Author Archives: Neil deMause

Warriors to get $295m for naming rights to arena plaza, or maybe $31m, math is still hard

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The healthcare group Kaiser Permanente has agreed to pay Golden State Warriors owners Joe Lacob and Peter Guber to give the plaza and park outside their new San Francisco arena the name “Thrive City.” That much we know. What we don’t know, after yesterday’s Phil Matier column in the San Francisco Chronicle, could fill volumes:

  • How much is Kaiser paying for the naming rights? Matier writes that “the total for the naming rights and other costs could hit $295 million,” but also that Kaiser indicated that “expenses ‘associated with Thrive City would be about $2.5 million a year,’” which would come to a present value of about $31 million. Clearly that’s a big difference! The larger figure is apparently from a December 2016 meeting of the Kaiser board’s finance committee, which included a single line recommended “the expenditure in an amount not-to-exceed $295.58 million for the Golden State Warriors sponsorship strategy over a twenty-year period.” The smaller figure is what Kaiser’s PR officer is claiming. The truth is either somewhere in the middle, or off to either side, because neither of these are exactly watertight financial figures.
  • What will Kaiser get for its money? The name of the park and plaza, certainly, but “sponsorship strategy” implies that Kaiser is also buying arena ad signage or the right to be the official health insurer of the Warriors or uniform ad patches or god knows what. So it’s tough to put a number on the actual naming rights.
  • Why “Thrive City” of all things? “Thrive” is a Kaiser wellness program/branding strategy that involves cutting healthcare costs by promoting healthier living and, for some reason, running marathons dressed as a lobster. One hopes that the company was smart enough to include in its deals with the Warriors the right to change the name of the plaza to something else if Thrive is abandoned or rebranded in the next 20 years, which seems extremely likely given the shelf life of corporate subbrands.

Whatever the actual amount of money changing hands in exchange for what, this does hint at how on earth the Warriors owners are planning to make back their new arena’s $1.4 billion construction cost. They’re already getting about $15 million a year in naming rights from Chase Bank, so if you add in plaza naming rights and new ad signage and corporate logos on anything not nailed down, then … even in a white-hot real estate and consumer market like San Francisco, it still seems like a lot of money to spend, but it’s Lacob and Guber’s money, so more power to them if it’s what they want. Though do remember that Warriors president Rick Welts wants you to know that the fact his team is building its own new arena is no reason for other cities not to give public money to their teams’ new arenas, a thing that should keep happening because arenas “enhance the quality of life for residents.”

Of course, one could also wonder if these naming rights deals, especially to a big empty plaza that is unlikely to get a lot of free TV mentions or whatever naming rights deals are supposed to do for companies, are really worth the expense. That’s what the National Union of Healthcare Workers is complaining, saying that Kaiser would be better off spending money on patient care (money that would flow to union members in the form of paychecks, naturally) at a time when “some patients wait weeks, even months for mental health appointments.” Good thing there’s no such thing as bad publicity, or one might be tempted to conclude that Kaiser had just bought itself $295 million of exactly that.

Friday roundup: Rangers fans don’t like nice weather after all, Orlando re-renovating renovated stadium, Dan Snyder has a $180m yacht

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Today is site migration day — cue the jokes about how Field of Schemes should be hosted half the time in Montreal and half the time in Tampa Bay — so if things look a bit weird after 2 pm Eastern or so, that’s to be expected. Rest assured that the site will be back to normal soon, hopefully later today but certainly entirely by Monday; or actually better than normal, because the whole point of this exercise is to have a zippier, more reliable platform so that you can get your immediate fix of stadium news without having to refresh or even wait multiple milliseconds for images to load.

