Friday roundup: Coyotes late with arena rent, Winnipeg move non-threats, and good old gondolas, nothing beats gondolas!

If you missed me — and a whole lot of other people you’ve likely read about here, including economist Victor Matheson and former Anaheim mayor Tom Tait — breaking down the Los Angeles Angels stadium deal in an enormous Zoom panel last night, you can still check it out on the Voice of OC’s Facebook page. I didn’t bother to carefully curate the books on the shelves behind me, as one does, so have fun checking out which novels I read 20 years ago!

And on to the news, which remains unrelentingly newsy:

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Hamilton votes down $130m junior-hockey arena as “giving money away” to a rich dude

When last we checked in on the Hamilton Bulldogs, the (I’m going to get this right this time, I swear) junior hockey team’s owner was demanding a smaller stadium or else he’d leave town, and the city council was on board with considering building a “right-sized” arena for as much as $130 million to replace the city’s existing one. So I honestly had to blink a couple of times to be sure I was really reading today’s news that the council has voted down the plan as stupid and a waste of public money:

Councillors voted 11 to 3 against participating with Hamilton Bulldogs owner Michael Andlauer in a development at the mountain mall…

A report presented by authors Glen Norton and Ryan McHugh from the economic development and planning department (EDPD) … recommended “no further action be taken” in terms of moving forward with the project, citing cost and location as issues as well as the potential “negative perception” associated with downsizing to a capacity of fewer than 10,000 seats…

[Mayor Fred Eisenberger] defended the city’s current downtown arena and suggested further investment in FirstOntario Centre as a more feasible option.

“But to continue to disparage a facility that is actually probably as good a facility as any that are around other than in size, I think is a little disingenuous,” said Eisenberger…

“It really comes down to the feasibility and whether or not we can afford it and what kind of asset are we going to get at the end of the day?” said [Coun. Brenda] Johnson. “We’re not getting an asset. We’re just giving money away to a private investor who’s going to benefit.”

Okay, so admittedly Andlauer had significantly blue-skied the city by lowballing maintenance and operations costs on a new arena and the price tag of building parking garages, and was trying to stick the public with three-quarters of the costs of his new building — that’s just what sports team owners do! For city analysts to actually notice, and then city officials to read the analysts’ report and vote a plan down as a result, is extremely unusual, and makes me think we’ve somehow passed into an alternate dimension where decisions are made based on common sense and not keeping the local very rich guy happy.

As for what happens now, Andlauer already moved an AHL team out of town two years ago, then moved it again two years later, so clearly he’s willing to pack up the moving vans in order to punctuate his hissy fits. On the other hand, Hamilton is in a virtual tie with Quebec City for the largest city in Canada without an NHL team, so Andlauer might not find greener pastures quite so easily, and if he does, you have to imagine somebody else would interested in locating a team in Hamilton if he leaves. Sure, he or they could always try to demand upgrades to the current arena as part of any deal — and the mayor did leave the door open for that, so Hamilton taxpayers aren’t totally out of the woods yet. But still, it’s nice every once in a while to see some elected officials willing to say publicly when the local sports team owner is wearing no clothes.

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Friday roundup: More on MLB attendance decline, plus stadium rumors and the reports of rumors

In case you missed it, I revisited the question of MLB’s attendance decline for Deadspin this week, by way of picking apart a New York Times article on the topic that got a couple of things right and a whole bunch of things less right. The upshot is that team owners don’t really need lots of fans to show up, but they sure would like them to, but only if they can accomplish this without cannibalizing the luxury seat sales that are their bread and butter these days — all of which makes all the “Whither baseball?” handwringing even less justifiable. Lesson: Don’t try to measure the demand curve just by looking at product sales. (Okay, maybe that’s only the lesson I take from it, but it’s one lesson.)

Meanwhile, news!

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Hamilton hockey owner: Build me a smaller arena, or I’ll leave town

The Hamilton Bulldogs arena kerfuffle is reaching one of the lower DEFCONs, with the discovery of a confidential proposal to the city by team owner Michael Andlauer to have taxpayers build a new arena at Lime Ridge Mall, for which Andlauer would “partially offset” the costs:

No construction costs are included in proposal documents viewed by The Spectator and team owner Michael Andlauer declined through a spokesperson Monday to talk about how much he is willing to pay. Past estimates floated for a Mountain arena have been around $60 million.

That would be smaller than the 10,000-seat arena that the city council was discussing just last week to replace the city’s 17,400-seat arena. And Andlauer has upped the ante by threatening to move his team out of town if an arena isn’t completed quickly:

Team owner Michael Andlauer isn’t prepared to wait the four or five years the proposed project is expected to take.

Andlauer says if the city can’t get a new arena up and running before that, he’ll be forced to look at moving his OHL hockey team elsewhere.

“I don’t want to be put in that position, but I think timing is going to create that.”

He can certainly do that, but as the second-largest Canadian city without an NHL team, Hamilton would be well-positioned to pick up another hockey franchise if the Bulldogs left town. In fact, that’s how the city ended up with these Bulldogs in the first place, after Andlauer’s previous American Hockey League team of the same name moved to St. John’s, Newfoundland in 2015.

Also, Andlauer has threatened this before, using the same Hamilton Spectator columnist, Andrew Dreschel, as his mouthpiece. One hopes that the two-minute warning ploy wouldn’t carry as much weight anymore now that so many team owners have tried it over and over again, but nobody ever went broke gambling on the gullibility of local elected officials.

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Hamilton could tear down arena and build new one to trim 7,000 seats

It was only a decade ago that Hamilton’s Copps Coliseum was being considered as a potential relocation target for various NHL teams, or at least being used as a threat by them. The Ontario city ended up without a franchise, though, and now the 34-year-old arena — since renamed something about a bank — is being targeted for possible demolition and replacement, not because it’s too old, but because it’s too big:

The city’s general issues committee voted Wednesday to set up a steering committee, hire a project manager and look at partnering with private companies to replace the city’s largest entertainment venue with a smaller one.

The move came after city staff said Hamilton needs a “right-sized” venue to replace the former Copps Coliseum — one with about 10,000 seats rather than the 17,400 the aging arena has now…

The Bulldogs are the current main tenant, and the staff report predicts attendance at those OHL games would increase 20 to 50 per cent with a new facility. Increased revenue, staff say, would bring in $20 million over the next 30 years.

But it would cost as much as $130 million to build a new facility, the report says. And some councillors are hesitant to tackle that price tag.

Okay, so a couple of things: First off, the idea that sports teams and the cities that love them too much should be building smaller venues is an old one, and makes sense if the new sports marketing strategy is to sell fewer higher-priced tickets and charge everyone else to watch on TV at home. But that’s if you’re building new — the idea of spending $130 million just to get a new arena that is 7,000 seats smaller is pretty crazy, when you can reduce capacity at an existing building just by throwing a tarp over the upper deck.

The premise here seems to be that the Bulldogs junior hockey team — that’s under-21s — would draw enough more fans in a smaller arena to make it worth the expense, which is at best an extremely speculative notion: Yes, watching sports in a “right-sized” venue can be more pleasant, but enough so that an additional 1,000 to 2,500 people are going to turn up every night just because there’s no upper deck? (The Bulldogs currently average just under 5,000 fans a night in attendance.) And to make a $130 million investment pay off, adding even 2,500 fans apiece at 34 home games would have to spend about $100 each for the arena just to break even on increased attendance alone. (A city report projects that ensmallening the arena would also save a little under $1 million a year in maintenance costs, in which case an additional 2,500 hockey fans a night would just need to spend $90 each to make the numbers work.)

There are other possible upsides to replacing your arena — you can get more modern facilities including revenue producers like ad boards and luxury seating, you can relocate it elsewhere in your city and redevelop the old arena land, etc. — but that seems to be less of a motivation than this “the old one has 7,000 too many seats” thing. Though most likely the real motivation has more to do with the Bulldogs owner making noise about wanting a new arena, after the previous minor-league Bulldogs moved to Newfoundland and were replaced by the junior hockey franchise. So while a new Hamilton arena may not necessarily be the dumbest idea on the face of the earth, it seems only reasonable to consider it dumb until proven smart.

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Friday stadium news: Warriors subway delays, MLS expansion scuttlebutt, ungrateful Hamilton

Oh hey, yeah, I forgot to mention that it’s the most important holiday of the year this week (and part of next), so posting may be a bit sporadic until Wednesday or so. But I could never ignore the weekly news roundup, so let’s get to it:

  • San Francisco’s new Central Subway likely won’t open until 2021, more than a year later than planned, which will mean a couple of seasons of Golden State Warriors fans walking or taking shuttle buses. Honestly, it’s not all that far, but I’m sure there will still be complaining.
  • David Beckham got some new minority partners for his MLS team that still doesn’t quite exist yet. Supposedly the league will issue an “update” on the Miami stadium situation soon, which maybe sounds ominous only to me because I think that way?
  • The city of Phoenix has now spent $200,000 on a Suns arena consultant, and still the city council doesn’t have any information yet even on what kinds of upgrades the arena might need, because the mayor says he has to keep negotiations with the team secret. From the city council. No, it sounds crazy to me, too.
  • The owner of the Hamilton Bulldogs junior hockey team offered to build a new arena and only ask taxpayers to foot half the bill, and he’s mad that the city hasn’t thanked him yet.
  • Cincinnati’s highway bridges are falling down, but the city is spending money on a new MLS stadium (maybe?) before addressing that, because hotel taxes and other money going to the stadium isn’t allowed to be used on highway infrastructure. You know, maybe cities and counties should start allowing things like hotel taxes to be used to improve other things that benefit tourists, like roads that don’t have overpasses fall on them when you drive under? Just a thought.
  • The Republican tax bill isn’t finalized yet, and we don’t know if the ban on tax-exempt stadium funding will survive, but the Detroit News speculates that if it does, it might help Detroit’s MLS expansion chances because it’s the only city that wouldn’t be building a new stadium. MLS already supposedly voted on the expansion cities yesterday, though, so you think the league owners called Congress for a sneak peek at the final bill? Does MLS have that kind of pull with Congress?
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Saskatchewan taxpayers subsidize junior hockey league, thanks to profit guarantee

