I take back everything bad I ever said about ESPN LA’s Arash Markazi … well, okay, no, I still really hated that damn gravy analogy. But let’s just say that Markazi has more than made up for with yesterday’s in-depth investigation of Ed Roski’s proposed NFL stadium in City of Industry. His conclusion: Roski’s whole financing plan is a house of cards — or, as one obscure stadium blogger tells him, “somewhere between ‘optimistic’ and ‘pie in the sky.'”
I’m not just praising this article because it cites me, though, or even because it’s critical of the Roski plan. Rather, Markazi’s piece gets stadium journalism right in just about every way:
- He doesn’t fall for pretty pictures. The artists’ renderings, Markazi acknowledges, are “perhaps the most beautiful stadium proposal NFL owners have ever seen,” with “wave pools, gondolas in which fans fly over the site, concert stages, an ‘NFL Experience’ area with punt, pass and kick competitions, a BMX course, and a Harley Davidson Cafe with an area for fans to show off their classic bikes and cars.” However, he then cuts to the chase: How will all this be paid for? Noting that Roski’s initial confusing financing plan has now been replaced by a new, even more confusing one, Markazi then spends the bulk of the article crunching numbers to see if any of it makes financial sense.
- He doesn’t take team owners’ or stadium builders’ word for things. Asked how the $800 million stadium would be paid for, Roski lieutenant John Semcken replies, “The team pays nothing for the stadium. The stadium pays for the stadium.” Many reporters would stop there, but Markazi presses on: How would that work, exactly? To which Semcken replies: $300 million would come from personal seat license sales, $150 million from the NFL, and the rest would be paid off by an estimated $28 million a year in naming-rights fees.
- He talks to economists. Not just one economist, which is the most you’ll see in a typical newspaper article, but multiple economists, so we can see whether they all agree on the numbers. And this case, they do: Retired stadium financier John Gillespie and Holy Cross economics professor Victor Matheson both say that $800 million sounds far too low for a state-of-the-art stadium in a major metropolitan area. (Particularly one with flying gondolas.) Matheson boggles at Semcken’s claims of $300 million in PSL sale proceeds, speculating that he may have neglected to notice that PSLs are taxable, which in California would cut the resulting revenues just about in half. And Smith College professor Andrew Zimbalist rolls his eyes at the notion of $28 million a year in naming-rights fees, noting that both AEG’s downtown L.A. stadium and the new New York Giants and Jets stadiums top the current market, and they only yielded $20 million a year.
There’s more, including info on how bank loan requirements have tightened up since the Staples Center was paid for with arena revenues a decade ago, and a long discussion of why no team is going to move to L.A. without a firm financing plan in place, yet Semcken says there can’t be a financing plan until there’s a commitment from a team. The one thing I wish Markazi had included was a breakdown of what siphoning off PSL money and other stadium revenues would do to a NFL team’s cash flow at an Industry stadium, but with this article already running almost 4,000 words, I’m happy to wait for the next one for that.