Friday roundup: Possible Suns arena renovation funding plan, A’s and Rays still promising stadium news by year’s end (but don’t hold your breath)

When it rains, it pours, and this week provided a deluge of stadium news:

Arbitrator rules Warriors can’t skip out on $40 million in remaining Oakland arena debt

Some unexpected good news for the city of Oakland and Alameda County: Four years after the Golden State Warriors owners announced they planned to move to San Francisco and stick taxpayers with the remaining debt on the Oracle Arena, an arbitrator has ruled that nuh-uh, the team has to pay up. By the time the Warriors move across the bay to San Francisco next season, the remaining debt is expected to be around $40 million — or, as NBC Sports puts it, “the equivalent of one year’s worth of Kevin Durant’s next contract” — which the team owners will now be on the hook for.

The dispute, if you’re interested, was over this language in the Warriors’ 1996 lease:

“if the licensee terminates this … agreement for any reason prior to June 30, 2027, and there is a principal balance remaining on the project debt … then licensee shall pay an amount equal to the excess of scheduled debt service.”

Sounds pretty cut and dried, no? Except that the lease expired in 2016, even though it was later extended through 2019, so the Warriors owners argued that it no longer applied even if the lease clause said “2027,” and — know what, they lost, so we don’t have to think about this anymore. Note to future cities negotiating future stadium and arena deals: Copy Oakland’s language about termination, because whoever wrote that did a good job.
Finally, here’s Pirates president Frank Coonelly dreamily recalling the 2013 wild-card game, also memorable as the last time the Pirates won anything in the postseason:

“People here from the outside to a person said that was the greatest crowd they ever witnessed because there was a guttural loud sound from hours before the game, the first pitch, to hours after the game was over.”

And truly, who can put a price tag on a guttural sound?

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

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.

Friday roundup: Warriors rail stop turns pricey, West End stadium undead again, Montreal mayor meets with would-be Expos owners

Superbrief mode today:

  • Expanding light-rail service to the Golden State Warriors‘ new arena is now expected to cost at least $62 million, which is a lot for Muni Metro, though not for some other transit systems. The Warriors owners are kicking in $19 million, but the rest will be funded by tax money from the arena district, which may or may not be enough to cover the entire nut. Tim Redmond saw this coming.
  • F.C. Cincinnati owners are officially pivoting back to the West End stadium site that it had declared dead last month after not getting offered enough property-tax breaks on the land. How come? Team CEO Jeff Berding said of the other two options, Oakley is “not as close to the urban core as desired,” and the team couldn’t secure land in Newport, Kentucky. Sounds like the West End has the club over somewhat of a barrel, which it should be able to use to ensure the team pays full property taxes, at least, though some residents may be more concerned about keeping out a stadium entirely over fears it will further gentrify their neighborhood.
  • The mayor of Montreal is meeting today with an ownership group that wants to bring a new Expos MLB team back to town. “We don’t need a cent from the city of Montreal, but we need a little help,” prospective co-owner Stephen Bronfman said earlier this week; your guess is as good as mine what that actually means.
  • Minnesota taxpayers have spent $1.4 billion on new or renovated sports venues over the past 20 years, if anyone is counting.
  • The Pawtucket Red Sox‘ stadium demands continue to be stalled, if anyone is keeping track.
  • “A deputy in one of Russia’s 2018 FIFA World Cup host cities has claimed that a latest inspection by the world’s footballing body has neglected a missing column at a newly built stadium.” You’ve just got to read the whole Moscow Times article now, don’t you?

 

Friday roundup: Coyotes seek investors, Detroit MLS stadium deal maybe not dead after all, and new stadium fireworks renderings!

So much news! Let’s get right to it:

Friday roundup: Crew claps back at Modell Law suit, Cincy mayor thinks his citizens are dumb, Wrigley Field is a construction zone again

This week brought thundersnow that led to a fireball in a subway tunnel, but the stadium and arena news was reasonably exciting too:

  • Columbus Crew owner Anthony Precourt says the lawsuit to force him to offer the team for sale to local owners before moving it to Austin is groundless, since he made “significant investments” in the team “both on and off the field” and yet the team isn’t making money hand over fist like he’d like it to. I would have gone with “fine, you can buy the team if you want, my asking price is one quattuordecillion dollars,” but that’s why Precourt pays himself the big bucks.
  • Oakland Raiders management says it has identified room for 27,000 parking spaces within 1.5 miles of its Las Vegas stadium, and 100,000 spaces within three miles. “Now, obviously, people don’t want to walk three miles, so you have to have a pretty strong infrastructure program and transportation plan in place,” said Raiders president Marc Badain. “We’re working on all of that.” Cool, get back to us!
  • Residents of the West End opposed to building an F.C. Cincinnati soccer stadium on the site of a revered high school football stadium there are all about “maintaining disinvestment, maintaining the status quo and not closing racial and economic gaps but keeping them divided,” Cincinnati Mayor John Cranley said this week. “I think that’s wrong.” But enough with the pandering to your constituents, Mayor Cranley what do you really think about them?
  • Because no arena project can truly be cost-free for the public, the new Muni Metro stop being built at the Golden State Warriors‘ new San Francisco arena has now risen in cost to $51 million, and the city of San Francisco hasn’t figured out how to pay for $17 million of that yet. Not that a new mass transit stop isn’t a public benefit for people other than Warriors fans, but just saying.
  • This is what Wrigley Field looked like as of a couple of weeks ago. There’s still time before opening day, so hopefully this renovation will go better than the Chicago Cubslast big one.
  • Does an “asteroid the size of a sports stadium” zooming past Earth count as stadium news? It does to my custom RSS feed for “stadium” news, so enjoy!

Friday roundup: Warriors debt fight, giant American butts, and the blackout curtains that will eat Minneapolis

It’s laugh to keep from crying week! (Just kidding: It’s always laugh to keep from crying week.)

  • The 46-year-old Richmond Coliseum is “clearly past its prime” and “smaller and gloomier than many competing venues,” and the city should use “original thinking and strong leadership from the private and public sectors” such as tax-increment financing to help pay for a new arena, according to the Richmond Times-Dispatch. Not included in the editorial: any indication of how much a new arena would cost or whether the benefit to the city would be worth it, because why think about such things when there’s new-car smell to be had?
  • Oakland and the Golden State Warriors owners are still fighting over who’ll pay for $40 million in remaining Oracle Arena debt once the Warriors move to San Francisco in 2019. It sure sounds like the team’s Oakland lease requires them to pay off remaining debt if they leave before 2027, but the city really would have had a much stronger case if it had refused to grant the team a lease extension without an agreement on debt payments, and made Steph Curry go play in the street for a couple of years.
  • The Texas Rangers‘ new stadium will feature seats that are 1 to 2 inches wider than in their old one, which is good for fans with wide butts (I stand accused, although not of being a Rangers fan), but less good for fans with butts of any size who will have to make do with seats farther down the outfield lines to make way for the butts of more well-off fans. Everything’s a tradeoff.
  • The Detroit Grand Prix owners, seeking to justify turning a public park into a private raceway for three months of preparation each summer, claim the annual event is worth $58 million to the local economy, and I told the Detroit Metro Times why that’s probably bullshit.
  • Here are some pictures of Los Angeles F.C.‘s new stadium in the final stages of construction that look disturbingly like pictures of stadiums in the first stages of demolition. At least season-ticket sales are going well, and those are way harder to fake than individual game ticket sales!
  • Derek Jeter may have gotten rid of anything not nailed down from the 2017 Miami Marlins, but he still can’t move Red Grooms’ horrific home run sculpture, because the public helped pay for it so now it’s public art. (Too bad Marlins fans couldn’t have tried the same argument about Giancarlo Stanton.)
  • The NCAA has awarded the 2019 men’s Final Four to U.S. Bank Stadium in Minneapolis, and now is demanding a giant blackout curtain to cover up the building’s windows for the event. Cost, according to Minnesota Sports Facilities Authority chair Mike Vekich: “It will be expensive — obviously.” Crazy idea: Tell the NCAA, “You already awarded us the Final Four, if you want a giant venetian blind, pay for it yourself or go play in the street with Steph Curry.”
  • The cost of a pedestrian bridge to get fans to a new stadium in Atlanta — no, not that bridge to that stadium, a different bridge to the Falcons stadium — has nearly doubled from $12.8 million to $25.1 million, thanks in part to rush charges to get ready for next year’s Super Bowl. You know where next year’s Super Bowl would look great if the NFL won’t pay rush charges for a bridge? You guessed it!

