Happy Friday! I have no meta-commentary to add this week, but hopefully when you have Def Leppard getting into a flamewar with Canadian elected officials over arena smells, you need no prelude:
The Salt River Pima-Maricopa reservation, long rumored as the possible site of a Phoenix Rising F.C. soccer stadium, has released an image of a proposed “$4 billion sports, technology and entertainment district” that indeed seems to show a soccer stadium, though honestly it looks a little small just from the rendering. There’s also an amazing image of people testing out robots and what looks like robot dogs, which surely will be the growth industry of the rest of the century, because I bet robot dogs don’t have an enormous carbon footprint or anything.
The Las Vegas Raiders are now projecting $478 million in personal seat license sales for their new stadium, up from an initial projection of $250 million. (All this money will go to defray Raiders owner Mark Davis’s costs, not the state of Nevada’s, because why would revenues from a publicly funded stadium go to the public? That’s crazy talk!) Unfortunately, the stadium might not be ready on time thanks to its roof behind months behind schedule, which could cause damage to the already-built parts of the stadium if it rains, but all those Raiders fans in Vegas (or people in Vegas anticipating selling their seats to out-of-towners who’ve come to see their home teams on road trips) will surely be patient after shelling out as much as $75,000 for PSLs.
Charlotte is still up for giving Carolina Panthers owner David Tepper $110 million to renovate his NFL stadium to make it more amenable to hosting an MLS franchise, but may want Tepper to agree to a lease extension first. Given that the last time Charlotte gave the Panthers money for stadium upgrades it was $87.5 million for a six-year extension, the city could maybe keep the team in town through 2027 this way. At this point, it might have been cheaper for the city just to buy the Panthers outright, thus guaranteeing the team stays in town while not only avoiding all these continual renovation fees but also getting to collect all that NFL revenue for itself. (Ha ha ha, just kidding, the NFL outlawed that years ago, no doubt partly to avoid anyone from trying exactly this scenario.)
The Atlanta Braves‘ stadium got a new name thanks to a bank merger, and the bank got lots of free publicity when news outlets wrote about the new name, but hell if I’m going to participate in that, so google it if you really must know.
Kalamazoo is maybe building a $110 million arena to host concerts and something called “rocket football,” which I’m not even going to google because it would almost certainly be a disappointment compared to what I’m imagining.
Anaheim is considering rebating $180 million (maybe, I’m going by what one councilmember said) in future tax revenues to hotel developers so that Los Angeles Angels and Anaheim Ducks players will stay in them? Don’t the Angels and Ducks players own houses locally? What is even happening?
Comcast and DISH Network are reportedly considering dropping some sports channels from their lineups as too expensive, which is notable because 1) until now cable and satellite providers have considered live sports the only sure way to stop viewers from cutting the cord, but apparently some would rather take their chances than keep on paying huge fees for sports, and 2) if the cable cash cow dries up (mixed metaphor, I know, but just imagine a liquid cow), the economics of the sports industry will change massively, with shifts in not only how much revenue comes in but how much is shared vs. retained by individual teams, changing the relative of value of being in a large cable market and generally making all our assumptions about how things work vanish into air. Plus already MLB is giving back local streaming rights to individual teams for resale, and the New York Yankees may be teaming up with Amazon, and … this really calls for a longer article of its own, stay tuned.
MLB commissioner Rob Manfred said Wednesday that the league’s plan to eliminate 42 minor-league affiliates was “by no means a fait accompli,” but also that by complaining publicly about the threat, minor-league owners had “done damage to the relationship with Major League Baseball.” (Replied one minor-league owner under condition of anonymity: “Rob is attempting to decimate the industry, destroy baseball in communities and eliminate thousands of jobs, and he’s upset that the owners of the teams have gone public with that information in an effort to save their teams. That’s rich.”) The irreplaceable Marc Normandin asked minor-league players what they thought of all this for Talk Poverty, and they pointed out that the Toronto Blue Jays already raised their minor-league salaries without cutting teams or going bankrupt, so why can’t the rest of the league?
