NFL could build L.A. stadium itself, charge team owner fees, and wait, how does this solve anything?

Sunday’s L.A. Times had a completely unsourced (unless you count a single quote from New England Patriots owner Robert Kraft) article speculating that the NFL could break the football logjam in Los Angeles by just building a stadium with its own money, then renting it to an NFL team. This could work, writes the Times’ Sam Farmer, in either of two ways:

  • The NFL pays for building the stadium, then earns its money back via a hefty “relocation fee” for whichever team moves in.
  • The NFL pays for building the stadium, then reimburses itself by selling naming rights, PSLs, and other goodies associated with the new building.

I’m sure you see the problem here: In the first case, any owner wishing to move to L.A. would effectively end up paying the cost of the new stadium, just funneled through the NFL. In the second, the owner would get a new stadium more or less free — but without the big revenues associated with a new stadium, which is the whole point of wanting one.

Now, paying for new NFL stadiums with PSL and naming rights revenue can work in certain situations — we’ve seen that with the San Francisco 49ers‘ Santa Clara stadium. But the 49ers had a strong incentive to remain in the Bay Area (since it’s where their fans already are), and the South Bay is an exceptionally lucrative market, and the 49ers are an exceptionally popular team, all of which makes for exceptionally big money from PSL sales. For other team owners, giving up either wads of cash or piles of future revenue streams to move to L.A. isn’t likely to seem too enticing when there’s still a chance of getting significant stadium subsidies out of their current home markets.

Really, NFL financing has the same problem as the developer-led stadium plans: Somebody has to pay the cost of a $1 billion stadium, and there’s only so much money to go around to pay construction costs and boost an owners’ profits. The only way this would be a game-changing option would be if the NFL decided it so wants to have a team in L.A. that it’s willing to take a loss on a stadium in order to get it done — but given that market size doesn’t matter much in football, I wouldn’t hold your breath.

The other possibility, of course, is that somebody leaked this “hey, we could build a stadium!” line to Farmer in an attempt to drum up articles making an L.A. stadium seem more feasible, thus putting perceived teeth into NFL teams’ move threats in order to get stadium cash out of their own cities. But naaaaah. The NFL would never be that Machiavellian, right?

 

A’s lease squabble continues to transition into A’s-Raiders land squabble

The Oakland A’s lease copyediting controversy goes on, now with Oakland’s city attorney making still more “minor” changes to the document, and Alameda County officials charging that they’re anything but minor:

“The city attorney interpreted that to mean that she could go back and insert changes to the language that she had been attempting to get the A’s to agree to for weeks but they had rejected repeatedly,” Streeter said. “This is the kind of thing that we are now going to have to smooth over.”

This is all completely hilarious, but it’s the kind of thing that nobody is likely to blow up the entire lease talks over at this point. Even Streeter said Friday that a final agreement should be in place within “a day or so.”

Marginally bigger news is that A’s owner Lew Wolff has ramped up his battle with the Raiders over the Coliseum site by sending Oakland city administrator Henry Gardner a letter that, in the midst of much sniping at “mean spirited persons” who would criticize his new lease extension or his good faith, declares that once the lease extension is settled, he’ll explore “looking into the bond costs and JPA operating costs to determine if we can present an offer that would vastly reduce or even eliminate the annual City/County subsidy and allow us to develop and control our own destiny.” And Wolff adds that he has “not once said or assumed that the desired new A’s ballpark would rely on or seek public funding” — calling this a “total distortion” put forward by “some parties.”

At the risk of being cut off Wolff’s Christmas card list, this isn’t actually much of a promise: “Looking into” building a stadium while paying off the existing Coliseum bonds isn’t the same as actually doing so, and it’s been clear for a while that any subsidies Wolff would require would likely be in the form of free land and tax breaks, which sports team owners generally don’t count as “public funding,” even though it is. Really, we have no idea — and for all we know Wolff has no idea — what kind of financing and development plan an A’s stadium would require, so it’s impossible to say what kind of deal it would be for Oakland, either compared to giving the Raiders’ Coliseum City partners the rights to the Coliseum site, or compared to not handing it over to either team.