Followers of the Memorial Cup may have been surprised to learn — what’s that? You know, the Memorial Cup. The championship of the Canadian Hockey League. What do you mean, you’ve never heard of … okay, I’ll start again.

So in Canada, there’s a separate set of hockey leagues for players 16 to 20 years old, and the champion is decided by something called the Memorial Cup. Like the Super Bowl and the NCAA tournament, it rotates among various venues each year, and like those other events, the league places demands on cities in order to be considered as host. Including, apparently, guaranteed profits:

Taxpayers in Saskatchewan are paying nearly $700,000 to cover a profit guarantee, promised to support the Memorial Cup in Saskatoon in 2013.

The guarantee was needed to secure the tournament from the Canadian Hockey League which was assured the event would net the organization $3.5 million.

In the grand scheme of things, this isn’t too horrible: $700,000 is a pittance compared to what some locales spend on sporting events, and when Saskatchewan hosted the world junior championships in 2010, it made its profit target, so amortized over all the guarantees the province hands out, it’s not a ton of money. Still, it’s sobering to realize that even in relatively subsidy-averse Canada, even for freakin’ junior hockey, leagues are able to extract guarantees that the public will subsidize their profit if it falls short of what they were expecting. Monopoly power is a bitch.

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Canada: No arena subsidies if it’s for a pro team

In yet another indication that Canada remains a different country from the U.S., the federal government is threatening to withdraw funding for an amateur hockey rink in Laval, Quebec, because it’s learned that a minor-league pro team might move there:

There are growing rumours that the Hamilton Bulldogs of the American Hockey League — the farm team of the National Hockey League’s Montreal Canadiens — are planning to move into the Laval arena when it will be built.

Ottawa is now warning that it will pull the plug on the project unless if obtains guarantees that the arena will not be used by an AHL or a major-junior hockey team. Otherwise, the government fears that it will be hit with a new round of lobbying for other sports infrastructure projects in cities like Quebec City, Edmonton and Regina.

“If we allow a breach in our policy, we’re toast,” a federal official said.

From the sound of it, part of the reason for the reversal was griping by city officials in Quebec City that the Laval arena was getting federal stimulus money and their own proposed NHL arena (which still isn’t any closer to having a team than when it was approved last year) wasn’t. Still, the concept that giving public money to one team might be a bad idea because it will encourage other teams to ask for it too is a notion that most U.S. officials would likely find … well, foreign.

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NYTimes: Small arenas failing because of economy (only not really)

The New York Times ran an article yesterday on how nine small cities that built small arenas in recent years have been left holding the bag after low revenues left them with piles of unpaid bills. One city, Rio Rancho, New Mexico (home of the New Mexico Renegades minor-league hockey team), is even suing arena manager Global Entertainment (which convinced the nine cities to build the arenas, possibly like this) to recoup losses that, according to the Times, are “eating into the city’s already tight budget and pushing lawmakers to eliminate jobs and cut costs, including asking police officers to buy their own practice ammunition.”

All very interesting and informative, especially if you’re a geek for the finances of mid-sized arenas. Only one problem. The Times chose to lead its story like this:

The plan sounded great during the real estate boom: build a midsize arena, stuff it with sports, music acts and monster trucks and create a centerpiece for the new city center being developed on a dusty mesa here, 20 miles north of downtown Albuquerque.

That’s certainly the argument of Global Entertainment (did I mention they also own the Central Hockey League? The Times gets around to that way down in the 17th paragraph), which insists that the lousy economy is to blame for all its empty arenas. But Rio Rancho city manager James Jimenez says it actually shouldn’t have sounded great, even during boom times:

“If you look at the numbers that Global Entertainment presented to us, it was really, really questionable then, let alone during a recession,” said James C. Jimenez, the city manager in Rio Rancho, who was hired after the arena foundered. “If we didn’t have to allocate the money for debt service, our employees would have had raises and our budget would be in a better position.”

And who was responsible for this mix of decent reporting with weird spin that ends up supporting sports leagues’ claims even against its own evidence? Why, it’s Ken Belson. Could there have been any doubt?

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