Author Archives: Neil deMause

Seattle mayor says hosting World Cup should break even, after not looking at actual costs of hosting World Cup

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Yesterday’s Seattle Times headline “Hosting 2026 World Cup would cost Seattle millions, but almost all money would be recovered, city says” was bound to catch my eye, especially given that several North American cities had already dropped out of consideration after complaining that FIFA’s demands were too steep. So how does Mayor Jenny Durkan get to a break-even estimate for hosting the World Cup?

Providing stadium security and police escorts, arranging practice fields, holding fan festivals and covering permit fees would eat up about $7.7 million for three games and about $10.5 million for five games, say the projections by Mayor Jenny Durkan’s office…

The memo says FIFA would reimburse Seattle for the stadium, police and field costs. That expectation would appear to clash with World Cup 2026 bidding guidelines released last year, which said FIFA would ask the host governments to take responsibility for security costs.

Um, yeah, seriously. Durkan’s office implied that she received assurances directly from FIFA that security costs would be covered somehow, but didn’t provide specifics beyond saying that “the mayor has knowledge of a range of very complex contracts and projects.”

Okay, so what about the pair of 20,000-seat open-air venues for World Cup watch parties that FIFA is demanding? The Durkan memo says that FIFA would allow the city to charge for admission and collect sponsorship money to cover these costs, which, maybe?

And what about the big holdup for cities like Chicago and Minneapolis, which was that FIFA was looking for a full exemption on sales taxes, ticket taxes, and the like on all its activities and that of its contractors for the entire run-up to the 2026 World Cup?

Seattle’s memo doesn’t account for potential costs related to security liability and tax breaks.

In short, it looks like Mayor Durkan’s office didn’t actually conduct a study of costs of hosting the World Cup; it merely conducted a study of costs of holding a big event like the World Cup (“These projections are preliminary and not based on information given to us by FIFA or US Soccer Federation, but rather by reviewing similar historic events using institutional knowledge and estimates for stadium game day operations”) and left it at that.

So the reassuring headline shouldn’t be very reassuring, and Seattle residents should still be concerned about being left holding a large bill for hosting the World Cup. And since Seattle, with possibly the best large stadium in North America for hosting soccer, is uniquely well equipped to be a host city, the other 22 cities on the list should still be afraid, be very afraid.

Friday roundup: Nobody wants the Olympics, nobody wants the Marlins home run sculpture, nobody wants the Chargers (but L.A. is stuck with them through 2040)

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So what else happened this week? Glad you asked:

  • Stockholm’s new city government said it won’t provide any public funding for a possible 2026 Winter Olympics. That would leave only Milan and Calgary as bidders, and the former hasn’t committed to public spending either, while the latter is set to hold a public referendum next month on hosting in the midst of complaints that no one knows how much it would cost. It’s still a longshot, but there’s a real chance here we could see our long-awaited “What if they held an Olympic bidding war and nobody showed up?” moment, or at least that the IOC will have to consider bids that don’t include its usual requirement that local government promise to backstop any losses.
  • “Several dozen” Long Island residents marched in protest last week against the New York Islanders‘ proposed arena near Belmont Park, saying it would create too much traffic and construction noise. Those aren’t the best reasons to be concerned about it in my book — I’d be more upset about the crazy discount on land New York state is giving the team, if I were a New York taxpayer, which I am — but maybe the protestors are worried about that too but it didn’t fit easily on a sign.
  • The owners of the Miami Marlins (i.e., Derek Jeter and the money men behind him) are going to have to pay $2.5 million to Miami-Dade County for moving Red Grooms’ home run sculpture outside their stadium, since relocating it means that Grooms will disavow the work and make it worthless. They should’ve just traded it to Milwaukee for some lousy prospects.
  • Oklahoma City is looking for capital projects to spend the next iteration of its sales-tax hike on, and Mayor David Holt says if a maybe-MLS-caliber soccer stadium isn’t included, “the Energy won’t be here forever.” The Energy, if that name draws a blank for you, is the city’s beloved USL franchise that’s been there since … 2014? It’s only a matter of time before teams start threatening to move before they even exist, isn’t it?
  • Bwahahahaha, the Los Angeles Chargers are reportedly locked into their lease at a new Inglewood stadium through 2040, so there’s no way they’re moving back to San Diego or elsewhere no matter how terrible their ticket sales are. Dean Spanos is so screwed! Uh, until he sells the team for a multibillion-dollar profit, but he’ll be crying the whole way to the bank, I promise you!

