New MLB CBA should help spark new A’s stadium, but maybe not why you think

Of all the small changes in the new MLB collective bargaining agreement agreed on last week (which include the end of our long national World Series home-field nightmare), one that’s getting a bunch of attention is the decision to phase out the Oakland A’s exemption that’s allowed them to be the only team to collect revenue-sharing checks despite playing in a big market. The upshot, according to most sportswriters, is that this should turn up the heat on the A’s to build a new stadium:

Q. Sure, losing $35 million is one thing, but spending $800 million or likely much more to build a privately financed stadium is in a whole other category. Why does this force the A’s hands?

A. In absolute terms, it can’t. But the A’s want and need a new stadium and its revenue generating potential, so this is a strong push in this direction. Both executive vice president Billy Beane and general manager David Forst have talked about a future in which they can dial up the payroll to fit a new stadium.

That’s … not wrong, but wrongish. The implication here is that now that the A’s won’t be cashing annual revenue-sharing checks from the rest of the league no matter how crappy their balance sheet is, they’ll have to turn a profit some other way, so time to finally get cracking on that new stadium that’ll open up the money taps!

But that’s not how sports team owners think, or at least not how they should think if they’re remotely rational economic actors. (Which they probably aren’t entirely, but let’s overlook that for the moment.) If a new stadium is going to bring in more money than it costs to build, then you’re going to do it regardless of how much money you’re currently getting from other sources; and if a new stadium is going to be a money-loser, it’s not going to help you either way.

Where the new revenue-sharing rules can change the game is in how they effect marginal tax rates. Think about it this way: If you’re considering making an investment — moving to a new city, buying a car that allows you to commute to a new job, getting an advanced degree — and trying to figure out if the extra income it will allow you is worth it, the first thing you need to know is how much your net income will change after taxes, deductions, etc. So if you’ll be earning an extra $10,000 a year, but your bank balance will only change by $6,000, that’s a 40% marginal tax rate. (We can call it this regardless of whether it’s actual extra taxes you’re paying, or, say, credits you’re no longer eligible for.)

So back to the A’s. In past years, as an exempted “small market” team under MLB’s two-tier revenue sharing system, they’ve been subject to the leaguewide 34% tax on each new dollar earned, plus a 14% “performance factor” tax where both the size of the tax and the size of the benefit is based on how much money your team brings in (or fails to). (the effective marginal tax rate impact of this is largely the same regardless of whether you’re a high-revenue team or a low-revenue team, since either you’re paying out more and more into revenue sharing as your revenue rises, or you’re receiving less and less in checks, or both.) The new system eliminates the performance factor sliding-scale tax and replaces it with more flat tax — while the math is complicated, it won’t change things drastically in terms of how much of each new dollar the A’s get to keep.

What will have a significant effect is eliminating the huge penalty the A’s were previously going to face for building a new stadium. Before, a new stadium was going to make the team ineligible for any revenue-sharing checks at all, since it would kick them into the “big market” bracket; now, with the checks already shutting off, there’s no disincentive to go ahead and build. Getting rid of this penalty — a “benefit cliff,” in economic terms — should make building a new stadium a lot more alluring to the A’s owners, which is no doubt a big reason why MLB took this measure. (Though also probably because some owners were just sick of giving the A’s any money when they weren’t spending it — though that remains a problem with some other teams that remain designated “small market.”)

In other words, while losing that $35 million a year should be a huge incentive for building a new stadium, it’s not actually the loss of the money that matters, but rather taking away the threat of losing the money if they built a new stadium. MLB could just as easily have incentivized Lew Wolff and Co. by saying, “Hey, you’re small market either way, go ahead and replicate the Miami Marlins if you feel like it,” and it would have done largely the same thing.

If all that is too much math to swallow on a Monday morning — it’s almost too much for me — just hold on to the takeaway that the A’s might be building a new stadium soon with largely private money, though there’s still concerns they may try to make a grab for public land. Just also remember that revenue sharing works in mysterious ways, so what’s sauce for the A’s may not be sauce for, say, the Arizona Diamondbacks.

Oakland mayor announces that Raiders stadium plan framework concept is mumble mumble something

Oakland Mayor Libby Schaaf announced a thing yesterday:

The mayor of Oakland announced that the city has reached a framework agreement with the Ronnie Lott group for a new stadium, with the hopes of keeping the Raiders in Oakland.

“It is exciting that we have reached a conceptual framework agreement with the Lott group,” said Mayor Libby Schaaf.

