Columbus could try to use “Art Modell Law” to force Crew to stay put

Ohio Attorney General Mike DeWine thinks he has a way to save the Columbus Crew from moving to Austin, and it involves a 21-year-old piece of legislation known as the Art Modell Law, officially Ohio Revised Code 9.67:

9.67 Restrictions on owner of professional sports team that uses a tax-supported facility.

No owner of a professional sports team that uses a tax-supported facility for most of its home games and receives financial assistance from the state or a political subdivision thereof shall cease playing most of its home games at the facility and begin playing most of its home games elsewhere unless the owner either:

(A) Enters into an agreement with the political subdivision permitting the team to play most of its home games elsewhere;

(B) Gives the political subdivision in which the facility is located not less than six months’ advance notice of the owner’s intention to cease playing most of its home games at the facility and, during the six months after such notice, gives the political subdivision or any individual or group of individuals who reside in the area the opportunity to purchase the team.

This was passed in 1996 in the wake of Art Modell moving the Cleveland Browns to Baltimore and the city coughing up big money for a new stadium to get a new Browns franchise, though it’s the first I’m hearing about it. (Joanna Cagan researched and wrote the Cleveland section of the opening chapter of Field of Schemes, so my knowledge of that deal isn’t quite as encyclopedic as it might be.) DeWine says his office has reviewed the law and believes it applies to the Crew, and is “prepared to take the necessary legal action under this law” to enforce the provision that team owner Anthony Precourt give Columbus six months to either find a local buyer or buy the team itself.

The law applies, according to state representative Mike Duffey, who asked DeWine to look into it, because, as the Columbus Dispatch puts it, “it is paying a below-market rate to lease state land for parking, the stadium sits on land that is tax exempt, and the state in 2009 provided $5 million for parking upgrades at the Ohio Expo Center, where lots just south of the stadium and are used by Crew SC fans.” Which all sounds reasonable enough to me, though I am not a lawyer, and in any case “reasonable” isn’t going to stop Precourt from going to court to fight it.

Of course, if the state or city were to sue and win, they’d then have to find an owner willing to buy the Crew. That actually may not be so difficult — if all else fails, Franklin County already owns the Clippers, so it has some experience hiring a professional manager to run a publicly owned sports franchise — and might actually be cheaper than ponying up for a new stadium would be, especially since then they’d get whatever profits the Crew are currently earning. Except, uh, there’s nothing in that law that I can see that says a team owner has to agree to sell the team to local owners at any particular price, is there? So what’s to stop Precourt from saying, “Fine, you win, but despite expansion franchises going for $150 million and my only spending $63 million to get my team four years ago, it’s such a glorious franchise that I won’t take a penny less than $400 million”?

And also, the law doesn’t seem to specify penalties, so what happens if Precourt just picked up and leaves? Does Ohio just have to sue to get back its past subsidies? Can it seize the team by eminent domain? I still have not gotten my law degree since two paragraphs back, so maybe these aren’t really such big worries, but it sure seems like there are a lot of lawsuits ahead for this project. Might be easier if Austin voters just tell Precourt to take his MLS-stadium-in-a-public-park plans and go back to Ohio.

Friday roundup: CFL in Halifax, Columbus ghost stadium, Sydney is the new Atlanta, and more!

Are any of my American readers even out there, or are you all too busy tormenting retail workers with your demands for discounted goods? If so, you’re missing out, because we’ve got all your goods right here, at our everyday discount of free!

  • The CFL is considering expanding to Halifax, which means Halifax would need a CFL stadium, which means somebody would have to pay for a Halifax CFL stadium. Halifax Mayor Mike Savage says a stadium is “not a capital priority at this time” and would have to be built “without putting taxpayers at risk.” The Ottawa RedBlacks stadium model is being floated, which is slightly weird because that ended up costing taxpayers a bundle of money plus free land, but maybe “taxpayer risk” is defined differently in Halifax. Anyway, we’ve been this far before, so grains of salt apply.
  • Remember how I wasn’t sure what would be included in the $75 million in public “infrastructure” spending that F.C. Cincinnati is demanding? Turns out that’s because nobody’s sure: WCPO notes that the team hasn’t provided any cost estimates or a traffic study, which “leaves us wondering where, exactly, FC Cincinnati came up with its figures.” I’ll take “nice round number, slightly less than the $100 million elected officials balked at previously” in the pool, please.
  • A guy in Columbus came up with an idea to use county sales tax money to build a new stadium to keep the Crew in town, then the next day said it was just an idea he came up with over the weekend by himself and never mind.
  • The city of Worcester is still trying to lure the Pawtucket Red Sox to town, and the state of Massachusetts may be getting involved, with one unnamed source telling the Worcester Telegram that stadium funding would need to be a “a three-legged stool” among the city, state, and team. You know this article is just going to be waved around in the Rhode Island legislature as it heads toward a vote on public funding for a PawSox stadium there, and what was everyone just saying about the role of enablers in abuse, again? (Not that stadium swindles are morally equivalent to sexual harassment, obviously, but you get my point. Also, why are all the articles about the role of enablers in sexual harassment a month old, are we not going to pay attention to that after all?)
  • The state of Connecticut may spend $40 million on upgrades to Hartford’s arena and some retail properties near its entrance, on the grounds that it might make it more attractive to buyers. If this seems like getting it backwards to you, yeah, me too, but at least it’s better than spending $250 million on the arena and then not selling it.
  • Laney College students, faculty, and staff all hate the idea of an Oakland A’s stadium on their campus. “They want to disrupt our education by building a ballpark across the street with noisy construction, traffic gridlock, pollution, and alcohol consumption by fans,” Associated Students of Laney College President Keith Welch told KCBS-TV. “We will not sacrifice our education so that the A’s owners can make more money.” Pretty sure they won’t get a vote, though.
  • “Industry experts” say that the new Milwaukee Bucks arena will charge more for concert tickets because … it’ll draw bigger-name acts that cost more, I think they’re saying? That doesn’t actually seem like a detriment, though they also note that the new arena has a higher percentage of seats in the lower bowl, which people will pay more for even if they’re way in the back of the lower bowl, and helps explains why arena and stadium designers are so obsessed with getting as many lower-deck seats as possible even if it makes for crappier upper-deck seats. Which we kind of knew already, but a reminder always helps.
  • And move over, Atlanta, there’s a new planned stadium obsolescence king in town: The state of New South Wales is planning to spend $2 billion Australian (about $1.5 billion U.S.) to tear down the Sydney stadium it built for the 2000 Olympics, along with another smaller stadium in Sydney built in 1988, in order to build newer ones that are more ideally shaped for rugby, I think? Because nobody thought of that in 2000? I need to wait for my Australian rugby correspondent to return from holiday break for a more authoritative analysis, but right now this is looking like one of the worst throw-good-money-after-bad deals in stadium history, and it’s not even in America, the land that has perfected the stadium swindle. Crikey!

Friday news: Phoenix funds Brewers but not Suns, brewers float crowdfunding Crew, and more!

So, so much news this week. Or news items, anyway. How much of this is “news” is a matter of opinion, but okay, okay, I’ll get right to it:

  • Four of Phoenix’s nine city council members are opposed to the Suns‘ request for $250 million in city money for arena renovations, which helps explain why the council cut off talks with the team earlier this week. Four other councilmembers haven’t stated their position, and the ninth is Mayor Greg Stanton, who strongly supports the deal, meaning any chance Suns owner Robert Sarver has of getting his taxpayer windfall really is going to come down to when exactly Stanton quits to run for Congress.
  • Speaking of Phoenix, the Milwaukee Brewers will remain there for spring training for another 25 years under a deal where the city will pay $2 million a year for the next five years for renovations plus $1.4 million a year in operating costs over 25 years, let’s see, that comes to something like $35 million in present value? “This is a great model of how a professional sports team can work together with the city to extend their stay potentially permanently, which is amazing, and we’re doing it in a way where taxpayers are being protected,” said Daniel Valenzuela, one of the councilmembers opposed to the Suns deal, who clearly has a flexible notion of “great” and “protected.”
  • And also speaking of Phoenix (sort of), the Arizona Coyotes are under investigation by the National Labor Relations Board for allegedly having “spied on staff, engaged in union busting and fired two employees who raised concerns about pay.” None of which has anything directly to do with arenas, except that 1) this won’t make it any easier for the Coyotes owners to negotiate a place to play starting next season, when their Glendale lease runs out, and 2) #LOLCoyotes.
  • A U.S. representative from Texas is trying to get Congress to grandfather in the Texas Rangers‘ new stadium from any ban on use of tax-exempt bonds in the tax bill, saying it would otherwise cost the city of Arlington $200 million more in interest payments since the bonds haven’t been sold yet. (Reason #372 why cities really should provide fixed contributions to stadium projects, not “Hey, we’ll sell the bonds, and you pay for whatever share you feel like and we’ll cover the rest no matter how crappy the loan deal ends up being.”) Also, the NFL has come out against the whole ban on tax-exempt bonds because duh — okay, fine, they say because “You can look around the country and see the economic development that’s generated from some of these stadiums” — while other sports leagues aren’t saying anything in public, though I’m sure their lobbyists are saying a ton in private.
  • A Hamilton County commissioner said he’s being pressured to fund a stadium for F.C. Cincinnati because Cincinnati will need a sports team if the Bengals leave when their lease ends in 2026 and now newspapers are running articles about whether the Bengals are moving out of Cincinnati and saying they might do so because of “market size” even though market size really doesn’t matter to NFL franchise revenues because of national TV contracts and oh god, please make it stop.
  • MLB commissioner Rob Manfred says the proposed Oakland A’s stadium site has pros and cons. Noted!
  • NHL commissioner Gary Bettman says the Calgary Flames‘ arena “needs to be replaced” and the team can’t be “viable for the long term” without a new one. Not true according to the numbers that the team is clearing about $20 million in profits a year, but noted anyway!
  • Cincinnati Mayor John Cranley is set to announce his proposal for city subsidies for F.C. Cincinnati today, but won’t provide details. (Psst: He’s already said he’ll put up about $35 million via tax increment financing kickbacks.)
  • The Seattle Council’s Committee on Civic Arenas unanimously approved Oak View Group’s plan to renovate KeyArena yesterday, so it looks likely that this thing is going to happen soon. Though apparently the House tax bill would eliminate the Historic Preservation Tax Credit, which the project was counting on for maybe $60 million of its costs, man, I really need to read through that entire tax bill to see what else is hidden in it, don’t I?
  • The owners of the Rochester Rhinos USL club say they need $1.3 million by the end of the month to keep from folding, and want some of that to come from county hotel tax money. Given that the state of New York already paid $20 million to build their stadium, and the city of Rochester has spent $1.6 million on operating expenses over the last two seasons to help out the team, that seems a bit on the overreaching side, though maybe they’re just trying to fill all their spaces in local-government bingo.
  • There’s a crowdfunding campaign to buy the Columbus Crew and keep them from moving to Austin. You can’t kick in just yet, but you can buy beer from the beer company that is proposing to buy the team and then sell half of it to fans, and no, this whole thing is in no way an attempt to get free publicity on the part of the beer company, why do you ask?