Jaguars owner to take Wembley purchase bid and go home because England doesn’t love him enough

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Whoops, turns out Jacksonville Jaguars owner Shahid Khan isn’t buying Wembley Stadium after all, withdrawing his bid because, uh, it was probably going to get rejected anyway:

A senior FA source told BBC Sport that the board believed the odds were slightly against the purchase being backed, given the strong objections of some councillors to the home of English football being sold off.

FA chief executive [Martin] Glenn said Khan had believed his offer “would be well received by all football stakeholders”.

However, Glenn added: “At a recent meeting with Mr Khan he expressed to us that, without stronger support from within the game, his offer is being seen as more divisive than it was anticipated to be and he has decided to withdraw his proposal.”

This will likely put an end to talk of the Jaguars relocating to London, though 1) that was probably a dumb idea to begin with and 2) there’s nothing stopping Khan from still moving to London if he really wants, and just paying rent on a stadium instead of buying one.

Anyway, apparently not everything is for sale at the right price, at least in the UK. You can still buy Utah if you want, though.

Chargers lower tickets prices at new stadium in hopes anybody might turn up to root for them

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ESPN reported yesterday that the owners of the Los Angeles Chargers, noticing the distinct lack of enthusiasm with which they’ve been met in their new home, were downgrading their initial revenue goals at the Inglewood stadium set to open in 2020 from $400 million to $150 million. And on cue, the Chargers announced yesterday that they were setting ticket prices and seat license fees at the new stadium significantly lower than the rival Rams:

The least-expensive general seating season ticket in the new Inglewood stadium will cost $50 per game and require a one-time personal seat license fee of $100…

The Chargers will share the new facility with the Rams, who last month announced their season tickets will start at $60 a game, with personal seat licenses beginning at $1,000.

I’m not actually sure what “initial revenue” means in that ESPN report, and the site didn’t specify — each NFL team gets $250 million just in TV revenue, so maybe it means first-year stadium revenue, or maybe it means the initial take from PSL sales. If the latter, that would make sense, since the biggest discounts appear to be on the seat-license side, where allowing cut-rate prices is going to seriously cut into the team’s cash flow, especially once fans realize they can get in for a $100 one-time fee and then balk at paying higher PSLs for better seats.

Team execs are spinning this as a way to make Chargers fans more likely to use their tickets themselves instead of selling them to out-of-town fans to recoup their costs, but I’m not sure that microeconomics works that way: It seems just as likely that this will goose sales to ticket speculators who will now figure, “Hey, for only a $100 fee I can get a steady supply of tickets to sell to visiting fans who actually want to see Chargers games, unlike people around here!”

All of which is only likely to stir more murmurings that maybe the Chargers picked the wrong city to move to — or, you know, shouldn’t have moved at all. Turns out that sometimes shooting the hostages doesn’t work out that well.

Angels opt out of stadium lease, prepare to threaten to make themselves homeless in 2020

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Los Angeles Angels owner Arte Moreno has opted out of his stadium lease, meaning the team is free to leave Anaheim after the 2019 season. This is very interesting, though probably not in the way that you might at first assume.

First off, the Angels are almost certainly not going to leave Anaheim after next season, if for no other reason that there’s nowhere to go. None of the other MLB-less options (Montreal, Portland, Las Vegas, Charlotte, etc.) are appealing demographically compared to Orange County; and it would take way more than a year and a half to get even a temporary stadium ready elsewhere in Southern California. (Talks about a new stadium in nearby Tustin collapsed in 2014 after Tustin officials realized how crazy much it would cost.) The only reason Moreno pulled the trigger now, team officials made clear, was that this was the only window the team had for opting out and renegotiating its lease, since the team’s lease said it was either yesterday or wait till 2028.

Just last year, though, Moreno had said that he wouldn’t trigger the opt-out now. So what changed?

“We’ll sit down with the new mayor and city council,” [Angels spokesperson Marie Garvey] said. “We also are going to look at all our options.”

Ah yes, the new mayor. Tom Tait, who has been the main obstacle to giving Moreno a whole mess of land that he can develop and use the proceeds to renovate his current stadium, is term-limited out after this year. So presumably the Angels owner smelled a better negotiating environment around the corner with a new mayor (and three new councilmembers) and figured he’d roll the dice.

That new mayor and council, though, would be well-advised to consider that Moreno isn’t in all that great a negotiating position himself. In opting out, he’s left himself without a guaranteed place to play in 2020, which means Anaheim elected officials would be fully within their rights to say, “How about you pay us more, and sign a lease extension to boot? If you don’t like it, I’m sure there are some lovely high school ballfields you can play on the season after next.”

