Category Archives: NBA

Friday roundup: Trump tariff construction cost hikes, Beckham lawsuit tossed, Elon Musk inserts himself into headlines yet again

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Lots of news to report this week, and that’s even without items that I can’t read because of Tronc Troncing:

Friday roundup: Delayed votes, poorly considered tributes, and a no-LeBron loan offer

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Greetings from my undisclosed location! I have time for an abbreviated news roundup this week:

Friday roundup: Untangling NYCFC’s stadium plan, fighting over the Crew’s future, and what to do with a luxury suite

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Sorry for the radio silence the last couple of days — it was a combination of not much super-urgent breaking news and a busy work schedule on my end — but let’s remedy that with a heaping helping of Friday links:

  • Part of that busy schedule was wrapping up work on my Village Voice article trying to unravel NYCFC’s latest stadium plan, and while the upshot remains what it was a month ago — this is a Rube Goldberg–style proposal with so many moving parts that it’s hard to say yet if it would involve public subsidies — it also involves city parks land that isn’t really parkland but is really controlled by another city agency that isn’t really a city agency and denies having control over it … go read it, you’ll either be entertained or confused or both!
  • The state of Maryland has luxury suites at the Baltimore Ravens and Orioles stadiums, and Gov. Larry Hogan mostly uses them for family members and political cronies. This should come as a surprise to no one, but it’s a reminder that getting government use of a suite as part of a stadium deal is less a public benefit than a, what do you call those things?
  • Based on questions asked at a Monday hearing, The Stranger concludes that most King County council members aren’t opposed to the Seattle Mariners‘ demand for $180 million in future county upgrade spending on Safeco Field, in exchange for the team signing a new lease. That could still change, obviously, but only if all of you readers turn toward Seattle and shout this post in unison. Three, two, one, go!
  • MLS commissioner Don Garber says talks are “ongoing” with the city of Columbus about replacing the Crew if they move to Austin, and by “with the city of Columbus” he apparently means the local business council the Columbus Partnership. And even their CEO, Alex Fischer, doesn’t sound too in the mood to talk, noting that Garber has called for a new downtown stadium in Columbus while not requiring the same of Austin: “I find it extremely ironic that the commissioner wants a downtown stadium at the same time that the McKalla site is the equivalent of building a stadium in Buckeye Lake.” MLS deputy commissioner Mark Abbott retorted that Fischer’s remarks are “certainly a strange way to demonstrate an interest in working with us.” The lines of communication are open!
  • The owners of Nashville S.C. would have to pay $200,000 a year in city rent on their new stadium, which is … something, at least. Except, reports the Tennessean, “Parking revenue collected from non-soccer events at the new MLS stadium, such as concerts or football games, would go toward the annual base rent and could potentially cover the entire amount.” So maybe not really something.
  • Glendale has extended its arena management deal with AEG through 2026, which will mean continuing to pay $5.6 million annual management fees, but also collecting about $1.6 million a year in shared arena revenues. That’s not good, but it is significantly better than the lease that had the city paying the owners of the Arizona Coyotes more than $7 million a year after revenue shares, so yay Glendale for tearing up that lease and bidding out the contract to at least cut their losses.
  • Here’s Austin’s lead negotiator with Crew owner Anthony Precourt over a new stadium, Chris Dunlavey of Brailsford and Dunlavey. on whether the deal is fair to taxpayers: “All around, I don’t know how it could get characterized as favorable to [Precourt Sports Ventures]. I think the city of Austin has negotiated this to as favorable for a city as PSV could stand to do.” Uh, Chris, you do know that “good for the public” and “as least awful for the public as we could get” aren’t the same thing, right?
  • Former U.S. senator Barbara Boxer has thrown her weight behind Inglewood residents opposing a new Los Angeles Clippers arena because it could cause gentrification and displacement. Which, not all arenas do, but in hot urban areas like L.A. it doesn’t take much to cause gentrification and displacement, so I can certainly see why there’s concern.
  • An otherwise unidentified group calling itself Protect Oakland’s Shoreline Economy has issued flyers opposing the A’s building a stadium at Howard Terminal because, among other things, it could displace homeless encampments to make way for parking lots. This is getting David Beckham–level silly, but also it’s getting harder and harder not to feel like the A’s owners should just give in and build a stadium at the Coliseum site, since at least nobody seems to mind if they do that. Yet.

