Thursday roundup: NBA mulls expansion to raise quick cash, 60-year-old community-owned team sold to local rich dude, Crew may seek more tax breaks somehow

Happy pre-Christmas, everybody! (That’s the name for today, right? I really should Google that.) Here’s the stray news for the short holiday week:

  • NBA commissioner Adam Silver has called expansion the league’s “manifest destiny” and said that “it’s caused us to maybe dust off some of the analyses on the economic and competitive impacts of expansion” (what “it”? shh, don’t ask questions, the important man is talking) but “not to the point that expansion is on the front burner.” The implication is after losing like $1.5 billion in revenue, some quick cash from expansion fees sounds real good about now, but Silver’s not going to be the one to say that out loud, not when it might make him look desperate, not when it’s expansion cities and prospective owners that should be begging him to expand, that’s just how this is supposed to work, you know.
  • The Wisconsin Timber Rattlers, since 1958 run by a community-owned non-profit, have been sold to a local rich guy because, um, something about Covid. Also the non-profit’s chair, Tom Lehr, said “100% of the profits from the sale of the team to Third Base Ventures will be invested back into the team,” according to the Appleton Post-Crescent, which, what? This guy gets to buy the team, and also use the money he paid for it on the team as well? What is even happening.
  • The Columbus Crew‘s old stadium, which is set to become the team’s training ground plus public soccer fields, still belongs to the team while the land under it belongs to the state, and the team has to make $210,000 in payments in lieu of property taxes each year under a 2007 court settlement, but they’re working on a long-term lease now and a term sheet proposed by the team mentions “Ownership of existing MAPFRE Stadium to be discussed and examined in connection with real estate tax and other considerations,” and all this is a red flag but no one’s quite sure of what exactly. Maybe something that should have been considered before giving the Crew $98 million toward a new stadium? Ennnnh, that seems like a lot of work.
  • This year’s Rose Bowl is going to be played in Texas because that California has one of the nation’s worst coronavirus surges (Texas isn’t far behind, but Texas’s governor doesn’t care), and also this year’s Pro Bowl is going to be played on Madden, which warms my heart that our glorious future may finally arrive soon. If you’re wondering if the Pro Bowl had to be moved because its home stadium in Honolulu is on the verge of being condemned, nope, it was going to be in Las Vegas this year anyway, but, you know, Covid. Also, Honolulu’s outgoing mayor Kirk Caldwell warns that the city’s indoor arena is even older than the stadium and even though it’s getting a $43.6 million upgrade, “at some point you run out of life” and okay, yes, Caldwell’s plan for a $700 million replacement arena was already rejected and also he’s only mayor for another week, sorry, I don’t know why we’re actually talking about him.
  • There’s now an online petition against “any taxpayer funding being used to finance, construct, acquire, renovate, equip, enlarge, or operate a new baseball stadium within the City of Knoxville or Knox County.” Allow the debates over what counts as “taxpayer funding” to commence now!
  • If you want to work at F.C. Cincinnati‘s new stadium, they’re hiring! What about all the people who worked at the team’s old stadium, which actually averaged more fans per game than the new one will hold? Sorry, no room in the article for that!
  • The owners of the New York Yankees have agreed to provide ten $5,000 grants to local businesses suffering amid the pandemic — wait, seriously, $50,000? That’s roughly how much the Yankees pay Gerrit Cole for each batter he faces. “We are extremely appreciative of this support from the Yankees,” local bar owner Joe Bastone said, according to a statement issued by the Yankees, which ended up getting a bunch of media coverage out of it, all of it positive. Until now.
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The sad story of the stadium named Dr Pepper for no good reason

A reader this weekend sent me this otherwise-innocuous article from 2019, which halfway through veers into discussing a stadium naming-rights deal gone wrong. Or, depending on your perspective, gone very very right:

If nothing changes before opening day on April 4, for the second consecutive season the team will play in a Dr Pepper Ballpark that is no longer technically Dr Pepper Ballpark.

After a 15-year relationship, the Plano-based soft drink company didn’t renew its sponsorship with the RoughRiders when its contract expired Oct. 1, 2017. …

Though it stopped paying for the privilege 16 months ago, Dr Pepper’s signage remains up throughout the RoughRiders’ stadium and the “Dr Pepper Stadium” name and logo is still prominent on the team’s website and promotional materials.

