So Orlando’s latest plan to build an $85 million soccer stadium for Orlando City Soccer Club (currently a minor-league team, but hopeful of landing an MLS franchise) with $30 million from the team and the rest in city and county money is not necessarily the best deal in the world, as we’ve discussed here previously. But Orange County commissioner Pete Clarke thinks he has a better way:
“I do not want another example of the county expending millions of dollars watching from the sidelines, as our investment climbs in value without the prospects of our taxpayers benefiting,” Clarke wrote in a memo he sent out late Monday.
Clarke said he wants the county’s contribution to secure a share of the soccer team’s ownership, with any yearly profits or money made from a future sale to go to county athletic programs and facilities.
Deadspin calls this “the best idea for stadium financing I’ve ever heard,” and the Orlando Sentinel quotes me as praising it as making the public’s expense “an investment, not a gift.” So I feel really bad throwing just a bit of cold water on it.
The problem is if Clarke’s plan is actually to get “a share of the team’s ownership,” as the Sentinel describes it. This would be dicey not just because sports leagues traditionally hate the concept of allowing municipalities into their little owners’ club, but because MLS in particular is a single-entity ownership structure, where the league actually owns all the teams (and the player contracts), and team “owners” just control operating rights for each franchise.
Fortunately, Clarke’s actual memo seems to have anticipated that, and actually asks not for a share of the team, but for a share of its revenues:
Make Orange County a member of the partnership on a funding basis, which would be a percentage of the stadium costs and a percentage of the total stadium/franchise fee costs, of $155 million.
During the course of the agreement, with the City of Orlando (20-25 years), City Soccer would share with Orange County, a pro-rata share of the yearly naming rights, proceeds from stadium vending and other City Soccer sponsored events. These proceeds would go to Orange County Parks and Recreation for soccer specific expenses.
If all the projections we have seen and heard are correct, MLS and Orlando City Soccer will be successful, as is the case with the Magic. Furthermore, the franchise value will escalate in a similar fashion. Therefore, include a provision that when the franchise is sold, Orange County be treated as a partner and share in the profits.
This is a far better idea for several reasons, among which that it evades the whole question of sharing profits (which, especially in a single-entity structure, are bound to be a nebulous concept), and instead just demands a cut of stadium- and sale-related revenues, proportional to the public’s share of costs.
My complete comment that I sent to the Sentinel:
That looks like a great idea. As I’ve always said, the problem with the current stadium business isn’t that the public is putting up money, it’s that the public is putting up money without getting anything back. If Orlando could get an actual share of the stadium revenues – and it’d have to be gross revenues, mind you, not net profits, since it’s too easy for clubs to cook the books with the latter – then this could actually be an investment, and not just a gift.
No reply yet from the Orlando City team, or from MLS, but I don’t expect they’re going to be nearly as excited as mine (or Deadspin’s). Given that Orange County commissioners look like the main roadblock to getting this stadium built, though, maybe they won’t dismiss it completely out of hand. Maybe.