Friday roundup: Pistons disguise empty seats as other-colored empty seats, Olympics tourism is bad and likely to get worse, Suns have no clue about arena plans, and more!

Off we go! In my case, literally: I’ll be traveling all next week, so if you don’t hear much from me around here, hold tight and I’ll catch up with all the news on my return. In the meantime, keep yourself warm at night with this week’s worth of fresh items:

  • Pyeongchang’s surge in tourism for the Olympics is unlikely to be sustained in future years, according to a study that shows tourism levels quickly drop back to normal, when they even have an Olympic uptick in the first place. (Overseas visitors to London were actually down in the summer of 2012.) Given that you can still walk up and buy tickets to most of this year’s Olympic events, I wouldn’t count on it being an exception to the rule. Hope the locals enjoy all those new hotels!
  • Phoenix Rising F.C. is designing a new MLS-ready stadium on the site of its current temporary stadium on the Salt River Pima reservation, and claims it will pay the whole $250 million cost. That would sure be nice, but then that’s what we were told in Sacramento, too.
  • The Koch brothers’ Americans for Prosperity is sponsoring bills in state legislatures that establishing bans on spending public money on pro sports stadiums, which would kick in as soon as 25 states agreed to join the compact. Better they spend on that than on trying to buy Congress, certainly, but as sports economist John Vrooman noted to the Arizona Republic, this wouldn’t stop the other 25 states from continuing to spend to try to lure teams, at which point the whole system would break down. Vrooman said really any legislation needs to happen on the federal level, and “unfortunately for local taxpayers held hostage, that ain’t gonna happen anytime soon.” You gotta believe, John!
  • The projected cost to restore Miami Marine Stadium — remember Miami Marine Stadium? — has risen from $45 million to $59.6 million, and Miami has only $50.4 million set aside to pay for it, and yeah, that’s not good.
  • If you were wanting a long, fawning profile of the Golden State Warriors COO in charge of building their new arena, the Associated Press is here to serve. I’m more interested in the accompanying photo of a giant model of the arena, which makes the upper deck seats look kinda crappy thanks to an intervening clot of suites and club seats, but other images that show the end seats make it look not so bad, so I’ll withhold judgment until somebody (maybe even me!) sees the new place with their own eyes.
  • Hey, Phoenix Suns president Jason Rowley, how are your arena plans going? “‘What’s the best solution?’ It hasn’t been figured out yet.” Are you thinking of going in on an arena with the Arizona Coyotes? “There really hasn’t been a whole lot of conversation between us and the Coyotes.” Any hints at all about what your plans might be? “There are so many pieces to an arena conversation that it’s very difficult to identify one thing that would either be a go-forward situation or one thing that would impact where you’re ultimately going to end up.” The Suns have an opt-out in their current arena lease in 2022, so expect more heated rhetoric once we get closer to that date.
  • The Detroit Pistons are putting black seat covers over the red seats at their new arena during their home games, to make it less obvious how many empty seats there are. The covers are removed for Red Wings games, because the Red Wings’ team color is red, so I guess for them it’s not embarrassing, it’s promotion of their brand? The Pistons are also letting fans move down from the upper deck to the lower at no cost to make the empty seats look less bad on television. Hope Detroit is enjoying all that economic development!
  • At least Detroit got lots of local construction jobs from the arena, and that’s one thing no one can take away! Unless you believe the claims of a local construction worker’s lawsuit against one arena contractor, which says he was only hired to meet the project’s 51% local hiring quota and then immediately fired, while at the same time suburban workers were brought in under fake addresses. And even then, city data shows that only 27% of total workers on the arena project lived in Detroit.
  • MLB commissioner Rob Manfred says he approves of the Tampa Bay Rays‘ preferred Ybor City site for a new stadium — it’s literally his job to say this, so no surprise there — and has told Tampa business leaders that they need to be “engaged in this effort” because “it’s good for community over the long haul.” He then added, “It’s crucial that we get a facility here that allows the Rays to get more toward the middle of the industry in terms of their revenues,” which pretty much sounds like, Hey, local corporate titans, one of your brethren isn’t making as much profit as he’d like, please give him a bunch of your money so his bank balance looks better, okay? More power to him if that sales pitch works, I guess, but I’m in no way confident it will take a significant bite out of that $400 million-plus funding hole, and remain concerned it’s mostly misdirection so that whenever the Rays eventually go to taxpayers hat in hand, they can say, Look, the business community is already chipping in, you gotta do your part too, capisce?

Aerial photos show just how ginormous new Bucks arena will be

There are new aerial photos of the new Milwaukee Bucks arena alongside their two previous arenas — see if you can play “Which of these things is not like the other?”

That’s right: The new arena is the freaking ginormous building that looks like it could swallow the two old arenas and have room left over for a couple of playground halfcourts.

We’ve covered before here that one reason new sports venues are so damned expensive is that they’re typically just so much bigger than the ones that preceded them, but this is nice photographic evidence. As for why they keep getting bigger, the reasons are two-fold: First off, a bigger footprint means more room to cram in stuff like food courts and corporate orgy spaces or whatever season-ticket buyers are looking for these days, all of which means more potential revenue streams for the team owners. But also, while the size of the court hasn’t changed, seating bowls are tending to get bigger and bigger to fit in more luxury seating and “open concourses,” which requires a lot of acreage.

All of which to say that Steve Kerr is probably right to be worried about the Golden State Warriors‘ new arena:

“Everybody loved the old Chicago Stadium, and the United Center was so huge that it felt more like a concession to modern needs.

“I understand (that reality). They’ve got to pay the bills. But the old Chicago Stadium was like the old Madison Garden, one of the iconic places to play. And as a player, you kind of like that intimacy. So you know, we may face some of that in leaving Oracle. I think it’s inevitable, given that when stadiums were built in the ’70s, they were much more intimate because you didn’t have the huge footprint with all of the suites and the causeways, the concourses and everything, to fit in all the restaurants and clubs. So you have to make a concession for the need, for generating the revenue that’s going to pay for the team. But if you can do it and still figure out a way to make it a really intimate place, that’s the trick. I know that’s what they’re trying to do here.”

Friday stadium news: Warriors subway delays, MLS expansion scuttlebutt, ungrateful Hamilton

Oh hey, yeah, I forgot to mention that it’s the most important holiday of the year this week (and part of next), so posting may be a bit sporadic until Wednesday or so. But I could never ignore the weekly news roundup, so let’s get to it:

  • San Francisco’s new Central Subway likely won’t open until 2021, more than a year later than planned, which will mean a couple of seasons of Golden State Warriors fans walking or taking shuttle buses. Honestly, it’s not all that far, but I’m sure there will still be complaining.
  • David Beckham got some new minority partners for his MLS team that still doesn’t quite exist yet. Supposedly the league will issue an “update” on the Miami stadium situation soon, which maybe sounds ominous only to me because I think that way?
  • The city of Phoenix has now spent $200,000 on a Suns arena consultant, and still the city council doesn’t have any information yet even on what kinds of upgrades the arena might need, because the mayor says he has to keep negotiations with the team secret. From the city council. No, it sounds crazy to me, too.
  • The owner of the Hamilton Bulldogs junior hockey team offered to build a new arena and only ask taxpayers to foot half the bill, and he’s mad that the city hasn’t thanked him yet.
  • Cincinnati’s highway bridges are falling down, but the city is spending money on a new MLS stadium (maybe?) before addressing that, because hotel taxes and other money going to the stadium isn’t allowed to be used on highway infrastructure. You know, maybe cities and counties should start allowing things like hotel taxes to be used to improve other things that benefit tourists, like roads that don’t have overpasses fall on them when you drive under? Just a thought.
  • The Republican tax bill isn’t finalized yet, and we don’t know if the ban on tax-exempt stadium funding will survive, but the Detroit News speculates that if it does, it might help Detroit’s MLS expansion chances because it’s the only city that wouldn’t be building a new stadium. MLS already supposedly voted on the expansion cities yesterday, though, so you think the league owners called Congress for a sneak peek at the final bill? Does MLS have that kind of pull with Congress?