That almost certainly won’t happen, if only because the “Anaheim council tells Angels to move out” headlines would look terrible. (Though maybe less terrible if the Angels finish in fourth place again.) But it is important to remember that lease leverage works both ways, and as we’re seeing with the Oakland Raiders mess, it’s not always easy for a team owner to follow through on threats to take his ball and go home. Garvey said yesterday that “we do have options” for a new home, but wouldn’t elaborate, which is a pretty transparent bluff after the Tustin debacle.

Anyway, the council has no one to blame for this opt-out but themselves, since they (or their predecessors, I guess) gifted Moreno with this option back in 2013 in exchange for absolutely nothing. One hopes at least they won’t double down on the stupid by negotiating themselves into a corner the minute the team owner points a gun at his own head and says, “Give me a new stadium or I’ll shoot!” It’s going to be a very interesting day after election day in Anaheim.

Montreal Impact owner wants tax break from city because he’s unhappy with 500% appreciation of team value

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And speaking of MLS’s wacky ownership structure, the owner of (the operating rights to) the Montreal Impact says he needs a tax break from the city of Montreal so that he can stop losing so much money:

“We are losing $11 million to $12 million per season,” [Impact president and CEO Joey] Saputo disclosed during a frank and transparent discussion with members of the media at Stade Saputo.

Saputo said one way the club is looking to stem the red ink is with help from city hall by reducing the club’s annual tax bill of $2 million.

“Frank and transparent,” eh, TSN analyst Noel Butler? So Saputo opened his books so that members of the media could verify those $11 million a year losses? No? Well, it’s the thought that counts.

Anyway, Saputo appears to be holding off on spending $50 million in upgrades on Stade Saputo because he says he doesn’t want the stadium to be worth more and his tax bill to go up — in perky Canada, sports team owners have to pay property taxes on their stadiums even when they sit on public land — which is about as good an argument as “I bought an MLS team for $23 million and they go for $150 million now but I’m losing money so bail me out here!” He’s got one Canadian sportswriter on his side, though: Butler warns that without subsidies the Impact could fall to be a second-tier team like fill out the bottom of European leagues, which doesn’t even make any sense since teams in European leagues pay their own player payrolls unlike in MLS, but anyway, can Joey Saputo have $2 million, please? He’s really sincere!

Diamondbacks switch to fake turf so they can crank their a/c, Rangers may follow suit

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Also on Friday, the Arizona Diamondbacks owners, who have been shopping around to get a new stadium to replace 20-year-old Chase Field since negotiating an out clause to their lease back in May, have announced that they’ll be switching their current stadium to artificial turf next year, as they apparently just discovered after two decades that grass needs sunlight and water:

The decision to swap live grass to turf, of course, came after failed attempts at finding grass that grew well in the desert. The team would keep the Chase Field roof open during the day, allowing the sun in, but even closing it in the late afternoon before night first pitches made for a hot game-viewing experience with the air conditioning cranked up.

Arizona tried a new strain of grass this past season, and while it looked better than in years’ past — when the outfield would develop brown, dry spots where outfielders stood — it still played hard.

“It looked good and when you talk players, when you talk to our facility staff, it still didn’t play well and still wasn’t very healthy out there,” [Diamondbacks CEO Derrick] Hall said…

The move to synthetic turf will save the team money on its water bill and electric bill.

The team expects a 90 percent savings, or two million gallons, in water consumption.

The irony here, of course, is that the Diamondbacks demanded a pricey retractable roof when it got its stadium built back in the ’90s in large part so it could open it to the elements to allow natural grass to grow. (The Houston Astrodome famously had to turn to newly invented artificial turf — dubbed Astroturf as a result — after its initial plan to grow grass under a roof with glass windows turned out to be a disaster.) Of course, they didn’t know then how much fans would demand that the roof be closed as much as possible to let the air-conditioning kick in, or for that matter how crazy hot it would get in Phoenix now that we’ve broken the earth’s climate. But still, irony.

Notably, the Texas Rangers owners still haven’t announced whether their new retractable-roofed stadium will feature grass or artificial turf, and team officials there may keep a close eye on how the D-Backs’ new turf plays next spring before making a decision. Given that the whole point of the Rangers’ new stadium is to have air-conditioning, though, and that Texas occupies the same Anthropocene climate as Arizona, you have to think they’ll be leaning hard toward plastic grass. Which makes you wonder why anybody bothers with moving roofs anymore anyway — they’re crazy expensive and hardly ever opened to the elements in warm-weather cities — but I guess it’s hard for even sports team owners to pass up stuff that looks so cool from passing airplanes.