In perfect synergy, Bucks arena to be named after another corporation that shook down Wisconsin for subsidies

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The new Milwaukee Bucks arena got a naming-rights sponsor last week, which, yawn, if I reported on every deal like this I’d never have time to talk about anything else, and a whole lot of corporations would just get some free publicity. But as it turns out, this corporation, the extremely uncreatively named financial services company Fiserv, is dropping money on naming rights to a publicly subsidized arena right after getting $12.5 million in public subsidies of its own as part of the infamous Foxconn deal:

“It makes the Legislature look foolish,” said Sen. Jon Erpenbach (D-Middleton), who voted against the deal. “It makes the governor look foolish.”

People don’t understand why a company would need taxpayer subsidies for its headquarters when it has funds available to buy naming rights, Erpenbach said.

“Maybe the state can sell naming rights on that new (Fiserv) headquarters and get some of the money back,” Erpenbach said.

As with Citicorp getting naming rights to the New York Mets‘ stadium right after getting bailed out by the federal government, there’s no direct relationship here between the naming rights deal and the venue subsidies — it’s just a terrible look for a company to demand $12.5 million in state funds and then turn around and use it to buy ad signage on a building that’s already getting $450 million in public money, especially when the Bucks owners get all the proceeds from the naming-rights sale on the publicly owned building. It’s an even worse look that Fiserv got its subsidy after turning a $1.2 billion profit last year — but then, nobody’s claiming that companies are getting these deals because they need the cash; it’s just extortion exacted by threatening to leave the state. Damn you, Leonard Yaseen.

Friday roundup: Bad spring training math, Beckham’s curse, and the opening of Megatron’s Butthole

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No time for quips today, just the news:

  • A study by Arizona State University found that spring-training baseball was worth $373 million to the Arizona economy in 2018. I can’t find the actual report itself, but it looks like they came up with this number by interviewing a sample of out-of-town visitors at spring training games about how much they were spending on their trips — which would be a perfectly good methodology if not for the fact that lots of people travel to Arizona and then think “I’ll go see a baseball game while I’m there,” instead of traveling there just for baseball and thinking, “Sure, I’ll check out that big canyon, too.” Which is why when spring-training games have been canceled for labor conflicts, the observed impact on local economies has been pretty much zero. I wonder if the people who wrote this Arizona State report are actual economists, at least.
  • Nashville is getting an MLS franchise because it promised to build a soccer stadium, but it still might change its mind and not build a soccer stadium, and this is going to be great fun to watch if it does. (Not if you’re a Nashville MLS fan, I guess. But [insert requisite jibe about anything being more fun to watch than MLS soccer].)
  • MLB commissioner Rob Manfred said last week that he hopes MLB expands by two more teams during his lifetime (or during his tenure as commissioner — he wasn’t exactly clear), specifically mentioning “Portland, Las Vegas, Charlotte, Nashville in the United States, certainly Montreal, maybe Vancouver, in Canada. We think there’s places in Mexico we could go over the long haul.” That got people in those cities all excited, which is presumably the point in saying such things — of course, none of those cities have MLB-ready stadiums (unless you count Olympic Stadium in Montreal), so prepare for a stadium arms race sometime before Manfred dies.
  • Megatron’s Butthole is now fully operational.
  • The estimated cost of renovating Key Arena has risen from $600 million to $700 million, but the city won’t have to pay any of that because their deal with the developers says those guys have to pay any cost overruns. Kids, when signing your next arena deal, do that.
  • A Florida man was arrested for setting fire to golf carts at the golf course where David Beckham wants to build his soccer stadium, but police say it was just arson and has nothing to do with the stadium proposal. Except insomuch as David Beckham is cursed, okay? If construction on this place ever begins, I fully expect it to be interrupted by all its milk cows going dry.