So what exactly would that be, a “framework agreement” with a developer to build a stadium for a football team that isn’t actually party to the agreement? Schaaf’s office hasn’t actually announced anything — and her press spokesperson didn’t respond to my queries — but NBC Bay Area’s Ray Ratto sums up the state of things as follows:

That stadium is considered by most experts, including Oakland mayor Libby Schaaf, to run in the neighborhood of $1 billion, with the city and county’s contribution limited to infrastructure improvements that are loosely estimated now at around $190 million, to be generated by some new tax or taxes as opposed to access to the general fund.

So: The city and county will put in maybe $190 million for infrastructure, which it will get from somewhere, while the developers will put in $1 billion, which it will earn back by charging the Raiders something. Or maybe getting an equity stake in the team. None of which has been worked out yet with team owner Mark Davis.

Maybe someone on the board of supervisors or city council, who would have to vote on this, can shed some light?

Alameda supervisors discussed the proposed deal behind closed doors Tuesday morning, but Supervisor Scott Haggerty, the president of the board, downplayed Schaaf’s comments that the county was close to voting on Lott’s proposal. Haggerty said the city has not released information supervisors have requested. He would not say what that information was.

Well, then. Maybe Schaaf and Lott have actually agreed on something, but if so, they aren’t saying what it is, and even then, it may not matter unless Davis agrees to have the Raiders play there. She got her name in the paper under “getting things done” headlines, though, so I suppose that’s a short holiday work week well spent if you’re a mayor.

Unapproved Braves vendors will still face arrest but maybe not jail, now quit your griping

The Cobb County Commission, having somewhat walked back plans to arrest anyone near the new Atlanta Braves stadium who offers parking spaces to Braves fans, is now backing away from restrictions on unapproved vendors around the stadium, too, saying they won’t necessarily face jail time:

Earlier this year, the county amended its anti-peddling ordinance to essentially grant an exemption for the Braves to control vending at the stadium and The Battery, a mixed-use development under construction next to SunTrust Park. It included what the county described as “standard misdemeanor language,” including fines and jail time for violators.

Following pushback, the county suspended the ordinance to remove references to specific penalties, effectively leaving the matter in the hands of the magistrate court.

Braves fans who want to buy peanuts for less than eight dollars, rejoice! Vendors will now be free to sell them to you and maybe escape jail time if they can talk a judge into a lesser penalty! That’ll be something to celebrate while running across the highway next year to watch the National League’s best last-place team.

Vegas needs the NFL or else tourists will go to Dallas, and other Raiders stadium arguments

The Nevada state legislature’s special session to discuss a $750-million-plus stadium subsidy to bring the Oakland Raiders to town kicks off today, which means it’s time for boosters of the plan to pull out all the stops in arguing that this not only is a reasonable amount of money to throw at two rich guys, but an absolute no-brainer. What do you got, stadium proponents?

Sisolak apparently said this back in early September (unless he said it again this weekend, which is possible), but the Las Vegas Review-Journal is reporting it as new news. Which is fine enough, because the notion that Las Vegas needs to be put on the tourist map is hilarious enough that it’s worth repeating as often as possible.

  • Brookings Mountain West (a joint project of the Brookings Institution and UNLV, which would get to use the new stadium for football games) directors Robert Lang and William Brown: “More than 42 million annual visitors also will notice what action Nevada’s leadership takes. Our core economy and the region’s standing as a global tourist and convention destination are in play.”

This seems to be a twist on Sisolak’s remarks, only implying that if Nevada doesn’t spend $750 million on a football stadium, tourists will stop visiting Vegas because they’ll think the state has bad leadership. Still reasonably hilarious!

Okay, starting to sense an agreed-upon message here: Sure, people are flocking to Las Vegas now, but if we don’t have a football stadium, they’ll have no reason not to go to Dallas instead! Why this would suddenly start happening now after decades of Dallas having a football stadium and Vegas not is anyone’s guess, but as “cold Omaha” statements go, it’s a vivid enough image, I suppose.

This is another common on-message point — McMillan makes it as well — so long as you don’t actually do the math on whether increased visitor spending on those things would be worth more than $750 million. (Spoiler: It wouldn’t.)

Anybody else?

This would give the members of my union more jobs while construction was underway — it’s narrow self-interest, but at least it’s true! We have a winner!

