Bush-Jeter $1.3b Marlins bid probably isn’t due to subsidies, but go hate Jeff Loria anyway

So it looks like this is probably happening:

A group including [Derek] Jeter and Jeb Bush, the former Florida governor and presidential candidate, has reached a tentative agreement to buy the Miami Marlins, according to two people briefed on the situation who requested anonymity because the deal is not official…

Bloomberg first reported that the Jeter-Bush group was within reach of buying the team. The Miami Herald reported that the sale price would be $1.3 billion.

Aside from all the obvious jokes — Jeter and Bush will get along great, neither can go to his left — the interesting thing for stadium-subsidy watchers is: How much of this $1.3 billion windfall for Jeffrey Loria, who bought the Marlins for $158 million (most of which was funded by his simultaneous sale of the Montreal Expos to MLB) in 2002, is attributable to the nearly billion-dollar public subsidy Loria received for his new stadium, and how much is just that baseball franchises keep appreciating like Brooklyn real estate?

A quick look at the Forbes team value page for the Marlins shows that year-to-year operating income has actually gone down since Marlins Park opened in 2012, which makes sense, since the team has spent (somewhat) more on player payroll since then and Marlins attendance is still pretty lousy. Forbes estimates that the team’s overall value has soared regardless, from $256 million in 2008 to $940 million in 2017 (Forbes values tend to lag a bit behind actual sale prices), but then, the Tampa Bay Rays‘ estimated value leaped from $290 million to $825 million over the same time period without the benefit of a new stadium, so maybe the stadium dough wasn’t that big a help after all, though you can see where you might get a small sale price premium for playing in a new stadium nobody wants to go to instead of an old stadium nobody wants to go to.

If Loria does walk away with $1.3 billion — and Forbes’ Mike Ozanian, citing his own unspecified “sources,” claims that the Jeter-Bush group’s bid is far from formal or finalized, and the Wall Street Journal’s Matthew Futterman and Jared Diamond concur — it might be fair to gripe that he’s walking away with a taxpayer-backed windfall. But it’s an equally valid assessment to say that after spending ten years shaking down Florida taxpayers for an $800-million-or-so subsidy for a stadium that didn’t help him or his team at all, Loria is throwing up his hands and selling the Marlins to a new set of suckers — who will probably re-enact this whole scenario in another decade or two. The nice thing about being a rich dude is you don’t have to learn from your mistakes, you can just cash out and walk away.

Washington Post reporters stick heads up NFL team president’s butt, call it journalism

Yeah, that about sums it up:

The Washington Post article in question is about the Washington NFL team‘s president, Bruce Allen, and can be summed up thusly:

  • People like sports!
  • Allen is a sports guy, his dad having been Hall of Fame coach George Allen! And a political guy, his brother being former Virginia governor George Allen!
  • His boss, team owner Daniel Snyder, is campaigning for a new stadium that he can point to and brag about — “not the hand-me-down venue he acquired from the estate of the late Jack Kent Cooke” — and needed a guy to spearhead it! You can see where this is going!
  • Fans hate Allen because he fired the team’s popular GM, but he doesn’t hold that against them!
  • Virginia Gov. Terry McAuliffe is friends with both Allen and Snyder!
  • Virginia offers non-union labor!
  • Bruce Allen is shorter than his brother George!

If you’ve managed to keep reading to this point, you’ll have gotten the idea that this is a kid-gloves profile of the team president trying to shake down Virginia for a new stadium, so it should come as no surprise that it concludes with the paragraph quoted by Burneko in his tweet (and elaborated on in a longer Deadspin WTF reaction piece), which makes total journalistic sense if journalism consists of viewing the world entirely through the subject’s eyes. (And assuming Allen drinks his own Kool-Aid.) It’s slightly more surprising that this is co-bylined by the Post’s NFL reporter and its former business editor — it took two people to write this crap, and one of them maybe even knows how money works — but given my past experience with the Post, maybe somebody high up the editorial chain is still determined to buy local sports teams’ PR line about economic benefits of stadiums at all costs.

Cavs owner promises to fix some basketball courts, Cleveland council says, “Okay, here’s $70m”

Cleveland Cavaliers owner Dan Gilbert finally blinked yesterday, offering up some long-awaited concessions in exchange for $70 million in public renovation money for his team’s arena. And what, exactly, is the billionaire mortgage tycoon offering?

  • The Cavaliers have pledged that the portion of the admission tax that goes to the city’s general fund will never fall below the portion directed toward debt service on the upgrades. If that happens, the Cavaliers will write the city a check for the difference.
  • The Cavaliers have agreed to refurbish the basketball floors in city recreation centers, more than 20 in total. After the announcement the city confirmed that the Cavs will also refurbish high school basketball courts in Cleveland public high schools, as well.
  • Additionally, the Cavaliers announced it will donate all admissions revenues from its road-game watch parties at The Q during the NBA playoffs to benefit Habitat for Humanity. Over the last two seasons, those watch parties have raised more than $1 million from admissions that was donated to several charities.

That is pretty weak tea, as the Cleveland Scene points out: The admission-tax money is already slated to go to the general fund, so this is just locking in the dollar amounts; and the road-game watch party money was already being donated to charity, so this just directs it to one specific charity. That leaves just the promise to “refurbish” 65 community and high-school basketball courts, which comes with no dollar value or specifics — as the Scene puts it, “It’s unclear if the Cavs will build new courts entirely or just, like, buff them.”

Still, that was enough to get the city council to approve the plan by a 12-5 vote just a couple of hours later. The Greater Cleveland Congregations and the Cuyahoga County Progressive Caucus, which had pushed for more substantial contributions to community programs by Gilbert, could still seek to overturn the vote via a public referendum, but there’s been no announcement of that as of yet.

If the decision stands, one of Cleveland’s richest businessmen just got $70 million in public funds to renovate his basketball team’s home arena, just a few months after he got $57 million in public funds to use for other upgrades, all for an arena built with $100 million in public funds in 1994. Turns out when you’re a rich dude, it’s not just subprime mortgages that are the gift that keeps on giving.

New Calgary report: Lookit, a parking lot, maybe somebody could build a Flames arena there?

The Calgary city council was presented with a new city report on the “Plan B” option for a new Calgary Flames arena just north of the Saddledome yesterday, and, um:

The report doesn’t include renderings, or information about cost or funding, and city administration refused to answer questions about the report ahead of Monday’s meeting.

Also:

The new centre, for which there are no plans yet, would include an NHL-level arena along with other “ancillary services” that are yet to be determined, the report says.

“Preliminary site planning and architectural investigations have determined that there is sufficient site area for an event centre with the same specifications and details as the event centre included as part of the CalgaryNEXT design,” the report said.

So basically, this report says, hey, there’s a big empty parking lot near the Flames’ old arena, bet you could fit an arena there. That’s nice and all, but wake me when somebody actually has some idea what it would cost or who would pay for it. Meanwhile, here are some Flames fans debating the new site. (Don’t click the link for the report, it’s broken.)

Nevada stadium authority chair: Raiders paying no rent in exchange for $750m sounds about right

Hey, remember how Oakland Raiders owner Mark Davis proposed paying $1 a year rent to the state of Nevada in exchange for $750 million in stadium subsidies, and we all thought, “Okay, sure he’s going to ask for that, but there’s no reason the state stadium authority needs to take him seriously”? Well, the stadium authority board chair now says $1 a year rent sounds just fine to him:

“It’s based on the fact that the Raiders are going to be investing up to $1.15 billion and certainly taking the risk for any overruns,” board chairman Steve Hill said after the meeting. “So, in order to make that agreement make financial sense, the revenue from the stadium needed to flow to those investors.”

Yes, Davis and his private investors are putting up a lot of money. You know who else is putting up a lot of money? The people of Nevada. And where Davis’s side will have lots of revenue streams like all of the naming rights and ad sales from the stadium to help pay off their share, the state will only have whatever new tax money flows from tourists who weren’t going to go to Las Vegas just because it’s Las Vegas, but now will because it’s Las Vegas with the Raiders, about which sports economist Roger Noll has already said don’t hold your breath. But hey, the main concern of state officials is to cut deals to ensure the profitability of private corporations, right? I’m pretty sure I read that somewhere.

It’s up to the stadium authority to determine and sign the lease, with no further input from the state legislature, so Nevada taxpayers are probably doomed. One hopes that at least they’ll manage to get an ironclad non-relocation clause without any “state of the art” loopholes, but with bright lights like Hill in charge, one shouldn’t hope too hard. Too bad Las Vegas doesn’t have anyone living there who has experience negotiating exactly these sorts of clauses and could be brought on to consult on this.

Islanders really definitely considering building new arena at Belmont Park, maybe

Confirming rumors that first emerged last summer and then re-emerged in February, NHL commissioner Gary Bettman said on Friday that the owners of the New York Islanders are definitely going to bid on state-owned land at Belmont Park racetrack, with the goal of building a new arena there:

“Yes, there is an RFP [request for proposal] for Belmont and I know they are going to participate in that,” Bettman said of the Islanders. “I believe that everyone thinks there is a terrific opportunity there, if not at Willets Point, to create a more hockey friendly environment for the Islanders, which is something [Islanders co-owner] Scott [Malkin] is committed to do.”

You’ll note that all this is still pretty hedgy: “Participating” in bids for the land isn’t the same as actually committing to building an arena (the New York Cosmos participated in bidding for years, and that went nowhere), and Bettman still isn’t ruling out building in Willets Point near the Mets‘ stadium, either. He did rule out playing at the renovated Nassau Coliseum as “not a long-term option,” but really all this comes down to is: The Islanders owners want a new arena of their own, and they’re going to try to get one, by gum.

Who would pay for both construction and land costs remains a mystery. Yes, Tim Leiweke’s Oak View Group and his partners at Madison Square Garden seem eager to make a splash in the arena business regardless of the cost, but that still doesn’t necessarily make the finances of yet another New York–area arena work out. I’ll close, by repeating what I said back in February:

There are way too many unknowns here to say whether this story could have legs, or is mostly just the Islanders owners trying to leverage Prokhorov into giving them a lease extension in Brooklyn that lets them keep their guaranteed-income deal and/or renovates the Barclays Center to be a less sucky place to watch hockey. I’m in an optimistic mood today, so I’ll say I hope that this is another indicator of a burgeoning arms race within Big Arena that sees billionaires throwing money at new venues without demanding big public subsidies, just because they’re trying to drive each other out of business. It couldn’t end well — anybody remember the Borders-Barnes & Noble war? — but at least the only casualties would be some private corporation’s bottom line.

The new Belmont Park request for proposals is expected to be issued soonish. If nothing else, it will be a very interesting ride.

Cincy arena owner: NCAA wants snazzier locker rooms, might as well tear the whole place down

The NCAA has awarded a round of its 2022 basketball tournament to Cincinnati, for the first time in 30 years. Yay, Cincinnati! But this is conditional on Hamilton County making $200 million in upgrades to its arena. Boo, NCAA! But actually the NCAA’s upgrade demands aren’t that major or costly, it’s just the arena’s owner/operator who’s trying to leverage this into a major upgrade:

U.S. Bank Arena needs to add two locker rooms and greatly expand media space below the seating area if it’s going to host the first- and second-round games, Ray Harris, CEO of Nederlander Entertainment, which operates and is majority owner of the arena, told me on Wednesday…

Harris is shooting to make those changes as part of a planned massive overhaul of U.S. Bank Arena that would likely cost anywhere from $200 million to $350 million, he said.
“We’d certainly advocate the major renovation that addresses what the NCAA needs and provides additional amenities as opposed to losing events,” Harris said. “That’s certainly our hope. We think this is a great time to address all the shortcomings of this facility. It would put Cincinnati on the map to be competitive with all the major cities around us.”

Well, sure, you’d advocate that the city chip in on $200 million to $350 million of upgrades to your arena, rather than just adding two locker rooms and some media space. And what would that greater renovation entail, exactly?

[Harris] said Wednesday that the current plan to prepare for the 2022 NCAA men’s basketball championship includes tearing down the arena and building a new, larger arena in its place.

Okay, then!

Some backstory: Harris has been proposing a major overhaul of the arena for two years now, with the minor snag that he wants the county to help pay for it, and after coughing up big bucks for new stadiums for the Reds and the Bengals, spending nine figures on an arena whose highest-profile tenants is a minor-league hockey team isn’t exactly likely to be a priority. But if it’s about making the NCAA happy, and “putting Cincinnati on the map” — hey, sure, maybe somebody will buy it. Not anyone on the county commission, admittedly — commissioner Todd Portune replied yesterday, “Go do it. It’s your arena. We’ll be happy to help with permits and zoning, but don’t think that the county has a pot of money over here that we’re waiting to make available” — but maybe somebody somewhere.

Falcons stadium delayed again, because newfangled roof doesn’t have all its fangles worked out

The much-delayed opening of the Atlanta Falcons‘ new stadium, originally set for this past March, has been delayed again, this time to a preseason game on August 26. The stated reason? Building a retractable roof that operates like no other roof before turns out to be hard!

[Falcons CEO Steve] Cannon said the latest delay disclosed Tuesday was driven by “steel work that is taking longer than we anticipated” in the roof and an analysis of the construction timeline from this point forward.

He said AMB Group’s expectation is that the roof will be fully operable when the stadium opens.

But Cannon acknowledged that the eight roof petals have required some extra work to make them fit.

“You install a shim that closes a gap or addresses a gap,” he said. “So yes, there was a shimming process that took place, normal seal work on a project of this size and complexity. We have completed all of that work. … It went very well. And now we’re moving on.”

The latest delay means that three Atlanta United games have had to be moved (one to Georgia Tech’s stadium, two to later dates) and demolition of the Georgia Dome has been delayed just in case the Falcons need to play some games there. Not that they’re going to have to do that, heaven forfend, the stadium will absolutely be open by August 26 — just like before it was absolutely going to be open by March 1, and then June 1, and then July 30. It’s also always possible the stadium might open without a fully functional roof at first — that’s happened before, after all, though the Falcons owners might not like reminding of that particular precedent.

Dan Gilbert may actually manage to blow up his $70m Cavs arena subsidy deal after all

When last we checked in on Cleveland Cavaliers owner Dan Gilbert’s $70 million big glass wall subsidy, it looked set for passage, with a majority of the city council set to approve it and opponents mostly just demanding some kind of fund for “community benefits” to be added. Now, though, it appears to be … “falling apart” is probably overstating it, but definitely hitting a major speed bump. Detangling this informative yet slightly convoluted article from the Cleveland Scene, we get:

  • After the arena renovations bill passed the Cleveland city council 11-6 in a preliminary vote last week, it was expected to get final approval this week. Instead, city council president Kevin Kelley pulled it at the last minute, saying “some members requested more time to discuss it.”
  • One possibility is that the Cavs are concerned about getting a 12-vote supermajority, which would allow them to avoid a public referendum as well. Except that, according to the Scene, it would only allow them to avoid a referendum if the city were selling the bonds, and it’s the county, so, what the hell?
  • Gilbert is so desperate to turn more votes, for whatever reason, that he personally called Ward 2 councilmember Zack Reed to ask what he could do to win his support. Reed answered that he wanted a community benefits fund, a la what Greater Cleveland Congregations had proposed, and Gilbert presumably wouldn’t give in, because Reed remains opposed (and now publicly gripey about having to spend 40 minutes on the phone with the Cavs owner to no good end).

While it still seems likely that the arena subsidy will be passed by the council eventually, there’s a lot more grumbling from councilmembers than a couple of weeks ago, which isn’t going to help this thing win if it goes to a referendum as now appears it will. Gilbert, meanwhile, is apparently refusing to budge on the one thing that would make his opposition melt, which is to throw a few million dollars at some community groups as the price of getting $70 million in public funds. If so, that’ll be some quality grasping-defeat-from-the-jaws-of-victory stuff there — though given that this is a guy who responded to federal government charges that his loan company had lied about borrowers’ creditworthiness by countersuing the government and then having his suit immediately dismissed, playing hardball to spite your face does seem to be a bit of a Gilbert character trait.

Baltimore Sun claims Camden Yards pays own way, can’t even keep up pretense for whole article

And hey, look, another major media article that can’t do basic math! Let’s start with the headline:

Orioles payments to stadium authority exceed original cost of Camden Yards

Wow, that would indeed be impressive. Is perhaps Camden Yards one of those rare examples like the Minneapolis Metrodome, of a stadium where the public put up a bunch of money up front but then was repaid in full and more by lease payments over time? Spoiler: no.

Documents show the authority has received an average of $6.4 million in annual rent from the team, plus $4.1 million a year as its share of state admissions taxes. The total, through the fiscal year ending June 30, 2016, is $255 million.

That compares favorably with the stadium’s original $225 million price tag, including $100 million for land acquisition and $125 million for the stadium.

Yeah, no, that’s not how money works. Even if you count state admissions taxes as new state revenues (the Orioles would have been paying them if they’d stayed at Memorial Stadium, too), $10.5 million a year over 25 years is only worth about $140 million in present value, still far less than the $225 million price tag. Or if it helps, you could flip it around the other way and see if $10.5 million a year is enough to pay off the state’s annual debt payments — oh, look, the Sun actually did that:

The stadium authority said it pays about $15 million a year in debt service — principal plus interest — on the 30-year bonds issued to pay for Camden Yards.

So by the Sun’s own calculations, Maryland is actually losing money on Camden Yards. Anything else?

The debt service, however, is paid with Maryland Lottery proceeds appropriated each year by the General Assembly. The authority uses the team’s rent money for ballpark operations.

Oh, right, ballpark operations costs. So really the Orioles’ rent payments pay nothing towards the public’s debt on Camden Yards. Lovely headline, though — beautiful plumage.