Friday roundup: Charlotte approves $35m in soccer subsidies, NYC spends $5m on stadium upgrades for team that may disappear, NBA joins NFL in welcoming fans back to giant virus stew

Even after dispensing with that crazy San Jose Sharks move threat story, there’s a ton of leftover news this week. So put down that amazing Defector article about how the British have fetishized the Magna Carta as a declaration of citizen rights when it’s really just about how the king can’t unreasonably tax 25 barons, and let’s get right to it:

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CFL shuts down season after Canadian government refuses to pay them to play

The Canadian Football League canceled its 2020 season yesterday, announcing it was abandoning plans to play games in a “bubble” in Winnipeg and instead will plan on resuming play in 2021. Commissioner Randy Ambrosie explained:

“Even with additional support,” Ambrosie said in a statement, “our owners and community-held teams would have had to endure significant financial losses to play in 2020. Without it, the losses would be so large that they would really hamper our ability to bounce back strongly next year and beyond. The most important thing is the future of our league.”

That “additional support” Ambrosie mentioned was government money, something that goes back to April when the commissioner asked for $150 million in federal funds (all CFL numbers in Canadian dollars from here on out) and then said teams could repay it by showing government PSAs on game broadcasts. That went over really poorly with members of parliament, and Ambrosie eventually switched to asking for a $44 million interest-free loan, then a $30 million interest-free loan, but came up empty.

Government loans and grants to bail out businesses that suffered unexpected losses due to the Covid pandemic are commonplace, of course — American, United, Delta, and Southwest Airlines combined have gotten $19.5 billion, and the U.S. Paycheck Protection Program alone has handed out $380 billion in forgiveable loans, of which only some has been used to buy yachts. But the CFL cash request was weird, in that it was intended less to keep people employed than to compensate league owners (or “philanthropists,” as Ambrosie called them) for losses from this season, which will supposedly amount to between $60 million and $80 million).

The real reason that the CFL is shutting down when other leagues are pushing ahead with season plans, as we’ve covered here before, is more about the league’s contract with its players’ union saying it doesn’t have to pay salaries if there are no games, so the league’s nine teams will save about $50 million collectively on payroll by not playing. U.S. sports leagues haven’t wanted to give up the vats of TV money they can earn even for playing games in empty stadiums and arenas; the CFL gets about that much from its new national TV deal, but I guess you also have to pay for turning the lights on and buying equipment and all that other stuff, so the league’s owners figured, meh, let’s just skip a year and come back when the grass is greener.

What just happened, then, is that the CFL decided it was only worth it to play games in 2020 if the Canadian government paid it to do so, and when that didn’t happen, it took its ball and went home. Which is its right to do, but it’s also Ottawa’s right to say, Hey, it’s not our job to underwrite your profits. I mean, who do the CFL owners think they are, American Airlines?

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Friday roundup: CFL calls its owners “philanthropists” who need bailout, plus actual sport with actual fans takes place in actual stadium!

And how is everyone out there? Going stir-crazy? Waking up early to watch Korean baseball? Starving to death? All good options!

I personally have been watching this 1988 game between the Philadelphia Phillies and Montreal Expos (spoiler: Randy Johnson is, as the announcers keep noting, very tall), while continuing to keep tabs on what passes for sports stadium and subsidy news these days. Let’s get to it — the news, I mean, not the Phils-Expos game, I have that paused:

 

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CFL demands up to $120m in bailout cash, offers to “repay” it through player public appearances

Anyone who had the Canadian Football League in your betting pool for “Which pro sports league will be the first to request a coronavirus bailout?”, you are an unexpected winner!

CFL Commissioner Randy Ambrosie told The Canadian Press on Tuesday the league’s proposal involves three phases: $30 million now to manage the impact the novel coronavirus outbreak has had on league business; additional assistance for an abbreviated regular season; and up to another $120 million in the event of a lost 2020 campaign.
“We’re like so many other businesses across Canada,” Ambrosie said. “We’re facing financial pressures unlike anything we’ve seen before.

“Our best-case scenario is we’re almost certain to have to cancel games. But at worst if this crisis persists and large gatherings are prevented, we could lose the whole season and the types of losses we could incur would be devastating.”

You and everybody else, pal. But let’s take a closer look at those “devastating” projected losses.

Forbes doesn’t bother with an annual survey of CFL team finances, but thanks to several teams being publicly owned, we can get a glimpse at what a typical balance sheet looks like. The Saskatchewan Roughriders‘ 2018-19 annual report, for example, shows $40.4 million in gross revenues (almost half of that from ticket sales, with merchandise sales and sponsorship money tied for a distant second) and an equal $40.4 million in operating expenses. (Capital fundraising by fan groups resulted in a net $1.5 million profit.) The biggest expense ($14 million) is listed as merely “football operations,” which could include a lot of things, though notably not “home game expenses,” which is a separate line item.

