Friday update: Bad D.C. arena math, bad Bucks arena math, bad Columbus ticket tax math

It must be September, because my TV is filled with Jim Cantore and Anderson Cooper standing ankle-deep in water. But anyway:

  • Washington, D.C., is about to open its new Mystics home arena and Wizards practice facility, and Mayor Muriel Bowser says it’s a model of how the city would build a new NFL stadium as well. “We know [sports] can help our bottom line by attracting people to our city, but it also has a big impact when we’re winning on our collective psyche,” says Bowser of an arena that got $50 million in public subsidies for two teams that were already playing in D.C. anyway. Maybe she should go back to using her terrible soccer stadium deal as a model instead.
  • People in Calgary are starting to ask whether, if the city is looking to spend $3 billion on hosting the 2026 Olympics, maybe it should build a new Flames arena as part of the deal? Camels, man.
  • Buffalo Bills co-owner Kim Pegula says she’s going to wait until after the gubernatorial elections this November to start negotiating a new stadium with whoever ends up in charge of the state. It won’t be the lox-and-raisin-bagel lady.
  • Speaking of the Pegulas and New York’s current governor, they’re planning an $18 million upgrade of Rochester’s arena that hosts the Rochester Americans minor-league hockey team (which the Pegulas also own), with costs to be split among the owners and city and state taxpayers. Split how? Sorry, no room in the Associated Press article, ask again later!
  • The AP did find time to fact-check Wisconsin Gov. Scott Walker’s claim that the new Milwaukee Bucks arena would return three dollars in new taxes for each one spent, and found that “Walker omits some of the state money spent on the 20-year arena deal and relies on income tax estimates that experts call unreliable.” I could’ve told them that — in fact, I did, three years ago.
  • “‘Ticket tax’ proposal could lead to higher prices on movies, theater, sports in Columbus” reads a headline on ‘s website, something that the station’s reporter asserts in the accompanying video without saying where he got it from. He’s at least partly wrong: Ticket prices are already set as high as the market will bear, so unless the ticket tax changes the market — in other words, unless people in Columbus are forced to spend more on movies and theater and such because the other options (staying at home and watching TV, going out to eat) aren’t good enough, mostly this will just mean prices will stay roughly the same but a bigger share will go to theater/team owner’s tax bills. (I could try to find an economist to estimate exactly how big a share, but isn’t that really WSYX’s job?)
  • Former Oakland A’s exec Andy Dolich says the team owners may be looking at buying both the Howard Terminal site and the Oakland Coliseum site, and using the revenues from one to pay the costs of prepping the other for baseball, which, if the Coliseum site is such a cash cow and Howard Terminal such a money pit, wouldn’t they be better off just buying the Coliseum site and developing that? Or is the idea that Oakland would somehow give up the Coliseum site at a discounted price in order to get a new A’s stadium done? I have a lot of math questions here.
  • With nobody wanting to spend $250 million on a major renovation of Hartford’s arena, the agency that manages the XL Center is now looking for a $100 million state-funded upgrade instead. Still waiting to hear whether this would actually generate $100 million worth of new revenues for the arena; if not, the state would be better off just giving the arena a pile of cash to subsidize its bottom line, no?
  • Cobb County is only letting the Atlanta Braves owners out of part of the $1.5 million they owed on water and sewer costs for their new stadium. Yay?

8 comments on “Friday update: Bad D.C. arena math, bad Bucks arena math, bad Columbus ticket tax math

  1. Re: the A’s wanting both the Coliseum and HT

    While the Coliseum is a sure thing for a new ballpark, the income potential is notably less than HT (being in the middle of low-income/industrial East Oakland will do that). The A’s can still get some income from it, but they don’t think it would be enough of a payroll boost to pull themselves out of second place in the local baseball market.

    The potential development income at HT is obviously higher (next to downtown/Jack London Square), but comes with a notably higher cost in money and red tape.

    The city and county own the Coliseum jointly, while HT is owned by the Port of Oakland (associated with but not answerable to the city).

    Alameda County wants out of the Joint Powers Authority, but the city has recently said they don’t have the money to buy the county out. The A’s in March offered to cover all the debt on both the Coliseum and Oracle Arena in order to obtain the property, and there are rumbling that the A’s are negotiating with the county for at least the county’s share of the JPA.

    The A’s are thinking big: if they can get HT for a ballpark and some accessory development *and* the Coliseum, they’ll have a extra backup income source not tied to HT development to fund the team. The Giants are a sinking ship, success-wise, and the A’s want make the most of the opportunity provided by having a young, skilled, hard-hitting team while looking to open the new ballpark within 5 years. Target is local baseball market dominance, but it’s an uphill fight as most of the local sports media has it’s hand in the Giants’ pockets (30% ownership of local NBC sports affiliate).

    • They’d have twice the land costs, too, though. This sounds a bit like combining two money-losing proposals and figuring you’ll make it up in volume.

    • “…The A’s are thinking big: if they can get HT for a ballpark and some accessory development *and* the Coliseum, they’ll have a extra backup income source not tied to HT development to fund the team…”

      This is not how billionaire sports franchise owners work. If it were, the current A’s ownership could just use GAP generated funds to fill any A’s operating shortfall (if such a thing exists, which I highly doubt).

      If “A’s ownership” should ultimately get control of both sites, I think you can bet that separate companies will control the two sites. The parent company of both organizations might use profits from one division to offset losses from another for tax purposes in any given tax year, but there will be no subsidy from one company to another in perpetuity.

      Wolff (years ago) suggested a model something like this to try to build an MLS stadium, but that version of “sell me this land for peanuts, then rezone it to my spec and I’ll sell it on for a huge profit and turn the proceeds into a stadium” was very different than what the A’s have proposed thus far.

      So far as I know, the club is still saying they will pay for stadium construction themselves.

  2. Since the DC United deal was done for the sole purpose of bringing back the NFL, I would argue that the value of the free land is actually an NFL subsidy. Getting the Skins to pay 100% of construction costs I don’t see happening.

  3. So basically in Columbus they will tax Crew fans to pay for the Bluejackets new scoreboard. Fools wonder why that team has to leave Nationwide Ohio.

  4. I agree that the Skins won’t pay for 100% of anything, but DCU was probably done to give pols a way to appeal to different voters than the NFL would—along with the belief that sports bring wealth.

    The NFL has been gone from DC for so long that it’s really just older folks who really think RFK was awesome. No new stadium will replicate that atmosphere.

    you clearly didn’t get the author’s point on ticket taxes. Do you think Columbus is the first/only city to do this?

  5. Earlier in the week, Seattle’s New Arena with Oak View Group had a Final Environmental Impact Statement that was opposed by nobody, officially, by the filing deadline. That’s often something that adds months (or a large chunk of a year) to a project. There was also a city council committee meeting on Friday that I’ve not yet studied up on.

    https://sccinsight.com/2018/09/13/key-arena-renovation-moves-into-the-fast-lane/

  6. Sapporo Japan just pulled out of the Olympic bidding for 2026 and post-election Sweden is less interested. It may come down to two cities again just like 2022 (Beijing and Almaty).

    For example Turkey is bidding and even if keying their current security and human rights situation, they have never won a winter Olympic medal.

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