The Dallas Observer omits a few details here, so let’s back up a second. The Frisco RoughRiders of the Double-A Texas League are the former Shreveport Swamp Dragons of the Double-A Texas League, whose owner, then-Texas Rangers owner Tom Hicks, relocated them in 2003 after getting the city of Frisco to build him a new 10,000-seat stadium. The city put up $67 million in future tax kickbacks toward the project, with Hicks kicking in another $233 million, though a lot of that wasn’t for the stadium but rather for the mixed-use development Hicks built around the stadium. (And was later sued by one of his partners over, before ending up going bankrupt and selling all his sports teams, but that is one if not several other stories.)

Though the city of Frisco helped pay for the park’s construction and owns the building — the better for Hicks not to pay property taxes on it — Hicks kept the revenue for himself, including any cash raised by selling naming rights to the RoughRiders’ new home. (Selling naming rights to buildings you don’t own is standard business practice among sports team owners, apparently for no better reason than that sports team owners tell city officials that it’s standard business practice.) Dr Pepper/Seven Up, which had its headquarters in neighboring Plano, stepped up with a 15-year offer for an undisclosed amount of money to name the new ballpark Dr Pepper/Seven Up Ballpark, which was such a massively stupid name that it was quickly shortened to just Dr Pepper Ballpark.

When that naming-rights deal expired after 2017, the company, by now renamed Dr Pepper Snapple after a series of corporate shenanigans too boring to recount here, decided that maybe having a stadium named after your soft drink wasn’t the best marketing strategy after all, and declined to renew. RoughRiders officials quickly announced that they would be seeking a new $18 million, 12-year deal, and at least one local economist predicted they’d have no trouble finding a company to pay up.

That has not gone so well. Three years later, the naming rights have still not resold, yet the stadium is still called Dr Pepper Ballpark. This is, apparently, because the team can’t be bothered to take down the old signage. As an anonymous former team employee told the Dallas Observer, “It would cost money to pull all those signs down. We know money is pretty tight up there so, congrats Dr Pepper, free advertising!”

For reference, here is a photo of the main stadium signage, which looks like it would be pretty easy to dismantle and take down, or, you know, throw a tarp over:

There is probably much to be said about the shortsightedness of minor-league sports team owners or the effect on naming-rights value of having ingrained one name in people’s consciousness for 15-going-on-18 years, but really I just want to focus on this poor baseball stadium, which not only has to put up with being festooned with drab gray siding and outfitted with a lazy river to coerce people to brave the Texas heat watching Double-A baseball, but is stuck being named after a poorly punctuated soda designed to taste like the inside of a drug store even though no one is paying for it to be called that. This is either an indictment of modern sports or late capitalism or something, but it makes me sad and yearn for simpler times when ballparks were named after racist team owners or something. Allow me some gauzy nostalgia, no matter how ahistorical it may be!

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Hartford unveils $100m arena upgrade so fans can ignore the game in comfort

The city of Hartford is taking advantage of pandemic downtime to move ahead with $100 million in state-funded renovations to its arena, something that would otherwise require interruptions to … the minor-league hockey Hartford Wolf Pack, I guess some concerts, whatever else they use the place for these days. The 45-year-old arena was previously described by its director as “out of its prime” and “tired,” and today we get a bunch of rendering showing how untired it will be with $100 million thrown at it:

Okay, this is some kind of dining area, I think? At least, that looks like a steam table of some kind off to the right, though one without any actual food on it. The woman in the shiny new Adidas appears to be taking a photo of it, because in the future, Instagramming empty plates will be a way to, I dunno, express solidarity with climate famine victims or something?

And this is … a cafe? The two identical bearded servers look to be pouring coffee, anyway. Not that anyone is drinking coffee, or doing much of anything else, other than using laptops and talking on their phones, while both hockey and basketball games play on ignored screens in the background.

This is a “bunker suite,” which would be built below the lower seating level. (You can glimpse the actual arena bowl at the top of those stairs to the right.) There would be a seating area for four to eight people outside the suite, while everyone else could sit on a sofa and watch on TV, or maybe in a comfy chair arranged so they couldn’t see the TV at all, in case the game is too painful to watch.

The Hartford Courant says the goal of all this is to “bring spectators closer to the action,” but if there’s one common theme, it’s that none of the renderings actually show people being able to see the action at all, or even paying the slightest attention to it. The reasonable conclusion is that the state of Connecticut has decided that the way to get people to go to more sporting events and concerts is to make doing so as much like sitting at home or watching at a bar as possible — which is definitely not an uncommon strategy, but does seem a little weird given that watching at home or at a bar doesn’t require shelling out for a ticket. We’ll see how it goes, I guess — the state will need to bring in several million dollars more a year to recoup its $100 million expense, so Connecticut sports fans had better be ready to drink a whole lot of invisible coffee.

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Friday roundup: Phoenix to get USL stadium with giant disappearing soccer ball, plus more fallout from MLB slashing minor league teams

Too much going on this week to have time for more than a brief intro, but I do want to note that “’Company announces advertising campaign’ is not a story, no matter how easily that campaign can be metabolized by the publications it’s aimed at” is something that should be tattooed on the foreheads of all journalists, even if it is a quote from an article about Pantone colors.

And now, how sports team owners and their friends are trying to rip you off this week:

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Raleigh commission warns $2B soccer plan could displace residents, council may still okay it

Plans for a $2 billion office/residential/hotel complex in Raleigh including a $180 million stadium for the USL’s North Carolina F.C. and the NWSL’s North Carolina Courage have been burbling along for more than a year now, as locals expressed concerns about the more than $300 million in city and county tax money that would be required over 30 years and also about encouraging gentrification and whether the city could afford any of this during a pandemic recession budget. Still, Steve Malik, the owner of the two soccer teams, and local developer John Kane got as far as a vote of Raleigh’s Planning Commission last night on rezoning the land, when things when unexpectedly awry, as the commission voted unanimously to deny the rezoning request because, man, I dunno, you try to parse all this:

“I find this whole thing disappointing because there is a general opportunity here for Raleigh, but you can’t do it at the expense of people,” said commissioner Jennifer Lampman.

“Maybe this is a really good thing, but it’s coming before things are in place to guide the growth to ensure that it is equitable. I worry by approving this now we will be signing off on the potential for disproportionally high and adverse transportation, environmental, economic and social impacts and there would primarily be bored by black communities,” said commissioner Nicole H. Bennett

“This rezoning application shows a vicious disregard for equity and fairness,” said commissioner Michele McIntosh.

The upshot — assuming WNCN-TV meant to type “borne,” not “bored” — seems to be that the planning commission is mostly worried that the project would price out residents of southeast Raleigh without consulting them first, a concern that has been raised in the past. And it’s a legit concern: Big development projects absolutely can, if not directly raise property values themselves, serve as a way to market a neighborhood as “revitalized,” which is the kind of thing that deep-pocketed newcomers like to hear, because less-well-heeled residents are unvital if not a little bit scary.

Still, we shouldn’t give short shrift to the concern that spending as much as $335 million in public money (mostly future property tax kickbacks, plus some other public cash) on a project based around a 20,000-seat stadium for one minor-league soccer team and one women’s soccer team — teams that currently average about 4,000 and 6,000 fans per game, respectively — is a little bit nutso. Malik has talked of wanting an MLS-ready stadium for Raleigh, but even though MLS seems determined to put a team in every city in North America, Charlotte is already getting an expansion team in 2022 with the help of public stadium upgrades, so a second North Carolina team probably isn’t going to be a priority anytime soon. (There was discussion earlier this year of downsizing the proposed stadium to 12,000 seats, but WNCN is saying 20,000 seats again, so either the developers are back to their original plan or the station’s proofreaders were asleep at the switch again.)

This whole mess will be dumped in the lap of the Raleigh city council for a public hearing next Tuesday, at which point lawmakers will decide whether to move ahead with the project or just torpedo the whole thing once and for all. Or at least until the developers inevitably return with a new plan, maybe one where they’ve paid to create some local pro-development groups? That’s how the pros do it.

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Friday roundup: More Jaguars move threats, more bad convention center spending, time is an endless loop of human folly

It’s Friday again! And December, how did that happen? “Passage of time,” what manner of witchcraft are you speaking of? Time is an eternal, unchanging present of toil and suffering under the grip of unending plagues! Thus has it ever been!

This notwithstanding, there was some news this week, though in keeping with the theme, it looks an awful lot like the news every week:

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Henrico County announces “smart economic partnership” for new Richmond arena that looks just like one city rejected as dumb last winter

When last we left the city of Richmond, Virginia, it was bailing on a plan to spend $300 million on a downtown arena after determining that doing so could have left the city raiding its schools budget and general fund if things went south. But never fear, the same developers are back with a new plan out in Henrico County that would cost even more money:

A group including Michael Hallmark and Susan Eastridge are planning a massive $2.3 billion arena-anchored development on the Henrico-owned 93-acre former Best Products site, according to an announcement made by the county this morning….