Not that any of these arguments are really expected to win the day on the basis of pure logic, economic or otherwise — rather, they’re intended to provide political cover for the state legislators who are going to have to explain in a few days why they approved giving three-quarters of a billion dollars in tax money to a wealthy casino owner and a not-quite-as-wealthy NFL team owner so they could build a stadium for private use. In modern political discourse, you don’t need to actually prove that the emperor has new clothes — you just need to make the case that reasonable people can disagree over the definition of nakedness.

Michigan residents’ $300m for Red Wings arena buying slightly closer seats, plus lasers

This week’s Sports Illustrated has a long profile of the Detroit Red Wings‘ under-construction new arena, which almost entirely consists of quotes from team execs and the arena’s designers, so take with a huge grain of salt. It does include a few tea leaves we can try to read, though, so let’s get to it:

The design starts with putting fans as close to the ice as possible. “We brought in our general manager, Ken Holland, to find which was the most intimidating place we play,” Tom Wilson, CEO of team and arena owner Olympia Entertainment, tells SI.com. “Without question it is Montreal. There is no light. No open concourses. Just a sea of red jerseys screaming at you in French. We went there to see it and, my gosh, they are on top of you.”

George Heinlein, HOK Sports principal, tells SI.com that they designed Little Caesars with Montreal’s Bell Centre’s vertical rise, but with added legroom. “It is about the steepness of the seating bowl,” Heinlein says. “But also the proximity of those fans to the rink.”

This is garbage: Since a hockey arena’s seating starts, by definition, at the edge of the rink, the only way to get fans (in the first deck, at least) closer to the ice is to reduce legroom. This is a tradeoff, obviously — less legroom is bad for the people sitting in those seats, but good for the fans sitting in the rows behind them — but unless HOK has reinvented geometry, they can’t accomplish both at once.

While Detroit’s current Joe Louis Arena has about 40% of seats in the lower bowl, Little Caesars flips the script, putting about 10,500 of the total 19,600 seats in the lower bowl, but with the last row in Little Caesars still able to fit within the last row of Joe Louis.

“More seats in the lower bowl” is actually HOK dogma at this point, apparently because team owners think they can charge more for a seat in the last row of a lower bowl than for a seat in the front row of an upper bowl, though they might be equally good for seeing the game. The last row being no farther from the ice than in the old arena is more promising, if that’s indeed what “fit within the last row of Joe Louis” means.

The baddest bowl eliminates the trendy concept of opening up the concourses to the rink. Instead of creating sightlines through the entire venue, the Red Wings wanted to focus on creating noise, eliminating any holes where noise or energy could escape. “We don’t want to blow out concourses, we want to contain all the energy in the seating bowl,” Heinlein says. “It is a throwback in that regard.”

This sounds like marketing gibberish — “we’re eliminating this thing that everyone has been claiming is one of the best things about new sports venues, and claiming it’s ‘throwback’ and trendy for not being trendy” — and it is, but it’s also potentially kind of cool. One staple of stadium and arena design the last couple of decades has been a large gap between decks, so that fans in concession areas can see the game while waiting on line for food. If you’ve ever been at one of these buildings, though, you know that this usually means “see maybe one corner of the game, or more likely a thin strip of the crowd that is watching the game, while peering around everyone standing around the concourse,” which is entirely useless, especially since there are typically TV monitors everywhere showing you the actual game.

Getting rid of that gap, though, enables the designers to move the entire deck above maybe 10-20 feet down and forward, which is a huge benefit to the people actually sitting in those seats, and could help explain that “worst seat is no worse than in Joe Louis” claim. I’m tentatively optimistic, anyway.

Connecting the interior of Little Caesars with the Via and surrounding neighborhood by blurring the entry plaza concourse with the external streets of the district, Wilson says the space offers diversity and will encourage fans to return over and over to experience new spaces. “The Via is a very active space,” Wilson says. “We want to change the way people come to games. Come at 6 (p.m.), have your choice of sports bars, a market house, a spaghetti house and have a full evening. At the end of the game, there are tons of experiences to still have and discover.”

In other words, the Via (a glassed-in concessions concourse that is meant to feel like it’s “outdoors”) is a cross between traditional concessions areas and an outdoor space controlled by the team like Eutaw Street at Camden Yards or Yawkey Way at Fenway Park. Nothing new, in other words — it’s just team-controlled restaurant space by another name.

Using a 12-laser projection system, the Red Wings can animate the arena, projecting full motion video and images on the arena’s “forward-thinking” metal-panel skin all the way through the Via. “There is nothing like it in Vegas, Disney or Times Square,” Wilson says. “It is an immersive sort of experience that everybody is going to enjoy.”