 

 

Columbus to keep Crew, send Anthony Precourt to Austin, this has gotta be a win-win

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I posted the week-ending news roundup late on Friday, but still not apparently late enough for the stadium news cycle, which promptly exploded in the afternoon, starting with the news that Cleveland Browns owner Jimmy Haslam was finalizing a deal to buy the Columbus Crew from owner Anthony Precourt so that it can stay in Columbus in a new stadium and Precourt can get an expansion team to move to Austin, Texas.

A bit of a recap for anyone new to this story: The Crew owners have been griping about wanting a new stadium to replace their current one (which was built all the way back in 1999) since they were the old Crew owners back in 2013; Precourt upped the ante last year by saying if Columbus wouldn’t build him a new stadium, he’d move the team to Austin. Precourt subsequently got Austin to approve a stadium deal there that included a $100 million tax break, but meanwhile Columbus sued under the “Art Modell Law” passed after the Browns moved to Baltimore to force Precourt to offer the team to local buyers first, and a fan group called Save the Crew issued proposals for a new downtown stadium in Columbus, to be paid for … somehow.

That takes us up to Friday, when it was revealed that Haslam — plus some local investors — had negotiated with Precourt and MLS to instead buy the Crew and have them stay put; Precourt will still get an expansion franchise in Austin, and everybody is happy. At least, maybe everybody is happy? There are still a bunch of unanswered questions here, like:

  • Who’s paying what to whom for what here? MLS is a “single-entity” structure, meaning that the league owns the actual teams, and the team “owners” only control operating rights. The Columbus Dispatch reports that the deal likely involves “the local investors purchasing the Columbus MLS rights from the league and current Crew operator Precourt Sports Ventures transferring its equity interest in the league to an Austin franchise, presumably an expansion team” — presumably this means Haslam and friends are paying something close to the $150 million expansion fee price that the league won’t be getting from Precourt. Unless maybe Precourt is paying the difference? This is all rich dudes shuffling money around themselves, so whatever, but it’d still be interesting to know.
  • What happens with the other cities looking for expansion teams? MLS already had a long list of cities angling to get the next two expansion franchises set to be announced, but it appears that Precourt and Austin have jumped the line. Media outlets in Sacramento, thought to be one of the expansion frontrunners, are already wringing their hands over the prospect of now only having one expansion slot to compete for. Assuming MLS doesn’t decide to keep both of next year’s expansion slots and make Austin its 29th team, or throw David Beckham back under the bus, or really anything, because MLS can decide whatever it wants here. (My bet would be on making the remaining cities compete for one slot, but if multiple cities come up with viable ownership groups and lucrative stadium subsidies, announce, “We changed our mind — everybody gets bees!”
  • Who’s going to pay for this new Columbus stadium, anyway? The Columbus Dispatch reports that there’s no deadline for a new Crew stadium to be in place, and that the team will continue to play in its old stadium until then, which would seem to reduce Haslam’s leverage if he wants to get public cash to help with his stadium plans. But it’s always possible Haslam has already been working things out along these lines with Columbus officials — news reporting on all this is fairly lousy so far, as to be expected when news drops on a Friday afternoon.

So what’s the upshot here? That MLS was more scared of moving the Crew to Austin than we’d been led to believe, either because of the Modell Law or because they didn’t want to be seen pissing off an established fan group or just because they saw the opportunity to get another NFL owner on board, and they just love those guys. Regardless, that Columbus will apparently get to keep its MLS team without having to pony up huge subsidies for a stadium for an expansion team has got to be seen as at least tentatively good news, and a sign that public mobilization can impact the battles of elephants. There are still many, many more shoes to drop, however, so glass-half-empty advocates, keep hope alive that this will still suck for someone! Anything is possible in the topsy-turvy world of MLS!

Friday roundup: Vegas MLB rumors, North American soccer superleague rumors, and everything just costs untold billions of dollars now, get used to it

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I published two long articles yesterday — one on sports stadium and arena deals that haven’t sucked too badly, one on a particular non-sports subsidy deal that looks to be sucking pretty hard — so I wasn’t able to post anything here, despite a couple of news items that might have warranted their own FoS posts. But as the saying goes, Thursday omissions bring a shower of Friday news briefs (please don’t tell me that’s not a saying, because it is now), so let’s dig in: