas City. In the short to medium term, expect this to mostly be a snazzier place to watch Cher, Billy Joel, and Justin Timberlake. Man, tell me why people like to go to Vegas again?

Everything that’s wrong with sports stadium coverage, in one sentence

I’ve made no secret of how unimpressed I’ve been with the Milwaukee Journal Sentinel’s coverage of the Bucks arena debate, but this, from today’s column by Michael Hunt, really takes the cake:

So now it becomes a matter of trust that the extraordinary financial commitments by Kohl and the new owners toward the building won’t languish on the table in another unseemly political fight.

So, to recap: The owners of a professional sports team offering to pay for less than half of the cost of their new arena is “extraordinary.” Public officials not wanting to pay for the other half, meanwhile, is “unseemly.” Got that?

(For those who would like an alternate perspective, I have a longer piece on the Bucks situation up at Sports on Earth, hot off the presses.)

Atlanta officially granted MLS team for 2017, because $70m, that’s why

Atlanta was officially awarded MLS’s 22nd franchise* yesterday, with the as-yet-unnamed team set to begin play in 2017 at the new $1.2 billion stadium being built by the Atlanta Falcons (with the help of about $560 million in taxpayer subsidies), whose owner Arthur Blank will own the soccer club as well. And given that Atlanta is currently home only to a minor-league team named for a now-deceased zoo gorilla that has only recently been able to draw more than 3,000 fans per game and once sold the rights to host a home game in exchange for cash, this has led to one of the most damning-with-faint-praise headlines of all time:

Despite what everyone tells you, an MLS expansion team in Atlanta will work

And sure, it might. In addition to its moving iris roof, the new Falcons stadium is supposed to have movable seats that will allow for a realignment to more soccer-friendly dimensions, and Atlanta is as sizable a market as plenty of other MLS home cities. And there is something nice about two consecutive new MLS teams being summoned into existence without requiring new stadiums to accompany them — I’m as much of a fan of soccer-only stadiums for viewing purposes as the next person, but there’s something to be said for making use of already existing facilities, especially for a team that isn’t that sure a bet to exist for very long.

Still, it’s another indication of MLS’s ongoing strategic shift from “Build us a soccer-specific stadium and show us you have some fan support” to “Give us enough money and a team is yours.” (Blank is coughing up $70 million for his expansion franchise.) It’s a defensible strategy, but it’s also one that could yet blow up in the league’s face if it works out as well as the NHL’s Sun Belt strategy. MLS will still always have that $70 million, though.

* Before anyone says anything about the reports calling it the league’s 23rd franchise: David Beckham hasn’t officially gotten his Miami franchise yet, just the option to buy one if and when he gets a stadium deal. So back off.

B.C. city bails on minor-league hockey deal after 5 years, $77m in losses

It’s not often that you see a city decide to cut its losses and jettison a deal to bring a pro sports team to town, but that’s just what has happened in the small British Columbia city of Abbotsford, which has terminated its deal with the minor-league Abbotsford Heat hockey franchise after five years and $7.2 million in losses:

The [Calgary] Flames were persuaded to leave town for $5.5-million, as Abbotsford was staring at annual losses of about $2-million, estimated at a total of $11-million, before the deal expired. The hockey team likely will move to New York State. While Abbotsford has cut off potential losses, it is left with a gleaming arena – including 15 luxury boxes – with no primary tenant.

The deal for the Flames’ top minor-league club was supposed to last ten years, but was apparently a disaster for several completely foreseeable reasons: Abbotsford is Vancouver Canucks fan territory, it’s a huge travel distance from the rest of the AHL, etc. Thanks to this terrible planning, plus one of those horrible “Sure, we’ll cover all your team’s losses, why not?” deals that someone should really be staging interventions when elected officials even consider them, the city will now be on the hook for a total of $12.7 million in subsidies and buyout, plus the initial $64 million it paid to build the Abbotsford Centre, but at least maybe now it can book some more concerts that Canucks fans won’t mind going to see.

But I know what you’re thinking: Enough about Abbotsford, what does this say about Chilliwack? Never let it be said I don’t have you covered.

Bucks sold, pledge to stay in Milwaukee, also threaten to leave Milwaukee

Former U.S. Senator Herb Kohl announced yesterday that he was selling the Milwaukee Bucks to a pair of New York hedge fund billionaires for $550 million, that he and the new owners would each be pledging $100 million towards a new arena, and that a condition of the sale is that the team will remain in Milwaukee.

All of the above is true. All of the above is also not exactly true. Here’s why:

Marc Lasry and Wesley Edens, the very very rich guys who will be the new Bucks owners, are indeed buying 100% of the team from Kohl, for a price that’s well above Forbes’ $405 million estimate for the team’s value. And while Forbes has a history of undervaluing teams compared to their eventual sale prices, there’s a bit of sleight-of-hand here: Because Kohl is kicking in $100 million toward an arena for a team he’ll have nothing to do with, this can equally be looked at (aside from some tax implications) as Lasry and Edens buying the team for $450 million, and pledging $200 million toward an arena.