Dear lord, that sounds awful. Unless you like the stimulation overload of Vegas and Times Square, which I guess lots of people do, but if I count among “everybody,” I expect I’ll be able to personally disprove that last statement.

And that’s more than enough time to spend on a team PR statement. Let’s close with a reminder of the $300 million in public money this is costing Michigan residents, since SI somehow forgot to mention it.

Tampa proposes $30m subsidy for Yankees’ spring stadium, this passes for getting off cheap these days

The New York Yankees, a team that will be paying $225 million in player payroll this season (just thought I’d mention that, no reason), have agreed to a lease extension with the city of Tampa on their spring-training stadium that will include $30 million in city- and state-financed upgrades. (The Yankees will chip in $4.1 million for improvements to their training complex, and $6.2 million that they’ve already spent on the stadium since 2010, which is a new meaning of “will chip in.”) Planned improvements include new concessions concourses, new sun roofs, and a new “grand entrance” for fans fleeing the watchful gaze of bronze George Steinbrenner.

In exchange, Tampa gets to ensure the presence of the Yankees for another 21 years: The lease currently ends in 2025, and will be extended through 2046. That’s not a horrific tradeoff, though it’s worth noting that entire new minor-league stadiums have recently been built for this price. And the assessment of Hillsborough County Commissioner Ken Hagan, aka the guy who thinks a single college football game can create 2,000 permanent jobs, remains, um:

[Hagan] said the deal is a good one for taxpayers. The county, which owns Steinbrenner Field, will receive an additional $8.4 million in lease payments for the extra 20 years of the contract. The improvements to the Yankees’ practice complex will raise its taxable value resulting in more property taxes.

And, Hagan said, the continued presence of baseball’s biggest name for spring training will continue to fill local hotels, bars and restaurants with out-of-state visitors.

“When you consider all the additional revenue, this is an extremely attractive return on investment, which makes this deal a no-brainer,” Hagan said.

First off, $8.4 million over the years 2026 through 2046 is never going to make a dent in $30 million in construction costs right now. The property-tax bump is likewise going to be small; as for the throngs of “out-of-state visitors” allegedly drawn to Tampa in March just to see Yankees spring training games, haven’t we killed that urban legend dead yet?

If there are two reasons to care about this, other than just enjoying hating the Steinbrenners for being rich and still being able to get public subsidies whenever they want (assuming the city and county approve the deal, which they haven’t yet), it’s because it’s likely to give another boost to the trend of MLB teams making demands for public upgrades or replacement of not-that-old spring training facilities (Steinbrenner Field was built in 1996), and because it gives us another hint of what Ken Hagan is likely to be like in negotiations for a new stadium for the Tampa Bay Rays. That’s almost certainly going to cost Tampa taxpayers a heck of a lot more than $30 million if it happens, especially if Hagan hauls out rationalizations like these.

Chargers want downtown stadium, mayor doesn’t, isn’t this where we came in?

San Diego Chargers owner Dean Spanos has decided where he wants a new stadium, and it’s not where the city wants one to go:

“We believe that a downtown multi-use facility will attract broad support from throughout our entire community,” the Chargers said Tuesday in a written statement.

Cue the city officials:

“Most experts we’ve talked to have concluded that building a stadium downtown — on land not owned by either the city or the Chargers — would increase costs by hundreds of millions of dollars and take years longer to complete,” San Diego Mayor Kevin Faulconer and San Diego County Supervisor Ron Roberts said in a joint statement.

Yeah, this whole reboot of the Chargers stadium battle is going about as smoothly as you’d expect. Yes, the team can potentially get around environmental impact laws by going straight to a voter initiative, as it did for its now-defunct stadium project in Carson, but polls show that it’d be tough to win a vote with any substantial amount of public funding, and Spanos still doesn’t want to build anywhere without a significant chunk of taxpayer change, so there’s that. Unless the promise of $100 million in added NFL stadium cash and the fear of having to be Stan Kroenke’s tenant in Inglewood is enough to make Spanos open his wallet wider — but if it is, he certainly won’t be tipping his hand about it now, not until he sees what he can get out of the city. Say, shouldn’t we have some renderings to distract us about now?

