Inglewood to hold public vote on NFL stadium this summer so Kroenke can evade environmental review

Citizens for Revitalizing the City of Champions — I swear, that is honest to god the name that St. Louis Rams owner Stan Kroenke and his development partners came up with for their astroturf citizens’ group to push for a new stadium in Inglewood, California — has delivered 20,000 petition signatures to put a vote on the ballot this summer to approve their development plan. That’s more than double what they needed, and nearly 20% of the entire city population, which bodes well for getting this thing actually passed.

As the L.A. Times’ Tim Logan explains it, approving the plan through a voter initiative “would avoid the need for time-consuming, costly and potentially legally-risky environmental review,” which would be required by the normal planning process. The exact finances of the plan are still a bit hazy — as you may recall, Kroenke is seeking tax kickbacks that could be worth anywhere between a few tens of millions of dollars and $180 million — but hopefully this will all be explained before the vote. Though not that that’s required or anything.

Meanwhile, Missouri Gov. Jay Nixon freaking out lawmakers in his state by asserting that he can sell stadium bonds without consulting them if he wants to. Not that he wants to:

At a state House budget hearing, Doug Nelson, Office of Administration commissioner, said a law passed more than 20 years ago allows the Nixon administration to issue such bonds. The law states that Missouri or any agency or department of the state can enter into a contract, agreement or lease to finance or develop a convention or sports facility.

“This is not an indication of what we’re going to do,” Nelson said. “This is an indication that we believe we have that authority.”

State Sen. Rob Schaaf immediately introduced a bill to say the governor does too have to ask the legislature’s permission before going and building a stadium. Today is truly a great day for democracy.

Wisconsin governor’s arena plan depends on future NBA players averaging $33m/year salaries

Wisconsin Gov. Scott Walker unveiled his Milwaukee Bucks arena funding proposal yesterday, and oh man, was there ever a last-second plot twist. Walker is not, as rumored previously, proposing to raise $150 million for an arena by kicking back all state income taxes on Bucks players and other employees and also possibly some arena sales taxes as well. No, he says he’s going to raise $220 million, and only from Bucks income taxes — and only from new income tax above what team employees already pay:

“There’s absolute security for the taxpayers,” Walker said. “No new taxes, no drawing on existing revenues, no exposure to the future…”

Well, except for the uncertainty of what happens if NBA salaries don’t soar to the point where enough new money pours into state coffers that the government can use it to pay off $220 million in arena bonds. How likely is that? I was all gearing up for some painful Excel crunching, but fortunately Walker’s office has made a handy-dandy chart for us:

That red block along the bottom is how much the Bucks (and visiting teams’ players, pro-rated for the days they play in Milwaukee) pay now in state income taxes, which is $6.52 million a year. The current Bucks player payroll is $62.6 million, and the top state income tax rate is 7.65%, so about two-thirds of that figure comes from the team’s roster, with the rest presumably coming from visiting players, team execs, hot dog sales people, and the like.

How much would salaries have to rise to make the green part of the above chart come true? Walker’s projected state revenue in the year 2046 is about $45 million, meaning at a 7.65% state income tax rate, we’re looking at $588 million in payroll. If two-thirds of that is the Bucks, then for a 12-player roster, the average player salary would have to be $33 million a year in order to make these numbers work.

Is that as crazy as it sounds? The average NBA player salary 31 years ago was $330,000, and it’s $4.1 million today, so it’s on pace with historic trends. (Salaries have leveled off the last few years, but they’re expected to take a big jump in the next CBA thanks to the league’s lavish new TV deal.) But past performance doesn’t guarantee future returns, and lots of things could torpedo that assumption:

  • The cable bubble could burst. In fact, it’s a near-certainty that nobody will be watching NBA games in 2046 by turning on a cable box — broadband Internet will have replaced it decades before then — but the issue isn’t really what pipe people use to get their sports fix but how much they’re willing to pay for it. Right now, sports on TV is a loss leader for cable companies to get viewers to buy their service at all; once everybody is watching TV on the web and companies don’t have to worry about cable cutters (because everybody has to have Internet service whether they want to watch TV on it or not), the economic calculations start to change. Unless you envision a future where a huge number of people happily pay $1000 a month for the right to watch sports on TV, NBA revenue — and salary — inflation is going to have to level off sometime soon.
  • Basketball could sink in popularity. The NBA has done great at expanding its marketing in recent decades, but who knows what the future holds? Competition from leagues in other nations? Kids defecting to watching e-sports? Not that this necessarily would mean plummeting salaries — baseball has lost market share for a while now, but continues to rake in more cash — but it wouldn’t help.
  • Jon Bois could seize control of the NBA and make it die an agonizing death.

If any of that comes to pass, it’s not altogether clear what happens to Walker’s arena bonds: I haven’t been able to find any indication of what the backup revenue stream would be if income tax revenues don’t balloon as expected. (There will have to be something, though, or else nobody’s going to buy these bonds.) But this is essentially an income-tax variant on a TIF — an iTIF? — and if the increment fails to materialize as they so often do, the only possible answers would be new taxes, drawing on existing revenues, or the Bucks paying of the debt themselves … okay, ha ha, that’s not very likely.

(I should also note that I’m slightly skeptical that Walker’s green triangle would be enough to finance $220 million in bonds — it looks like about $600 million in nominal dollars, but the bulk of that is pushed way back into the future, which is going to require tons of finance charges like Miami took on for the Marlins. But a more specific accounting is going to have to wait for someone with better Excel skills than me.)

And finally — finally — keep in mind that all of this is not actually found money, but rather income tax receipts that the state of Wisconsin would otherwise be able to spend on other things if they weren’t handing it over to the Bucks owners. Unless you assume that the Bucks would definitely leave without $220 million in subsidies, and that Milwaukee sports fans wouldn’t find something else to spend their money on that would increase income tax receipts elsewhere, neither of which is anywhere close to a sure thing.

What Walker appears to have done is to come up with a way of writing a $220 million check to the Bucks that is rationalized in the most politically acceptable way possible: It’s not new taxes, it’s not existing taxes, it’s just future taxes on future imaginary super-rich basketball players who otherwise wouldn’t be playing in future Milwaukee because the future NBA will have future teams everywhere but there unless the state subsidizes a new arena. (And the city or county — Walker assumes another $50 million from those taxpayers, though he doesn’t specify how.) That still may not be enough to win over the state legislature, whose leaders were making mildly skeptical noises after Walker’s announcement yesterday, but it’s got as good a shot as anything.

And okay, really finally, I can’t let the Milwaukee Journal Sentinel article on all this pass without noting that Walker’s plan was apparently so remarkable that it stunned Journal Sentinel writer Don Walker into actually calling some economists to ask what they thought of it:

Andrew Zimbalist, a sports economist at Smith College in Massachusetts, says studies have found there is no statistically positive correlation between sports facility construction and economic development.

“Bear in mind that this is an observation about the average case,” Zimbalist said via email. “It does not mean that in a particular case that there can’t be a positive or negative effect. I would say in individual cases one has to look carefully at the financing and lease terms, as well as elements of land use and the local economy.”

The Bucks will argue that plans for ancillary development near the arena site will bring new construction jobs, new dollars and new development to a revitalized downtown Milwaukee.

Mark Rosentraub, a professor of sports management at the University of Michigan, says the key for Milwaukee and the Bucks is whether the anticipated ancillary development is successful. The new Yankee Stadium in New York, he said, was a “complete wasted opportunity. One billion dollars was spent and it had no impact at all on the south Bronx.”

This is, so far as I can tell, unprecedented in the history of Don Walker reportage, which normally lends itself to this. Maybe he’s actually starting to realize that only citing the people proposing the arena plan isn’t the best way of doing journalism—

Patrick Marley of the Journal Sentinel staff contributed to this report.

Or maybe not.

Do Chargers have secret deal with Goldman Sachs to build L.A. stadium? (SPOILER: no)

So on a podcast on Friday, a St. Louis radio reporter who covers the Blues said this about a San Diego Chargers stadium, for some reason:

“Spanos from the Chargers has a deal in place with Goldman-Sachs to build a new stadium and the NFL has asked him to hold off from accouncing those plans,” Strickland said, citing St. Louis officials.

Whoa, that’s news! Strickland also said he thought the stadium deal was in L.A., not San Diego, and you know what, let’s stop right there, because though the Strickland report was soon all over the news, immediately thereafter this was:

[Chargers general counsel Mark] Fabiani told 10News Friday night, “The story is untrue. Nothing to it, except that we have worked for years with Goldman Sachs. But the rest of the story is incorrect.”

Now, team execs can lie, of course, but usually they temper their words a bit more when they do so. And the idea that the Chargers have a secret stadium deal in place that has gone unnoticed by everyone except a St. Louis hockey reporter is … let’s just say I’ll believe it when I see it.

Meanwhile, back on planet Earth, U-T San Diego actually does some reporting today that could be construed as critical of the Chargers’ stadium plans, or at least skeptical that the team can get them funded: Fabiani has talked of raising hotel taxes to help pay for a stadium, but the hotel owners hate the idea, it would take a two-thirds vote to approve it, and the last time a referendum was attempted on hiking hotel taxes, it only got 41.6% of the vote. And that was to hike hotel taxes to fund police and firefighters, not a stadium. I guess it’s pretty hard to find a “cheerleader” spin on facts like that.

