“Several dozen” Long Island residents marched in protest last week against the New York Islanders‘ proposed arena near Belmont Park, saying it would create too much traffic and construction noise. Those aren’t the best reasons to be concerned about it in my book — I’d be more upset about the crazy discount on land New York state is giving the team, if I were a New York taxpayer, which I am — but maybe the protestors are worried about that too but it didn’t fit easily on a sign.
Oklahoma City is looking for capital projects to spend the next iteration of its sales-tax hike on, and Mayor David Holt says if a maybe-MLS-caliber soccer stadium isn’t included, “the Energy won’t be here forever.” The Energy, if that name draws a blank for you, is the city’s beloved USL franchise that’s been there since … 2014? It’s only a matter of time before teams start threatening to move before they even exist, isn’t it?
“We are losing $11 million to $12 million per season,” [Impact president and CEO Joey] Saputo disclosed during a frank and transparent discussion with members of the media at Stade Saputo.
Saputo said one way the club is looking to stem the red ink is with help from city hall by reducing the club’s annual tax bill of $2 million.
“Frank and transparent,” eh, TSN analyst Noel Butler? So Saputo opened his books so that members of the media could verify those $11 million a year losses? No? Well, it’s the thought that counts.
Anyway, Saputo appears to be holding off on spending $50 million in upgrades on Stade Saputo because he says he doesn’t want the stadium to be worth more and his tax bill to go up — in perky Canada, sports team owners have to pay property taxes on their stadiums even when they sit on public land — which is about as good an argument as “I bought an MLS team for $23 million and they go for $150 million now but I’m losing money so bail me out here!” He’s got one Canadian sportswriter on his side, though: Butler warns that without subsidies the Impact could fall to be a second-tier team like fill out the bottom of European leagues, which doesn’t even make any sense since teams in European leagues pay their own player payrolls unlike in MLS, but anyway, can Joey Saputo have $2 million, please? He’s really sincere!
I posted the week-ending news roundup late on Friday, but still not apparently late enough for the stadium news cycle, which promptly exploded in the afternoon, starting with the news that Cleveland Browns owner Jimmy Haslam was finalizing a deal to buy the Columbus Crew from owner Anthony Precourt so that it can stay in Columbus in a new stadium and Precourt can get an expansion team to move to Austin, Texas.
That takes us up to Friday, when it was revealed that Haslam — plus some local investors — had negotiated with Precourt and MLS to instead buy the Crew and have them stay put; Precourt will still get an expansion franchise in Austin, and everybody is happy. At least, maybe everybody is happy? There are still a bunch of unanswered questions here, like:
Who’s paying what to whom for what here? MLS is a “single-entity” structure, meaning that the league owns the actual teams, and the team “owners” only control operating rights. The Columbus Dispatch reports that the deal likely involves “the local investors purchasing the Columbus MLS rights from the league and current Crew operator Precourt Sports Ventures transferring its equity interest in the league to an Austin franchise, presumably an expansion team” — presumably this means Haslam and friends are paying something close to the $150 million expansion fee price that the league won’t be getting from Precourt. Unless maybe Precourt is paying the difference? This is all rich dudes shuffling money around themselves, so whatever, but it’d still be interesting to know.
What happens with the other cities looking for expansion teams? MLS already had a long list of cities angling to get the next two expansion franchises set to be announced, but it appears that Precourt and Austin have jumped the line. Media outlets in Sacramento, thought to be one of the expansion frontrunners, are already wringing their hands over the prospect of now only having one expansion slot to compete for. Assuming MLS doesn’t decide to keep both of next year’s expansion slots and make Austin its 29th team, or throw David Beckham back under the bus, or really anything, because MLS can decide whatever it wants here. (My bet would be on making the remaining cities compete for one slot, but if multiple cities come up with viable ownership groups and lucrative stadium subsidies, announce, “We changed our mind — everybody gets bees!”
Who’s going to pay for this new Columbus stadium, anyway? The Columbus Dispatch reports that there’s no deadline for a new Crew stadium to be in place, and that the team will continue to play in its old stadium until then, which would seem to reduce Haslam’s leverage if he wants to get public cash to help with his stadium plans. But it’s always possible Haslam has already been working things out along these lines with Columbus officials — news reporting on all this is fairly lousy so far, as to be expected when news drops on a Friday afternoon.
So what’s the upshot here? That MLS was more scared of moving the Crew to Austin than we’d been led to believe, either because of the Modell Law or because they didn’t want to be seen pissing off an established fan group or just because they saw the opportunity to get another NFL owner on board, and they just love those guys. Regardless, that Columbus will apparently get to keep its MLS team without having to pony up huge subsidies for a stadium for an expansion team has got to be seen as at least tentatively good news, and a sign that public mobilization can impact the battles of elephants. There are still many, many more shoes to drop, however, so glass-half-empty advocates, keep hope alive that this will still suck for someone! Anything is possible in the topsy-turvy world of MLS!
A Las Vegas blogger has tweeted that the Rio hotel-casino could be demolished and replaced by a Major League Baseball stadium, so now everybody’s talking about Las Vegas getting an expansion team, along with Portland and Montreal and I forget who else. (San Antonio? Charlotte? Half of Mexico?) Just imagine how frenzied this would be if commissioner Rob Manfred were talking about expansion on a faster timetable than “in my lifetime,” or if he were older than 60 or suffering from a terminal illness or something.
Speaking of ticket taxes, a Nashville councilmember is proposing raising them at the new MLS stadium there and using the proceeds to help pay off the city’s share of construction costs. Nashville S.C. ownership is opposed, saying “this kind of after-the-fact tinkering would make the deal worse for soccer fans and set a bad precedent for the city,” neither of which is true (pssst sports teams already set prices as high as they can regardless of ticket taxes) but it’s totally what you’d expect them to say.
The projected cost of the Tokyo Olympics has now risen from $7.3 billion to $25 billion over the past five years .“It’s the most amazing thing that the Olympic games are the only type of megaproject to always exceed their budget,” Olympic finance expert Bent Flyvberg told the Associated Press. I would say that the fact that cities keep bidding for the Olympics despite this fact is even slightly more amazing, but they’re both pretty incredible.
The Oakland Raiders promised that their stadium project in Las Vegas would provide 18,700 construction jobs, but right now only about 650 workers are involved in construction at the site, and over its first year the project has employed the full-time equivalent of just 195 workers. Nevada really should have gotten that promise in writing.
The head of Mexico’s La Liga MX says that after the 2026 World Cup jointly hosted by the U.S., Canada, and Mexico, maybe the three nations’ pro soccer leagues will merge to form one mammoth soccer league. This isn’t a terrible idea on the face of it — Mexico has the soccer talent, the U.S. has the fan spending money, and Canada has, I guess, donuts — but as it would require MLS owners to share their league with a bunch of other team owners who didn’t pay the $150 million expansion fee, and probably accept some kind of tiered promotion/relegation system as well to avoid having a 50-team league, I wouldn’t hold my breath.
For those who thought the city’s ambitions of becoming a Major League Soccer town died at the ballot box last year, there is hope — and its name is Taylor.
Taylor is the family behind Enterprise rental cars, which is based in the St. Louis suburb of Clayton. The Post-Dispatch goes on to pick up such press release soundbites as that this would be the first MLS team majority-owned by women, and that Enterprise has lots of ties with local nonprofits, and okay okay, we get it, what about the damn stadium that was the stumbling block the last time somebody tried to get a soccer expansion team for St. Louis?
A roughly $250 million stadium dedicated to the soccer franchise would be “overwhelmingly” privately financed, the Taylors say. Public help would likely come from dedicated sales taxes on concessions and other merchandise sold to patrons, a property tax break from a city agency owning the stadium site and leasing it to the group, state tax credits and a break on the city’s 5 percent ticket tax.
That “overwhelmingly” sounds good; that longish list of tax breaks sounds less good. Let’s take them one at a time:
Those “dedicated sales taxes on concessions and merchandise” would apparently mean an extra 3% sales tax surcharge within the stadium. That would mostly come out of the team’s pockets — the economics gets a bit complicated, but suffice to say that as with ticket taxes, sports teams tend to lower concessions prices to eat the surcharge themselves, since they are already trying to charge fans as much as the market will bear for hot dogs — so probably wouldn’t be a significant public subsidy.
The size of the proposed property tax break is unknown — here’s the site under consideration if somebody wants to dig through St. Louis tax records to estimate how much it would normally be expected to pay.
Actual MLS ticket sales and prices are famously hard to calculate thanks to teams’ policies of goosing the gate by giving away tickets for free or cheap, but if we guesstimate 300,000 tickets a year at an average of $30 a pop, then eliminating the 5% ticket tax would cost the city about $450,000 a year.
So all told, yeah, that all sounds preferable to the $60 million from sales tax hikes and kicked-back property taxes on adjacent land that would have gone into the previous soccer stadium plan. Though of course right now we’re just taking the word of the prospective team owners for it, so let’s see what the fully fleshed-out proposal looks like. Hopefully the Post-Dispatch will remove its rose-colored glasses long enough to report on that, once it’s available.
People who want an NBA franchise in Louisville say they’d consider building a new arena for it, despite Louisville already having two perfectly good basketball arenas, which is arguably even more crazy than the idea of Louisville getting an NBA franchise at all.
An official in Gov. Mike Parson’s office told the Post-Dispatch that officials with the state Department of Economic Development met with Major League Soccer representatives as recently as Tuesday, and that the Parson administration was interested in working on a stadium proposal.
Anyway, MLS may still be a Ponzi scheme, but Ponzi schemes can last a good long while if they’re run well and can come up with a continual supply of new marks. And with both prospective owners and prospective cities lining up to prove Apocryphal P.T. Barnum right, it looks like it’ll be a while yet before any chickens come home to roost.
Getting a late start this morning after being out last night seeing Neko Case, so let’s get to this:
MLS commissioner Don Garber is still beating the drum for two more expansion teams to get to a total of 28, and mentioned seven cities — Detroit, San Diego, Cincinnati, St. Louis, Charlotte, Las Vegas, and Phoenix — as possibilities, notwithstanding that Cincinnati was already picked for an expansion franchise earlier this year. Cut the man some slack, it’s gotta be hard to keep track of all the cities that do and don’t have MLS franchises yet. Maybe he could get someone to make him an app.
A $1.5 billion redevelopment of the parking lots around the Nassau Coliseum is seeking $100 million in New York state grants, despite concerns that building a $1.5 billion mixed-use development in what’s kind of the middle of nowhere without a major-league team playing there is kind of a crazy idea.
The Mobile BayBears are moving to Huntsville — as I’m sure you know, right? — and the city’s terrible lease on their 22-year-old stadium means the landowner could tear it down if the city doesn’t find a new team to move in. Don’t put all your development eggs in the basket of minor-league sports, kids, and if you do, for god’s sake get some grownups to write the lease.
Restaurateurs in Inglewood are hoping for a windfall once the new Los Angeles Rams and Chargers stadium opens in 2020. Somebody should really tell them that even with two teams, that’s only 20 games a year, so they’d better figure out how to seat 70,000 people all at once to make up for other 345 days a year when not much is going on there. (Okay, not 70,000 people at once when it’s Chargers games.)
David Beckham’s Miami MLS ownership group had a big announcement this week to reveal that the team will be called Club Internacional de Futbol Miami (Inter Miami for short), and the Charlotte Observer ran this under the headline “David Beckham’s team named Inter Miami, still lacks stadium.” That’s cold, Charlotte Observer. Fair, but cold.
The simmering Nashville S.C. existential crisis — MLS had approved an expansion franchise after the city council approved a new stadium with $75 million in public subsidies (plus free land), but it turned out they hadn’t actually approved approved it yet — was taken off the burner last night, as the council voted 31-8 to demolish existing buildings at the city’s fairgrounds to clear the way for the stadium, while also approving bills to rezone the land, approve the team’s ground lease, and sell $50 million in bonds to help fund construction. The council also voted 25-12 to reject a proposal for a public referendum on the stadium bonds.
All this happened by the skin of the council’s teeth, as even earlier in the day, it wasn’t clear if the stadium plan would must the necessary 27 votes for passage. But when the team and the community group Stand Up Nashville announced a community benefits agreement earlier in the day, that was enough to shake loose the deciding swing votes.
So what did Nashville get in the CBA? A minimum wage of $15.50 for stadium workers, a requirement that at least 20% of the new residential units be “affordable” or “workforce” housing (no details available on what income band this would need to be affordable to), the inclusion of a day care center, some soccer equipment for Metro schools, and a few other things. It’s not nothing, but it’s also going to cost the team owners a drop in the bucket compared to the $75 million (plus free land!) that the city is gifting to the team owners. So, classify it under “better than a poke in the eye with a sharp stick,” which is where the vast majority of stadium deals end up.
Nashville S.C. is now all set to enter MLS in 2020 along with David Beckham’s Miami team, which will bring the number of teams in the league to an even 28. This is not large for a U.S. sports league, but is mammoth for a soccer league, which usually top out at 20; it remains to be seen whether the league’s policy of endless expansion will ever hit a wall, but for now, the owners can keep on cashing those $150 million expansion fee checks.