California city terminates minor-league team’s lease on grounds giving away money is illegal

Back when they were filing lawsuits against the Phoenix Coyotes‘ arena deal every week or so, the libertarian Goldwater Institute at one point suggested it might challenge the team’s sweetheart lease as a violation of the state constitution because it represented represented an unlawful gift to a private enterprise. Goldwater never went ahead with that particular suit, but now the city of Adelanto, California is trying a similar tack to rework its lease with the minor-league High Desert Mavericks baseball team:

The Adelanto City Council on Wednesday night voted unanimously to terminate its stadium agreement with the ownership of the High Desert Mavericks…

The city says the public facility use agreement struck in 2012 violates the state Constitution and is essentially a “gift of public funds” in that the majority benefit is skewed toward the minor league baseball team. City officials say Adelanto has spent $2 million on maintenance obligations since August 2012 and yet Mavericks ownership Main Street Baseball, LLC pays $1 annually to lease use of Stater Bros. Stadium.

The Mavericks owners fired back with an “Oh, no, you don’t!” open letter, followed by a request to go to arbitration. They also insisted that the $1-a-year lease serves a public purpose because the lease says it does, so there. (Not quite in that language, but pretty close.)

Apparently a bunch of states have these kinds of gift clauses in their constitutions, and they’re almost always ignored, because not ever giving public funds to private entities for no public purpose would be un-American. This is the first time I can recall an actual elected body trying to void a lease on these grounds, so I guess I’m going to have to add the Victorville Daily Press to my reading list to keep up with how this fight goes.

Australian state is selling off a whole government agency so it can build more stadiums

The premier of the Australian state of New South Wales is selling off an entire governmental department to raise money to upgrade Sydney’s sports stadiums. I am not shitting you:

Hot on the heels of the privatisation of the state’s electricity poles and wires, the Baird government is selling the operations of the Land and Property Information Service – hopefully for a 10-figure sum – to help fund its $1 billion-plus upgrade of Sydney’s sports stadiums.

Premier Mike Baird has already earmarked $600 million from the Restart NSW fund for the ambitious stadiums plan, which includes the new 50,000-seat stadium at Moore Park, rebuilding Parramatta Stadium and upgrading ANZ Stadium at Homebush.

My knowledge of Australian sports venues is extremely limited, but fortunately we have on hand FoS correspondent David Dyte, who’s a Melbourne native and knows all these stadiums well. I asked him for a rundown, and he replied:

Parramatta Stadium serves the far west of the city, and is home to its own rugby league team. It’s pretty old and I guess could use work. ANZ (aka Stadium Australia) is the 2000 Olympic stadium and is reconfigurable – it hosts Australian football (Sydney, Western Sydney) as well as state level rugby league, and national soccer and rugby. It’s in good shape and does well. Moore Park is central and already has the Sydney Cricket Ground – Australia’s only MLB park – and the Sydney Football Stadium (for all the rectangular field sports I already listed, and home to Easts in rugby league, and Sydney FC in soccer) right next door. Why you need another stadium there, unless it’s a rebuild of the football one, is beyond me. [EDIT: It’s indeed a rebuild of the football one.] It’s already redundant with ANZ, really.

As to the arena, the SEC was fine and didn’t need replacing.

So, um… wtf.

WTF indeed. This would be a pretty remarkable stadium spending spree even without selling the state’s property-licensing arm — which normally brings in a hefty chunk of change to the government each year — to a private company and using the proceeds to pay for it, but … they’re selling off part of the government to pay for new sports stadiums. I mean, guh.

I think that’s all I can handle for today. See you on Monday, unless Stan Kroenke takes Roger Goodell hostage or something.

What if they built a new stadium and nobody showed up — oh, hi, 49ers!

Today in empty stadium porn, we present to you the third quarter at yesterday’s San Francisco 49ers home game:

Okay, so maybe that’s the unbearably sunny side of the field, and new stadiums have all kinds of other things for people to do other than actualy sit in your seats and watch the game (I was at Game 2 of the NLCS last night, and the seats behind home plate were empty for most of the game because it was cold and there’s a club where you can sit inside and watch on TV just steps away), and nobody actually goes to football games to watch with their own eyes anymore anyway. Still, it doesn’t exactly show why this place is $1.2 billion preferable to the place they just blew up. Especially not when the game also featured this, courtesy of the still-crappy stadium turf:

Ah, well, the 49ers owners already got their money from fans to pay for the place, so it’s not their problem. If you own a 49ers personal seat license, though, I’ll be wishing on your behalf for the team to get better, and some quirk of climate change to somehow bring rainclouds to the South Bay, I guess.