Slightly less than half of the football operations expenses are player salaries, based on the league’s $5.75 million salary cap. (I was about to write something about having to pay for costs like health benefits as well, then I remembered, Canada.) The Canadian government is offering to cover about $10,000 worth of payroll costs per employee through June 6, something that seems likely to be extended if the pandemic keeps businesses shuttered past that point, something that is almost certain at this point. But given that the CFL’s player contract indicates that players don’t get paid if there are no games, player salaries likely aren’t an expense that teams need to worry about.

What other expenses can be dispensed with if there’s no season? Advertising ($2.5 million) and ticket office costs ($1.3 million), for starters, and likely a whole lot more. But clearly some costs can’t be entirely eliminated, so each team is going to face at minimum millions of dollars in red ink.

That’s going to be a far bigger problem for teams like the community-shareholder-owned Roughriders than for, say, the Toronto Argonauts, owned by Canadian telecommunications giant Bell Media, which turned a $3 billion profit last year. But still, even if the CFL could be fine in the long run, a one-time revenue hit would create a fiscal crisis that could destabilize the league, so it’s not entirely unreasonable for the Canadian government to look for ways to help.

Ways to help, though, could mean a lot of things. For starters, as a Change.org petition opposing the subsidies proposes, the government could simply loan the league money, with promises that it would be repaid at a later date once games have resumed. But that, uh, is not exactly what the CFL has in mind:

Ambrosie has insisted that the CFL would find ways to pay back the $150 million if the government grants the request to help keep the league afloat. The league and its teams would not write a cheque to re-pay the funds — rather, the CFL has proposed an in-kind “payback” by involving players in the community and in charitable and government-sponsored programs, such as social programs, tourism videos and public health initiatives.

That would be an awful lot of tourism videos to get to $150 million! Not to mention that I’m very curious to hear how eager CFL players would be to appear in tourism videos their team owners promised they’d do to “repay” loans that weren’t used to pay them any salaries.

Situations such as this one get us back to a philosophical difference about what government involvement with sports leagues should look like. Some subsidy critics, especially those of a more fundamentalist libertarian bent, take the line that the business of sports isn’t the government’s business, and any money changing hands is a bad thing. Others — such as the majority voting populace of Seattle, or me — think that you cant and shouldn’t try to untangle government policy from private business operations, so the best goal should be to ensure that any money provided by the public at least results in some equal public good.

If CFL teams want to take out a loan from Canadian taxpayers, in other words, they should make it worth their while. There’s an almost infinitely long list of ways they could do so — an increased public stake in teams, free or discounted tickets to future games, a share of future revenues, one free serving of poutine to every household in the nation — but “our players will appear in some tourism videos, no change” is not one of the better ones.

At least one member of parliament is demanding to see the CFL’s books before agreeing to any leaguewide bailout, which would be a start. But — as with other industry bailouts — it’s important to get this right, because you only have one chance to demand some kind of public return on a public expense. If the U.S. airline industry can agree to provide both cash and an equity stake to the public in exchange for loans, then you wouldn’t think it’d be too much of an ask for perky Canada to demand the same of its pro football league.

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Friday roundup: Sports remains mostly dead, but train subsidies and bizarre vaportecture live on

It’s been a long, long week for many reasons, so let’s get straight to the news if that’s okay:

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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.
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Halifax council okays $20m for CFL stadium for ex-Coyotes owner, but says not a penny more

In a bit of a surprise because everyone in local government seemed to hate the idea, the Halifax regional council voted 10-7 yesterday to provide $20 million in public money toward a new CFL stadium in the city. There are a few caveats, though:

  • Would-be Halifax Schooners owner Anthony LeBlanc (yes, that guy) wanted as much as $79 million, but is getting only a little more than a quarter of that.
  • LeBlanc will have to agree to pay full property taxes on the stadium.
  • The government won’t be on the hook for any construction loans or ongoing capital or maintenance costs.

This is not the worst deal in the world for the public, and certainly a lot better than what LeBlanc was proposing. On the other hand, $20 million is $20 million, and there are lots of other things that Halifax could be spending it on instead: One councillor who voted against the proposal said he’d rather see the money go toward a new police station, a new library, or traffic and transit improvements.

Of course, LeBlanc now still needs to raise the rest of the money for a $110 million stadium, and the CFL has to approve a new franchise, though the league did make appreciative noises following yesterday’s vote. Part of me kind of hopes this stadium does happen, if only to see if they really build something that looks anything like the surreal renderings.

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Friday roundup: Developers pay locals $25 each to hold pro-arena signs, a smoking and farting winged horse team logo, and do you even need a third thing after those two?

