NFL owners trying to get L.A. stadium funding inserted into union talks, says Dan Patrick

I’m not sure what to do with this story because it’s so sketchily reported, but it’s also so damn weird that I can’t let it pass unremarked: Dan Patrick has said on his nationally syndicated radio show that with the cost of Los Angeles Rams owner Stan Kroenke’s new stadium having soared from $2.5 billion to $5 billion, the NFL is trying to use collective bargaining talks with the union to find a way to make the players help pay for it, sorta:

“The league is proposing that maybe they give players 49 percent of the revenue, but they want to use the extra money they get—a percentage [point] is about $150 million I was told—they want the players to then help finance the Los Angeles stadium. We’ll give you 49 percent of the revenue, but we want to use 2 percent of that revenue—so $300 million for the next couple years—to help finance the stadium.”

If you want to watch video of the relevant section of the radio show, as one does, it’s here:

The backdrop to all this is that NFL player payrolls are currently set at 47% of league revenues, and the players’ union wants to bump that up to perhaps 50%, but in exchange the owners want to play a longer regular season. If Patrick’s source is to be believed, though, there’s a proposal on the table to require that for the first couple of years, the players’ additional cut would be diverted to pay for Kroenke’s Folly, or at least a $300 million sliver of it.

This isn’t quite “getting players to pay for the Rams stadium,” but more like “okay, we’ll give you an additional couple percent of revenues like you’re asking for, but we want to keep it the first couple of years because man, that stadium sure is turning out to be expensive.” Which is effectively the same as giving the players a slightly smaller cut, or giving them a 49% cut but delaying its start for a couple of years, or any of a number of other asks that then reduce their ability to demand other things, like a longer season schedule.

Why would the other 31 NFL owners want to take a hard-won collective bargaining concession and use it to subsidize the Rams’ new stadium? It’s almost certainly not because it’s their only way of raising cash: Both the NFL and Kroenke have so much money flowing through their hands that skimming off $300 million (or using the revenue as collateral to borrow $300 million) would be trivially easy. Besides, even if the L.A. stadium is wildly over budget and in danger of never earning back its cost, that just hurts Kroenke, not the rest of the league — other owners will still get the same cut of any stadium revenue even if the construction debt hits $5 trillion — so what the hell?

Right now all we have to go on is Patrick’s statement, attributed to an unnamed source, so it’s pretty much at the wild rumor stage of verification. But if there’s actually been any attempt to insert L.A. stadium funding into league-wide collective bargaining talks, something very, very odd is going on, so it’s worth keeping an eye on.

UPDATE: A sharp-eyed reader (see comments below) points out that an NFL.com article from earlier this month noted: “Sources say one important issue within a complicated economic discussion is how to divide revenue from the new SoFi Stadium in Inglewood, California, which will be home to the Rams and the Chargers. The roughly $5 billion price tag for the L.A. stadium project is much higher than others; by owners’ calculations, it also will bring in much more revenue than other stadiums and they want the new CBA to reflect that investment, while players have pushed back at the idea of altering the revenue-sharing calculation based on one project they had no role in approving.”

That would imply that the league is trying to argue that L.A. revenues shouldn’t really count toward the league salary cap, because they’re already committed to paying off that exorbitant price tag. Which I can see why they’d want to do that, but I can also see why the union would be responding: Hey, you’re the ones who set the cap based on gross revenues, if you’re not turning enough profit on your crazy-expensive stadium that’s not our problem.

It would also explain why the NFL labor negotiators are pushing this angle: It’s not that they’re really trying to help pay off Kroenke’s stadium debt, so much as they’re trying to carve out a bunch of Kroenke revenues and say “These don’t count.” You could actually make a decent case that all revenue sharing should be based on net revenues, not gross, but then you get into questions of net of what (owners’ failed real estate investments? Caribbean island getaways? massage parlor bills?), which would make for some tricky negotiations, as well as tricky audits down the line.

Could visiting fans taking over Rams and Chargers home games be good news for Las Vegas? (Yeah, no, probably not)

They played football again on Sunday — nobody seems to be getting on that idea of banning the sport for being hazardous to human health, nor even the idea of replacing human players with digital avatars — which included home games for both the Los Angeles Rams and Chargers. And, as has become commonplace for L.A.’s new teams, most locals seem not to have gotten the message that the sport is still being played:

All of which is embarrassing news for the Rams and Chargers owners who moved their teams to L.A. on the premise that they’d sell lots of tickets in America’s second-biggest market, and slightly worrisome for when the two teams move into their new Inglewood stadium next year. But could it be good news for the Las Vegas Raiders, who are building their entire business model on selling tickets to tons of visiting fans?

