Friday roundup: Tons of news, but you’ll forget it all once you see that Houston is spending public money on a pro rugby stadium

And in other news that doesn’t involve proposed Tampa Bay Rays stadium sites:

  • United Airlines is spending $69 million on naming rights to the Los Angeles Coliseum in advance of the 2028 Olympics, but IOC rules prohibit corporate names during the Olympics, oops. Hope you enjoy the most expensive college-football naming rights deal in history, United!
  • Hotel revenue fell 16% in San Diego last year after the Chargers left town, but went up 0.2% in St. Louis after the Rams left. I’m not honestly sure what if anything this means — you’d really have to look at hotel revenue on football weekends to do this right, and it doesn’t look like this study did — but feel free to speculate wildly.
  • Did I mention the Yahoo Finance article yet that compares the Amazon HQ2 chase to the competition to host the Super Bowl, and cites me saying that while Amazon will bring more jobs, “that said, there’s almost no way it’s worth the kind of money that cities are talking about”? Well, now I have, enjoy!
  • AL.com has recalculated the public costs of a proposed University of Alabama-Birmingham football stadium and come up with a total of $18.2 million a year — $10.7 million from a bunch of county taxes, $3.5 million from a new car rental tax surcharge, $1 million from other county funds, and $3 million from city funds — not the $15.7 million I had previously reported. UAB and a naming rights sponsor and other private contributors, meanwhile, would only put in $4 million a year, and only for the first ten years. Out of his goddamn mind, I tell you.
  • Norman Oder of Atlantic Yards Report filed a Freedom of Information Law request to see the competing bids for the Belmont Park site that eventually got awarded to the New York Islanders, and was shot down on the grounds that it would “impair present or imminent contract awards.” Wait, wasn’t the contract already awarded? Will it be okay to ask again once it’s too late to do anything about it?
  • The WNBA’s Chicago Sky are moving to the new DePaul basketball arena that the city of Chicago helped pay for, which I guess is marginally good for Chicago in that it gets to steal a tiny sliver of economic activity from Rosemont, screw those guys, right? (Actually, Rosemont is apparently a gated community, so maybe screw those guys.)
  • A New Orleans Pelicans game was delayed because the arena roof leaked. No one is demanding that a new arena be built just yet that I’ve heard, but given that the current one is 19 whole years old, it’s gotta to be a matter of time, even if this one does have a fire fountain.
  • The Pittsburgh Pirates are threatening to sue the city-county sports authority over who’ll pay how much for $10 million in improvements to their stadium, because apparently the people who write these stadium leases are idiots.
  • If you enjoy this site but were thinking, “Wouldn’t this be better as a YouTube video with lots of animated charts?”, Vox has got you covered.
  • The Houston city council has approved spending $3.2 million in tax dollars on a pro rugby stadium for the Houston SaberCats, who are a pro rugby team that is going to play in a pro rugby league, which councilmember Jack Christie calls “a beautiful example of public-private partnerships that we ought to look at in the future, because as far as I have heard, there’s not been one city tax dollar used for this development.” I’m done. Have a good weekend.

Virginia votes down bills to block stadium subsidies, because won’t anyone think of the business decisions?!?

Hope you weren’t excited by the prospect of an interstate pact not to engage in a public bidding war for the Washington NFL team, because that’s not happening now:

A House of Delegates panel quickly shot down two bills Wednesday that would have barred state subsidies for a new Washington Redskins stadium in Virginia and blocked localities from spending public money on professional sports facilities.

A House budget subcommittee voted 7-0 to lay the bills on the table, effectively killing them for the year…

The subcommittee voted down the bill with no discussion.

This is par for the course, and the main reason why most experts predict the Economic War Among the States won’t be ended by mutual ceasefire: It’s way too tempting for one side or the other to try to cheat and lure all the businesses to their side of the state line. Federal legislation is the best way to stop bidding wars for sports franchises and businesses of all kinds — and there’s no benefit to the U.S. as a whole when one municipality steals a business from another, obviously — but that didn’t get far when it was proposed, either.

Meanwhile, the Virginia house of delegates also shot down another bill by the same delegate, Republican Michael Webert, that would have barred all stadium subsidies starting in 2019, on the grounds that, as Republican delegate Riley Ingram put it, “It’s a business decision. And this would bar localities from making that decision.” I guess that’s the subsidy equivalent of “They knew the risks when they chose to play football”?

Friday roundup: Beckham stadium opposition, Arizona bill to block “disparaging” team names, and oh, so many soccer stadiums

So. Much. News:

  • F.C. Cincinnati CEO Jeff Berding says the team still hasn’t decided among stadium sites in the Oakley and West End neighborhoods and one in Newport, Kentucky, while it awaits traffic studies and whatnot, though the team owners did purchase an option to buy land in the West End to build housing for some reason? Still nobody’s talking about the $25 million funding gap that Berding insists the public will have to fill, but I’m sure they’ll get back to that as soon as they decide which neighborhood hates the idea of being their new home the least.
  • Here’s really sped-up footage of the final beam being put in place for D.C. United‘s new stadium.
  • Indy Eleven is officially moving this season from Carroll Stadium to the Colts‘ NFL stadium, but hasn’t figured out yet whether or how to lay down grass over the artificial turf. Might want to get on that, guys.
  • San Diego is looking at doing a massive redevelopment of the land around its arena, and as part of this isn’t extending AEG’s lease on running the place beyond 2020. This is either the first step toward a reasonable assessment of whether the city could be getting more value (both monetary and in terms of use) for a large plot of city-owned land, or the first step toward building a new arena in some boondoggle that would enable a developer to reap the profits from public subsidies — Voice of San Diego doesn’t speculate, and neither will I.
  • Some Overtown residents are still really, really, really unhappy with David Beckham’s Miami MLS stadium plans for their neighborhood, and have been getting in the papers letting that be known.
  • “Can stadiums save downtowns—and be good deals for cities?” asks Curbed, the official media site of tearing things down and building other things to turn a profit. You can guess what I say, but you’ll have to wade through a whole lot of self-congratulation and correlation-as-causation from the people who built the Sacramento Kings arena to get there.
  • Tampa Bay Rays owner Stu Sternberg is still seeking as much as $650 million in stadium subsidies, with local elected officials holding secret meetings with lobbyists to make a project happen. WTSP’s Noah Pransky reports that “commissioners told 10Investigates there remains little appetite to make up the nine-figure funding gap the Rays have suggested may be needed to get a stadium built,” though, so we’ll see where all this ends up.
  • Arizona state rep Eric Descheenie, who is Navajo, has introduced a bill that would prohibit publicly funded stadiums in the state from displaying any team names or logos that local Native American tribes consider “disparaging,” which could make it interesting when the Cleveland Indians, Chicago Black Hawks, or Washington RedHawks come to town.
  • The U.S. Justice Department is investigating possible racketeering and other charges around bidding on major sports events, including American consulting firms that may have helped Russia get the Sochi Olympics and this year’s soccer World Cup. If they can’t find enough evidence to prosecute, they’re not watching enough TV.
  • I didn’t even know there was a surviving Negro League baseball stadium in Hamtramck, Michigan, let alone that there was a cricket pitch on it. Who’s up for a road trip?
  • The town of Madison — no, not the one you’re thinking of, the one in Alabama — is looking to build a $46 million baseball stadium with public money because “economic development.” They’re hoping to get the Mobile BayBears to move there, at which point the Huntsville region will undoubtedly become the same kind of global economic engine that is now Mobile.
  • An East Bay developer wants land in Concord (way across the other side of the Oakland Hills, though developing like crazy because everything is in the Bay Area right now) that’s owned by the BART transit system, and says they’ll build a USL soccer stadium if they can get it. Have you noticed that like half of these items are about soccer these days? Of course, half of all sports teams in the U.S. will be pro soccer teams soon the way league expansion is going, so that’s about right.
  • Here’s a map of failed New York City Olympic projects and how they helped Mayor Michael Bloomberg ruin neighborhoods. Sorry, did I say “ruin”? I meant “improve,” of course. This is from Curbed, after all.

Study shows Super Bowl only sells 22% as many hotel rooms as NFL claims

If you want a good concrete example of how Super Bowl economic-benefit claims are bunk, just keep in mind this paragraph from a Sunday New York Times article on the subject:

In a forthcoming paper, [Berry College economist Frank] Stephenson examines the 2012 Indianapolis Super Bowl, which generated 224,000 hotel stays, according to its economic impact report. Indianapolis serves as an apt comparison to Minneapolis since it is a cold-weather city in the Midwest. Actually, in the week leading up to the Super Bowl and the three days afterward, Indianapolis hotels rented an additional 49,000 rooms compared with what would be expected, less than a quarter of the estimate.

That is a large discrepancy! We’ll have to wait for Berry’s full paper to get into the nitty-gritty of where all those Super Bowl visitors are staying, but it certainly helps explain why other economists like Holy Cross’s Victor Matheson have found the economic impact of the game to be less than a quarter what the NFL and host cities claim.

Stephenson goes on to note that there’s likely a ton of leakage of that money from the local economy, since fans “don’t give it to the housekeeper or bellboy or front-desk person; a lot of it just flows to whoever owns the hotel” — or as Matheson once put it, “Imagine an airplane landing at an airport and everyone gets out and gives each other a million bucks, then gets back on the plane. That’s $200 million in economic activity, but it’s not any benefit to the local economy.”

Meanwhile, the city of Minneapolis is spending $50 million on hosting the game (on top of the billion dollars or so it put into the Vikings‘ new stadium that’s hosting it), though it says it’s raised it from corporate donors. I think I’ll wait to see what the actual numbers look like after the fact, though — it’s becoming increasingly clear that when it comes to the Super Bowl, you want to check the final bill, not the initial estimates.

Former Denver mayor proposes pot ads to fund Broncos’ stealth $650m stadium reno demand

Former Denver mayor Wellington Webb has issued a letter suggesting ways to pay for $650 million in upgrades to the Denver Broncos‘ stadium over the next 20 years — phone photo of crumply paper version here — that includes selling ads to marijuana companies on folding seat bottoms (so they’ll be visible to fans but not on TV) and getting fans to chip in by buying shares in exchange for “good will” and … hold up, did he just say $650 million?

I understand there’s an estimated $650 million in stadium improvements wanted over 20 years

Apologies for previously missing this news, which appears to have been revealed in a statement by Broncos execs buried deep in a boring naming-rights article from last September. Sure, sports venues need maintenance, but $650 million in work over 20 years for a 17-year-old stadium is insane, and is better described as “Broncos owners want to tear down their nearly new stadium and build a new one in place over the next two decades, but want somebody else to pay for it.”

Under the Broncos’ lease, naming-rights money goes toward maintenance and upgrade costs, but the last naming-rights sponsor went bankrupt two years ago, and realistically there’s no way on earth they’re going to get anything close to $32.5 million a year for the name of a stadium that’s already had two corporate names, and which everyone will just call “Mile High” anyway. So while Webb’s idea may or may not be the best — though obviously ads reading “[Marijuana Company Here] Brings You Mile High” would be a no-brainer — the bigger concern is that the Broncos appear to have levied a demand for $650 million and gotten everyone to swallow it as perfectly cromulent, which stops here, as far as I’m concerned. Whoever actually owns the Broncos now, you crazy!

Charlotte newspaper to new Panthers owners: Here’s how to shake us down for stadium cash

So I know I’ve poked fun before at the Charlotte news media for wondering aloud about how to meet the new Carolina Panthers owners’ demands for a new stadium when the new owners haven’t even been selected yet, let alone have they made any stadium demands. But, guys, this is getting seriously nuts.

Here, for your perusal, is an article from today’s Charlotte Observer, an actual newspaper, about all the ways that a prospective Panthers owner could extort stadium money from taxpayers, and which ones would work best:

  1. “We need a new stadium built outside Uptown Charlotte.” Unlikely to work, says Tom Regan, graduate director of the University of South Carolina’s sport and entertainment management department, because it’s too hard to get to the outskirts of town, just look at how the San Francisco 49ers are suffering in Santa Clara. (Which probably isn’t actually the reason for the 49ers’ woes, but whatever.)
  2. “A new domed stadium will draw frequent major events.” They only play the Super Bowl and Final Four once a year each, so they wouldn’t be in Charlotte very often regardless.
  3. “A major retrofit on Bank of America Stadium is necessary.” The place is only 22 years old and just got a significant taxpayer-funded upgrade, seriously?
  4. “If you don’t give us what we want, we’ll find a city that will.” “Given the current ownership structure of the Panthers and ongoing renovations (and lease agreements) at BOA,” says Vanderbilt sports economist John Vrooman, “the new majority ownership partner will probably be from or have strong financial ties to sweet home Carolina, and the Panthers are not likely to engage a credible franchise-relocation stadium-extortion game for at least another decade.”
  5. “We’ve upgraded, but there are still things city could help us do.”
    Add more suites at public expense, maybe, suggests Regan? Who could say no to that, right?

None of this specific analysis is incorrect, per se — in fact, it sounds like the Observer polled a bunch of stadium experts and got back, “The Panthers don’t really have much reason to complain or much leverage.” But the thrust of the article itself — trying to figure out which arguments for getting public stadium money might work best, like you’re a consultant to the team’s new owners rather than, you know, a journalism outlet — remains nuts, and is even more so when you consider the headline:

‘Stadium extortion’ arguments for Panthers ‘folly,’ industry experts say – except one

Except even Regan didn’t say that demanding more upgrades like suites wasn’t “folly” — in fact, he said, “When I look at stadiums on the East Coast – outside of the domes — Charlotte has one of the nicer stadiums.” So the Observer is really bending over backwards here to find some way to spin this as “Charlotte needs to do something for the Panthers.” I’d expect better from a major newspaper, but then, I’d also expect a headline that doesn’t make it sound like “one industry expert” is the exception, not one stadium extortion argument, so clearly I’m not hep to the ways of 21st-century journalism.

Friday roundup: Islanders close to Nassau deal, Olympic stadium to be razed after four uses, and it’s rethink your MLS stadium site week!

And in other stadium and arena news this week:

Have a great weekend, and see you Monday!

Falcons make more money by lowering food prices, also make less money by lowering food prices

I have griped here about the New York Times’ Ken Belson on so many occasions, usually right after he’s written a long article drawing sweeping conclusions that aren’t actually quite justified by the facts of what he’s describing. Today, Belson is back with a report on concessions prices at the new Atlanta Falcons stadium, and let’s see if he has improved any:

In Atlanta, Concessions Prices Go Down and Revenue Goes Up

Wow, that would be an impressive feat! How did they manage this?

Despite a 50 percent decrease in prices for food and nonalcoholic drinks compared to prices in the Georgia Dome, the amount spent per fan increased by 16 percent, Blank’s sports company, AMB Sports and Entertainment, said on Thursday.

The results suggest that fans will consume more if prices are kept at more reasonable levels, with potentially no effects on the team’s bottom line.

That … is not how math works. Even if fans spend more overall on cheaper food, actual team revenue from concessions depends on what’s left over after you pay for all that additional food — so if you bring in 16% more in cash but spend, say, 30% more on buying frozen hot dogs, that’s not “no effects on the team’s bottom line.” So how did this gambit actually work out in terms of net revenue?

Belson doesn’t actually say, but fortunately Bloomberg has the full story:

[Fans] bought more food — sales were up 53 percent — and each fan spent, on average, 16 percent more on concessions. It wasn’t enough to offset the drop in prices, though. The team made less on concessions in 2017 than it did the year before, according Steve Cannon, chief executive officer of AMB Group, the company through which Blank owns the team.

Okay, then! So Belson’s article really should have been headlined “Falcons Cut Food Prices by Half, But Make It Up in Volume.’

To be fair: Belson doesn’t explicitly say that the Falcons are profiting on the food price cuts (though he implies that they could), and even the headline could mean “gross revenue goes up” and not “net revenue (i.e., profit) goes up,” though that’s not how normal humans tend to read that word. Still, it’s all very misleading, especially when Bloomberg shows how to get it right.

Why is this all important, aside from getting to poke fun at the Paper of Record yet again? Because the true numbers hint at the reason why concession prices — and ticket prices, and everything prices — at sporting events are so crazy high: Yes, you can make more fans happy by setting prices lower, but in the early 21st-century economy, you make more money by selling fewer seats/pulled pork sandwiches to fewer people than by selling more of them to more people.

Props to the Falcons management for not choosing to do it that way — given Cannon’s quote to Bloomberg that “sure, we could shake out a few more dollars of margin under the old model, but we believe that the direction we’ve taken, given all the other positive benefits, is the bigger revenue play, period,” it sounds like they figure this is a necessary loss leader to keep people interested in live football, especially with fans increasingly choosing to watch on TV or not at all. Or maybe they figure fans will spend more willingly on pricey tickets this way, as I predicted when they announced the food pricing scheme back in 2016. Either way, it’s a move that’s worth not oversimplifying if we want to understand how sports teams try to extract maximum dollars from our pockets, and that’s what we’re here to do every day, right?

How not to evaluate how much public money to spend on a stadium, in seven easy steps

I’ve often said that cities should calculate what sports teams are actually worth to them before writing a blank check for a stadium or arena — you know, like Naheed Nenshi has tried to do in Calgary — so when Andrew Dunn, editor-in-chief of something called the Charlotte Agenda (“Charlotte Agenda exists to make Charlotte the smartest, most human city in the world”! Also: “We believe in drinking beer at work”!), set out to do just that today for a Carolina Panthers stadium deal, gotta give him at least some props, right? Let’s see how he did:

  • “Economists generally agree that the costs to taxpayers outweigh the benefits of all the additional spending on construction, hotels, restaurants, tickets and concessions.” He can read! Good start!
  • Notes that Charlotte paid $87.5 million in 2013 for a six-year lease extension for the Panthers, which means “the going rate is at least $13.75 million per year to make a team stay put.” He doesn’t note that that was one of the worst returns on a stadium subsidy in history, so maybe his reading doesn’t extend to this site.
  • “I believe that the Panthers are worth public money.” That’s kind of assuming your conclusion there, but in case he means “something, even if it’s only a penny,” I’ll allow it.
  • “I’ll grant that Charlotte’s government will never be able to directly recoup in employment and sales taxes the money it puts toward the Panthers. But putting public money toward pro sports shouldn’t be analyzed that way. Think of it more as a marker of what kind of city we want Charlotte to be.” Followed by an assertion that the Hornets and Panthers “put the Charlotte name in the national consciousness and touched off a business boom,” his sole presented evidence being a 1994 Chicago Tribune article in which a Hornets season-ticket holder says that the teams put Charlotte on the map.
  • “An investment in the Panthers is not using the same money that would build affordable housing.” This because the city could use hotel and rental car tax money that is earmarked for promoting tourism, notwithstanding that if general fund revenue ends up being used on a tourism project because the hotel and rental car tax fund is all spent on a football stadium, it’s absolutely taking away from money for things like affordable housing.
  • “Let’s figure out what we’re willing to do before a new ownership group gets involved. They’ll buy the team knowing what support they can count on from the community.” I.e., let’s make an offer before we’ve even been asked for anything. Where figuring out what a team’s presence is worth to a city (and, just as important, whether it has any better options for leaving if you don’t lavish its owners with cash) is a great preparatory step for negotiations, up and telling new team owners, “Hey, we have a check this big waiting for you!” is a terrible, terrible idea. What were we just saying about bidding against yourself?
  • “Perhaps both sides will come out in the black.” Uhhh, remember bullet point #1 back up there? Where you wrote that economists agree a win-win situation almost never happens? Maybe his reading doesn’t even extend to the very editorial he’s writing.

Overall grade: D, maybe C-minus for a good essay topic, but the execution needs a lot of work. To do this right you need to analyze the actual return on a stadium investment in tax revenues, the emotional value of an NFL team to a community, any measurable impact on business activity as a result of the presence of sports teams (though those economists back in the first paragraph have it covered for you: there is none), what other options the team has to move, and so on. Instead, Dunn’s analysis comes down to: Economists say stadiums don’t pay off, but I really like football, and there’s tourism tax money just sitting right there, so somebody just offer something already, I can’t take this uncertainty! Sounds like somebody needs another beer.

Three bills introduced to try to block Washington NFL team stadium bidding war

One of the big questions in the stadium-subsidy world is “Why don’t local elected officials just get together and say, ‘Fuck those greedy sports owners, let’s agree among ourselves not to get played for subsidies in interstate bidding wars’?” (Actually, it’s the same question for non-sports bidding wars, too.) And now some legislators in Maryland, Virginia, and D.C. are getting attention for trying exactly that in response to Washington NFL team owner Dan Snyder’s stadium shakedown attempt:

The liberal Democrat in Maryland, conservative Republican in Virginia and left-leaning independent District of Columbia Council member have introduced legislation to set up an interstate compact barring any public spending on incentives for a new stadium.

The idea is to prevent the jurisdictions from competing against each other with lucrative offers of public assistance for the new facility. The team’s current lease at FedEx Field in suburban Maryland ends in 2027 and it is exploring new potential locations.

This is, needless to say, a great idea for protecting the public purse, and the elected officials behind it — Virginia Republican delegate Michael Webert, Maryland Democratic delegate David Moon, and District Council member David Grosso — deserve to be cheered for their efforts.

It’s important to note, though, that these bills have a long road ahead of them. Each one has only been introduced, and there’s no indication yet of how much support they have — and each jurisdiction (man, would choosing nouns for these articles be easier if D.C. were just a state already) will no doubt be keeping a close eye on the others to make sure they don’t jump into a non-aggression pact before any of their erstwhile rivals. And then, too, even on the rare occasions when pacts like these have been enacted in the past, they haven’t held up well — non-poaching agreements between New York, Connecticut, and New Jersey, and between Minneapolis and St. Paul, pretty much immediately collapsed back in the 1990s. (Though I’m not sure if those had the same legislative teeth as these bills — it’s been 20 years, my notes are in a box somewhere.)

In short: A for effort, but the devil is going to be in the political machinations necessary to get these bills passed. Everyone watch this very closely, because if D.C., Virginia, and Maryland somehow do manage to say “You’re not the boss of us” to Snyder, it could have nationwide repercussions.