Now, about that arena. News reports all say that Kohl made it a “condition of the sale” that the team remain in Milwaukee, but also all indicate that a new arena is a condition of that condition — meaning what he’s actually demanded is that Lasry and Edens continue his policy of promising to stay in town so long as a new arena is built, largely with public money. In fact, Kohl made that explicit in an interview yesterday with Milwaukee Journal Sentinel reporter Don Walker:

 ”Ultimately, if we don’t get to a new arena, yes, we will lose our team,” Kohl said. “The money will go away.”

That $200 million combined “pledge,” then, can equally be looked at as a demand for the $200-300 million in money that would be required to pay for the rest of the arena — or else.

Milwaukee chamber of commerce president Timothy Sheehy made an unspecified promise yesterday that “there is more private-sector money coming,” but far from being a “game-changer” as Walker insisted in his lede, this is pretty much the same game as always: The Bucks have owners who say if they don’t get public subsidies for around half the cost of a new arena, they’ll threaten to leave town. The only thing that’s changed is the names of the owners, and their ages (Lasry and Edens are in their early 50s; Kohl is 79). “Milwaukee Arena Shakedown: The Next Generation” isn’t quite as boosterishly sexy a headline as this, but it’d be a more honest one.

Wolff makes pitch for 10-year A’s lease extension in Oakland

We’ve heard Oakland A’s owner Lew Wolff say before (via his intermediaries in the newspaper columnist world) that what he really wants is to stay put for another decade at the Oakland Coliseum — Tim Kawakami of the San Jose Mercury News reported as much last month, and Kawakami’s colleague Mark Purdy echoed that sentiment, saying all Wolff really wants is a long-term lease so that he can sink some money into a new scoreboard. The San Francisco Chronicle’s Matier and Ross joined the fray today, saying Wolff is ready to sign a ten-year lease extension at the Oakland Coliseum:

“We hope to have (a deal) as soon as possible,” A’s co-owner and managing partner Lew Wolff told us Tuesday. “It’s really up to Oakland now.”

The new lease could keep the A’s at the Coliseum until at least 2024. It calls for the team to make nominal rent payments in return for the A’s paying for $10 million to $12 million in stadium improvements.

On the one hand, this shouldn’t be all that shocking: Wolff’s attempt to move to San Jose is still spinning its wheels (that antitrust suit wending its way toward the Supreme Court notwithstanding), and there’s little chance of a new stadium in the East Bay happening in the next few years, and the A’s have got to play somewhere in the meantime. And if they’re going to be playing at the Coliseum anyway, Wolff may as well have a ten-year lease so he can plan ahead accordingly, and replace the bulbs on the Kittyvision.

Still, these reports raise a bunch of questions:

  • Is Wolff serious, or is this just a negotiating ploy? Oakland has been dragging its feet on extending the A’s lease — city officials say they want to resolve the Raiders stadium situation first, which could involve building a new football stadium on the Coliseum lot — and this could just be the A’s owner calling Oakland’s bluff: If you want me to stay, then put the lease years where your mouth is.
  • What happens to the A’s if the Raiders get their new stadium? Having been to the Coliseum, it seems to me there should be enough room to squeeze a new stadium in the parking lot without disturbing the baseball team. That said, Wolff told Matier and Ross that in the lease he’s working on, “There’s a clause that if the Raiders build a new facility, with some notice we will evacuate.” Which doesn’t seem like the security he says he’s looking for, but we’ll have to wait to see what the actual language says.
  • What would this mean for the A’s cut of revenue sharing? Right now the A’s are exempted from the ban on big-market teams getting a cut of MLB revenue sharing, thanks to a special clause that allows Wolff to keep receiving checks so long as he doesn’t have a new stadium. That clause expires with MLB’s collective bargaining agreement following the 2016 season, however, and there’s likely to be a pitched battle among the owners about whether to renew it.

None of which is to say any of this is a bad thing: If Wolff and Oakland are close (or at least closer) to resolving their lease squabbles, this could be a way for the team to finally settle in and worry about building a fan base (and making some improvements to the home it’s stuck with, a la the Tampa Bay Rays) instead of going through this “Are the A’s moving to San Jose/Sacramento/Portland/Boise?” business every year. And who knows? Maybe if the Raiders leave the Coliseum, it might even be possible to knock down Mount Davis, the tower of football luxury seating that is worse than useless for baseball, and rehab the Coliseum into the not-half-bad baseball facility it once was.