That question was discussed Monday in an article in the San Francisco Chronicle that asked, among other things, if projections by the Southern Nevada Tourism Infrastructure Committee are correct that the Raiders’ presence will bring in tons of new visitors to Vegas:

An early study by the Southern Nevada Tourism Infrastructure Committee forecast the stadium would generate $620 million in annual economic impact and bring in 450,000 visitors who otherwise would not have come to in Las Vegas. Officials said just under half of attendees at all stadium events are expected to be non-resident consumers, with about 23% in town specifically for that event.

Those projections, as they pertain to Raiders games, are a sticking point for Stanford economist Roger Noll.

“There is no NFL team in the country that has more than about 3 or 4% of tourists in the stands,” Noll said. “So it would have to be the case that this would be more than an order of magnitude increase.”

But also!

Stephen Miller, director of UNLV’s Center for Business and Economic Research, said while Las Vegas quickly adopted the [Golden] Knights, many out-of-town fans also go to games.

“They come specifically to attend the game,” Miller said, “and then they stick around and have fun in Las Vegas.”

I reached out to both economists for their sources on these stats, and while I’m still waiting on Miller, Noll got right back to me. He said that he’s gotten peeks at proprietary data from team surveys of fans and addresses of ticket buyers on the resale market, and what he’s seen supports his conclusion: Very few NFL fans travel for games. He also clarified that his 3-4% estimate is for fans traveling specifically in order to see football — if a Pittsburgh Steelers fan happens to be in L.A. (either for a trip or because they’ve relocated there, as people are known to do) and decides to take in a Steelers road game while in town, that’s not additional spending that can be credited to the presence of the NFL.

Noll does add that the number of visiting fans typically rises when the home team is terrible, and season ticket holders start dumping their tickets on the secondary market — “For example, when the 49ers were having bad years, empty seats at the last couple of home games were one-fourth to half of the total seats, and sometimes a quarter or so of attendance was fans of the other team.” Which brings up an interesting question: Would it be in Nevada’s best interest for the Raiders to suck, so that more seats will go to out-of-towners looking to cheer on their teams to stomp on the Raiders, who will then “stick around and have fun in Las Vegas”? Modern economic development strategy has gotten very, very weird.

Friday roundup: Team owners rework tax bills and leases, Twins CEO claims team is winning (?) thanks to new stadium, and other privileges of the very rich

Tons more stadium and arena news to get to this week, so let’s dive right in without preamble:

Friday roundup: Lots more fans showing up disguised as empty seats

Is public financing of sports venues worth it? If you’ve been noticing a bit of a dip in the frequency of posts on this site over the past few months, it’s not your imagination: I had a contract job as a fill-in news editor that was taking up a lot of my otherwise FoS-focused mornings. That job has run its course now, which should make it a bit easier to keep up with stadium and arena news on a daily basis going forward, instead of leaving much of it to week-ending wrapups.

That said, you all do seem to love your week-ending wrapups, so here’s one now:

Should everyone consider just moving the Chargers back to San Diego already?

With football season in full swing, it’s time for Los Angeles Chargers fans to start not showing up in droves again, and they happily obliged yesterday, with both lots of empty seats and lots of visiting fans despite playing in a 27,000-seat soccer stadium. Which is always fun for schadenfreude purposes, but it also seems to be alarming Los Angeles Rams owner Stan Kroenke, who is not at all happy that the Chargers’ alleged L.A. fan base isn’t turning out to pre-purchase seats to the new stadium the teams will share next year:

That’s a pretty weak tease, admittedly, and also not really surprising, since as the Big Lead notes, there’s been tension between Kroenke and Chargers owner Dean Spanos ever since the two were forced into their L.A. marriage by the NFL a couple of years back. And it’s only been exacerbated by the Chargers’ ticket sales woes:

The Chargers told NFL owners they were projecting to make $400 million from PSL sales in Los Angeles. That number was part of the justification for leaving San Diego, as more money was available in the the nation’s second-biggest media market. After being in said market for more than a year, the franchise “adjusted” that projection from $400 million to $150 million. A little quick math shows that’s just 37.5 percent of the team’s initial projection. That’s also $250 million that would not be helping to fund Kroenke’s stadium.