No, Warriors’ new arena doesn’t mean they don’t have to worry about the luxury tax

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The Athletic is one of the latest new sports websites, and I wish them all the luck in the world, since more sports news (and more sports news jobs) can only be a good thing for those of us who cover this world. One thing I can’t do, though, is read The Athletic, because it has a hard paywall that doesn’t even allow a certain number of free articles a month, and they simply don’t run enough must-read stories for me to cough up $5 a month for a subscription.

So instead I’m reading (and linking to) this summary in The Big Lead of Tim Kawakami’s Athletic article about how the Golden State Warriors don’t have to worry about the $200 million luxury tax bill they’ll be hit with starting in 2019 for all their high-priced players, because hey, they’ve got a new arena:

According to Kawakami, the Chase Center will have “membership fees” of about $15,000-$20,000 per seat for season tickets, which get paid back without interest in 30 years. A Warriors official said that 79% of season ticketholders who have been pitched so far have agreed to pay them; additionally, most luxury suites are already sold, and Chase is paying about $20 million a year for the naming rights. Add in parking, concessions, actual ticket sales, and money from both local and national TV and even if the Warriors are paying $300 million a year for their players they are going to be just fine.

Two things: First off, yes, the Warriors owners are going to collect bucketloads of money from their new arena — if the above is correct, that’s somewhere in the neighborhood of $700 million just for seat licenses and naming rights alone. But they’re also going to have roughly a $1 billion construction bill for the new San Francisco arena, so most of that new revenue is already spoken for.

Secondly, Kawakami (or at least The Big Lead’s summary of Kawakami) fundamentally misunderstands the difference between fixed and marginal costs and revenues. Most of those new revenues — certainly the PSLs and the naming rights — the Warriors owners will be getting regardless of whether the Warriors are any good for much longer. So the decision they’ll be facing won’t be “do we have $200 million extra lying around to tithe to the NBA for having all the good players” — their owners have more than $2 billion in wealth between them, so cash on hand isn’t so much an issue — but rather “would we rather have another all-but-guaranteed ring, or would we rather have $200 million more this year?” (Previous Kawakami reporting showed that the Warriors bring in about $35 million a year in added revenues from each playoff run, which isn’t enough by itself to justify those crazy luxury tax expenses.) And that’s a tough call for even the mos championship-hungry sports team owners, as witness the New York Yankees‘ scramble to get under MLB’s luxury-tax threshold.

So anyway, short version: Yes, the Warriors’ arena will bring in lots of money; no, it’s not all free money that the owners will happily spend on whatever bills come in under the door. Thanks to the crazy San Francisco market, it may well be the exception to the rule that most sports venues don’t even pay their own construction costs, but it’s not “an ATM machine” as this article claims, either.

LeBron James was not the centerpiece of the Cleveland economy stop it stop it please god stop it

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Eeaaaaaaaaaaaaaaaaaaaaaaugh, nooooooooooo, not another article about how much LeBron James is worth to the Cleveland economy!

When James played for Miami, there was a downward trend in the number of restaurants in Cleveland that coincided with an upward trend around the stadium in Miami. Likewise, when James returned to the Cavs, restaurants near Cleveland’s Quicken Loans Arena spiked while the number restaurants within a mile of the American Airlines Arena started to slide, according to the Harvard study.

That’s from a CNBC article headlined “How LeBron’s move west could tip parts of Cleveland’s economy south,” though it’s mostly full of economists saying anything from “we’ll see” (Case Western Reserve’s Jack Kleinhenz) to “people who stop going to Cavs games will just go to Indians games instead” (Smith College’s Andy Zimbalist) to “we saw more tourist restaurant spending the year LeBron came back, but that could easily be a coincidence” (city tourist bureau spokesperson Emily Lauer). The headline is already a giveaway to the problem with the story’s premise, as is the above quote: Of course less money is spent in and around the Cavs’ arena when fewer people go to Cavs games, but that doesn’t mean people stop eating or going out at night — it just means that they find other things to do than going to see NBA basketball.