Crew owner claims Columbus is bad for business, actual numbers show otherwise

SBNation’s Elliott Turner dug into Columbus Crew owner Anthony Precourt’s claim that he needs to move the team to Austin because the “business is struggling,” and, surprise surprise, it turns out this is not so much the case:

  • The Crew currently pay a piddling $72,000 a year in rent. In fact, they’ve only paid $1.14 million in rent their entire 19-year history.
  • The team pays no property taxes on its stadium, an annual savings of $414,000. The New York Red Bulls, by comparison, pay more in property taxes each year than the Crew have paid in their lifetime as a franchise.
  • The Crew brought in around $11 million in ticket revenue in 2017, plus about $1 million in parking revenue, plus an undetermined share of naming rights money. Turner doesn’t provide comparable figures for other MLS teams, but it’s worth noting that the Crew were right in the middle in terms of team revenues in past rankings.

Is that thriving? The team’s total payroll is under $6 million, so … really, it depends on how much it costs to run the rest of the operation. But the Crew’s costs and revenues are pretty comparable to other MLS teams, so this means that either 1) Precourt is lying about needing to move in order to turn a profit, or 2) pretty much all MLS teams are struggling financially. And either way, there’s no reason to think he’d be better off in Austin. It’s almost as if he’s trying to come up with an excuse to threaten to leave, in order to get subsidies for a new stadium out of Columbus — hmmmmmm.

Austin won’t give public cash to Crew stadium, but public land maybe

Austin officials have started looking for sites for a new stadium if the Columbus Crew relocate as planned/threatened, and while they say they don’t want to spend public money on construction, delivering free land may or may not be another story:

Mayor Pro Tem Kathie Tovo told the Austin Monitor on Sunday she is working with other City Council members to draft a resolution for the Nov. 9 meeting that would ask city staff to complete an inventory of available city-owned parcels, and conduct an analysis of the possible impacts of having a professional soccer team located in Austin. If that resolution passes, the reports would be due in December…

[Crew owner Anthony] Precourt and his business partners have said a piece of land 10 to 15 acres in size located close to downtown or in the urban core is the best scenario for attracting private investment for a new stadium. The going rate for those facilities is between $100 million and $150 million and Mayor Steve Adler and other Council members have said they would not support public financing for an MLS stadium in Austin.

“Some of the land that we look at may be parkland, and if that’s the case then we need to have a long talk about how it’s used,” Tovo said. “The use of parkland is an important consideration because we want to preserve as much public use as possible. When you talk about having a for-profit business involved, there would have to be extremely high public benefit as well.”

I would hope that “extremely high public benefit” would be defined as “enough rent on the city-owned property to allow us to build a new replacement park,” but there’s always the chance that that “possible impacts” part of the study will allow Precourt to point at all the increased economic activity that comes with a pro sports team (note: there is next to no measurably increased economic activity that comes with a pro sports team) to justify a land giveaway. Hopefully we’ll know more in December, including why Austin needs a permanent mayor pro tem when it already has a perfectly operational mayor.

Columbus Crew owner: I’ll move team unless — wait, did I forget to come up with an “unless”?

Yesterday morning’s report that the owner of the Columbus Crew, one of the most historically popular MLS franchises, was set to announce that he’d move the team to Austin if he didn’t get a new stadium was a bit weird and unexpected. Then team owner Anthony Precourt made his announcement, and things got so much weirder and unexpecteder:

  • Precourt’s actual statement was vague about what he was looking for, saying only that the Crew’s “current course is not sustainable,” that “we have no choice but to expand and explore all of our options,” and that “MLS in Austin could be an ideal fit.” That covers the first two of the six steps in the stadium-grubbers’ playbook: the obsolescence claim and the non-threat threat.
  • The Crew issued a letter to fans saying, in effect, Thank you for your support and sorry about this, but it’s not you, it’s us. Please buy playoff tickets.
  • Franklin County Commissioner John O’Grady said that Precourt never actually asked for help with a new Columbus stadium, but only said he needed “a better location.” O’Grady told the Columbus Dispatch: “If he needs a Downtown stadium, he should have said something. That’s a weird negotiating ploy.”
  • Austin Mayor Steve Adler emailed the Dispatch to say that he’d love to host the Crew, but “I don’t think there’s support for public funding of a stadium.”