I’m pretty sure that’s wrong — not that the Chargers slashed PSL prices, that’s correct, but that Kroenke would have to take a $250 million bath as a result, since Spanos has to pay a share of stadium costs regardless of how much money he’s making from PSL sales. Unless the Chargers owner tries to get out of his obligation by claiming he doesn’t have the cash, which would indeed make for quite the Monday noon Pacific time bombshell.

The bigger question here is: Why is everyone even going through this whole charade anymore? Sure, Kroenke (and the NFL) needed a tenant to help defray costs of the Rams’ new stadium, but now that the total price tag is up around $5 billion, any contribution from the Chargers is starting to seem like a drop in the bucket. (The Big Lead further claims that “Kroenke and the Rams would love nothing more than to completely remove the Chargers from the equation and have the Inglewood stadium all to themselves,” which seems odd since it’s not like Kroenke would be able to do much of anything else with the stadium on Rams off weeks, but this whole stadium keeps seeming more and more like an expensive vanity project anyway, so who knows?) So maybe would it make sense to look at just sending the Chargers back to San Diego, where their actual fans are?

Sure, it would involve figuring out how to undo the Chargers’ $650 million relocation fee, and also you know Spanos won’t want to go back to San Diego unless he can find a way to leverage it into his own shiny new stadium, preferably paid for by someone not named Dean Spanos. But I think it’s fair to say that calling a do over is more of a non-zero possibility than it was a couple of years ago, which is pretty amazing considering the Chargers haven’t even moved into their new L.A. stadium yet. Let’s see what noon Pacific time brings.

Santa Clara to sue 49ers for stadium control, after team allegedly gave itself cut-rate rent for college bowl game, among other things

The simmering squabble between the San Francisco 49ers management and the city of Santa Clara blowed up real good last night, when the Santa Clara city council voted to strip the 49ers of their right to run concerts and other events at their stadium, on the grounds of having “grossly mismanaged” them:

The City Council voted 6-0 Tuesday, with council member Patricia Mahan absent, to initiate legal proceedings to end the team’s management agreement. The action would not affect the team’s home games or other National Football League activities, City Attorney Brian Doyle said.

“We have hit rock bottom and we have nothing to lose” by ending the agreement, Doyle said at the council meeting.

One of the city’s claims: The 49ers rented out the stadium to something called the Redbox Bowl, at a $500,000 loss to the city. “Guess who owns the Redbox Bowl?” said Doyle. “The 49ers.”

As you may recall if you were following when the 49ers’ crazy-convoluted stadium deal was arranged way back in 2012, the city of Santa Clara built and owned the stadium, paying it off partly from stadium revenues and partly from rent money the 49ers paid to the city to repay money that the 49ers loaned to the city after borrowing it from banks. (If you think that last clause is hard to read, think how it was to type it.) This, at the time, seemed like a maybe-promising way to fund a stadium, since the 49ers would get out of paying property taxes by not owning the stadium and get out of having to share a bunch of revenues with the NFL by having them go directly to the city, while the city would get all its debts paid off so long as 49ers fans bought enough personal seat licenses (which they did, not that they were all that happy about it afterwards).

Things have gone way downhill since then, including the 49ers owners threatening to withhold rent payments to the city; Santa Clara’s mayor threatening to seize management of the stadium if 49ers execs didn’t hand over documents on how they were spending city money; and finally last week the Rolling Stones complaining of mismanagement at the stadium and vowed never to play there again, which is honestly maybe kind of an idle threat for a band whose members range in age from 72 to 78, but anyway.

The 49ers have responded by calling Santa Clara’s actions “purely retaliatory.” There’s a city press conference scheduled for right about now to maybe explain exactly what lease clauses the team has violated that could allow Santa Clara to terminate the management contract — I’ll add an update if we learn anything new then.

UPDATE: Per SFist: “At the press conference, per KPIX, Santa Clara Mayor Lisa M. Gillmor leveled accusations of wage theft on the 49ers, saying they failed to pay prevailing wages for workers at the venue. Also she said that stadium manager Jim Mercurio had ‘received or purchased stock in two companies that were granted stadium authority contracts,’ which is a ‘clear conflict of interest.’ The team maintains that they will continue to manage the stadium for all event, and they say the city’s actions are ‘in direct violation of the clear language of the relevant contracts.'”