In any event, though, given the amount of verbiage in Wolff’s letter disparaging the city’s exclusive negotiations with the Coliseum City group over the site, it looks like he’s preparing to move on from fighting with Oakland over the lease to fighting with Raiders owner Mark Davis over the land, as expected. If they play their cards right, Oakland and Alameda officials could turn this into a nice bidding war for the site — though given recent events, it might be a bit much to expect those guys to even hold their cards without dropping them all over the floor.

Goodell floats Raiders move to Santa Clara, but 49ers fans’ PSL rights could be stumbling block

The San Francisco 49ers‘ new Santa Clara stadium had its ribbon-cutting yesterday, and according to Levi’s CEO Chip Bergh, whose company bought the naming rights to the place, it is “the most amazing stadium on the face of the planet.” Though, according to SF Gate’s Ann Killion, all NFL stadiums “are big, impersonal, infrequently used and tend to be the same, depending on what era they were built in,” so maybe Bergh is grading on a curve here.

In any event, the stadium opening was slightly overshadowed by NFL commissioner Roger Goodell’s suggestion that the Oakland Raiders might want to consider moving in there as well if stadium talks in Oakland go poorly:

“They have to make that determination, whether they’re in a new stadium in Oakland or whether they feel that it’s best to join this stadium,” Goodell said, according to the Bay Area Sports Guy, who tweeted the commissioner’s remarks. “We’re working on that, and that’s one of the decisions they’ll have to make.”

Rattling move-threat sabers is, needless to say, Goodell’s job. And the 49ers owners have been open to renting to the Raiders if need be. Yet as the San Jose Mercury News’ Tim Kawakami points out, there could be a major stumbling block to the Raiders and 49ers sharing digs: the stadium builders licenses (aka personal seat licenses) that the 49ers sold, for anywhere from $2,000 to $80,000 per seat, to raise $500 million toward construction.

Part of the agreement is that SBL-holders have first dibs on most other events at the stadium…. There is no way the Raiders would agree to 49ers SBL-holders getting first look at their tickets.

Even if they did, the 49ers wouldn’t want to share any % of their precious SBL cash with the Raiders.

That’s a problem on two counts. First off, since SBLs have already been sold, the Raiders would be missing out on a source of cash that the team could otherwise collect at its own new stadium. On top of that, though, if the Raiders then sold tickets without requiring their own PSL purchases, 49ers seat license holders could scream bloody murder about being forced to put up tens of thousands of dollars for seats while Raiders fans paid nothing, and even potentially file lawsuits over the inequity. Kawakami says NFL sources have “muttered” about this problem previously, and that “nobody has a good answer for it, not practically.”

Kawakami doesn’t mention it, but this is a potential stumbling block with any proposed move of the A’s to San Francisco’s AT&T Park, which the Giants similarly sold PSLs, though only on the 15,000 priciest seats. Giants “charter seat license” holders likewise have dibs on buying tickets to other events at the stadium, which could cause major problems in the event of an A’s move. Not that the A’s are likely to move, or the Giants to okay it without usurious lease terms, but it’s an important reminder that there’s more to relocating a team than just saying, “Hey, look, that stadium is empty part of the time, let’s set up there!”

UPDATE: A 49ers SBL holder has posted language that seems to indicate that the 49ers accounted for this problem by omitting “other NFL games” from SBL rights — see comments.

Buffalo Bills stadium report delayed, because writing is hard!

A New York state-commissioned report on the future home of the Buffalo Bills that was expected to arrive Friday didn’t, with the Associated Press citing “a person familiar with” the consulting firm blaming “the large volume of information.” Yeah, I’ve used that excuse too.

While we wait for the report, though, it looks like Buffalo elected officials are increasingly declining to take the Buffalo News’s bait that a new stadium is inevitable, and it’s just a matter of where to put it:

County Executive Mark Poloncarz tells 2 On Your Side his preference is at this point is a renovation of Ralph Wilson Stadium.

“I’ve said all along the one thing we cannot do is take off the table Ralph Wilson Stadium. We’re investing $130 million there, one of the reasons it was done was not only to make it good for the next five to ten years, but many years thereafter. After the investments we’re doing now it’s going to be a different stadium and when people go there this fall they’re going to realize that it’s still very viable to have the Ralph as the home of the Bills,” said Poloncarz.