And speaking of your immediate stadium fix, here’s the rest of this week’s news:

  • The Texas Rangers are building (read: mostly having the citizens of Arlington build for them) a new stadium just so they can have air-conditioning so that fans will go to games, but the Fort Worth Star-Telegram points out that the team has been winning and the weather has been nice this spring, and fans still aren’t showing up.
  • MLS commissioner Don Garber said that he “could see [Las Vegas] being on our list for future teams,” which is literally the most noncommittal thing he could say, but he still gets headlines for it, so he’s gonna keep saying it.
  • Here’s an article about how building a whole real estate development that will turn a big profit will help the Golden State Warriors make more money, if anyone wasn’t clear on that concept already.
  • The Orlando city council approved the $60 million in renovation money for Camping World Stadium (née the Citrus Bowl) that they said they would last fall. Since the stadium doesn’t even have a regular sports tenant — it is only used for the occasional soccer friendly, college football game, or concert — it’s hard to call this a subsidy to anyone in particular, but it’s still probably a pretty dumb use of money, especially since the stadium was just renovated once already in 2014.
  • There is no actual news in this Page Six item, but if you thought I was going to pass up a chance to link to an article that begins, “Washington Redskins owner Dan Snyder roared up to Cannes Lions in his $180 million yacht as ad sources speculated he’s in town to find a title sponsor for the team’s new stadium,” you’re crazy.
  • Construction on the Las Vegas Raiders stadium was momentarily halted last week when it turned out one of the parts didn’t fit, which probably isn’t a big deal in the long run — in fact, the ill-fitting steel truss was adjusted and reinstalled a few days later — but that doesn’t mean we can’t make Ikea jokes.
  • The Arizona Diamondbacks owners have hired architecture firm HKS, who designed the Texas Rangers’ new park, to design a new stadium for them if they choose to build one, and you know what that’s going to mean: lots of renderings with Mitch Moreland and his wife in them.

St. Pete mayor on Rays’ Montreal timeshare plan: Nuh-uh, you won’t

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St. Petersburg Mayor Rick Kriseman hasn’t always been the hardest of hard-liners when it comes to stadium negotiations, coming to office in 2013 saying he was willing to talk about a new stadium for the Tampa Bay Rays, and then handing Rays owner Stuart Sternberg a lease buyout option for a relatively modest price. (Though that worked out well when the buyout expired without Sternberg using it.) Handed a gimme yesterday, though, in the form of Sternberg’s offer/threat to build new stadiums in both Tampa Bay and Montreal and split time between them, Kriseman knocked it out of the park:

#micdrop.

There are many supremely dumb things about the Tampontreal ExpoRays gambit, but Kriseman has accurately identified the most important one: Sternberg can’t even talk about pursuing any kind of part-time move anywhere until after the 2027 season according to his lease with St. Pete, and St. Pete has zero incentive to let him. So while it doesn’t make much sense in reality, it makes even less sense as a threat. MLB commissioner Rob Manfred tried to explain it away as a plan for beyond 2027 — “They’re committed to being in Tampa Bay through 2027. This is a longer-term project for them” — but then why announce it now, unless you’re hoping Montreal will start gearing up to build a non-domed part-time stadium on spec, in the hopes that Sternberg will still want it (indeed, will still own the Rays at all) by the time 2028 rolls around and he can actually negotiate a move?

On the other hand, yesterday’s declaration got so very much press coverage that if the goal was to get people in Tampa Bay thinking about life without the Rays, at least during the summer months, then mission accomplished. If the goal was to get them to think about it without laughing and pointing, then not so much.

Rays could build new stadiums in both Tampa Bay and Montreal, because that’s totally not insane

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This is totally unsourced aside from “sources familiar with the situation,” but Jeff Passan is a decent reporter, so take your grain of salt and let’s dive right in:

The Tampa Bay Rays received permission from Major League Baseball’s executive council to explore a plan in which they would play early-season home games in the Tampa Bay area and the remainder of the year in Montreal, sources familiar with the situation told ESPN…

Under the plan, the Rays would play in new stadiums in both the Tampa Bay area and Montreal, according to sources. The ability to play games early in the season in Florida would preclude the need for a domed stadium, cutting the cost of a new building.