Deadspin’s Albert Burneko is a national treasure whether he’s writing about sports or movies or punctuation, and his takedown this week of a Fivethirtyeight article that asserts there are too many minor-league baseball teams is very much no exception. Drop whatever you’re doing — which is reading this post, so okay, drop whatever you were going to do after that — and read it now, whether you care about the purpose of sports as entertainment or the role of the media in management-labor relations or the increasing propensity to reduce human beings to measures of technocratic efficiency. With the demise of the alt-weeklies, there are fewer and fewer outlets eager to combine tenacious reporting and big-picture analysis and engaging writing toward the end of helping us understand the world we live in beyond “here are some potentially viral things that happened today,” so we need to cherish those that remain while we can.
And with that, here are some potentially viral (in the not especially infectious sense) things that happened this week:
The Arizona Diamondbacks signed a nondisclosure agreement with the city of Las Vegas in 2018, which the Las Vegas Review-Journal takes as enough evidence to run a headline saying that the D-Backs were talking with Vegas about relocation, so long as they add the word “apparently.” This is truly a new breakthrough in relocation threats, as team owners no longer even have to go through the trouble of hopping on a plane to get news outlets reporting that their team could move; now, you just have to sign some paperwork and wait until reporters notice. Why, this way, you don’t even have to answer any embarrassing questions like “Why would you want to move to a much smaller market?” or “Are you worried that D-Backs fans will burn you in effigy on Opening Day?” Truly a sign of disruptive efficiencies at work.
Sacramento is supposedly finalizing a deal to bring an MLS expansion franchise to town in 2022, and though there are no details yet, it’s only a matter of time before it happens, mostly because it’s only a matter of time before every census tract in America and maybe a few other countries gets its own MLS team.
The Voice of O.C. has calculated that the city of Anaheim has turned a $1.6 million profit on running the Los Angeles Angels‘ Angel Stadium over the past nine years, which isn’t much, but at least it’s not a sea of red ink. Though as sports economist Victor Matheson points out, “What are 155 acres of prime real estate worth in the LA metro area? That’s a gigantic opportunity” that’s being lost by using the land for a stadium instead. All food for thought in those upcoming public forums on the proposed stadium land deal that the city won’t tell the public basic facts about like how much the land is worth.
The Rolling Stones and San Francisco 49ers execs are mad that the city of Santa Clara told the Stones at the last minute not to set off fireworks on stage, and Mayor Lisa Gillmor has responded that it’s really the 49ers’ fault: “The 49ers should spend less time criticizing others and more time learning how to follow the laws like those governing workers wages and the curfew, which they agreed to when they opened the stadium in 2014.” Remember that hot minute when the Santa Clara stadium was supposed to be a beacon of how to successfully arrange a sports venue deal? Those were such simpler times.
Here are three options presented for Honolulu’s $350 million replacement of Aloha Stadium, none of which, weirdly, are “Keep the $350 million and spend it on something else, you do realize that you don’t have a pro football team and even the Aloha Pro Bowl moved to Orlando three years ago, right?”
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.
It’s Friday (again, already) and you know what that means:
New York State’s Empire State Development agency held a series of three public hearings on the plan to build an Islanders arena on public land near Belmont Park racetrack (which the team would be getting at as much as a $300 million discount), and the response was decidedly unenthused: Speakers at the first hearing Tuesday “opposed to the project outnumbered those in favor of the plan by about 40 to one,” reports Long Island Business News, with State Sen. Todd Kaminsky joining residents in worrying that the arena will bring waves of new auto traffic to the town of Elmont, that there’s no real plan for train service to the arena, and that there’s no provision for community benefits to neighbors. Also a member of the Floral Park Police Department worried that the need for police staffing and more crowded roads would strain emergency services. Empire State Development, which is not a public agency but a quasi-public corporation run by the state, is expected to take all of this feedback and use it to draft an environmental impact statement for the project, which if history is any guide will just include some clauses saying “yeah, it’ll be bad for traffic” without suggesting any ways to fix it. I still want to see this plan from the Long Island Rail Road for how to extend full-time train service there, since it should involve exciting new ideas about the nature of physical reality.