It’s been another week of pretty bad news, topped off by a private equity firm somehow buying the entirety of .org domains, meaning every nonprofit website will now have to be licensed from an entity whose sole mission is to squeeze as much money from them as possible. The stadium and arena news, by contrast, isn’t all terrible, so maybe it qualifies as cheery? You be the judge:

  • The Richmond city council voted Tuesday to put off a decision on a $1.5 billion downtown development that would include a new arena (public cost: $350 million), after a contentious hearing where both supporters and opponents held signs espousing their opinions. Or espousing somebody’s opinions, anyway: Some locals holding “yes” signs later reported that the project’s developers paid them $25 a pop to do so. City council president Michelle Mosby replied that if anything people were just reimbursed gas money, which 1) only makes sense if everyone there drove their own car and had to travel like 250 miles round trip to get to the hearing and 2) isn’t really any less corrosive of democracy anyway.
  • If you’ve been wondering how Inter Miami plans to build a temporary 18,000-seat stadium in Fort Lauderdale (later to be turned into a practice field) between now and March and figured it would have to involve throwing up a bunch of cheap metal bleachers, now there’s video of construction workers doing exactly that. Also laying down the sod for the field, which I thought usually takes place after the stadium is more or less built, but I guess if they can build the stadium without treading on the field, no harm in doing so now. This all raises questions of whether the stadium will feel excessively crappy, and if not why more soccer teams can’t just build cheap quickie stadiums like this without the need for public money; I guess we’ll know the answer by springtime one way or another.
  • When the state of Minnesota agreed to pay for the Vikings‘ new stadium with cigarette revenue after electronic pulltab gambling money didn’t come in as expected, it still kept collecting the gambling cash; and now that e-pulltabs (which are just lottery tickets, only on a tablet) have taken off, there’s debate over what to do with the cash that the state is collecting, about $5 million this year but projected to rise to $51 million by 2023. The Vikings owners want the money used to pay off their stadium debt early, while some lawmakers would like to use the revenue to fund other projects or reduce taxes on charitable gambling institutions now that it’s no longer needed — all are valid options, but it’s important to remember that the state already paid for most of the stadium, this is just arguing over what to do with the zombie tax that was left over after the financing plan was changed. (It would also be nice to know if e-pulltab gambling has cannibalized revenues from other gambling options, thus making this less of a windfall, but modern journalists have no time for such trivialities.)
  • The city of Wichita is spending $77 million (plus free land) on a Triple-A baseball stadium to steal the Baby Cakes from New Orleans, and have been rewarded with the Wichita Wind Surge, a name that’s supposed to reference the city’s aviation history or something but actually means “storm surge,” which isn’t a thing that they have in landlocked Kansas? It also features a logo that looks like a horse and a fly got caught in a transporter accident, which the team’s designer explained with “The nice thing about Pegasus, however, to me, was the fact that it’s got a horse in there.” A local designer responded with a sketch of a winged horse smoking a cigarette, drinking a beer, and farting, which by all accounts is much more popular with Wichitans. (The sketch is, I mean, though I’d love to see a poll asking Wichitans, “Which do you prefer, the name Wichita Wind Surge or farting?”)
  • San Diego State University’s plan to buy the city’s old football stadium and its surrounding land for $87.7 million has hit some “speed bumps,” namely that city economists have determined that the price could be below the land’s market value and $10 million of the sale price would have to be set aside for infrastructure improvements for the university’s development. “There’s also the matter of the $1-per-month lease that, as proposed, may not adequately protect the city from expenses or legal risk,” notes the San Diego Union-Tribune. Given all these uncertainties, the city’s independent budget analyst called SDSU’s proposed March 27 deadline “very challenging,” not that that’s stopped city councils before.
  • Saskatoon has enough room under its debt limit to finance either a new central library or a new sports arena, and regardless of what you think of how badly Saskatooners need a new library, it’s still a pretty strong example of how opportunity costs work.
  • The Phoenix Suns‘ new practice facility being built with the help of public money will include a golf simulator for players, because of course it will.
  • Speaking of Phoenix, the Arizona Republic has revealed what the Diamondbacks owners want in a new stadium; the original article is paywalled, but for once Ballpark Digest‘s propensity for just straight-up paraphrasing other sites’ reporting comes in handy, revealing that team owners want a 36,000-  to 42,000-seat stadium with a retractable roof and surrounded by a 45- to 70-acre mixed-use development and a 5,000-seat concert venue and good public transit and full control of naming-rights revenue and public cost-sharing on ballpark repairs. And a pony.
  • Will Raiders football hike your home value?” asks the Nevada Current, apparently because “Is the moon made of green cheese?” had already been taken.
  • And last but certainly not least, your weekly vaportecture roundup: The New Orleans Saints‘ $450 million renovation of the Superdome (two-thirds paid for by taxpayers) will include field-level open-air end zone spaces where fans have ample room enjoy rendered people’s propensity for flinging their arms in the air! The new Halifax Schooners stadium designs lack the woman hailing a cab and players playing two different sports at once from previous renderings, but do seem to still allow fans to just wander onto the field if they want! It should come as no surprise to anyone that even Chuck D can do a better job of drawing than this.
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Friday roundup: Team owners rework tax bills and leases, Twins CEO claims team is winning (?) thanks to new stadium, and other privileges of the very rich

Tons more stadium and arena news to get to this week, so let’s dive right in without preamble:

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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:

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