The $250 million multi-purpose arena would be comparable in size to what Hallmark and Eastridge had proposed as part of their involvement in the unsuccessful Navy Hill development which would have replaced the Richmond Coliseum. That project was killed by Richmond City Council in a heap of controversy earlier this year.

County Manager John Vithoulkis alluded to Navy Hill’s fate in explaining at today’s press conference how Henrico expects to handle things differently than the city.

“This is what we do in Henrico: Smart economic partnerships with no risk and significant benefit to the tax payer,” he said.

Yeah, about that “no risk” to the taxpayer, how would the Henrico County project be funded?

GreenCity would be financed in part through the creation of a community development authority, which would allow for the sale of private bonds that would be repaid with taxes produced by the development.

A community development authority is basically a tax-increment financing district, where tax payments from a development are kicked back to developers to pay down their construction debt. In other words, pretty much the exact same plan that was considered by the city and rejected, because TIFs way too often turn into money pits if the projected tax revenue doesn’t come in. (And even if it does come in, if siphoning off tax revenues turns your local budget into Swiss cheese.) This is what we do in Henrico: Copy off of other jurisdictions’ dumb ideas, then declare them to be smart, because we’re the ones doing them! Oh, and call it GreenCity, all the kids will like the sound of that.

UPDATE: A reader points me to the Henrico Citizen’s reporting on the county plan, which says the main difference from the city plan is that the tax kickbacks would be limited to taxes paid by the project itself, not any surrounding properties. Which is a nice idea in theory, but if those taxes were enough to pay off construction costs, then why would the city have needed to make the TIF district bigger? And there’s nothing stopping the county from making its district bigger if its money runs short. So while not exactly the same as the city’s plan, it’s awfully close, and Henrico really needs to come up with more details than “Different acronym! And the green thing!” to show that it would be any better for taxpayers.

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Friday roundup: Raiders stadium runs short of tax dollars, Falcons owner makes film about how great Megatron’s Butthole is, and a Ricketts cries poor (again)

Well, that was certainly something to wake up to on a post-Thanksgiving Friday morning. Not sure how many U.S. readers are checking the internet today, but if that’s you and you’re looking for some non-Canadian stadium and arena news for your troubles, we have that too:

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David Perdue lobbied for tax break to benefit fellow Georgia senator (and WNBA owner) Kelly Loeffler

If the names Kelly Loeffler and David Perdue aren’t immediately familiar to you, they will be soon, as they’re the two Republican U.S. Senators facing runoff elections in Georgia on January 5 that will determine which party controls the Senate. (The Democrats need to take both to reach a 50-50 tie, which would be broken in their favor by vice-president Kamala Harris.) Loeffler is also co-owner of the WNBA’s Atlanta Dream, whose players have called her out for her pro-Trump and anti-Black Lives Matter stances (Loeffler wrote to the WNBA’s commissioner at one point blaming BLM for “the removal of Jesus from churches and the disruption of the nuclear family structure” and promoting “violence and destruction across the country”), even taking the court during pregame warmups wearing shirts endorsing Loeffler’s Senate race opponent.

So while it wasn’t surprising to see Loeffler and Perdue show up together in a ProPublica story on Friday, this one was a bit unexpected:

Sen. David Perdue, R-Ga., privately pushed Treasury Secretary Steve Mnuchin to give wealthy sports owners a lucrative tax break last year, according to a previously unreported letter obtained by ProPublica…

The Treasury ultimately declined to adopt the revision Perdue sought. If the regulation had been altered as Perdue wanted, it would have been a boon for some of his largest donors. Perdue has received hundreds of thousands of dollars in campaign contributions from the owners of professional sports clubs, including now-fellow Georgia Sen. Kelly Loeffler, who co-owns Atlanta’s WNBA team, the Dream.

The tax break in question has to do with pass-through entities, which are corporations whose net profits are declared on the tax returns of the individual owners. When the GOP’s 2017 tax law cut the corporate tax rate from 35% to 20% (among lots of other changes, including double-taxing residents of high-tax states that just happened to be mostly Democratic), it allowed many pass-through business owners to deduct 20% of their business income, effectively lowering their personal income tax rate to the lower corporate one. But not all, and one of the exceptions was owners of pro sports franchises, meaning that Loeffler was set to lose a pile of money as a result of not being included.

Enter Perdue, who as ProPublica writes with eyebrow exquisitely raised, “was not on the committee that crafted the legislation, making his in-the-weeds lobbying on the arcane regulation unusual, congressional experts said.” He did have another reason to be interested in the tax break, though:

A review of his campaign contributions shows that Perdue has taken more than $425,000 from the owners of professional sports teams and their relatives. Some of the top donors include the DeVos family, which owns the Orlando Magic; John Ingram, who owns the Nashville SC soccer team; Los Angeles Kings owner Philip Anschutz; and Cleveland Browns owner Jimmy Haslam.

On the same day Perdue sent Mnuchin the letter, he received $3,000 in donations from three lobbyists at GeorgiaLink Public Affairs Group, a lobbying firm that was representing the Atlanta Braves. Because of the Braves’ ownership structure, it’s unlikely the team would have been affected by the regulation, but around that time, MLB was lobbying on the rule, urging the Treasury to give its team owners the tax break.

Perdue also got $108,000 in donations from Loeffler, her husband, and her Dream co-owner Mary Brock.

Perdue’s letter ultimately went nowhere: Mnuchin didn’t direct the IRS to change the tax law to benefit sports team owners, so Loeffler’s tax bill remains undiminished. But it’s nice little moment to remember the next time you wonder how come so many corporate titans can duck paying taxes so easily: When you can ask the senator who sits next to you to write a letter to the IRS requesting you get a tax break, and enclose $108,000 in checks to sweeten the pot, that’s going to get you a lot more consideration than the average taxpayer.

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Today in “Is It Stupid?”: Fans to return to English sporting events

U.K. prime minster Boris Johnson has announced the end of England’s month-long second Covid lockdown, with the country set to switch to a three-tier system that will allow some fans to attend live sporting events for the first time since spring. And while there are many questions about how it all will work — who will get to buy tickets at reduced-capacity events, how much will they cost, can they be discouraged from hugging each other when a goal is scored? — let’s focus today on one question: Is this very very stupid?

The details of the sports fan plan:

  • In “tier 1” areas where virus levels are relatively moderate, outdoor sports venues can allow in a maximum of 4,000 fans or 50% of capacity, whichever is less. Indoor venues will face an attendance limit of 1,000 fans or 50% of capacity, whichever is lower.
  • In “tier 2” areas with high virus levels, the same attendance caps apply, but the outdoor maximum is 2,000 or 50%, whichever is lower.
  • In “tier 3” (very high alert) areas, no fans are allowed at all.

Is this stupid? For many sports venues, not at all: 4,000 fans at Arsenal‘s Emirates Stadium, for example, is under 7% of capacity, and so should leave plenty of room for fans to spread out. (London is actually likely to be a tier 2 zone, so Arsenal would be limited to 2,000 fans at first.) Given both the experience of U.S. stadiums and what we know about the spread of the virus outdoors, that seems relatively safe, especially if everyone is wearing masks (which hasn’t been announced as a requirement yet, but is likely) and is kept from from spending significant time gathering in indoor areas like concessions concourses or restrooms (which also hasn’t been spelled out yet).

For other stadiums, the flat cap looks very different. A.F.C. Bournemouth, for example, plays in the second-tier Championship level in an 11,000-seat stadium; since Bournemouth is in the low-virus south of England, they’re likely to be allowed the full 4,000 fans per game, which is getting close to half capacity. That’s maybe okay in a low-virus area, but does it really make any sense to make it the equivalent of 2,000 fans rattling around Emirates in a higher-virus zone?

Allowing 1,000 fans/50% capacity for indoor sports, meanwhile, seems patently insane: Most of the British Basketball League, for example, plays in arenas with capacities of under 2,000, so they’ll be able to pack in fans in every other seat. That’s not very much distancing, and six-foot distancing is essentially useless indoors anyway, meaning Surrey Scorchers fans will be at a massively higher risk than Arsenal or Chelsea or Tottenham fans — if anything, it seems like it would make much more sense, epidemiologically, to ban fans entirely at indoor sporting events and allow somewhat more at outdoor ones.

But epidemiological sense surely isn’t the guiding factor here; rather, this feels more like an attempt to level the playing field, so that every sports team can bumble through some sort of reopening, at least once every region has worked its way out of Tier 3 status. That’s par for the course for sports leagues right now — just look at college basketball in the U.S., which is determined to restart play (without fans, but with lots of players traveling to and from high-virus areas and then breathing on each other during games indoors) even though college football has barely managed to limp along with partial seasons. But it’s not the kind of guidance one would hope for from a national government, even one with a pretty lousy track record in this area. Verdict: Pretty stupid.

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