We also asked Mayor Byron Brown about whether he thinks a new stadium is needed to keep the team in Western New York.

“I’m not sure about that,” said Brown. “I certainly want to see the team stay in this community for the long term and if a new stadium is needed, if a new stadium is required, I think it makes sense for us to accomplish that.”

It’s probably too soon to call this a major shift — even politicians who want to build new stadiums often say they’ll look at renovation, if only so they can reject it later — but taken along with Gov. Andrew Cuomo’s subtle rhetorical shifts, it looks like Buffalo elected officials are at least realizing that building a whole new stadium for a team that just got a renovated one is going to be a hard sell. We’ll see what they say once they get a look at the clear plastic binder.

Raiders say they don’t need to tear down Coliseum right this very minute after all

No major shifts in the Oakland A’s and Raiders who-gets-dibs-on-the-Oakland-Coliseum-land controversy today, but there is one minor bit of notable news: The Coliseum City development team aligned with the Raiders issued a letter on Wednesday saying they don’t actually need to tear down the Coliseum right away, and are fine with the A’s new lease requiring two years notice before any demolition.

Which couldn’t have been that hard, given that the lease is almost certainly going to go through anyway, that the Raiders aren’t going to have funding in place for a stadium anytime soon, and that waiting two years in the grand scheme of things isn’t that big a deal if there’s a new stadium and a giant development project on a huge swath of public land at the end of the wait. But still, it’s a concession, kind of.

In any event, it seems like everyone involved is now positioning themselves to move ahead to Act II (or really more like Act XXVII), wherein the two teams fight over the Coliseum site without discussing in public, for as long as possible, how much public cash and/or free land and/or tax breaks they’d want as part of the deal. Assuming the Oakland city council signs off on the A’s lease extension by the end of the month, which while still likely, isn’t yet assured, with tons of official “undecided” votes. We could be here a while.

Oakland stadium battle lines officially shift from city-vs.-A’s to A’s-vs.-Raiders

Looks like you can forget any thoughts of Oakland city officials trying to make major changes to the A’s lease extension that the city-county joint Coliseum Authority just approved. Oakland Mayor Jean Quan yesterday declared at a news conference, “We need the City Council to approve it as quickly as possible so we can start talking seriously about a new stadium in the city,” though she did say that she’d sent city administrator Henry Gardner to meet with A’s owner Lew Wolff to discuss “clarifications” of the deal.

And with everyone kissing and making up, it’s apparently time for Wolff to make nice as well, responding to councilmember Larry Reid’s stated concern that the A’s could have moved to San Antonio or Montréal by saying he would never dream of such a thing:

Wolff said he hadn’t spent any time thinking about those two cities and wasn’t even sure Montreal has a stadium that would fit the team’s needs.

“I have not done one thing relative to that,” Wolff said. “We’d rather stay in the Bay Area than move to Timbuktu.”

Not one thing other than sending a late-night email saying he could move out of Oakland if the lease wasn’t approved exactly as he proposed it. But apparently not to Montréal, or San Antonio, or Mali, something he took pains to clarify as soon as it was clear that the lease extension was going to be safely approved.

Anyway, if you’re disappointed that the likelihood of political fisticuffs seems to be fading, never fear, as there’s still plenty of opportunity for entertaining chaos ahead. That’s because the developers behind Coliseum City — the redevelopment project that Quan has endorsed despite nobody knowing how to pay for it — sent a memo to the mayor last week asserting that the Oakland Coliseum needs to be torn down next year to make way for a new Raiders football stadium. The new A’s lease would preclude that, since Oakland would be required to give Wolff two years’ notice before demolishing the Coliseum, yet Quan still insists that both the A’s lease and the Coliseum City project should go ahead, despite them being mutually contradictory on this point.

Members of the Coliseum Authority, meanwhile, have pointed out that the city doesn’t actually own the Coliseum, they do, and they have no intention of tearing it down tomorrow. City councilmember and authority board member Larry Reid called the idea “crazy, absolutely insane,” while county supervisor and authority chair Nate Miley said, “This is either smoke and mirrors or they are on crack.”