Meanwhile in Phoenix, the final of five public hearings was held on that city’s $168 million Suns renovation plan, and “out of nine public comments, three involved questions, five voiced support and one was against the deal,” according to KJZZ, so clearly public ferment isn’t quite at such a high boil there. One thing I’d missed previously: The city claims that if it doesn’t do the renovations now with some contribution ($70 million) from Suns owner Robert Sarver, an arbitrator could interpret an “obsolescence clause” in the Suns’ lease to force the city to make the renovations on its own dime. I can’t find the Suns’ actual lease, but I think this just means that Sarver can get out of his lease early if an arbitrator determines the arena is obsolete [UPDATE: a helpful reader directed me to the appropriate lease document, and that is indeed exactly what it means], and he can already opt out of his lease in 2022, it’s pretty meaningless, albeit probably more of the “information” that helps convince people this is a good deal when they hear it. (Also important breaking news: A renovated Suns arena will save puppies! Quick, somebody take a new poll.)
Speaking of leases, the Los Angeles Angels are expected to sign a one-year extension on theirs with Anaheim, through 2020, while they negotiate a longer-term deal. It’s sort of tempting to wish that new Anaheim mayor Harry Sidhu would have played hardball here — sign a long-term deal now or you can go play in the street when your lease runs out, like the Oakland Raiders— but I’m willing to give the guy the benefit of the doubt in his negotiating plans. Though if this gives Angels owner Arte Moreno time to drum up some alternate city plans (or even vague threats a la Tustin) just in time to threaten Anaheim with them before the lease extension runs out, I reserve the right to say “I told you so.”
The Calgary Planning Commission issued a comprehensive plan for a new entertainment district around the site of the Flames‘ Saddledome, but forgot to include either the Saddledome or a new arena in it. No, really, they forgot, according to city councillor Evan Woolley: “It should’ve been identified in this document. It absolutely should have. Hopefully those amendments and edits will be made as they bring this forward to council.” The 244-page document (it’s not as impressive as it sounds, most of them are just full-page photos of people riding bicycles and the like) also neglects to include any financial details, beyond saying the district would be “substantially” funded by siphoning off new property taxes, “substantially” being one of those favored weasel words that can mean anything from “everything” to “some.” Hopefully that’ll be clarified as this is brought forward to council, too, but I’m not exactly holding my breath.
Here is a Raleigh News & Observer article reporting that the Carolina Hurricanes arena has had a $4 billion “economic impact” on the region over 20 years, citing entirely the arena authority that is seeking $200 million to $300 million in public money for upgrades to the place. No attempt to contact any other economists on whether “economic impact” is a bullshit term (it is) or even what they thought of the author of the report, UNC-Charlotte economics professor John Connaughton, who once said he “questions the sincerity” of any economist who doesn’t find a positive impact from sports venues. Actually, even that quote would have been good to include in the N&O article, so readers could have a sense of the bona fides of the guy who came up with this $4 billion figure. But why take time for journalism when you can get just as many clicks for stenography?
The San Francisco Giants‘ stadium has another new name, which just happens to be the same as the old new name of the basketball arena the Warriors are leaving across the bay, and I’m officially giving up on trying to keep track of any of this. Hey, Paul Lukas, when are you issuing “I’m Still Calling It Pac Bell” t-shirts?
Indy Eleven, the USL team that really really wants somebody to build it a new stadium so it can (maybe) join MLS, still really really wants somebody to build it a new stadium, and hotels, office and retail space, an underground parking structure, and apartments, all paid for via “[Capital Improvement Board president Melina] Kennedy wasn’t available to discuss the proposed financial structure of the project.” It would definitely involve kicking back future property taxes from the development (i.e., tax increment financing), though, so maybe Indy Eleven owner Ersal Ozdemir is hoping that by generating more property taxes that his development team then wouldn’t pay but instead use to pay off his own stadium costs, that would look better, somehow? I mean, he did promise to keep asking, so at least he’s a man of his word.