Friday roundup: New sports venues, new sports venue threats, and our dwindling journalistic resources

Deadspin’s Albert Burneko is a national treasure whether he’s writing about sports or movies or punctuation, and his takedown this week of a Fivethirtyeight article that asserts there are too many minor-league baseball teams is very much no exception. Drop whatever you’re doing — which is reading this post, so okay, drop whatever you were going to do after that — and read it now, whether you care about the purpose of sports as entertainment or the role of the media in management-labor relations or the increasing propensity to reduce human beings to measures of technocratic efficiency. With the demise of the alt-weeklies, there are fewer and fewer outlets eager to combine tenacious reporting and big-picture analysis and engaging writing toward the end of helping us understand the world we live in beyond “here are some potentially viral things that happened today,” so we need to cherish those that remain while we can.

And with that, here are some potentially viral (in the not especially infectious sense) things that happened this week:

Friday roundup: When is a football stadium too old to be a football stadium?

If it wasn’t clear from the photos of devastation in the Bahamas, the death toll from Hurricane Dorian is going to get much, much worse than the official confirmed number (30, at this writing). You can find a list of some organizations raising money to help survivors here; please give generously if you can. And remember as you do that it’s the warming oceans that helped make this so bad.

And with that, on to news that’s marginally less life and death:

  • Denver Metropolitan Football Stadium District chair Ray Baker says the Broncos‘ current stadium (which just got a new corporate name, go keep track of these things on your own if you like because I can’t be bothered to remember them) should last “between 50 and 60 years,” at which point Broncos president Joe Ellis replied that “I can’t judge where entertainment venues are going to need to be in the future” and “I can’t tell you whether or not, in 10 years, the city of Denver and our seven-county region has an appetite to host a Super Bowl or an appetite to host a Final Four, which means you need a roof. Or do you need a new stadium?” The new naming-rights deal lasts 21 years, at which point the stadium will be 40 years old; please place your bets on whether it will still be standing by then.
  • RFK Stadium in Washington, D.C., will not make it to its 60th birthday in October 2021, which is all well and good as nobody plays there now and it’s costing the city $3.5 million a year for maintenance, landscaping, pest control, security, and utilities. (Note: Yeah, that seems like a lot to me too for an empty stadium.) D.C. officials say they plan to build an indoor sports complex and food market on the site, but have no plans as yet for an NFL stadium, no matter how much Mayor Muriel Bowser might want one.
  • Cleveland Browns COO David Jenkins says team execs still haven’t decided whether to demand a new stadium or a renovated one, but “we’re not far from having those conversations.” Note to Denver: The Browns’ stadium is two years older than the Broncos’.
  • Forbes reports that the value of the Oakland Raiders jumped by $1.5 billion to $2.9 billion after announcing their move to Las Vegas, which is an indication that either there’s something wrong with Forbes’ franchise valuation estimates or there’s something wrong with how much rich people are willing to spend to buy sports teams, or both. Even with the state of Nevada kicking in $750 million, the team will still be on the hook for more than $1 billion in stadium construction costs, which is going to soak up most of the team’s new stadium revenue even if their plan to sell tickets mostly to tourists and visiting fans works out.
  • The Anaheim city council is still squabbling over who knew when that when they voted on a Los Angeles Angels lease extension back in January, they were actually giving team owner Arte Moreno the right to stay through 2029 if he wanted, not just until 2020. (The team owner got a one-year extension of his opt-out clause as well, but the lease is now back in place to its original expiration date set before Moreno opted out the first time last year.) One thing that’s for sure is that this was a major gift to Moreno as stadium renovation talks continue, because “the best friend of a sports team owner is time,” says, uh, me.
  • A bill making it easier for Oakland to create tax districts at Howard Terminal to help raise money for infrastructure for a new A’s stadium passed the California state legislature this week; it’s still unclear exactly how much tax money would be spent on infrastructure, or exactly what “infrastructure” would mean, or even if the stadium will be built at Howard Terminal at all, but that’s one more skid greased, anyway.
  • The new Long Island Railroad station outside the new New York Islanders arena is set to be open by 2022, which only about 90 years faster than these things usually go in New York. It helps to have friends in high places!

 

Friday roundup: Will Royals sale spark new stadium, is Miami asbestos report a Beckham ploy, could developers influence Bills’ future?

Happy last Friday of summer! You’re probably busy getting ready to go somewhere for the long weekend, but if you’re instead staying put (and enjoying the space left by all the people going somewhere for the long weekend), consider spending some time if you haven’t yet reading my Deadspin article on “What’s The Matter With Baseball?“, which interrogates the various theories for MLB’s attendance decline and determines which ones may not be total crap. Do I conclude that it’s all the fault of team owners who’d rather charge rich people through the nose for a lesser number of tickets than try to sell more seats to less deep-pocketed fans? No spoilers!