All this points to an owner who either really really wants to move the Crew to Austin no matter what and is using this whole “my stadium sucks” argument as an excuse, or is really really bad at this whole stadium money shakedown thing. Either way, it sucks for Crew fans, who are now facing losing their team to one of the few media markets that’s actually even smaller than Columbus. “I don’t understand the obsession with Austin,” supporters’ club organizer Kevin Glenn told the Dispatch. That makes a whole lot of us.

Columbus Crew: Without public stadium funds, we’ll go demand public stadium funds in Austin

MLS has seen a ton of attempts to extract public money in exchange for granting expansion teams of late, but not so much in the way of existing teams threatening to move if they don’t get cash for new homes. That’s about to change in a big way, as Columbus Crew owner Anthony Precourt is reportedly set to announce today that if he doesn’t get money for a new stadium in Columbus, he’ll instead demand money for a new stadium in Austin, Texas:

Columbus owner Anthony Precourt is set to announce in a press conference on Tuesday that he will move his team to Austin in 2019 if a downtown soccer stadium for the Crew cannot be finalized in the next year…

Alex Fischer, the president and CEO of the Columbus Partnership, a group of 60 Columbus business leaders and CEOs, said Precourt had rejected offers to buy 100 percent and 50 percent of the Crew by a group of local business and community leaders in Columbus…

Fischer continued: “We’ve received notice from the ownership that at a press conference [Tuesday] they are going to announce they are jointly pursuing that plan in Austin as well as continuing conversations about a possible new stadium in Columbus.”

When asked if he thought Precourt was seeking public financing or support for the stadiums in Columbus and Austin, Fischer was clear. “I think there’s no question he expects public financing and or support for any stadium in either city,” he said.

This does not come entirely out of the blue — right after Precourt bought the team in 2013, his ownership group started talking about the need to replace their then-14-year-old stadium, and they hired a consultant to start looking into it last fall. Still, jumping straight from “we’d like a new stadium, we haven’t figured out how to pay for it” to “if we don’t get a new stadium, we’re out the door after next year” is an unusual tactic, to say the least. And Austin is an unusual target, given that it’s not one of the 12 cities bidding for an expansion team, though who knows, maybe city leaders figured they could skip that whole process if they thought they could get the Crew instead.

The Columbus Dispatch, meanwhile, seems to think this is less a leverage threat on the team’s current home than an all-but-finalized plan to relocate the team, coupled with keeping the door open in Columbus in order to keep ticket sales from going through the floor:

One source close to the team said a deal to host home games at the University of Texas is “all but done” for 2019. The source also said Precourt paid $68 million — above market value — for the team in 2013 because he long entertained plans to move it. Another source said plans for a “pristine, waterfront development” in Austin are gaining steam.

The sources spoke off the record because negotiations to keep the team in Columbus are not officially dead. It is standard practice for team owners who might want to move to keep hope alive for the purposes of selling tickets for a lame-duck season. The late Art Modell, for instance, made a public promise to keep his NFL team in Cleveland before he moved it to Baltimore.

Unlike in other major pro sports — or maybe “more major pro sports” is a better way of putting it — it’s really tough to tell whether MLS move threats make sense just based on such things as market size, since the league’s finances are so screwy. (For the record, Austin is a slightly smaller media market than Columbus.) Would it make sense for Precourt to pull the trigger on a move to Austin, depending on how lucrative a deal he got there? Would he stay put in Columbus for the right level of cash subsidies? This isn’t hockey, so it’s hard to dismiss the threat as saber-rattling — but it’s also hard to say that it isn’t. Hopefully we’ll have more tea leaves to read after Precourt makes his announcement later today.

