The week in stupid, California edition

There are days when I feel like things are getting better. Days where I get calls from daily newspaper journalists asking intelligent questions about stadium financing, where elected officials actually make some substantive demands of team owners, recognizing that they, too, have leverage. Days where it seems like 17 years of writing about this crap hasn’t been entirely for naught.

And then there are days like today. First up, from an article on something called San Jose Inside, by Rich Robinson, a “political consultant in Silicon Valley”:

While the NHL lockout allegedly hurts owners and players, the real victims are businesses in or around arenas. Small businesses that cater to fans and are dependent on the league don’t have the luxury of losing over a billion dollars on principle…

These businesses are not hobbies or philanthropic endeavors. Few will retire after four years of labor. For them, hockey really does matter. And it is for this reason the lockout must end.

I appreciate that Robinson is probably a hockey fan, and so probably fed up with the comical non-negotiations that have the NHL barreling toward its second canceled season in the last nine years. (Even if the rest of us are finding it endlessly entertaining.) But we’ve covered this before, as have others: Just because people aren’t going to San Jose Sharks games doesn’t mean they’re not going out to eat or otherwise spending money. In fact, in all likelihood businesses in San Jose not near the arena are seeing at least a minor windfall of customers as local residents try to figure out what to do with all that refunded ticket money that’s burning a hole in their pockets — just like the Toronto comedy club owner who, during the MLB baseball strike, quipped, “We really feel it would be in the best interest of entertainment in Toronto if the hockey players sat out the whole season too.”

Moving on, we have the alleged journalism enterprise Bleacher Report, which today sees its AFC West Lead Writer Christopher Hansen proclaim that the Oakland Raiders really really need a new stadium because:

A new stadium does wonders for a team’s value by drastically increasing revenue. The Raiders have a revenue problem which can’t be sustained long-term. If the Raiders don’t get a new stadium soon, Mark Davis could be forced to cut back on expenses or sell the team.

Where to begin? Perhaps with the fact that yes, stadiums bring in more revenue, but they also come with additional costs, namely about a billion dollars to put one of them up. That’ll cut into your drastically increased revenue pretty fast, unless you get somebody else (i.e., taxpayers) to pay for it. As for Mark Davis having to cut corners or sell the team, according to Forbes, yes, the Raiders are one of the less-valuable teams in the NFL, but they’re still turning a profit ($23 million last year). So Davis would be selling the team … what, in a huff because he’s not making enough money? Actually, wouldn’t it be more likely that he’d sell the teamafter getting a stadium deal, since he’d be selling high? Don’t any editors at Bleacher Report actually read these things before they’re posted? (Don’t answer that.)

Meanwhile, the Bleacher Report piece links to a Bloomberg News report that notes that Oakland fired a quarter of its police force last year to save money, but still made good on the $17.3 million a year it’s obligated to pay off each year on renovations to the Oakland Coliseum that induced the Raiders to return to town. You’d think this would be a pretty good cautionary tale of why not to devote scarce city resources to a sports team that only plays 10 games a year in town, but not if you’re Raiders CEO Amy Trask:

“The 1995 deal didn’t work from a financial perspective for any party to the deal — city, county or Raiders,” says Amy Trask, chief executive officer of the Raiders. “That shouldn’t stop us from trying to reach a deal that works for everyone.”

Really, trust her, this time it’ll totally work. You don’t want anyone to think you’ve lost your ability to believe in people, do you?


15 comments on “The week in stupid, California edition

  1. Ha… You said ‘editors’ and ‘Bleacher Report’ in the same sentence.

    That somebody said something monumentally stupid on RB (relevant to stadium building or not) is hardly worth the effort to it point out. That’s pretty much the stock content there.

  2. Rich Robinson was a consultant (paid $23K) on the “Yes on J” stadium measure in Santa Clara (you know, the ad campaign that didn’t actually mention a stadium, but rather schools, jobs, and yes “Santa Clara!”).

    It’s nice to see you out him Neil as nothing he said in Santa Clara made (makes) any sense at all to anyone with a modicum of financial common sense. Thank you.

    BTW I have a co-worker with a partial SJ Sharks season ticket plan. I asked her jokingly what’s she doing with the money she’s saving and she mentioned that she’s been able to take nephews/nieces to the SJ Ballet Nutcracker and a ski trip this weekend instead.

  3. So the Raiders are a team making a profit in a salary-capped league…and they need more revenue to be “competitive”? No, they need more revenue to be more profitable.

    Well, I guess profits could be viewed as a kind of competition between owners. “Yay, our owner won this year!” “Damn, we really need to subsidize the team so our owner can win next year.”

  4. When political consultants start throwing big words like “revenue” around, your clue detectors should be going off. When Mr. Robinson was being paid by the 49ers to boost the $950 million public subsidy for their stadium, he was no more precise about the “revenues” then, either.

    Let’s put some real numbers out there, since Mr. Robinson will not:

    Revenues from stadium, 1st year, Santa Clara’s General Fund:
    $180,000.

    Revenues to Jed York, 1st year:
    $30,000,000 for the luxury boxes, $100,000,000 for the TV royalties for a (very conservative) total of $130,000,000.

    Whether hockey or NFL football, the “consultants” are concealing the fact that nearly all of the money is going into the pockets of millionaire team owners who can then afford to hire more “consultants.”

    They also conceal the fact that public entities then end up hundreds of millions of dollars in debt – just so that we can sell a few cheeseburgers.

    And we’re supposed to be satisfied with those “revenues”?

    Regards,
    Bill Bailey, Treasurer,
    SantaClaraPlaysFairdotOrg

    -=0=-

  5. Neil, more on the Raiders for you:
    “Crime-Ridden Oakland Lays Off 200 Police Officers While Giving $17 Million To Pro Sports Teams”
    thinkprogress.org/economy/2012/12/20/1368251/oakland-police-sports/
    “Oakland, California, the fifth-most crime ridden city in America, faced a $32 million budget deficit last year. It closed the gap by dismissing a fourth of its police force, more than 200 officers.
    Untouched was the $17.3 million that the city pays to stage 10 games a season for the National Football League’s Oakland Raiders and to host Major League Baseball’s Athletics in the O.co Coliseum. The funds cover debt financing and operations and are supplemented by $13.3 million from surrounding Alameda County, based on data compiled by Bloomberg from public records.”

  6. In Santa Clara stadium subsidy news, the 49ers have filed to expand the lawsuit:
    bizjournals.com/sanjose/news/2012/12/19/exclusive-49ers-santa-clara-schools.html
    “the California State Department of Finance rejected the city’s appeal of a state decision in November to block the deal splitting the money between the 49ers and the schools.”
    “In the letter sent to the City of Santa Clara on Tuesday, the state reiterates its initial objection to the compromise, arguing that the agreement was invalid because it was made after the redevelopment agencies were dissolved.”

  7. In additional Santa Clara news, the audit of the redevelopment agency is now available to the public, and it does not bode well for Santa Clara. Our council was repeatedly asked by citizens here to stop playing games with redevelopment money, such as giving millions of RDA property tax dollars to the 49ers for ‘safekeeping’ after the Governor stated that RDAs would be wiped out by legislation:

    insidebayarea.com/crime-courts/ci_22223603/state-again-rejects-30-million-deal-between-san?source=rss

    “Meanwhile, county officials this week said in a separate report that the city of Santa Clara owes the state a total of about $302 million after “illegally” trying to keep redevelopment assets.
    The advisory report comes as state Controller John Chiang decides whether officials in Santa Clara can keep those funds. Chiang recently ruled that Milpitas and Morgan Hill illegally transferred redevelopment assets and is in the process of weighing projects from hundreds of cities around California.
    “My initial reaction was, ‘I told you so!’ ” said Deborah Bress, a spokeswoman for Santa Clara Plays Fair, which opposes the stadium and city government. “What they did was irresponsible from the beginning. Now it’s coming back to bite them.”
    In the report to the state, county Finance Director Vinod Sharma and a private auditor said city officials improperly transferred all assets from their redevelopment agency, which included cash, property and investments, to other city departments or funds.”

  8. Yeah, you gotta love what’s going on in Oakland. $17,000,000 annually would buy a lot of police.

    This is the cautionary tale 40 miles up the road from Santa Clara.

  9. @Neil- refunded tickets- I’m a Sharks season tix holder and there is no refund as of yet- I agree with Zrich R that the businesses that have been established around the arena because of he Sharks and nearlyb18000 nearly 50 times a year are definetely suffering during the lockout- am I going out to dinner and grabbing a beer elsewhere because the Sharks aren’t playing- no- any savings I have are going into a bank account that will help my kids someday but isn’t doing a damn thing for the economy today-

  10. Sharks season ticket holders should start seeing month-by-month refunds for the % of cancelled games. They were supposed to start paying out at the end of Nov.

  11. Redevelopment fund fight will go on for years, cities did not want to give up money to the states, these rulings of “illegally” transferring money will fought in court by every city.

    The state wants these funds to balance its budget, they didnt care that part of the $30 million fight (SC/49ers) was going to go to the county (Agencies/Schools), they straight up rejected it. So now the county gets nothing and the state and the 49ers will fight in court for the money.

  12. yeah i have not gotten any refunds for my sharks ST either, but that money will just go into next years ST fund… but i dont think i have increased my rate of going out to eat because of no hockey.

  13. Taxpayers will continue to be flogged by professional sports owners as long as they keep voting for politicians who plop the turd of sports palaces into voters hands and contend that it’s a diamond (world class).
    Nobody to blame but ourselves.
    Businesses that depend on big league attractions for customers leave themselves open to the almost inevitable down side of athlete/owner disputes and those two combatants don’t give a damn about that unless they have a cut of the biz. Don’t have much sympathy for those losses and probably most of the “savings” for tix holders is being spent elsewhere than sleepy “downtown” S.J..
    BR has the fan (child’s) view of sports industry finances, that’s why I turn to this site.

  14. The redevelopment funds (assets which aren’t required to pay of former redevelopment agency enforceable agreements) don’t go to the state. They are supposed to go to the redevelopment successor agency, which is supposed to divide the assets up among the public entities which receive property tax dollars. They are the same public entities (schools/city general fund/county agencies/water district/fire district) which have been starved of property tax dollars for decades by the redevelopment agency’s skimming off of ‘tax increment’ – the property taxes above the baseline established when the RDA was created.

    In Santa Clara, there was a 160 page document recently released by the county auditor (audits of all RDAs are required by the state; the county finance department in Santa Clara County performed the SC RDA audit.) The audit shows that Santa Clara’s City Council was shuffling money/assets around and now they have to give back the former RDAs assets to the RDA successor agency. The amount they are supposed to give back is enormous – twice our city’s annual general fund. This is an enormous mess that our council has created for us. The $30 million in disputed funds the 49ers want is only the tip of the iceberg in terms of the amount of money shuffling that has gone on. The state dept of finance has said that the settlement which gives the 49ers $30 million is not allowable.

    (Note that the same 7 people in charge of Santa Clara’s City Council were also in charge of Santa Clara’s RDA, Santa Clara’s Housing Authority, Santa Clara’s Stadium Authority, Santa Clara’s Sports and Open Space Authority – you get the picture – the council would create a new agency, establish themselves as in charge of it, say it is a separate legal entity from the city, and also pay themselves extra for meeting as the governing board for a new agency, for each agency. They’d stack up the meetings, close one, open another, back to back. The RDA dissolution law says that those ‘agencies’ aren’t separate legal entities, they’re all part of the city.)

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