All of which means that Quan and Wolff’s rapprochement notwithstanding, we still have a major war of all against all going on over Oakland’s stadium situation, with next major issue being whether the A’s or the Raiders get control over the Coliseum site. Quan seems dead-set on being on every side at once, but then, she might not be mayor anymore by next year, and in any case the Coliseum Authority holds the ultimate cards, so… yeah, pretty much more chaos assured.

And meanwhile, neither Raiders nor A’s execs have provided any details about how much new stadiums would cost, how much public money (or free land or tax breaks or what have you) would be required, or where the teams would play if the Coliseum needed to be demolished before starting construction on new venues. These might seem like important things to find out before choosing sides on a potential billion-dollar-plus redevelopment plan that could determine the fate of two sports franchises, but so much gets lost in the fog of war.

Raiders oppose A’s lease extension, set up showdown for Coliseum development rights

Forget the Oakland city council — an actual heavyweight has weighed in on A’s owner Lew Wolff’s proposed 10-year lease extension, and boy, are they mad:

The development team working to build a new Raiders football stadium has urged city officials to reject a lease extension for the Oakland A’s because it would frustrate the football team’s desire to tear down O.co Coliseum next year.

In a letter to Mayor Jean Quan and council members last week, the development team’s attorney wrote that “the current proposal … simply allows the A’s to buy more time to find a site outside of Oakland … and disrupt the ability to deliver a stadium for the Raiders and the ancillary developments adjacent to that stadium.”

Translation: We wanna build a new stadium where they play! Why aren’t you making them leave? This is so unfair!

Matthew Artz’s article in the Oakland Tribune does shed a bit more light on the gamesmanship going on between the A’s and Raiders owners, though, as well as some of the strategy involved. Both Wolff and Raiders owner Mark Davis, notes Artz, have their sights set on not just building a new stadium where the current Oakland Coliseum now stands — a location that’s plenty big enough to fit two stadiums if need be — but on being the primary partners on developing the rest of the site. And that town literally isn’t big enough for the both of them:

Because outdoor sports stadiums are often money losers and Oakland can’t afford to help pay for them, any new stadium development in the city is expected to include shops, a hotel and offices to subsidize the project. Sports economists have questioned whether the A’s and Raiders would want to work together because a second stadium would remove land that could be used for more profitable development.

“The probability of Coliseum City working financially and some team committing to it would be greater if there was only one team involved,” Stanford University Economics Professor Emeritus Roger Noll said when asked about the development in April.

In other words, it’s clearer than ever now that both owners’ business plans involve extracting as much as possible in negotiations over the Coliseum site, not just in public money, but in development rights to land, which in the suddenly hot Oakland real estate market could be more valuable than any old sports stadium. Which explains both why Davis is insisting on the A’s eviction at the earlier possible time, and why Wolff is eager to get a lease extension signed that would force the Raiders to wait (two years, anyway) on their stadium plans: The owners aren’t just negotiating with Oakland for the best possible deal, they’re competing with each other not just for sports market share, but for dibs on a mammoth piece of prime real estate.

Right now the Oakland council seems cranky about the Raiders’ less than detailed plans, and so is inclined to let Wolff have his way. (Or as much of his way as they have to, anyway.) But then, Davis hasn’t yet sent any late-night emails pointing out the existence of the rest of North America.

 

 

Buffalo News still just wants to know where we can put the new stadium, oh boy oh boy

The Buffalo News, never afraid to ask the tough questions about a new Bills stadium, is at it again, wondering where a replacement for the just-now-being-renovated Ralph Wilson Stadium should be built. And who better to ask that question to than a disinterested party, like, say, local developers?

  • “Downtown makes a lot of sense for a lot of reasons,” [former Sabres president Larry Quinn] said, noting the growth that’s already gone on there and the availability of a decent amount of existing parking.
  • “Given that we are a relatively small NFL market, that we are next to a large and rapidly growing metropolis like Toronto, that our binational location is one of our key strategic differentiators and that Niagara Falls is an internationally recognized icon – it’s certainly worthy of a close look as a possible new stadium site,” [said developer and regional development organization co-chair Howard Zemsky].
  • “The only logical place is downtown Buffalo,” [downtown's biggest landlord, Carl Paladino,] said, mentioning the Shoreline Apartments along lower Niagara Street and the Commodore Perry projects between South Park Avenue and the Niagara Thruway.