And now to the news, and lots of it:

  • A new rich guy is buying the Kansas City Royals, and already there’s speculation about whether John Sherman will demand a new stadium when (or before) the team’s Kauffman Stadium lease is up in 2031. The Kansas City Star editorializes that “Kansas Citians should reject any plan that significantly increases public spending for the Royals, either for a new downtown stadium or a ballpark somewhere else,” and further notes that there’s no guarantee a new stadium would even help the Royals’ bottom line (“Winning, it turns out, is more important than a new stadium”), which is all a nice first step; let’s see what happens when and if Sherman actually opens his mouth about his plans.
  • Miami has closed Melreese golf course after determining it had high levels of arsenic and reopened Melreese golf course after environmental officials determined there was nothing “earth shattering” about the pollution levels. And now there’s concern by at least one city commissioner (Manolo Reyes, if you’re scoring at home) that the release of the arsenic findings is part of a ploy by David Beckham’s Inter Miami to get a discount on the lease price of the land, which is still being hashed out. The Miami Herald reports that the team and city are at loggerheads over whether to take environmental remediation costs into account when determining the land value; this epic Beckham stadium saga may have a couple more chapters to go yet.
  • Buffalo developers Carl and William Paladino are really excited about the possibility of a new Bills stadium near land their own, because they could either sell it to the team at an inflated price or develop it themselves once people are excited to live or shop near a new football stadium. (No, I don’t know why anyone would be excited to live or shop near a football stadium only open ten days a year, just go with it.) Carl Paladino once ran for governor of New York, so it’s worth watching to see if he uses his political ties (or skeezy lobbyist friends) to try to influence the Bills’ stadium future.
  • A group trying to get an MLB team for Nashville may not have a stadium or a site or a team, but they do have a name for their vaporteam: the Nashville Stars. Guy-who-wants-to-be-an-MLB-owner John Loar tells the Tennessean he decided on the name “after reading a book on Nashville’s baseball history by author Skip Nipper,” which is presumably this one; the Seraphs, Blues, Tigers, Americans, Volunteers, and Elite Giants honestly all seem like better names than the Stars, which was last used by a franchise in the World Basketball League (the basketball league where tall players weren’t allowed, which, yes, was actually a thing), but it’s really not worth arguing over the name a team that may never exist in our lifetimes.
  • The Richmond city council’s plan to approve spending $350 million on a new downtown arena without consulting the public has hit an apparent snag, which is that four or five members of the nine-member council reportedly oppose the plan, and seven votes are needed to pass it.
  • The editor of the San Francisco Examiner has penned an opinion piece saying the Golden State Warriors‘ new arena is overly opulent and expensive — premium lounges feature wine butlers and private dining rooms, so yeah — but is resigned to this as a necessity (or at least the headline writer is) that it’s “the price we pay for a privately-funded arena.” Which, does anyone really think the Warriors owners would have passed up the chance to charge through the nose for wine butler service if they’d gotten public money? This is the price we pay for rampant income inequality, and don’t you forget it.

Charlotte Business Journal proposes ways to raise $2B for Panthers stadium before owner has even asked for it

The Charlotte Business Journal has an article (paywalled, but you can find your way around it if you’re clever) speculating on ways that the city could help pay for a new Carolina Panthers stadium, and it comes down to:

  • Sales and property tax revenues are probably off the table, because the city needs those to fund basic services.
  • Hotel and rental car taxes are a possibility, but problematic because they’re already 8% and 16% respectively, and if you raise them much more, people might start booking their vacations (or conventions) elsewhere.
  • Doubling the restaurant tax from 1% to 2% could raise about $40 million per year, and would only hurt people who eat food, and totally wouldn’t reduce sales tax receipts because people would have less remaining spending money as a result or anything like that.
  • Tax-increment financing, because people still think tax revenues from a new project is not real tax money for some reason.

The entire article, of course, is right in line with the traditional local-newspaper tradition of treating team owner subsidy demands as a problem to be solved by looking under the sofa cushions to see where to find a few hundred million dollars, not as a proposal to be analyzed to see if it makes any damn sense. (There is exactly bupkis on what kind of economic impact if any Charlotte would see from gifting the Panthers a new stadium, though the writer did talk to the head of the local restaurateurs’ trade group, who predictably said they would fight against any restaurant tax hike.) You might think reporters should at least wait for the local team owner to actually make a specific ask beyond just saying “hey, the public really should buy me a stadium with a roof, my old one doesn’t have a roof, roofs are cool” before proposing ways to pay for it, but that’s been a problem for a long, long time.