Okay, so yes, not having to build a dome would make a Montreal stadium cheaper. But it would also mean building two stadiums, which would be much, much more expensive. Also the Tampa Bay stadium would still probably need a dome because it rains in Florida all the damn time, plus they’d have to figure out how to get two separate fan groups to root for the same team, plus where would they play postseason games, plus how would they work out territorial and TV rights, I mean, really? The stadium watcher who tipped me off to this moments after it was posted prefaced it with “This may be the most cockamamie scheme I’ve ever heard, but you’re the expert,” and I think it just may be. (Note: Those who would like to endorse me on LinkedIn for my Cockamamie skills can do so here.)

If I were a betting man, I would put heavy money on this being a rumor floated by Rays owner Stuart Sternberg to put Montreal on the table as a move threat — or at least a partial move threat — at a time when he’s not contractually allowed to talk to cities other than St. Petersburg about a new stadium. (I haven’t checked the Rays’ lease to see what it says about talking to MLB’s executive council about talking to other cities.) But also the Rays’ attendance situation is so dire — they cut ticket prices to $5 recently and still couldn’t get takers — that maybe Sternberg is truly considering this mad plan. It is undeniably cockamamie, but that’s never stopped baseball team owners before.

Coyotes sold to billionaire, Gary Bettman celebrates with arena demand and move threat

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The NHL approved a new billionaire to buy a majority stake in the Arizona Coyotes from their old not-billionaire owner, and league commissioner Gary Bettman naturally cited this as a reason why somebody should get the new billionaire guy a new arena:

“I think (Meruelo) is committed to trying to get a new arena in the right location and making it work,” Bettman said. “He is a person of substantial means, and he is very good, if you look at his career, in turning around businesses and making them successful. I think this is an extraordinarily positive step for the Coyotes and their fans in Arizona.”

Alex Meruelo has substantial means! It is entirely possible, of course, that Bettman means that Meruelo has lots of money and will “try to get a new arena” by looking deep within his own bank account and then paying for one, but also this is Gary Bettman so of course that’s not what he means.

Bettman added that while he didn’t want to threaten that the Coyotes would leave Arizona without a new arena, that’s exactly what he was saying:

“I’d rather not go there, because I’m not going to issue threats,” Bettman said. ”(Meruelo) has told us, including in his interview with the executive committee, that he very much likes Arizona. He wants to make it work there, and he’s going to try very hard for that to be the case. Obviously, the club is not viable long-term in Glendale, but hopefully we don’t get to that point.”

The Associated Press then filled out its article on Bettman’s crafted public statement by citing the Coyotes’ low attendance and all the places they could move to if they wanted. There’s a reason why I have a category titled “the sports-media complex.”

Public cost of Columbus Crew stadium keeps rising, public revenue share still at zero

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One of the most confusing parts of calculating stadium subsidy costs is accounting for the present value of future expenses: It’s how F.C. Cincinnati‘s $213 million in taxpayer largesse is really more like $81 million once you factor in that a lot of the spending doesn’t need to take place for decades.

(Note, by the way, that this isn’t directly about inflation: Even if inflation were zero, a dollar spent 30 years from now would still be less of a cost than a dollar spent now, simply because you can put a fraction of a dollar in the bank now and end up with a dollar in three decades.)

Anyway, all of this is to say that when the Columbus Dispatch reports that the public cost of the new Columbus Crew stadium has risen from $115 million to $140 million, it’s important to determine whether this requires an asterisk, if some of that cost is in the future. My previous calculation of the present-value public cost was $88 million; the new total is, per the Dispatch:

  • $28 million in cash payments from the city of Columbus, plus $12 million to build a new public sports park.
  • A county contribution of $2.5 million a year for 30 years, which comes to $45 million in present value.
  • A state contribution of $20 million.
  • $25 million in property taxes that will be diverted to the stadium.
  • ???????? for purchasing the stadium land, which is supposed to be figured out by August 15, though that deadline could be extended.

The Dispatch actually seems to have done a good job of accounting for present value, but unless I’m missing something, they’ve done a less good job on addition: $40 million + $45 million + $20 million + $25 million = $130 million, not $140 million. Which isn’t to say the public cost won’t reach $140 million — the public land costs could easily drive it that high — but it seems like the current price tag should be “$130 million plus land,” so that’s what I’m going with.

The Crew, meanwhile, would according to the Dispatch “market, control and have the rights to all revenue from the new stadium,” including naming rights, paying just $10 a year in rent. You might think that with the public putting up about half the cost of the building, they should get something like half the revenues — but if so you clearly haven’t read the subtitle of the book that launched this website. Silly you!

Friday roundup: New Coyotes owner could move team (or not), public cost of Panthers practice facility goes up, and fresh Austin FC vaportecture!

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If you noticed this site being inaccessible a lot the last two days, hey, so did I! The good news is that a bunch of that time was spent in discussions with the good folks at Pair.com about migrating the site to a more stable hosting platform, which is currently in the works, though it may take a week or so before everything is finalized. In the meantime, if you notice occasional glitches, rest assured it’s all part of the process for bringing you a Better, Brighter Tomorrow.

Meanwhile, in the week’s stray stadium news roundup, where the tomorrows never seem to get better or brighter:

  • Billionaire real estate developer Alex Meruelo is set to purchase a majority ownership stake in the Arizona Coyotes, and The Hockey News wonders if this means the team will finally get a new arena or move to Houston, because surely the team’s previous owners never thought of those things. It’s also worth noting, as I do every time Houston gets raised as an NHL team relocation bogeyman, that while Houston is a big market, so is Phoenix, so moving the Coyotes to Texas might not immediately solve the team’s attendance woes as much as you’d think.
  • South Carolina’s $160 million public price tag for a Carolina Panthers practice facility — I know, that dollar figure and that noun phrase make me boggle every time I type it — could go up by an undetermined amount, thanks to road improvements and other stuff the state could be on the hook for. A hundred million here, a hundred million there, and you start to run into some real money.
  • New Austin F.C. stadium renderings! Bonus points for portraying players on the pitch in positions that might actually be possible in a real soccer match; demerits for trying to make the game seem exciting by having a few fans randomly raising fists, and for devoting way too much space to pictures of dining tables instead of showing what the view would look like from other parts of the stadium. (Though there is one renderings of what the game would look like from behind a dining table, which is, you will be surprised to learn, not very good.)
  • The Tampa Bay Rays can’t get people to come to games even by selling tickets for $5, which sounds bleak until you remember that bleacher seats at New York Yankees games went for $1.50 as recently as 1985, which is only $3.55 in 2019 dollars, so maybe the Rays are still charging too much?
  • Here’s an article by CBS San Francisco about the Oakland city council passing two bills in support of a new A’s stadium at Howard Terminal that is entirely sourced to a tweet by A’s president Dave Kaval. Oh, journalism.
  • And here’s an article (on some sports site I’ve never heard of) that declares it a “RUMOR” (in all caps) that MLB is exploring an expansion team in Las Vegas, cited entirely to a tweet by a Las Vegas “news and rumors” site I’ve never heard of, which really only predicts that there will be an announcement after the World Series of a “Major League Baseball plan.” You know who else has a Major League Baseball plan? Portland, Oregon. They don’t have an MLB expansion team either, and all signs are they won’t for a while, but nice to hear they’ll be getting some company in the vaporfranchise competition.

Analysis reveals FC Cincinnati stadium has $150m in hidden public costs, or maybe $17m, math is hard

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Cincinnati’s WCPO has done a long analysis of the projected public and private costs of F.C. Cincinnati‘s new stadium, and determined that contrary to claims that contrary to claims it will cost taxpayers $63.8 million, the actual public price tag will be $213 million. That’s a lot more money!

Unfortunately, the charts that WCPO has used to accompany its article are not all too clear:

And even more unfortunately, WCPO has included 20-year costs as if they’re all payable now, meaning it’s impossible to figure out the cost in present-value terms. (Paying $10 million over 20 years isn’t really a cost of $10 million any more than paying $1 million in mortgage payments over 20 years means you bought a $1 million house.) So we’re going to have to break these down one by one:

  • It’s projected to cost $34.4 million over 20 years ($1.72 million a year) to pay for the construction of two parking garages, and while garage revenues are projected at $2.6 million a year, some of that needs to go to pay operating expenses. Net cost: unknown.
  • “The city of Milford is borrowing $3.5 million to cover the cost of purchasing land for FC Cincinnati’s training facility.” Net cost: $3.5 million.
  • The city of Cincinnati is “likely to finance up to $25 million in funding commitments for road improvements, a 750-car garage and other stadium infrastructure.” Net cost: $25 million.
  • The stadium and practice facility will be owned by Hamilton and Clermont counties, respectively, and to get around a law that private entities must pay property taxes on any port authority land leased for more than one year, the team will operate under a series of 360-day leases. The team will make a lump sum payment of $9.3 million to the Cincinnati public schools, which is estimated to be 25% of the present-value total of future property taxes, so if we assume the other 75% to be a tax break then we get net cost: $27.9 million.
  • The team will be exempt from sales tax on construction materials. Net cost: $7.7 million.
  • Cincinnati is providing $8.9 million in cash, and the state has committed to $4 million in cash and is expected to approve another $4 million. Net cost: $16.9 million.
  • There’s a bunch of land changing hands in complicated ways, and the WCPO article isn’t clear about what’s a cost and what’s a revenue, so net cost: unknown.

That gets us to a total of upwards of $81 million, which is definitely more than $63.8 million, but not nearly as much as $213 million. This is why it’s important to specify your units: There’s a massive difference between paying $213 million now and paying $213 million over 20 years, and headlines confusing the two are, well, confusing.

That said, there are still hidden costs to this deal, and upwards of $81 million is still a lot to pay for a soccer stadium for a team that was already drawing well in its existing stadium. The F.C. Cincinnati deal was a major taxpayer handout to begin with, and it’s only getting handoutier.

Columbus Crew stadium opening delayed, team exec says it’ll still be great in indescribable ways

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The Columbus Crew‘s new downtown stadium, which is getting $90 million or so in cash grants and tax breaks to replace the Crew’s 20-year-old non-downtown stadium, now won’t open until at the earliest July 2021, instead of at the start of the 2021 season, because reasons. (“Some paperwork needs to be finished,” according to the Columbus Dispatch.) Which is maybe interesting to diehard MLS fans, but far more interesting to me is what team president Tim Bezbatchenko said about the new stadium’s impact when it finally does open:

″[The stadium is] going to change the trajectory of this club forever,” Bezbatchenko said. “There’s going to be so many ancillary positive consequences to this that you can’t even approximate and can’t guess about in terms of the culture change that the fans are going to go through.”

That is a lot of buzzy words; let’s attempt to unpack them:

  • Change the trajectory of this club forever: This sounds like a vague promise that the Crew will stop losing quite so many games once they get a new stadium, which is questionable in any sport, but doubly so in one with a single-entity ownership model where team owners don’t get to plow profits directly back into improving the club.
  • So many ancillary positive consequences to this that you can’t even approximate: “Ancillary” means “subordinate” or “supplementary,” so here Bezbatchenko is presumably talking about things outside of actually playing and watching soccer. Or not talking about them, as the case may be, since he says he can’t even begin to guess about them! Though there will be very many of them, of that he is sure!
  • The culture change that the fans are going to go through: “Culture change” is one of those terms that business management types love to throw around, and here is presumably a reference to the shift to a more urban location. How exactly that would significantly change things from the “drive to game, watch game, drive home” model isn’t entirely clear — Columbus is famously the largest American city without a rail transit system — but again, clearly it’ll be yuge!