Or it could just mean kicking the can down the road a few years, while Wolff bides his time, or more likely sells the team to someone younger who’s up for fighting the next battle. Either way, it’s not a resolution I think anyone would have expected even a couple of years ago, but baseball moves in mysterious ways.

Cruise ship industry vows to sink Beckham’s Miami port stadium

If there’s one fundamental law in stadium campaigns, it’s that the odds of success go down as the number of high-powered opponents goes up. So this is not at all good news for David Beckham:

Royal Caribbean Cruises and its allies have formed an organization to oppose a Major League Soccer stadium at PortMiami, marking the first coordinated resistance to David Beckham’s waterfront dream.

The Miami Seaport Alliance took out a full-page advertisement in Monday’s Miami Herald, titled “Here We Go Again,” to launch its campaign against the 25,000-seat, open-air stadium that Beckham and his representatives have proposed for the port’s shallow-water southwest corner.

“Here We Go Again” is a not-too-veiled reference to the Miami Marlins stadium fiasco, and is a sign that Loria’s Folly is still having a chilling effect on stadium subsidies in Florida. Not that the cruise ship industry is an unstoppable behemoth or anything, but Beckham might want to start considering some of his other 29 site options.

NYC F.C. finally admits they’ll be playing at Yankees’ stadium already

In news that should surprise absolutely no one, the New York Times is reporting that the MLS expansion team New York City F.C. will announce next week that it will play at the Yankees’ stadium for the 2015, 2016, and 2017 seasons while working on getting a stadium of its own built. This was really the team’s only option: It’s not going to get its $350 million Bronx stadium plan approved and built by next March, there aren’t a whole lot of available soccer-ready stadiums sitting around in New York, and the Yankees are part owners of the team, so it’s the only port in the storm for now. There were (and are) concerns about the impact of soccer usage on the baseball field turf, but apparently those pale in comparison to having to have their soccer team play in the street.

The big question now is how long NYCFC will be stuck in this port. Melissa Mark-Viverito, the new city council speaker who represents the district where the team owners want to build their stadium (with city land and tax subsidies that could amount to more than $250 million), isn’t going anywhere for at least the next four years, and from all accounts she’s just as dead-set against this deal as ever. NYCFC already tried and failed to get a stadium built in Queens, and is rapidly running out of possible sites that are accessible to public transit; I predicted last summer that this could end up as a D.C. United situation, with the team in “temporary” digs for a lot longer than anybody anticipated, and that’s looking even more likely now. Though being stuck in the world’s most lavishly expensive baseball stadium isn’t exactly the worst thing in the world — if NYCFC fans don’t like the view of the pitch, they can always drown their sorrows in $60 steaks.

Milwaukee business leaders propose “super TIF” to pour property, sales, income taxes into Bucks arena

The Milwaukee Milwaukee Association of Commerce (aka “local business leaders) set up its own task force last year to figure out how to pay for a new Milwaukee Bucks arena without having to, you know, ask the Milwaukee Bucks for the money, and the latest they’ve come up with is a “super TIF.” The Milwaukee Journal Sentinel is a bit hazy on the details, but this apparently would involve not just kicking back increased property taxes in an arena district, like in a regular TIF (aka tax increment financing, aka “the financing method most likely to completely blow up in your face if tax receipts go down and not up”), but sales taxes and state income taxes as well, over a large geographical area.

While on the face of it this may seem like a great idea — if we need a lot of money, let’s build a bigger TIF! — this goes against the logic (using that term loosely here) of TIFs, which are designed to capture the increased economic activity from specific projects. Recall that Louisville actually shrunk its TIF district last September in order to bring in money, because it had drawn its circle so broadly that it was having to figure in all the other areas of downtown that were losing spending to the arena district, whereas a smaller TIF area can pretend that any arena spending is new money, and to hell with the effect on the region as a whole.

Looking on the bright side (using that term loosely here), a supersized TIF in Milwaukee involving property, sales, and income taxes is likely to generate a bunch of money, if only because those tax revenues tend to go up over time regardless. (Yes, Milwaukee is growing. Slowly. Plus there’s inflation regardless.) On the less bright side, this would mean crediting the Bucks for economic activity they had nothing to do with, and giving them the proceeds instead of using it to, oh, I dunno, pay for the increased cost of future city services.

MMAC president Timothy Sheehy told the Journal Sentinel that “such TIFs had worked in other markets,” but reporter Don Walker (who you may remember from this fine piece of journalism) apparently didn’t think to ask him for actual examples. Walker did cite developer Hammes Co.’s involvement with a TIF-financed minor-league hockey arena project in Allentown, Pennsylvania, which doesn’t open until September, but is already massively over budget. That’s a funny definition of “worked,” but I guess that’s why Chamber of Commerce presidents get paid the big bucks.