At least CNBC managed to avoid repeating the urban legend that LeBron is worth $500 million a year to Cleveland’s economy, which hopefully we put a stake in back in 2015. But still, even putting a reporter on such a story reveals that some CNBC editor thinks “let’s look at how Pro Sports City will fare economically without Pro Sports Star” is an assignment worth making, which, no, it really isn’t, and the economists you spoke to ended up telling you as much. And you didn’t even call Geoffrey Propheter, who did the definitive study on NBA arenas and their economic impact! I bet he has lots of ideas for better ways that CNBC reporters could be spending their research time — give him a ring, he’s in the book.

Friday roundup: Bucks say arena can fight racism, Rays in line for federal tax breaks, Falcons to get glowing bridge

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Slow news week thanks to the holiday, but there were still a few items of note:

  • Milwaukee Bucks president Peter Feigin thinks his new publicly funded arena will help fight segregation because it’ll have a public plaza. The Chicago Tribune notes that the Bucks owners once released a strongly worded statement of support for one of their players after he was tased by Milwaukee police, so … nope, I don’t get the connection either, unless this reporter was assigned to cover Feigin and couldn’t find much else to say about his bizarro statement, so just googled “Milwaukee and race and basketball” and dumped the results into a Word file.
  • The Sacramento Kings owners are going to use computers at their arena to mine cryptocurrency for charity, which mostly serves as an excuse for the team to issue a press release mentioning themselves in the same sentence as blockchain, because we know that’s a thing. Too bad the earth is going to burn as a result, but everything’s a tradeoff, right?
  • Ybor City, where the Tampa Bay Rays want to build their new stadium (price and funding still TBD), has been tabbed as a federal “economic opportunity zone,” meaning developers can use it as a short-term tax shelter for profits that are reinvested into the area. The program is way too complicated for me to calculate at the moment just how much U.S. taxpayers would end up paying toward a Rays stadium, but suffice to say it’s one more piece of the funding puzzle that team owner Stuart Sternberg doesn’t have to worry about himself.
  • Speaking of the Rays, they’ve announced they’ll release new renderings of their stadium plans next Tuesday, which I guess makes this announcement itself vaporvaportecture?
  • The Atlanta Falcons pedestrian bridge that will now cost Atlanta residents $23 million is going to glow! And who can put a price on that, really?
  • Since it was a slow stadium news week, here’s a bonus article on how Nevada giving $1.4 billion to Tesla to open a battery factory there is looking to be a disaster, with the state ending up losing its entire budget surplus while new workers attracted to the area have driven up rents and increased local government’s police, fire, and schools costs, leaving residents with a higher cost of living and fewer services. One unemployed local who was forced to move into a motel room listed for the Guardian things she now considered unaffordable luxuries: “Ice cream. Bacon. A movie ticket.” It’s a fun weekend beach read!

With LeBron gone, who will come see Cleveland’s new glass wall?

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LeBron James is a Laker, which means the Cleveland Cavaliers will be really, really, laughably bad next season, and probably for many seasons to come. Which means Cavs fans won’t have much reason to come out and see the team’s new glass wall.

Bloomberg News, for one, is worried about the effect on the new ticket tax that’s helping pay for the arena’s renovations:

The departure of the team’s biggest draw could pose risks if attendance drops, given that a tax on ticket sales is used to help pay off the debt.

Risks to who would that be exactly, Bloomberg doesn’t say. But given that the ticket taxes would be collected by the city to help repay $140 million in public debt on the stadium upgrades, it sure looks like taxpayers will be on the hook for repaying it if there’s any shortfall, much like happened in Cincinnati with the Bengals stadium when sales tax receipts fell short, with dire consequences.

But hey, maybe with the Cavs’ future in the toilet, Clevelanders will instead spend more money on concerts — substitution effect, right? Except that the Cavs’ arena already just had a record-setting year for concerts, so expecting much improvement in that department is probably ambitious. Maybe they can sell the glass wall on eBay.

Friday roundup: Rays set stadium deadlinish thing, D.C. United can’t find the sun in the sky, Inglewood mayor flees lawsuit filing on Clippers arena

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Farewell, Koko and Argentina: