Friday roundup: Zombie apocalypse in full effect, go and get a late pass

So as you all undoubtedly know by now, everything is shut down. The NBA is shut down for at least 30 days, the NHL is shut down indefinitely, MLB has canceled the first two weeks of the season, MLS is on hold for a month, this summer’s Euro 2020 tournament may be moved to 2021 so maybe the Champions League and Europa League can finish up in June and July, the XFL is shut down maybe for good, and even the Little League is on hold until April 6. And all those dates are just minimum wild-ass guesses: New York Mayor Bill de Blasio, a calming voice of reassurance as ever, said yesterday that this “could easily be a six-month crisis” — and even if you dismiss him as just a guy who gets his every stray thought printed in the newspaper because he’s an elected official, as I wrote yesterday for FAIR, it’s still very much true that nobody really knows how long this will last, or how to decide (or who will decide) that the curve has been effectively flattened and life can go back to normal(ish) now.

So instead of dwelling on that, let’s dwell instead on another aspect of plagueworld that overlaps somewhat with the mission of this site: the economic impacts of shutting stuff down. I’m sure somebody out there is thinking, “But Neil, you always say that economists say it doesn’t matter much to the economy whether one sporting event or another is played, because people will just spend their money on something else like going out to eat or to a bowling alley instead. So why won’t the substitution effect save us now?”

I am, as I have to take pains to remind journalist quoting me from time to time, not an economist, but I think I can explain this one well enough: There’s a huge difference between one sports team or league shutting down and everything shutting down. Once everyone has completed their panic-shopping therapy and stocked up on a lifetime supply of toilet paper, they’re mostly not going to be looking for other things to spend money on — they’re going to sit at home and watch the Netflix subscriptions that they already paid for. And meanwhile a bunch of them are going to be out of work, and still more will be out of work once restaurants and barber shops and the like have to close for lack of business, and that will mean even less business, and soon enough the entire economy has shut down in a cycle of fear.

I was lucky to get a first-hand example of this in high school, when my U.S. History teacher had each of her classes play a game where each student was one player in late-19th-century frontier society, either a farmer or a railroad company owner or a banker or I forget what else. This made for lots of fun experience with the consequences of unregulated capitalism — I remember one friend of mine contracted to make a loan to another friend, and set the interest rate but not the term of the loan, and our teacher refused to step in and rule on when it had to be paid back because a contract is a contract — but in another class some friends of mine were in, it got even more severe: There was only one banker, and he refused to loan anyone any money at less than usurious rates, and the entire class plunged into an economic depression.

Anyway, there are lots of reasons this is going to be really bad in many, many ways, even if all these closures aren’t too late to avoid the old people being left to die in ERs that has reportedly been taking place in Lombardy. (I do not make a very good voice of calm, either, sorry.) But eventually this crisis will be over, and it’s still worth thinking about what the world will look like when we come out the other side. After all, with no sports to watch we’ve got plenty of time on our hands.

Not that everything being shut down has brought sports subsidy demands to a halt, because some things are just too big to fail:

Friday roundup: New stadium demands in Calgary, 90% shortfall in promised Raiders jobs, corporate subsidies found (yet again) to do squat-all to create jobs

Happy Friday! Is Australia still on fire? (Checks.) Cool, I’m sure we’ll be ready to pay attention to that again as soon as there are some more images of adorable thirsty koalas.

In the meantime, news on some slightly less apocalyptic slow-moving catastrophes:

  • CFL commissioner Randy Ambrosie says the Calgary Stampeders deserve “a state-of-the-art, beautiful stadium” but he’ll “take my queues [sic, seriously, Montreal Gazette, you’re supposed to be an English-language paper]” from team execs for when “they think it’s time for me to be a guy who makes a little noise and tries to stimulate a positive discussion.” Yep, that’s a sports league commissioner’s job! Why a new stadium is Calgary’s job and not the Stampeders owners’ job is less clear, but given that the team owners did such a good job at extracting public money for an arena for the Flames (which they also own), you know they’re going to be jonesing for a sequel. (In fact, a Stampeders stadium was originally part of the Flames plan before Mayor Naheed Nenshi rejected it as too expensive and only would approve the Flames part, so maybe this is just a case of a team owner deciding it’s easier to get sports projects approved in serial rather than in parallel.)
  • It’s now been 100 days since Nashville Mayor John Cooper called a halt to Nashville S.C.‘s stadium construction, and Cooper is still not answering questions about when it may resume. Previous indications were that he’s refusing to issue demolition permits in order to renegotiate who’ll pay for cost overruns, but it would be kind of cool if he’s just realized that he can take advantage of MLS having approved a Nashville expansion franchise before everything was signed off on regarding public stadium subsidies by just declining to build the stadium and keeping the team. (Nashville S.C. will have to play in a 21-year-old NFL stadium until then, boo hoo.)
  • Las Vegas Raiders stadium proponents promised it would create 18,700 construction jobs, and now it’s only creating 1,655 jobs, and the stadium boosters say this doesn’t count off-site workers like “support staff at construction companies, architects and engineers, and equipment and service suppliers,” but really it’s more about how most of those 18,700 jobs were never full-time anyway. At least state senator Aaron Ford can sleep at night knowing he didn’t deny a single construction worker a job; guess he isn’t kept up by thinking of any of the people who were denied jobs by virtue of the state of Nevada having $750 million less to spend on other things.
  • 161st Street Business Improvement Director Cary Goodman has a plan for a new NYC F.C. stadium in the Bronx to benefit the local community by having it be owned by the local community, so that “when naming rights are sold, when broadcast fees are collected, when merchandising agreements are made, or when sponsorships and suites are sold, revenue would pour into the [community-owned] corporation and be distributed as dividends accordingly.” This sounds great, except that broadcast fees don’t go to a stadium, they go to the team that plays in a stadium, and also things like sponsorships and suites and naming rights are exactly the kind of revenues that the NYC F.C. owners would be building a stadium in order to collect, so it’s pretty unlikely they’d agree to hand it over to Bronx residents. We really gotta get over the misconception that stadiums make money, people; playing in stadiums that somebody else built for you is where the real profit is, and don’t anyone forget it.
  • Reporters in Kansas City are still asking Royals owner John Sherman if he’d like a downtown baseball stadium, and Sherman is still saying sure, man. (See what I did there? Huh? Huh?) This article also features a quote about how great a downtown ballpark would be from an executive vice president of Vantrust Real Estate, which owns lots of downtown properties; it must be nice to be rich and get to have your Christmas present wish lists printed on local journalism sites as if they’re news.
  • A new study of business tax incentives found that state and local governments spend $30 billion a year on them, with no measurable effect on job growth. Also, most of the benefits flow to a relatively small number of large firms (good luck getting a tax break for your pizzeria), and some states spend more on corporate tax breaks than they collect in corporate taxes, with five (Nevada, South Dakota, Texas, Washington, and Wyoming) spending an average of $44 per resident on tax breaks even though they have collect no state corporate income tax at all. (The biggest spenders on a per-capita basis: Michigan, West Virginia, New York, Vermont, and New Hampshire.) Surely local elected officials will now take a hard look at the cost of these subsidies and ha ha, no, even when tax breaks are proven failures it takes decades before anyone might notice and do anything about them, so don’t hold your breath that anyone is going to see the light just because of one more study, at least not unless it’s accompanied by angry mobs with pitchforks.

Friday roundup: Lots more fans showing up disguised as empty seats

Is public financing of sports venues worth it? If you’ve been noticing a bit of a dip in the frequency of posts on this site over the past few months, it’s not your imagination: I had a contract job as a fill-in news editor that was taking up a lot of my otherwise FoS-focused mornings. That job has run its course now, which should make it a bit easier to keep up with stadium and arena news on a daily basis going forward, instead of leaving much of it to week-ending wrapups.

That said, you all do seem to love your week-ending wrapups, so here’s one now:

Yes, Graceland actually threatened to move to Japan to get $194m in subsidies from Memphis

The Wall Street Journal ran an article on Sunday that began like this:

MEMPHIS, Tenn.—The Memphis City Council will vote this month to complete new tax breaks for Graceland to fund a $100 million expansion, a peace offering in a nearly two-year war that included threats of Elvis’s estate leaving his adopted hometown.

I don’t know precisely what the rest of the article says, because the Journal will only let me read it if I give them either $187.20 for a year’s subscription or $1 plus my credit card number so they can charge me $187.20 when I forget to cancel, neither of which is appealing. Fortunately, though, the uncopyrightable nature of information has led to lots of other news sites reporting on the Journal’s reporting, which means we can learn things like this for significantly less than $187.20:

“We had an offer ten days ago to move Graceland to Japan,” Joel Weinshanker, managing director of Elvis Presley Enterprises, said. “We had two offers to move to the Middle East and one [to move] to China. They offered us more profit than we could ever make in Memphis.”

It should go without saying — oh, I so hope it should go without saying — that Graceland is a place (“the place Elvis called home,” as Graceland’s own website touts it, complete with “the gardens where he found peace”), and you can’t move a place, though obviously you can move all the stuff that’s in the place. Whether people will still go visit the stuff if the stuff isn’t in the place is an open question, but apparently not one that Memphis wanted to consider too hard, because city officials approved giving Graceland several briefcases full of money in order not to go through with moving overseas.

