I’ve said a lot of nasty things about Convention, Sports & Leisure, the consultancy firm owned by the New York Yankees and Dallas Cowboys that has gotten flak for its outrageously high estimates of benefits, for doing economic impact reports for teams its concessions arm is already doing business with, and for being owned by the Yankees and Cowboys. But I’ve never accused them of being so grossly incompetent that they can’t even get the math right on their own 400-page reports.
According to the Washington Post’s Jonathan O’Connell, CSL has sent a letter to D.C. council president Phil Mendelson, explaining that two-thirds or more of the promised $109 million in benefits from a $300 million D.C. United soccer stadium weren’t actually benefits at all, they were, in effect, a typo. O’Connell hasn’t written this up for the paper as of yet, but did take to Twitter to report it:
In case you’re having trouble following here: A big part of the District’s $180 million in subsidies for the stadium would involve selling public land and using the proceeds to buy other land that would be used for the United stadium. (This is both to get around the city’s bond cap, and to get around United’s desire not to have to put in much capital of its own, because jeez, they’re not even billionaires. Quite. Probably.) D.C. would be left with $71.4 million in extra cash at the end of the deal — but would be out $71.4 million worth of land. So this is effectively a wash, and shouldn’t be counted as a benefit of the stadium.
O’Connell also tweeted out the relevant section of the report where CSL just flat-out threw in this $71.4 million to make the benefit numbers look much, much bigger:
To its credit, CSL subsequently sent out a letter “clarifying” its numbers (very small scan of it here); less to its credit, it spent all summer and half the fall coming up with a 400-page report that completely botched the one number that anyone would care about, artificially inflating the projected benefits from $17.6-38.0 million up to $89.0-$109.4 million. Yes, the report still projects that the stadium would provide a small net profit to D.C. over 32 years, but given that this is based on questionable assumptions that are completely undocumented in the CSL report, it wouldn’t take much in the way of overoptimistic assumptions to put the District back in the red on the deal.
Of course, that might well have been the intent here: Throw in unrelated dollar figures and call it “profit” and hope nobody noticed until after the deal was already approved. (Or, more likely, give your employees the sense that looking too hard at where the positive numbers in your report come from is not the best way of earning future contracts, or job security.) Except that now it’s apparently backfired, with D.C. council members, who were already not real psyched to rush into a deal just because the mayor is getting kicked out of office and wants it done before year’s end, openly questioning whether this financing plan is a load of crap.
This doesn’t mean that a United stadium deal won’t ever get done — there’s plenty of haggling left to do, and the D.C. council has proven itself willing and eager to do so in the past — but it does mean it may not be in this round of negotations. Also, it means you should never ever take anything CSL says seriously. Not that you should have before, but now when you see their reports, there’s only one acceptable response.