Category Archives: Atlanta Braves

Coronavirus shutdowns will cost pro teams mumblety-something, say sports finance experts

Posted on by

Forbes is starting to focus on the all-important question of whether the coronavirus, in addition to killing tens of thousands of people, will harm the bank balances of some of your favorite multibillion-dollar sports franchises. Let’s give them a read and see if they make any damn sense and/or are affronts against humanity!

First up, because it beat the other one by a few hours, is “senior contributor” Patrick Murray’s essay on the Golden State Warriors, who had the misfortune to open their new San Francisco arena the same year as sports came to a grinding halt (and before that, the same year as its vaunted starting lineup suffered a sudden and gratuitous total existence failure). Take it away, Patrick:

The Athletic’s Anthony Slater has reported that cancelling the remaining seven home games would cost the Warriors in the region of $25m. That’s on top of the money they might have expected back in the fall from a potential playoff run, before Stephen Curry got injured. They might not have been hotly tipped to make a deep run with Klay Thompson out, but most people were expecting a team led by Curry to at least make the postseason. And that would have meant more revenue flowing in. Tim Kawakami previously reported that at Oracle Arena in recent years the Warriors received $4-5m gross per home game in the early playoff rounds. At Chase Center that figure would have been even higher.

Oh noes, the Warriors are missing out on all the playoff money they would have earned … if they’d been in the playoffs, which they weren’t going to be? So maybe it’s just that $25 million for seven home games that is at risk — Forbes has the Warriors’ gate receipts at $178 million per year, so the per-game figure pencils out.

And, of course, the Chase Center isn’t just about basketball, it’s about concerts and other arena events, so how will that work out?

It’s unknown just how much that will cost the Warriors, but in Forbes’ latest franchise valuations just under a quarter of their $4.3bn valuation was attributed to their arena.

Thanks for the math, Mr. Senior Contributor! You’re totally worth every penny of that $250 a month you’re being paid!

The second article is by Mike Ozanian, who is an actual Forbes staffer and the magazine’s longtime sports valuation guru, even if he’s had his own occasional problems with basic math. Ozanian takes on the finances of the Atlanta Braves, and discovers (according to “John Tinker of G.research LLC,” which is apparently a thing that a financial analysis firm has actually decided to call and punctuate itself) that playing only half a season of baseball will, amazingly, cause fewer people to go to baseball games:

Tinker reckons the Braves’ revenue would drop to $174 million, from $438 million in 2019, with attendance dropping to 630,000, from last year’s 2.65 million. The drop in attendance would cut revenue from the gate and concessions to about $55 million in 2020, from $202 million the prior year, and halve the broadcast and sponsor revenue to $118 million, from $236 million.

Player expenses, meanwhile, were lowered by only 50%, to $86 million, and operating expenses and SG&A costs by 40%, to $146 million. Bottom line: Tinker estimates the team will post an operating loss of $59 million, versus an operating profit of $24 million in 2019.

There’s some weirdness here: Why would attendance drop by three-quarters if the number of games is cut in half? (Not that playing games in front of fans is even that likely, but if it does happen wouldn’t you expect there to be some pent-up demand? Especially since games would be played in the summer, when ticket sales are normally the highest? Unless the G.research study assumes that by summer fans will be too afraid to leave the house, which is certainly possible.) And how would broadcast and sponsor revenue fall by $118 million when the Braves’ TV deals with Fox Sports South and Fox Sports Southeast only gets them $83 million a year in the first place? And does Ozanian know for sure that the Braves’ TV and sponsorship contracts would be canceled (or scaled down) if a full schedule isn’t played? Who can say!

If there’s a takeaway here, it’s that while the sports stoppage will almost certainly cost sports team owners big time, the actual bottom-line numbers are going to depend on myriad picayune contractual details that probably can’t be figured out just by looking at profit and loss summaries. And also, in case anyone might think otherwise, that whether a team is paying for their own building (the Warriors are, the Braves mostly aren’t) shouldn’t play at all into financial impact assessments, because stadium and arena expenses are sunk costs that don’t change the calculus of how much added red ink teams will see.

(This is true for local governments that are paying for sports venues, too, incidentally: If your state was counting on hotel-tax revenues to pay off a stadium and hotel-tax revenues are in the toilet because no one is leaving their houses anytime soon, that’s bad, but no worse than if hotel-tax revenues were being counted on to pay for other public expenses. Maybe if you were counting on hotel-tax revenues to soar as the result of people coming to see your new team, but that probably wasn’t a safe bet anyway.)

And, of course, that owning a major pro sports team is so fabulously lucrative that even skipping most or all of a season isn’t likely to bring anyone to their knees. The Warriors turned an estimate $109 million profit in 2019, according to Forbes figures, while the Braves’ Liberty Media ownership group made $54 million. So while losing a season could wipe out an entire year’s worth of profits — that’s not good! — the other way of looking at this is that teams could regain their losses in just the first season of resumed play, whenever that might be. Starting to get why sports leagues are so willing to shut down over labor contract disputes? If you’re a team owner doing this right, you’re playing the long game, or at least the medium-term game, and if COVID-19 is still affecting things like sports attendance in the medium term, we’re going to have way bigger things to worry about than the Braves’ bottom line.

Friday roundup: Phoenix to maybe get soccer stadium/robot factory, Raiders roof is delayed, Def Leppard and Hamilton face off over who’s old and smelly

Posted on by

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.
  • A Virginia state delegate wants to reboot Virginia Beach’s failed arena plans by setting up a state-run authority to attempt to build a new arena somewhere in the Hampton Roads region, which includes both Virginia Beach and Norfolk. “The hardest part is the financing mechanism behind it,” said Norfolk interim economic development director Jared Chalk, which, yeah, no kidding.
  • Denver is helping build a new rodeo arena, and as a Denverite subhead notes, “The city says it won’t reveal how much taxpayers could be on the hook for because that would be bad for taxpayers.”
  • 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?
  • And finally, what you’ve all been waiting for: A video from last summer has surfaced showing Def Leppard lead singer Joe Elliott complaining that Hamilton, Ontario’s arena is “old” and “stinks like a 10,000 asses stink,” to which Hamilton councillor Jason Farr replied that Def Leppard is “also old and stinks.” Clearly one of them needs to be torn down and entirely replaced! It worked for Foreigner!

Friday roundup: Lotsa new vaportecture renderings, lotsa new crazy expensive bridges

Posted on by

I’m traveling this week and next, so there will likely be some weird scheduling changes for posts, such as this Friday roundup appearing close to noon Eastern time. (I think. I’m not entirely sure what time it is here or anywhere, just that it’s hot, which doesn’t narrow it down much because it’s hot everywhere.) The news watch never stops, though, so here’s a somewhat abridged week of highlights:

  • New Los Angeles Clippers arena renderings! This vaportecture is honestly all starting to look more or less alike to me, though what appears to be a transparent roof on an arena is novel — the article refers to “indoor/outdoor ‘sky gardens,'” though, so maybe this is those, whatever those are. (Gardens open to the sky? Wouldn’t that be … “gardens”?) Anyway, constantly releasing renderings is a great way to show people that you absolutely are going to be able to build an arena, despite any lawsuits trying to block it, because everyone knows cartoons always come true.
  • And on the other side of the pond, Everton has released its own stadium renderings, with more lens flare and balloons and promises that 1.4 million more people will visit Liverpool just by Everton moving into a new stadium. (The balloons are probably the least fanciful of these predictions.)
  • Norman Oder has a long analysis of the New York Islanders Belmont Park arena plan laying out all the remaining questions about the project, from the value of land and tax breaks to how exactly the state expects a Belmont arena to host sports and concerts without cannibalizing shows from the nearby Nassau Coliseum. (Not that it should matter to the state if the Coliseum loses business, but if shows are just relocated, they’re not new economic activity. For that matter, if Long Islanders just go to more shows and fewer restaurants, say, that’s also not new economic activity. So very many questions.)
  • Dodger Stadium is getting a $100 million facelift this offseason, including a new centerfield plaza, new elevators and bridges for fan circulation, and a statue of Sandy Koufax. A hundred million dollars seems like a lot for that, but it’s Magic Johnson‘s stadium and his money, so whatever floats his boat.
  • And finally, the cost of the Atlanta Falcons‘ pedestrian bridge has now surpassed $33 million. up $6 million from the last accounting. On second thought, maybe $100 million for some bridges and a statue isn’t that crazy at all.

Friday roundup: Sacramento soccer subsidies, Fire could return to Chicago, and a giant mirrored basketball

Posted on by

Did I actually write a couple of days ago that this was looking like a slow news week? The stadium news gods clearly heard me, and when they make it rain news, they make it pour:

Friday roundup: Cobb County still losing money on Braves, Beckham now wants two new stadiums, A’s reveal latest crazy rendering

Posted on by

It’s yet another morning to wake up and read the news and want to immediately go back to bed, or maybe get out of bed and protest something or just hug somebody. There’s a full week of additional stadium and arena news to recap, though, and that still matters, even if maybe not quite as much as man’s inhumanity to other humans, so:

  • Cobb County is still losing money on the new Atlanta Braves stadium, but it was at least down to $5.8 million last year from $8 million the year before. That’s mostly thanks to increased property tax payments from the development around the stadium, though, and as I’ve covered before, property taxes aren’t free money, they’re revenues that are supposed to pay for all the social costs of new development, so please everybody stop pretending that’s how fiscal math works.
  • David Beckham’s Inter Miami (do I have to keep identifying them that way? you bet I do!) now wants to play its first two MLS seasons, 2020 and 2021, at a new stadium in Fort Lauderdale while waiting for its Miami stadium to be ready. I admit to being somewhat confused as to how an 18,000-seat stadium can be built in Fort Lauderdale in less than a year (even if it’s just a temporary facility that will eventually be converted to host the franchise’s youth team) when it’ll take two years at least to build one in Miami, but mostly I’m just excited for Beckham to have two different stadium ideas that can run into inevitable obstacles because he’s Beckham.
  • The Oakland A’s dropped another new rendering of their proposed Howard Terminal stadium as part of their latest site plan, and mostly it’s notable for apparently being the only building left with its own electrical power after the apocalypse wipes out the rest of humanity, which should help ticket sales. Vaportecture fans will also be pleased to see that the gratuitous shipping cranes for unloading containers to nowhere have been moved to a different corner of the site, possibly for logistical reasons but more likely because the renderers thought they framed the image better there.
  • Tottenham Hotspur stadium update: Finally looks on target to open in early April, except for the small problem that players trying to take corner kicks will tumble backwards down a slope if they stand more than one foot from the ball.
  • Milwaukee-area residents will finally get to stop paying a sales-tax surcharge to pay off the Brewers‘ Miller Park next year, after 24 years of the 0.1% tax being in place. (The public will keep on paying for repairs to the stadium, but it’s already built up a reserve fund from sales tax payments for that purpose.) That’s certainly good news for Wisconsin residents who want to see their spending dollars go 0.1% farther, though even more so it will make it harder for anyone to try to use that tax stream to fund a replacement stadium for Miller Park, which the Brewers haven’t talked about but you know it’s just a matter of time.
  • The Oakland-Alameda Coliseum Authority is set to vote today on a new short-term lease for the Raiders, who would pay $7.4 million in rent for 2019 and $10.4 millon in rent for 2020 if necessary, plus $525,000 a year in rent for the team’s practice facility for up to three years after moving to Las Vegas. Plus, Oakland still gets to continue with its antitrust suit against the Raiders for leaving in the first place. I love happy endings!
  • Calgary city councillor Evan Woolly says instead of giving tax kickbacks to a new Flames arena, he wants to give tax breaks to all businesses across the city in an attempt to keep more of them in town. I’d definitely want to see his projected economic impact numbers before deciding if that would be worth it, but it certainly makes as much economic sense as giving money solely to a pro hockey team on the same logic.
  • “Planning experts” told the city of Saskatoon that it should kick off downtown revitalization efforts by building a new arena, because that’s the “biggest piece,” and, and, sorry, I’m looking for any actual reasons these experts gave, but not finding any. Though given that one is described as a “real estate sales specialist,” maybe their reasoning is not so mysterious after all.
  • The New York Islanders management emailed season ticket holders to ask them to sign a change.org “Support New York Islanders New Home at Belmont” petition, which leads me to think that maybe they’re taking this whole local elected official opposition thing more seriously than they’re pretending when they keep saying don’t worry, they’re totally going to have the place open by 2021.
  • The Carolina Panthers are talking about moving to South Carolina, but only their offices and practice field, not their actual home stadium. Not that that’s stopping them from trying to get out of paying their stadium property tax bill.
  • The government is Sydney is rushing to demolish a 31-year-old Australian football rugby (sorry, read too quickly and can’t tell all the Australian ball sports apart really anyway) stadium nine days before a new government might come in that would have preserved the building, and while I don’t fully understand the whole history here, you can read about it here while we wait for FoS’s Aussie sports correspondent David Dyte to chime in.
  • Emails obtained by the Los Angeles Times reveal that Irving Azoff tried to talk the Los Angeles Lakers into moving out of the Staples Center and into the MSG-owned Forum, but talks didn’t go anywhere. This honestly doesn’t seem like much since it was just an emailed offer that was rebuffed, but it is interesting in that it shows how the arena management wars are playing into sports team decisions. (And also in that it reveals that Lakers owner Jeanie Buss refers to Clippers owner Steve Ballmer as “Ballz.”)

Friday roundup: Flames arena questions, Braves funny math, and more vaportecture renderings and videos of suite chairs than you can shake a stick at

Posted on by

I swear they keep making these Fridays closer and closer together:

  • Canadian economists have lots of questions about who’s going to pay for a new Calgary Flames arena, which is as should be because the city council won’t say yet how it will be paid for. And we apparently won’t know more for a while, because first the council needs to figure out who’ll be on the negotiating committee with the Flames, and it’s not even scheduled to meet until next month. I can’t be the only one thinking, “Excellent, lots of time for somebody to leak the details to the press before everything gets negotiated,” can I? Deadspin has a tips line, just saying!
  • The Atlanta Braves brought in $442 million in revenue last year, for a profit of $92 million, but blamed the team’s debt payments on their new stadium in Cobb County for not leaving enough left over to spend big on free agents. After public subsidies, the Braves owners are on the hook for less than $20 million a year in construction debt payments, plus $6 million a year in rent, so, um, yeah.
  • The latest Texas Rangers stadium renderings make the seats in the top decks look just as crappy as in the previous renderings, there are still clip-art fans with translucent heads, and the roof is open in all of them even though the whole point of the new stadium is to have air-conditioning, which won’t work if the roof is open. At least we finally get to see how fans will get to that deck suspended in midair in left field — via a brick-colonnaded walkway, of course — so we no longer have to worry about Rangers fans having to purchase jetpacks to get to their terrible seats.
  • And still more renderings, these of a USL stadium a would-be team owner wants to build in Fort Lauderdale on the site of Lockhart Stadium, the same site David Beckham has targeted as a training site for his Inter Miami MLS team. Are there spotlights pointing pointlessly into the sky? You bet! Is this, regardless of whether the USL stadium stands a chance of getting built, yet another reason to laugh at Beckham over how he can’t catch a break? Don’t you know it!
  • Here’s a video of what the chairs and shelving will look like at the new Las Vegas Raiders stadium. And here’s a picture of what the place settings will look like in the luxury suites at the new Golden State Warriors arena, but it’s just a still photo — come on, Ben Golliver, it’s 2019, don’t you know people want to see furniture in video form?
  • New York Islanders owner Jon Ledecky insists that the team’s proposed Belmont Park arena is still “on track for the 2021-22 season,” but what else is he gonna say?
  • Winnipeg will provide a total of $16.6 million in tax breaks and other operating subsidies this year to the Jets, Blue Bombers, Goldeyes, and Manitoba Moose, and bonus points to any non-Canadian who can name what sport each of those teams play. Economic Development Winnipeg CEO Dayna Spiring claimed that the public will make its money back — no, not through the taxes the teams won’t get breaks on, that’s a Wichita thing to say. Rather, Spiring said the public will earn its money back on exposure, via the value of Winnipeg’s name appearing on hockey broadcasts. Somebody please alert this Twitter account.
  • Tottenham Hotspur stadium opening update: still maybe early April! Also, it may be called Nike Stadium, or maybe not.
  • Wichita announced it planned to double down on its $75 million expense for a new minor-league baseball stadium for the relocated New Orleans Baby Cakes Triple-A franchise by also selling land around the stadium to the team owners for $1 an acre, with the mayor saying the city would make money on the $38.5 million in taxes the new development would pay over the next 20 years. This is still not how taxes work, but Wichita has since said it was putting off the land sale after Wichitans griped about the stealth subsidy, so I won’t belabor the point. For now.
  • And finally, NBA commissioner Adam Silver want to make watching basketball at home more like being at the game, via “technology.” Wait, isn’t one main problem pro sports is facing that fewer and fewer people want to go to games because it’s just as pleasant and cheaper to watch games at home on their giant hi-def TVs? I mean, no complaints here if Silver really wants to replicate the smell of Madison Square Garden in my living room, but it seems a bit, I dunno, against their business model? Unless maybe this will be some kind of premium feature you only get by subscribing to their streaming service that will be described as “Netflix for basketball,” yeah, that’s probably it.

Cobb County officials still don’t know how much Braves stadium cost, because they’re afraid to ask

Posted on by

The Atlanta Braves have played two seasons now at their new Cobb County stadium, but still no one knows how much the whole thing cost, because — I swear I am not making this up, and neither is the Atlanta Journal-Constitution, which reported it — nobody in the county has bothered to ask for all the receipts:

The Braves, who managed the stadium construction, say at $684 million, the ballpark exceeded its budget, with the team covering more than its share. But Cobb only has invoices covering $536 million, meaning there are roughly $148 million in construction costs for which Cobb officials have not reviewed receipts.

“We have invoices for all work that was the county’s responsibility to pay for,” the county said in a statement.

The county has the right in its contract to demand an audit of stadium expenses, but, according to one county commissioner:

Commissioner Lisa Cupid, who has been a consistent skeptic of the Braves deal, said there is little appetite on the board to damage the relationship with the team by asking “pointed questions.”

On the one hand, this probably isn’t a huge deal in the long run: The county knows where its $392 million went, and it isn’t getting any of that back unless the Braves’ share came in way under budget, which it almost certainly didn’t. Still, we don’t know how much our private partners are spending on this project because we don’t want to upset them by asking is pretty telling about elected officials’ usual approach to stadium deals.

Braves owners say money pit of stadium is made up for by other stuff that isn’t a money pit, if your head hurts, that’s as intended

Posted on by

I’ve gotten used to newspapers running headlines that contradict not only reality but the stories they themselves head, so when I saw yesterday’s Wall Street Journal headline “Atlanta Braves Owner Says County Wins Big From Development Near New Stadium,” I assumed most of it was probably wrong. And it is, undeniably: The only thing the Braves “owner” — not specifically identified, but probably actually CEO Derek Schiller, since he’s quoted directly later in the piece — says is that (in the WSJ’s words) “taxes and other income generated by the site are helping offset some of the county’s costs incurred by the Braves’ controversial $672 million suburban stadium,” which isn’t exactly the same thing. (The article also notes that the Braves are turning a tidy profit on the sale of three apartment buildings near the new stadium, which is very much not the same thing.)

The article does, however, reference a September study from September by Georgia Tech’s Enterprise Innovation Institute, done on behalf of the Cobb County Chamber of Commerce, which claims that public debt service on SunTrust Park come to $9.5 million a year, while the stadium has generated $18.9 million a year in new tax collections and “other benefits.” That really would be winning big. So is it true?

The report (and some executive summaries) can be found here. It is, just in terms of readability, horribly written — the numbers in the charts bear no obvious relation to those discussed in the accompanying text — but here’s the best I can understand it.

In terms of public costs of the new stadium:

  • Debt service on Cobb County’s $300 million stadium debt is $22.5 million a year, of which the Braves owners pay $6.1 million in rent, leaving $16.4 million a year for taxpayers to pay off.
  • $10 million a year is paid off by two Cumberland Special Service District funds (SSDs), wherein businesses “tax themselves in order to contribute to the stadium project.”
  • The county is putting in $1.2 million a year to a stadium capital maintenance fund, and spending an extra $970,000 a year on public safety and other additional operational costs of the stadium.

That would seem to come to $8.6 million in remaining annual public costs, but the report says it’s $9.5 million. (The difference may be because of added cost of things like building that damn pedestrian bridge, but it’s not clear — like I said, this thing is horribly written.) This is almost exactly what the Atlanta Journal-Constitution came up with in its own calculation, so that checks out.

(There’s still one big problem here, which is that the analysis assumes that the SSD money — which is a tax surcharge on local businesses — would only come in if the stadium were built. But we’ll come back to that in a second.)

On the benefit side:

  • $817,000 in sales taxes on ticket and concession sales to out-of-county residents
  • $905,000 in hotel and sales taxes from fans who traveled more than two hours to the game, on the assumption they came specifically for the game, stayed overnight, and spent the average that an overnight Atlanta-area visitor did on food and lodging
  • $89,000 in sales tax on Braves employee spending (no source given for this, other than the LOCI™ computer model)
  • $270,000 in taxes on taxable office property in the tax-exempt stadium, including copiers and ice-making equipment

That all leaves SunTrust Park as a $7.4 million annual loss to the county, which over 30 years would be cost taxpayers about $100 million in present value — not as bad as at first feared, but also nothing like “winning big.”

Ah, but that’s just the stadium! The big benefit of the stadium, according to the report, is actually the development that the Braves owners built next to it, plus the “halo effect” of rising property values on adjacent land. This is probably best presented in a chart from the report:

In short, the Braves’ stadium remains a money pit for taxpayers, but they’re building a whole lot of other stuff that’s not a money pit, so yay, win!

The problem here isn’t one of math, but one — really two — of logic. Yes, building a stadium at a public loss next to a mixed-use development project that’s a bigger public gain is a net public gain. But who the hell said anybody had to build the stadium? If people in Cobb County are clamoring to live and work and eat in a new fake urban district in the suburbs, by all means give it to them, but unless you think they’ll only do so if there’s a baseball team playing next door 81 times a year, don’t shackle it to a money-losing stadium.

Also, if Atlanta suburbanites were indeed hankering for more places to walk around and pretend they’re in the city without actually being in the city, there’s every indication that somebody would have given it to them somewhere — just not necessarily in Cobb County. Yesterday’s WSJ article even notes that Cobb may just be benefiting by stealing economic activity from other parts of the metro area:

“We have friends in Buckhead,” one of Atlanta’s upscale neighborhoods, said Mike Plant, chief executive of the Braves Development Corp. “We hear from them. They’re not real happy.”

So basically, what we have is that the Braves owners built a stadium that is costing taxpayers lots of money, but they also held out the carrot of an accompanying development that would steal enough revenue from neighboring areas to put the final numbers in the black — if you assume that nobody ever could have been convinced to build development there without a stadium. This is indeed an exceedingly common gambit, dating way back to the Brooklyn Nets‘ money-losing-arena-plus-a-bunch-of-development plan, and dating right up to the Worcester Red Sox‘ similar minor-league stadium project. It relies on the fact that it’s nearly impossible to say if a mixed-use development would have been built “but for” the accompanying subsidies — so if you attribute all the new taxes being paid to the subsidy, any new development looks like free money.

All of this makes it very, very hard to determine exactly where the Braves stadium falls in terms of historically bad sports subsidy deals, which is precisely the point. Ancillary development projects bring in new revenues, yes, but more importantly they muddy the waters of determining who’s paying what — still nobody, including me, has a good number for how much that Nets arena is costing New Yorkers — and justify handing over public cash to a baseball team that was turning a tidy annual profit even before building new apartment buildings next to its new stadium and selling them for a 22% return on investment.

If the Braves stadium is the wave of the future, in other words, it’s less a revolution in figuring out how to absolve taxpayers of stadium costs than a revolution in how to confuse taxpayers about who’s paying for what. They’ve already succeeded in confusing the Wall Street Journal — tomorrow, the world!

[ADDENDUM: Atlanta-area sports economist J.C. Bradbury responded to this report on Twitter last month — something I missed because Twitter is but a blur passing before my eyes — and came to similar conclusions: “The report isn’t as bad as many I’ve read, but it’s estimated $18.9 mil impact isn’t correct.” He also raises questions about whether the SSD taxes are really “businesses taxing themselves” or just taxes that the county could have levied on businesses and used for other purposes, which is an excellent point that is beyond the scope of this post, because it’s long enough already, but maybe another time.]

Friday update: Bad D.C. arena math, bad Bucks arena math, bad Columbus ticket tax math

Posted on by

It must be September, because my TV is filled with Jim Cantore and Anderson Cooper standing ankle-deep in water. But anyway:

  • Washington, D.C., is about to open its new Mystics home arena and Wizards practice facility, and Mayor Muriel Bowser says it’s a model of how the city would build a new NFL stadium as well. “We know [sports] can help our bottom line by attracting people to our city, but it also has a big impact when we’re winning on our collective psyche,” says Bowser of an arena that got $50 million in public subsidies for two teams that were already playing in D.C. anyway. Maybe she should go back to using her terrible soccer stadium deal as a model instead.
  • People in Calgary are starting to ask whether, if the city is looking to spend $3 billion on hosting the 2026 Olympics, maybe it should build a new Flames arena as part of the deal? Camels, man.
  • Buffalo Bills co-owner Kim Pegula says she’s going to wait until after the gubernatorial elections this November to start negotiating a new stadium with whoever ends up in charge of the state. It won’t be the lox-and-raisin-bagel lady.
  • Speaking of the Pegulas and New York’s current governor, they’re planning an $18 million upgrade of Rochester’s arena that hosts the Rochester Americans minor-league hockey team (which the Pegulas also own), with costs to be split among the owners and city and state taxpayers. Split how? Sorry, no room in the Associated Press article, ask again later!
  • The AP did find time to fact-check Wisconsin Gov. Scott Walker’s claim that the new Milwaukee Bucks arena would return three dollars in new taxes for each one spent, and found that “Walker omits some of the state money spent on the 20-year arena deal and relies on income tax estimates that experts call unreliable.” I could’ve told them that — in fact, I did, three years ago.
  • “‘Ticket tax’ proposal could lead to higher prices on movies, theater, sports in Columbus” reads a headline on WSYX‘s website, something that the station’s reporter asserts in the accompanying video without saying where he got it from. He’s at least partly wrong: Ticket prices are already set as high as the market will bear, so unless the ticket tax changes the market — in other words, unless people in Columbus are forced to spend more on movies and theater and such because the other options (staying at home and watching TV, going out to eat) aren’t good enough, mostly this will just mean prices will stay roughly the same but a bigger share will go to theater/team owner’s tax bills. (I could try to find an economist to estimate exactly how big a share, but isn’t that really WSYX’s job?)
  • Former Oakland A’s exec Andy Dolich says the team owners may be looking at buying both the Howard Terminal site and the Oakland Coliseum site, and using the revenues from one to pay the costs of prepping the other for baseball, which, if the Coliseum site is such a cash cow and Howard Terminal such a money pit, wouldn’t they be better off just buying the Coliseum site and developing that? Or is the idea that Oakland would somehow give up the Coliseum site at a discounted price in order to get a new A’s stadium done? I have a lot of math questions here.
  • With nobody wanting to spend $250 million on a major renovation of Hartford’s arena, the agency that manages the XL Center is now looking for a $100 million state-funded upgrade instead. Still waiting to hear whether this would actually generate $100 million worth of new revenues for the arena; if not, the state would be better off just giving the arena a pile of cash to subsidize its bottom line, no?
  • Cobb County is only letting the Atlanta Braves owners out of part of the $1.5 million they owed on water and sewer costs for their new stadium. Yay?

Friday roundup: The Case of the Dead Beer-Tap Inventor, and Other Stories

Posted on by

This was the week that was:

  • The Denver Broncos are finding it slow going getting a new naming rights sponsor for their stadium because a used stadium name loses lots of its value, thanks to everyone still calling it by the old name. Yes, this is yet another reason why teams demand new stadiums when the old ones are barely out of the cellophane.
  • Here’s a Los Angeles Times article arguing that if rich sports team owners are granted permission to evade environmental review laws, small business owners should be too. I am not entirely sure this is the best lesson to take from this, guys.
  • Pennsylvania is preparing to legalize sports gambling, and the owners of the Pittsburgh Pirates think it would be great if the state imposed a gambling fee and gave some of the money to them, the only surprising part here being that they actually said this out loud.
  • F.C. Cincinnati‘s ownership group is preparing upgrades to Nippert Stadium as the team’s temporary home while a new stadium is built, and “isn’t concerned by the cost,” according to WCPO. Yes, these are the same owners who said they couldn’t possibly build a new stadium without $63.8 million in public money. Also who said Nippert Stadium couldn’t possibly be made acceptable as an MLS venue. I’m done now.
  • Fredericksburg, Virginia has scheduled a July 10 vote on whether to build a new $35 million stadium for the single-A Potomac Nationals, and paying off the city’s costs by siphoning off property, admissions, sales, meal, personal property, and business license taxes paid at the stadium and handing them over to the team. I guess that would make it a PASMPPBLTIF?
  • And finally, a man found dead in a walk-in beer cooler in the Atlanta Braves‘ new stadium turns out to have been there to install a revolutionary new fast-pour beer tap he’d invented, and no one yet knows how he died. This is going to be the best season of True Detective yet! (No, seriously, this is a tragedy for the man and his family, and I hope that everyone involved soon finds closure, at least, by determining the true facts of what happened. But also, no, I’m not going to go back and delete the joke. If this makes me a monster, at least I’m an appropriately social-media-driven monster.)