If there’s a surprise here, it’s that several of the developers somewhat chided the News for jumping the gun by assuming that a Bills stadium is necessarily necessary: Quinn said you can’t decide on a stadium until the team has a business plan (which requires an owner who is still breathing), Zemsky echoed his boss Gov. Andrew Cuomo by saying that the current renovations work well and “if we don’t need to change that formula, let’s not” (but if we do, let’s), and hotel developer Rocco Termini warned that stadiums themselves don’t necessarily boost economic activity in the surrounding area (“Show me where it’s worked and prove me wrong”).

The News, hearing this criticism, topped off its article with a sidebar listing six possible sites for a new stadium.

Buffalo op-ed says new Bills owners could threaten selves with moving team

Yesterday’s Buffalo News had an op-ed by an economic development consultant about building a new Bills stadium, and “op-ed by an economic development consultant” should tell you all you need to know about it. But I just want to call attention to it to show how op-eds can make it into the newspaper without making a damn bit of sense. Follow the bouncing logic here:

The Bills’ new owner will likely have to come up with at least $1 billion. The average NFL team is worth $1.17 billion, according to a 2013 Forbes analysis.

Yes, NFL teams are super expensive, because they’re super valuable. Even in Buffalo.

Once a deal is struck and the NFL approves, the new owner will have to deal with the expensive – and politically sensitive – issue of a new stadium.

Okay, “need” is a bit strong, since the Bills’ current stadium is already getting $130 million in taxpayer-funded renovations, but certainly if they want a new stadium they’ll need to deal with the politics of it.

But NFL Commissioner Roger Goodell wants more. He told ESPN that without a new stadium, the Bills might leave.

Oh, okay, so if the new Bills owners don’t get a new stadium, then the team might get moved … by the new Bills owners. So they totally have to deal with this, because there’s nothing so awful as spending $1 billion on an NFL team and then having your own self threaten to move the team out from under you.

There is a teeny point here somewhere, which I suppose would go something like “Whoever buys the Bills for $1 billion is going to want to maximize their profits, and the best way to do that might be to move the team to a bigger market, even though market size in the NFL doesn’t matter much and there are no huge markets with NFL stadiums ready to go, and Roger Goodell will stand behind them on any such threat.” But that’s not what this op-ed says at all, which makes you wonder who at the Buffalo News is bothering to vet submissions for making any damn sense. Unless, I suppose, making any damn sense is less important than espousing opinions that don’t anger the powers that be. Nah, couldn’t be that.

Oakland’s war of the five kings is turning out just like you’d expect it to

As promised, I’ve written up a longer analysis of Friday’s Oakland A’s lease talks train wreck today. It’s not here, though, but rather at Sports on Earth. You can read the whole thing there, replete with Game of Thrones riffs, but here’s the key paragraph:

So long as San Jose remains off the table, the East Bay is by far the best option for the A’s, something [A's owner Lew] Wolff has to know — he and his partners didn’t spend $180 million on the team, which sounds like a pittance in the post-Ballmer era but was a lot in 2005, in order to end up owning the Charlotte A’s or the Louisville Sluggers. (For Davis, who is inclined to care less about city size since he’d get a cut of NFL national TV checks regardless, it’s more about Oakland being his best option for extorting a generous stadium deal.) And for Oakland city officials, who want to keep both Wolff and [Raiders owner Mark] Davis happy while also not breaking the bank, stalling as long as possible may seem their best hope.

In other words, everyone has good reason to be behaving like morons, because there’s no easy resolution to the A’s situation that will benefit Wolff, Davis, Oakland, and MLB. Or as I put it in SoE, this is “an insanely complicated multilateral game of chicken,” so don’t hold your breath waiting for everyone to figure out who’s holding who hostage.

And now we direct you to your regularly scheduled comment war…