“At some point in time, there’s going to have to be a stadium solution,” declared the president of a pro sports team that plays in a stadium that just turned 23 years old. “If we don’t start thinking about it, we’ll wake up one day and have a stadium that’s not meeting the needs of the fans or the community.” Want to try to guess which team? “All of them” is not an acceptable answer! (Click here for this week’s puzzle solution.)
It’s Friday already? Seems like we were just doing this, but the pile of stories in my Instapaper queue says otherwise, so away we go:
The Florida state house has again passed a bill that would ban building or renovating private sports facilities on public land, which would potentially affect the Tampa Bay Rays, among others. This is kind of a dumb idea, as we discussed back in October, since there’s nothing wrong per se with putting stadiums on public land so long as the public gets a good deal for it; a far better plan would be a Seattle-style bill to require that local governments get a return on their investment in any sports lease project. But then, this bill already passed the Florida house last year and died in the senate, so probably not worth getting worked up over too much just yet.
Sports Authority agreed in 2011 to pay $6 million a year for 25 years for the naming rights to the Denver Broncos stadium, and now Sports Authority is bankrupt, and Metropolitan State University of Denver marketing professor Darrin Duber-Smith is saying I told you so: “My big warning was, ‘I’m not sure Sports Authority is a big enough or healthy enough company to commit that much money from their marketing budget each year.’ And I was right.” The Broncos are now looking for another company to pay $10 million a year for naming rights, and haven’t found any takers yet, hmm, I wonder why?
Chelsea F.C. will get to move ahead with its new-stadium plans after the town council used a compulsory purchase order — like eminent domain, surely you’ll remember it from that Kinks song — to clear an injunction that a nearby family had gotten on the grounds that the new stadium would block their sunlight. The purchase order isn’t actually seizing their home, but the land next to it, which is enough to invalidate the injunction; not that this doesn’t raise all kinds of interesting questions about the use of state power for private interests, I’m sure, but man, don’t you wish this were the only kind of stadium controversy we had to put up with in North America? League monopoly power over who gets a franchise is a bad, bad thing.
New Seattle mayor Jenny Durkan says that while it’s “a longshot,” it wouldn’t be impossible for Chris Hansen to build his Sodo arena while OVG renovates KeyArena at the same time. I’m going to interpret the tea leaves here as “Hey, if you want to spend your money to try to compete with another arena across town, be my guest,” but stranger things have happened, maybe?
The city of Austin has issued a report on eight possible sites for a stadium for a relocated Columbus Crew, and are now waiting on Crew owner Anthony Precourt to tell them which, if any, he likes. A consultant for Precourt has since ruled out a site or two, but it looks like nothing might be ready for the city council to vote on February 15 as planned; Austin MLS lobbyist Richard Suttle says the problem is “between the holidays, flu season and winter storms, it’s been slow going.” It’s not quite helping to spark women’s suffrage, but the flu still reminds us who’s boss from time to time.
Now that Amazon has announced its short list of cities that will get to bid on its new second headquarters, it’s time for another look at how to stop corporations from launching interstate bidding wars to be their homes, which once again leads us to David Minge’s 1999 bill for a federal excise tax on public subsidies. “Of all those offers [made to Amazon] there’s one obvious one that should have been made and it should have come from Congress,” University of Minnesota economist and former Minneapolis Federal Reserve research director Arthur Rolnick, who helped Minge concoct that bill, tells CityLab. “Now if that offer were on the table it would end it, it would end the bidding war. Then Amazon would simply base its decision on where location is best for business.” It’d work for sports leagues, too!