 

Buffalo poll finds voters want new downtown Bills stadium, neglects to ask about paying for it

The Buffalo News has conducted a poll of county voters on a new Bills stadium, and they asked — oh, come on, what do you think they asked?

55 percent of all the people surveyed said the new stadium should be located downtown, while 40 percent favor Orchard Park, the poll found.

Apparently having run out of ways to send reporters out to cover where are we gonna build a new stadium oh boy oh boy, the News is now crowdsourcing this story.

Okay, the News did also ask Erie County voters whether they think the Bills should get a new stadium, and respondents supported that as well, 54-36%. And that’s all that anyone could want to know about public opinion on the project, right?

The survey of 505 Erie County registered voters offered a far different take on the stadium issue than some of the public dialogue about it, which has centered on concerns about financing the facility and the potential loss of the Bills’ tailgating tradition if the team were to move downtown.

Right, these people didn’t express concerns about how to finance construction of a new stadium, because … hey, did we forget to ask them if they thought the public should help the Bills pay for a new stadium? Aw, crap. Well, it probably wasn’t important anyway.

Wisconsin governor to propose “jock tax” for Bucks arena, but do so when he hopes no one is listening

Rich Kirchen of the Milwaukee Business Journal, one of the two reliable press mouthpieces for the Bucks arena campaign, reports that according to “sources close to the situation,” Wisconsin Gov. Scott Walker will announce plans for a “jock tax” to provide state subsidies for an arena project. He’ll reportedly do so in the next week, because next Tuesday he presents his state budget, and he wouldn’t want to create a “distraction” by, um, talking about things he wants to spend state money on?

Anyway, remember that a “jock tax” isn’t actually a tax: It’d just be the state taking all the income taxes it collects from Bucks players (and executives, and hot dog sales people) and writing a check to the Bucks owners in that amount every year. The theory, I suppose, is that without the Bucks, the state wouldn’t collect any of that money — except that 1) if people weren’t buying hot dogs at Bucks games they’d still have to eat somewhere, and employees there would be paying taxes, and 2) really anyone working or running a business in the state of Wisconsin could make a similar claim, and they all did so at once the state wouldn’t have any money to run a government at all. Though Walker might not actually mind that.

Meanwhile, the other reliable pro-Bucks local writer, Don Walker of the Milwaukee Journal Sentinel, wrote an article yesterday about how Detroit is hoping to pin its redevelopment hopes on a new arena (hint, hint). Sources cited in Walker’s article: the developer behind Detroit’s project, a pro-development (if “cautiously” so) Detroit councilmember and community activist, a real estate consultant, and the Detroit mayor’s office. It’s not quite Walker’s most impressive work, but in terms of one-sided reporting, it still gets the job done.

Florida economic panel rules everybody should get tax money for stadiums they already agreed to build

The Florida Department of Economic Opportunity has issued its long-awaited (well, for a couple of months, anyway) ruling on which of the four finalists for state sales-tax subsidies are to get priority, and the answer is: all of them!

The Florida Department of Economic Opportunity advised Jacksonville, Orlando, Daytona International Speedway and Sun Life Stadium that their applications met all “statutory criteria.” In a letter, the department also recommended that lawmakers could approve all four.

Daytona International Speedway and Sun Life Stadium are each seeking $3 million a year for 30 years for ongoing improvements to those facilities. Orlando has requested $2 million a year for three decades to help pay for a planned $110 million soccer stadium. Jacksonville, with its application supported by the NFL’s Jacksonville Jaguars, has asked for $1 million a year for three decades.

This is jaw-droppingly dumb, since the whole point of this process of having teams seeking state subsidies to submit standardized forms to a state agency was to come up with a ranking for who’d get first dibs on the money; instead, the state legislature will now have to decide who gets what, which is exactly as it would have been anyway. It’s also dumb because, as an analysis of past state sports subsidies found, Florida has only received 30 cents of return on each dollar spent on stadium and arena projects. And finally, it’s dumb because all four of these projects — renovations to the Jacksonville Jaguars and Miami Dolphins stadiums and to the Daytona Speedway, plus a new stadium for Orlando City S.C. — are already underway, meaning whatever economic benefit the state would get from them, it’ll happen regardless of whether the state decides to divert public money their way after the fact.
If there’s a bright side, it’s that the four sports entities have demanded $9 million a year in funding, and there’s only $7 million in the state’s available sales-tax fund, so the Joint Legislative Budget Commission will have to figure out somehow who’s going to see their subsidy demands trimmed. This is a bright side, however, only in the sense of “The bank just got robbed, but they ran out of money before the robbers’ bags were full.” Also, there’s nothing stopping the state from approving more money later, which means if these teams (and more) don’t get what they want this round, they can just come back for more. Congratulations, Florida — you appear to have just invented the first self-replenishing cat feeder of sports subsidies.

Las Vegas tells soccer stadium referendum petitioners deadline actually today, oopsie

Las Vegas city councilmember Bob Beers is not having a very good couple of months. First one of his fellow councilmembers flipped to cast the deciding vote on a $122 million soccer stadium subsidy after Beers and his colleagues gave the stadium developers extra time to eliminate the need for public subsidies. (Instead they spent the time lobbying the swing vote, because duh.) Then when Beers proposed a referendum campaign to overturn the council vote, this happened:

The opposition group was told it had until Jan. 24 to gather 2,308 signatures to put an initiative on the June ballot seeking to block taxpayer funding for the project.

Then, on Jan. 14, the city clerk informed the group that there was a miscalculation and that it would need 8,258 signatures to qualify for the ballot.

Today, Las Vegas City Attorney Brad Jerbic ruled that the signatures were due a day earlier than expected. The petition must be turned in 130 days before the election, but Jerbic said Election Day shouldn’t have been included in calculating the due date.

Today, then, will be a race to file the rest of the petitions, and then possibly a race to file a lawsuit against the city for changing the rules midstream. Isn’t democracy fun?

Wrigley rooftop owners say Cubs execs punishing them for refusing to enter into price-fixing scheme

The Wrigley Field rooftop owners have filed yet another lawsuit against the Chicago Cubs, adding to their previous suits over landmarking violations and violating the Equal Protection Clause of the U.S. Constitution by placing signs to block views of rooftop owners they didn’t like. The new charge: price-fixing!

On May 8, 2012, at least nine owners met with Ricketts and Cubs executives. They said that demand for tickets inside Wrigley was declining because the rooftop businesses’ offered discounted tickets, sometimes through Groupon, and game-day tickets. The team asked them to “agree with the Cubs on setting coordinated, minimum ticket prices.”

Ricketts later threatened to block the views unless they agreed to a “price-fixing scheme, stating, ‘whatever you give us is in return for not being blocked.’ ”

The suit also includes charges of fraud and defamation, and probably puppy-kicking for good measure. All of which could conceivably be true, but it’s clear that the rooftop owners’ legal strategy has gone in record time from “threatening to sue but not ever actually doing so” to “throw everything at the wall at once and see what sticks.”

Boston’s “no public money” Olympic stadium pledge may not count public money for land

The Boston papers are off to an excellent start asking the questions that need to be asked about Boston’s 2024 Olympic bid: First the Boston Globe asked architects whether a temporary stadium would really be any cheaper than a permanent one (answer: nope); now the Boston Herald is questioning why, if the Olympic stadium won’t require any public money as promised, it needs a quasi-public authority to build it?

The city, the state and the MBTA would hand over public land in Boston’s Seaport District to the newly created agency or an existing quasi-public with “expanded authority,” which would purchase surrounding private land, as well as railway air rights, to build the 80-acre stadium and surrounding development, according to the bid submitted to the U.S. Olympic Committee last month.

Quasi-publics are typically financed at least in part by taxpayer funds or public resources. The backers behind the Boston Olympics have repeatedly denied taxpayers would foot the bill for the creation of a public authority…

The bid doesn’t address how the city or state could cede public land and relocate current public facilities without taxpayer money.

All excellent questions! Boston 2024 executive vice president Erin Murphy Rafferty replied in a statement to the Herald that the pledge not to use “any tax dollars for Olympic-related construction” is “non-negotiable and is one we will keep” — but, of course, “land acquisition” isn’t “construction,” now, is it? This is one to keep an eye on, so hopefully the Boston newspapers will continue to do so.

Warriors: We need a new $1B arena because we don’t like the restaurant manager at the old one

The San Francisco Business Times has a report out on the pressing matter of “Why the Raiders, A’s and Warriors want new homes” (verbatim headline), and the answer is: They all need to tear down their old venues and build entirely new ones at a cost of billions of dollars because they don’t like the concessionaires, duh!

Consider the recently opened BMW Club at Oracle Arena. BMW is a Warriors sponsor, but the Oakland-Alameda County Coliseum Authority contracts arena operations to Anschutz Entertainment Group. AEG, in turn, contracts arena restaurant management to Levy Restaurants.

“It’s a little bit of a challenge” to make customer service part of the overall game experience when food service and stadium operations aren’t in the Warriors’ control, team President and COO Rick Welts said.

Here’s a crazy idea: If your main complaint is the guys the county hired to run the arena operations, why don’t you offer to buy the arena operations rights from the county, and then pick your own operator? Sure, it might cost you something, but less than the billion dollars it will cost for a whole new building.

The real answer, of course, is that this is about the 74th most important reason for these teams wanting out of their old stadiums, but it’s what the Warriors president told the Business Times, so it’s what they’re going to report, dammit. Remember, kids: Friends don’t let friends read news stories that only include sports team execs and stadium developers as sources!