Columbus Crew looking into new stadium, not saying who’d pay for it

Looks like the owners of the Columbus Crew are moving ahead with plans to replace their 17-year-old soccer stadium, hiring Barrett Sports Group LLC (who worked for Sacramento on a new arena for the Kings, among other projects) to “evaluate the potential demand for a new multipurpose soccer stadium in Columbus,” surveying fans as to what they’d like in a new stadium.

All of which is fine: If the Crew owners think they’ve outgrown their 20,000-seat stadium, then sure, look into building a bigger one. (Not they’ve completely been selling out the old place, but maybe they think more fans would turn out if the stadium had more steak bars or something.) The bigger question, obviously, is who would pay for a new or upgraded stadium, and nobody’s breathing a word about that. Or about when Barrett will complete its survey. Count on this one dragging out a bit longer — Crew execs have already been talking about this for more than three years, after all — but don’t be surprised to see stadium talk heat up in the next year or so.

Columbus Crew exec says team needs new soccer-only stadium to replace old new soccer-only stadium

When reporters ask me how long a stadium can be expected to last before it becomes obsolete, I like to remind them of sports economist Rod Fort’s classic quip that “I don’t see anything wrong, from an owner’s perspective, with the idea of a new stadium every year.” At least, I thought it was a quip at the time:

[Columbus Crew president Mark] McCullers says the time is approaching when the team’s owner, Hunt Sports Group, will have to decide whether to upgrade Crew Stadium or build a new facility in the area.

“The stadium is 15 years old now,” he said. “We don’t want to throw good money after bad. We need to start having the discussions about a longer term facility solution for us and that could take a variety of forms.”

Crew Stadium actually opened May 15, 1999, which makes it a little less than 14 years old, not 15. And there are examples of teams wanting replacements for buildings younger than that — the Fort quote above, for example, was in reference to Orlando Magic owner Rich DeVos demanding a new arena just 12 years after his existing one opened. (For that matter, McCullers said something similar three years ago, when his stadium was only 11 years old.) But it is possible that McCullers may have set a record for youngest sports facility to be used in the same sentence with the phrase “throw good money after bad.”

New book by Harvard prof details $10b in hidden stadium and arena subsidies

Hallelujah! After years of waiting, Harvard stadium researcher Judith Grant Long’s book is finally out, and while I haven’t seen a copy yet, Bloomberg News has and provides some highlights of her findings:

  • The 121 sports facilities in use during 2010 cost taxpayers about $10 billion more than is commonly reported, thanks to hidden subsidies for things like land, infrastructure, operations, and lost property taxes.
  • Once hidden costs are taken into account, the average sports facility split is 78% public, 22% private.
  • The worst deals for the public include stadiums for the Indianapolis Colts, Cincinnati Bengals, and Milwaukee Brewers, each of which managed to rack up more in subsidies than the stadiums themselves cost to build. Best deals include venues for the Columbus Crew, Toronto Maple Leafs, and Ottawa Senators.
  • Arenas are generally better deals than stadiums, because they cost less to build. And  small cities tend to get get worse deals than larger ones, since they have less leverage to keep a team in town without large payoffs.

If you’re not familiar with Long, she’s been a favorite reference of FoS ever since she first started publishing her “Full Count” data on the true costs of sports facilities close to a decade ago. (At one point her book was also going to be called “Full Count,” I believe, but it ended up with the slightly less pithy title “Public/Private Partnerships for Major League Sports Facilities.”) Until Long came along, for example, it wasn’t clear that the Minneapolis Metrodome was actually one of the best deals for the public, thanks to a lease that forced the teams to actually share revenues; you can read more about her work in a profile I wrote of her for Baseball Prospectus back in 2005.

Needless to say, I’ll have much more to say about this once I’ve actually gotten my hands on a copy. (Which will have to wait until Routledge starts sending out either review copies or e-books, because $125 isn’t in my research budget.) But suffice to say that this is big, big news, and will be a huge boon to anyone trying to suss out the true public costs of stadium and arena deals after all the parts have stopped moving.