Here’s what you missed this week, or rather what I missed, or rather what I saw at the time but left till Friday because there are only so many hours in the week, man:
The Oakland Raiders are negotiating with the Oakland Alameda County Coliseum Authority for a lease extension that would let them play in Oakland through 2020, despite a Las Vegas stadium being in the works to open that year. Which makes sense for the Raiders — they need to be sure of a place to play even if there are stadium construction delays — but for Oakland’s sake I hope the authority drives a hard bargain with Raiders owner Mark Davis, because if you’re going to charge through the nose on stadium rent, negotiating with a team that has literally nowhere else to go when you have no real incentive to want them to stay on a lame-duck deal is exactly the time to do it.
Here’s an article on how Moline, Illinois changing the name of its arena from the iWireless Center to the TaxSlayer Center will help the city get big-name concerts because the new name “makes it sound a little more big time.” You’re welcome.
The Los Angeles Rams are considering charging a top personal seat license price of as much as $225,000, just for the right to then buy season tickets for $350-400 per game. This seems like a bit of a reach when the payoff is just that you get to watch Rams games, but I guess Stan Kroenke needs to try to recoup his $2 billion in stadium costs somehow — and at least if it all goes south, he’ll be the one on the hook, not taxpayers.
Some Canadian bank bought the naming rights to the Toronto Maple Leafs arena away from some Canadian airline. Is this going to buy it valuable market exposure and name recognition that will justify the $40 million a year expense? Not on this blog!
Cleveland Cavaliers owner Dan Gilbert has officially reinstated his plan to do $140 million of renovation work to the team’s arena, with Cuyahoga County paying for half the cost. ”This is corporate welfare at its worst,” said Steve Holecko of the Cuyahoga County Progressive Caucus, after his erstwhile coalition partners the Greater Cleveland Congregations withdrew petitions against the arena subsidy after getting a promise of two mental health crisis centers from the county. Holecko’s group doesn’t plan to mount another ballot challenge on their own, though, so construction work is set to begin later this month.
Mikhail Prokhorov is ready to sell the Brooklyn Nets, but will hold onto the Barclays Center, after renegotiating the team’s lease so that it will pay less rent to the arena. This … does not seem like the smartest way of going about things, but maybe Prokhorov is figuring he’ll give up future rent revenue in exchange for a higher sale price now on the team? Or maybe he’s just not very smart.
U.S. Cellular Field will change its name to Guaranteed Rate Field, the White Sox announced Wednesday afternoon.
The White Sox and Guaranteed Rate, a national mortgage lender, have signed 13-year naming rights deal, according to the Sox. But the name could last even longer — the Sox have an option of extending the deal past 2030.
There is nothing to say about this other than to make jokes. And the Chicago Tribune’s Phil Rosenthal has already won that contest:
Low interest at Guaranteed Rate Field? OK. Now I get it. #WhiteSox
More seriously: You know, there’s nothing requiring any of us normal people (or even us abnormal people who are journalists) from using the corporate-assigned name for a stadium — we can still call it U.S. Cellular Field, or New Comiskey Park, or my preference, “the White Sox’ stadium” all we want. Which is no doubt why resold naming rights go for discount rates: Business owners know that there are plenty of other options for what to call the place, so they’re willing to pay less to slap their name on it. Which is also why you see so many smaller companies putting their name on used stadiums — American Airlines doesn’t need that kind of attention, but Monster Cables, sure.
Speaking of which, the White Sox and Guaranteed Rate didn’t reveal how much the new naming rights deal was for. I’m going with “not nearly enough to be worth the ridicule.”
The Charlotte Hornets‘ arena, which was the Time Warner Cable Arena, is now the Spectrum Center, thanks to the local cable company getting sold.
The price tags on the Buffalo deal was $40 million for seven years; no money changed hands in Charlotte, obviously, while the Dolphins declined to say how much they got for 18 years of their stadium name. I’m guessing not much, since nobody is going to remember this corporate name any better than the last five or six, but maybe since they just did a renovation, people will think of it as a new building with a new name?
Anyway, the fact that naming rights are worth more for a brand-new, nameless venue continues to be an incentive for teams to demand them. It’s probably not the best thing from an environmental sustainability standpoint that teams and cities are building stadiums partly just to act as giant billboards, but I can’t complain too much so long as it does allow them to fob off some costs on another sucker.