All of these would have been outstanding followup questions for the Dispatch, or really for any other reporters interested in reporting and not just taking stenography. It really can’t be overstated how much the functioning of anything like a democratic system depends on robust media outlets to shed light on what’s going on. In the absence of that, we just get a whole lot of press releases, and I guess comment sections of people complaining about the press releases, which is okay but not precisely the same thing. So if you have a local (or even non-local) media outlet that is doing a decent job, please send them some money, because just imagine what it would be like if news coverage got even worse than it is already.

Friday roundup: Beckham proposes stadium lease, FC Cincinnati pays off evicted tenants, Florida city admits its spring training economic projections were bunk

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Is anyone else hugely enjoying John Cameron Mitchell’s new semiautobiographical musical podcast “Anthem: Homunculus” but having a hard time listening because the Luminary podcast platform keeps freezing up mid-episode? Is there enough overlap in the Field of Schemes and John Cameron Mitchell fan bases that anyone here even understands this question? (If not, here’s a good primer by my old Village Voice colleague Alan Scherstuhl.) Is Luminary still offering podcasts on its pay tier without the creators’ permissions? How should one handle it when great art is only available on platforms that have some major ethical issues? Are we ever going to get to this week’s stadium news?

Let’s get to this week’s stadium news:

  • David Beckham’s Inter Miami has offered to pay $3.5 million a year in rent on Melreese Park land for 39 years, plus $25 million for other Miami park projects, as part of a stadium lease agreement. That still doesn’t sound like too bad a deal for the public to me, but as nobody seems to be linking to the lease proposal in its entirety, there could still always be some time bombs hidden in there that weren’t reported on. More news when the Miami city commission actually gets ready to vote on this proposed lease, hopefully!
  • The owners of F.C. Cincinnati have agreed to pay off the tenants they’re evicting to make way for an entrance to their new stadium, but one of the conditions of the payout is that no one can discuss how much it’s for. We do know, however, that “at one point pizza was ordered in during the eight hours of negotiations” — thank god for intrepid journalism!
  • Clearwater, Florida just cut its estimate of the economic impact of the Philadelphia Phillies‘ presence during spring training from $70 million a year to $44 million a year after realizing that it didn’t make sense to include spending by locals who would be spending their money in town anyway. Now let’s see them adjust their estimates to account for tourists who are visiting Florida already because it’s March and Florida is warm and happen to take in a ballgame while they’re there and maybe we’ll be getting somewhere.
  • Good news for Columbus: After a good year for concerts, the public-private owned Nationwide Arena turned a $1.87 million operating profit last year. The less good news: None of that was used to repay the $4.76 million in tax subsidies the arena received, because the profits were instead poured into improvements like “roof and concrete repairs, natural-gas line replacement, new spotlights, metal detectors, and renovations to corporate suites.” The maybe-good news: If this means that the arena managers won’t ask for new subsidies for renovations for a while because they’re getting enough from operations, yeah, no, I don’t really expect this will forestall that either, but here’s hoping.
  • MLB commissioner Rob Manfred again said a bunch of things about the Oakland A’s and Tampa Bay Rays stadium situations, but as usual nobody read them to the end because it’s impossible to do so without falling asleep. I am not complaining when I note that Manfred is an incompetent grifter compared to some of his colleagues in other sports, really I’m not. (Well, a little.)
  • Speaking of the Rays, Minnesota Twins broadcaster Bert Blyleven would like to blow up Tropicana Field because a fly ball hit a speaker, but the game broadcast cut to commercial before he could spell out his financing plan to build a replacement stadium.
  • A street in Inglewood near the Los Angeles Rams‘ new stadium is seeing stores close as a result of luxury blight, but Mayor James Butts says it’s just because of gentrification unrelated to the stadium. Which either way makes it hard to see how the stadium (or the arena that Clippers owner Steve Ballmer and Butts want) is needed to help the Inglewood economy, but mayors aren’t paid to think very hard about this stuff.
  • Washington, D.C., is spending $30 million to install three public turf ballfields near RFK Stadium, which sounds like a lot of money for just three turf fields, but still a better investment than some other things D.C. has spent money on, so go … kickball players? Kickball needs to be played on turf? The things you learn in this business!