How much money precisely? Slate reports that Graceland would get “a bigger cut of city and county property and sales tax revenues for a new expansion project,” and that the expansion project would cost $100 million, but that the new property tax kickbacks would “add up to between $194 million and $269 million in reduced taxes for Graceland.” And that the local economic development corporation president “stressed the expansion would not have happened without those incentives, and would be a net gain for the city and county on tax revenue alone.”

So to recap: A tourist attraction based around Elvis Presley’s home in Memphis threatened to move to a place that Elvis never lived, until the local government agreed to give them at least $194 million to pay for a $100 million expansion, which the local economic chief claims will leave the city and county turning a profit. 2019, people.

 

Friday roundup: Neo-Expos seek public land for stadium, Hawaii mulls new stadium to host nothing, D-Backs spend bupkis fixing supposedly crumbling stadium

So very, very much news:

  • Would-be Montreal Expos reviver Stephen Bronfman has reportedly settled on federally owned land in Peel Basin near downtown as a prospective stadium site once a franchise is obtained, through expansion or relocation. Mayor Valérie Plante called the idea “interesting”; other than that, there’s been no word of what Bronfman would pay for the land or how the stadium would be paid for or really anything involving money, so sure, “interesting” is a fine evaluation of this news.
  • Charles Allen, the D.C. councilmember whose district includes RFK Stadium, calls the site “a very wrong choice for an NFL stadium,” and instead would like to see housing and parks there. Mayor Muriel Bowser disagrees, so this is going to come down to a good old council fight. Too bad Marion Barry isn’t around anymore to make things interesting.
  • Hawaii is considering spending $350 million in public money on a new football stadium to replace Aloha Stadium because, according to state senator Glenn Wakai, “It’s kind of like driving a Datsun pickup truck that is just being run into the ground. At a certain point, time to get a new pickup truck.” Given that Aloha Stadium currently hosts nothing much at all other than University of Hawaii football, it’s more like spending $350 million to replace your pickup truck that just sits in the driveway with a new pickup truck, but far be it from me to interfere with Sen. Wakai’s attempts to bash Datsun for some reason.
  • Halifax is still considering whether to spend $120-140 million on a stadium for an expansion CFL team, maybe via the magic of tax increment financing; University of Calgary economist Trevor Tombe points out that a TIF isn’t magic but just “makes the subsidy less transparent, less obvious that it indeed even is a subsidy” — but then, pulling the wool over the public’s eyes is a kind of magic, no?
  • The Oakland Raiders have a “very real” chance of playing 2019 at the Oakland Coliseum, according to … this Bleacher Report headline, but nothing in the actual story? What the hell, Bleacher Report?
  • Arizona Diamondbacks owner Ken Kendrick has claimed that the team’s stadium would need $8 million in upgrades over the winter, but has only spent $150,000. Which isn’t totally a gotcha — team execs say they’re conserving the stadium maintenance fund to spend on future repairs — but it does poke a bit of a hole in their argument that the stadium is in such bad shape that MLB could order the Diamondbacks to leave Arizona.
  • Austin residents will get to vote in November on whether the city can give public land to a pro sports team owner without a public vote, but it’ll probably be too late to affect the deal to do that for Austin F.C. owner Anthony Precourt. It’ll come in handy next time Austin is in the market for a pro sports team, I guess, though then the owner will probably just figure out a different way to ask for subsidies. “Better late than never” doesn’t work that well when it comes to democracy.
  • Calgary Mayor Naheed Nenshi said he’s “not sure that there’s much space for public consultation” on a redevelopment project to include a Flames arena, though he added that “it would be very interesting to hear from the public on what they think the right amount of public participation in this should be, and certainly there will be an opportunity for the public to have their voices heard but it might not happen until there’s something on the table.” It’s hard to tell whether that’s a justification or an apology — and keep in mind that Nenshi was deliberately shut out of the committee negotiating any deal — but there you are.
  • MLS commissioner Don Garber just got a five-year extension, and — quelle coincidence! — the league is now talking about expanding to 32 teams by 2026. Whether this is really a Ponzi-esque attempt to paper over weak financials with a constant influx of expansion fees won’t be entirely clear until the expansion finally stops and we see how the money looks then, but one thing is increasingly clear: It’s kind of crazy to throw stadium money around in hopes of landing an MLS franchise when it’s increasingly clear every reasonably large city in the U.S. is going to get one sooner or later.
  • And finally, Amazon pulled out of its $3 billion tax break deal with New York yesterday, and it sounds like it’s because its execs were tired of taking a PR beating around the company’s anti-union stance and contracting for ICE. Some New Yorkers are celebrating victory, others are retreating into the Casino Night Fallacy, and as always, The Onion has the final word.

Friday roundup: Don’t subsidize bad people, XFL to pay St. Louis more in rent than Rams did, unscientific poll on Suns arena is unscientific

Happy first Friday roundup of 2019! I could add a whole lot of thoughts on lists I’ve read and haven’t made of the best of this and that of last year, but to save time let me just stick with saying that this song is pretty damn excellent and get right to the news of the short week:

  • Sally Jenkins of the Washington Post wrote a column about how Washington NFL team owner Daniel Snyder is a bad person and a terrible owner and should never get a dime of public stadium money because that’d be “a bailout, welfare,” none of which I can disagree with, but at the same time I’m a bit uncomfortable with the implication that if Snyder were less unpleasant, he’d then be deserving of public largesse.
  • The XFL may still be considered a bit of a joke league, but at least it can pay the city of St. Louis a decent stadium rent, unlike the Rams ever did. (Of course, the “joke league” bit is exactly why they are being required to pay real rent whereas the Rams could refuse to; there’s not much advantage to being an 80-pound gorilla.)
  • This essay responding to Amazon’s tax breaks is pretty excellent, though it’s still a half-notch below this classic Tom the Dancing Bug cartoon.
  • An opposing team manager has demanded that Tottenham Hotspur be required to play the rest of their season at Wembley rather than moving into their much-delayed stadium, because … teams that got to play them while they were adjusting to their new grounds would have an advantage somehow? From what I’ve been able to tell, most of home-field advantage in soccer comes from home fans booing (or whistling) at refs to intimidate them into making calls that go their team’s way, but the last time I tried reading the literature on this it quickly went deep into the weeds, so I won’t belabor the point.
  • “Fans at Talking Stick Resort Arena” were “surprisingly” in favor of spending public money to renovate the Phoenix Suns arena, according to Fox10 Phoenix, compared to “the online response” which was more “mixed.” This is both an impressively off-label use of “surprisingly” and an impressively lazy attempt at polling Phoenix residents — two impressively lazy attempts, even — so fine job, Fox10 Phoenix!

Amazon subsidies and sports stadium subsidies are each terrible in their own special way

If you didn’t already get enough links to read from today’s weekly news roundup, and didn’t hear enough of my thoughts on Amazon’s $4 billion payday as it compares to sports subsidies, I’ve elaborated on my thoughts at length in an article that just went up this morning at Deadspin. Some sample takeaways:

  • Jeff Bezos will be getting more public cash than any single sports venue, but at least he’ll be employing actual full-time workers, so the cost-per-job ratio won’t be as dismal as in sports deals (though it’s still probably pretty bad).
  • Just like we’ve seen in sports deals, here are tons of hidden costs to the Amazon agreements, from infrastructure slush funds paid for with public tax dollars to federal tax shelters set up by Donald Trump that will cover Amazon’s New York headquarters, even though they were supposed to be for impoverished areas and Long Island City is decidedly not.
  • As in many sports deals, Amazon’s subsidies will evade most public oversight (in New York, anyway), and were arguably unnecessary at this level given that the company, like sports teams, undoubtedly ended up locating in the market that it wanted to anyway.

Or if you want to skip to the ending: “The Amazon deal is ultimately another step in the legitimization of government by extortion, where the nation’s richest men can withhold ‘job creation’ as a condition of not having to pay taxes, or commute without a helicopter.” But go read the whole thing, it’s way more entertaining than the bullet-point summary above, or at least way more packed with pop-culture references.

Amazon just walked away with maybe $4B in public cash for doing what it was going to anyway

In case you somehow missed it, Amazon made it official this morning that its new 50,000-person second headquarters was going to be split into two 25,000-person sites, one in the Long Island City section of New York City and one across the river from Washington, D.C., in Arlington, Virginia. (Nashville, Tennessee, will also get an “Operations Center of Excellence,” which is maybe not the name you want to give your corporate outpost if people are already worried your company is an Orwellian nightmare.)

Attached to its press release, Amazon included the full memoranda of understanding for the New York, Arlington, and Nashville deals — since my purpose in life somehow seems to have evolved into reading these damn things and figuring out what’s hidden in them, I sat down to write up an analysis of the New York deal for Gothamist. The upshot: Between the city and the state, Amazon will cash in at least $2.5 billion in checks from the public (and probably more like $3 billion — see update below) in the form of tax breaks and other goodies. With Jeff Bezos in line for about another $1 billion from Virginia and a pittance of $60 million from Nashville — hardly worth counting the bills, honestly — that’s about $4 billion that America’s richest man will be raking in for the trouble of holding a year-long bidding war before doing whatever he wanted anyway.

A few further notes on this, from our usual perspective of sports subsidies:

  • Damn, that is a chunk of change. Yes, an Amazon headquarters is arguably more valuable than a sports stadium — there’s no way even the busiest sports venue will employ 25,000 workers, and those it does employ only be there a few hours a day during the season of whatever sport it hosts — but even the Steinbrenners have never managed a $4 billion payday. Neither did Elon Musk. (Though Boeing did, and celebrated by laying off workers.)
  • Modern subsidies are really hard to keep count of. Amazon’s press release fessed up to $1.5 billion in subsidies from New York and $573 million from Virginia, but that didn’t count $200 million from each state for bonus jobs created over 25,000, nor a $300 million infrastructure fund in Arlington, nor about $1.3 billion in off-the-rack tax breaks from New York City (I included $900 million of those in my Gothamist article, the New York Post’s Nolan Hicks found another $386 million), nor an additional infrastructure slush fund that will be created in New York from payments in lieu of property taxes. I’ve been staring at this thing all day and I still don’t feel 100% confident there aren’t additional hidden costs lurking about — which is par for the course for both sports and non-sports subsidy deals.
  • Subsidies aren’t what determine location decisions. We’ve seen this before in sports, where team owners have used the threat of going elsewhere to shake down the cities they already want to be in for cash. But it’s especially bald-faced in this case, where other states offered as much as $8.5 billion for Amazon’s hand, only to have Bezos say, Sorry, our first love is big cities where techies want to live. At which point you have to wonder: If Amazon was going to go to NYC and D.C. anyway, why did those locales bother coughing up so much public money? As with sports venues, cities could be thinking, “These people on the other side of the table need us more than we need them” — but they’re largely not.

Anyway: New York just threw a giant wad of cash at Amazon, Arlington can comfort itself that its wad is at least a bit smaller, and all the cities that missed out don’t get the new jobs, but do get to keep their money. There’s probably a lesson in here somewhere, but given that everyone involved is steadfastly refusing to learn it, it’s hardly worth spelling it out.

Friday roundup: More MLS expansion drum beating, more wasteful non-sports subsidies, more bonkers Tottenham stadium delay stories

Getting a late start this morning after being out last night seeing Neko Case, so let’s get to this:

Friday roundup: Bucks say arena can fight racism, Rays in line for federal tax breaks, Falcons to get glowing bridge

Slow news week thanks to the holiday, but there were still a few items of note:

  • Milwaukee Bucks president Peter Feigin thinks his new publicly funded arena will help fight segregation because it’ll have a public plaza. The Chicago Tribune notes that the Bucks owners once released a strongly worded statement of support for one of their players after he was tased by Milwaukee police, so … nope, I don’t get the connection either, unless this reporter was assigned to cover Feigin and couldn’t find much else to say about his bizarro statement, so just googled “Milwaukee and race and basketball” and dumped the results into a Word file.
  • The Sacramento Kings owners are going to use computers at their arena to mine cryptocurrency for charity, which mostly serves as an excuse for the team to issue a press release mentioning themselves in the same sentence as blockchain, because we know that’s a thing. Too bad the earth is going to burn as a result, but everything’s a tradeoff, right?
  • Ybor City, where the Tampa Bay Rays want to build their new stadium (price and funding still TBD), has been tabbed as a federal “economic opportunity zone,” meaning developers can use it as a short-term tax shelter for profits that are reinvested into the area. The program is way too complicated for me to calculate at the moment just how much U.S. taxpayers would end up paying toward a Rays stadium, but suffice to say it’s one more piece of the funding puzzle that team owner Stuart Sternberg doesn’t have to worry about himself.
  • Speaking of the Rays, they’ve announced they’ll release new renderings of their stadium plans next Tuesday, which I guess makes this announcement itself vaporvaportecture?
  • The Atlanta Falcons pedestrian bridge that will now cost Atlanta residents $23 million is going to glow! And who can put a price on that, really?
  • Since it was a slow stadium news week, here’s a bonus article on how Nevada giving $1.4 billion to Tesla to open a battery factory there is looking to be a disaster, with the state ending up losing its entire budget surplus while new workers attracted to the area have driven up rents and increased local government’s police, fire, and schools costs, leaving residents with a higher cost of living and fewer services. One unemployed local who was forced to move into a motel room listed for the Guardian things she now considered unaffordable luxuries: “Ice cream. Bacon. A movie ticket.” It’s a fun weekend beach read!