Pittsburgh and the terrible, horrible, no good, very bad sports team impact study

Check it out, the owners of the Pittsburgh Penguins, Steelers, and Pirates, seeking $800,000 a year in county money for a slush fund for improvements to their venues, have teamed up to pay for a study showing how much the teams contribute to the city’s economy, and their hired hands have determined: a hell of a lot! $6 billion over five years’ worth of a lot! Do we dare try to analyze their methodology without actually seeing the report itself, because the teams haven’t released that? I’m game if you are! Let’s begin with this from the Pittsburgh Post-Gazette’s article on the report:

They commissioned accounting firm PricewaterhouseCoopers to produce an economic impact study that measures their value on several fronts, including direct and indirect spending, tax revenue and jobs.

That’s not a good sign: PwC is an accounting firm, not an economic analysis firm, so it’s unlikely they tried to account for the substitution effect whereby if Pittsburgh residents didn’t have pro sports to spend their money on, they wouldn’t just stuff it under their mattresses instead. A serious economic impact study would look at, say, spending during years when there’s a labor stoppage vs. spending during years when all the teams are playing, but we can probably safely assume that didn’t happen here.

[Penguins CEO David] Morehouse said the teams brought nearly 4 million people, counting concerts, to the city in 2017 to eat at restaurants, to stay at hotels, and to partake in other activities.

“Counting concerts”? How are the teams credited with people in Pittsburgh going to concerts? (People even go to concerts in cities with no major-league sports teams! It’s a true fact!) And the total attendance of the three teams in 2017 was only about 3.2 million, so clearly a lot of these people “brought to the city” were already in the city, which makes bringing them there not such an impressive accomplishment.

“You can’t just talk about Pittsburgh’s revitalization and then say these greedy sports bastards over here. I mean, if you’re going to tell the positive story about what’s happening in Pittsburgh, we’re part of it and we shouldn’t be the ones having to say it,” [Morehouse] said.

“But if we’re going to have to say it, we’re going to say it with the largest numbers we can possibly justify! Wait, did I say that last part out loud?”

Frank Coonelly, the Pirates president, doubts Pittsburgh would be one of 20 finalists for Amazon’s second headquarters if it did not have pro sports teams. Only one finalist for the online retailer’s new location — Austin — is without at least one pro sports team in its region.

This is not actually true: Montgomery County, Maryland, isn’t home to any pro sports teams either, nor is northern Virginia, though I suppose one could squint and give them credit for the teams nearby in D.C. But mostly, this is selection bias: Amazon is looking for a major urban area to put its new headquarters in, and there simply aren’t that many major urban areas without major sports teams: There’s Greenville and Grand Rapids, I suppose, but somehow I don’t think they would have made the cut even if they had acquired teams. (Oklahoma City and Buffalo, which are similar sized, didn’t.)

The GumGum analysis found the three teams generate 513.3 million in “combined impressions” a year, whether through TV broadcasts, social media, or print publications.

To get that kind of “postcard” exposure — whether it’s shots of the city skyline, the bridges, or other local landmarks — through paid advertising would cost nearly $41.5 million.

So basically the teams want to be credited for every time they got the name “Pittsburgh” mentioned in the national media, regardless of whether it was in a positive or negative light. I could note that there are other things that got Pittsburgh mentioned nationally lately that you really don’t want to start crediting for ad impressions, but I probably shouldn’t go there.

When the Penguins were fighting for a new arena a dozen years ago, a move to Kansas City made more sense — the deal was better and the city had a larger population, Mr. Morehouse said.

But, but, your own owner said it was a bluff! Get on the same page here, guys!

Friday roundup: Leaky fountains, cheap stadium beer, and the magic of computers

The world may be on vacation this week, but the stadium news decidedly is not:

Steelers owner: If you won’t pay for my Wi-Fi, maybe I won’t host the Super Bowl, nyah

Pittsburgh Steelers owner Art Rooney II has announced that he’s suspended efforts to get awarded the 2023 Super Bowl, and is blaming it on the Pittsburgh-Allegheny County Sports & Exhibition Authority not giving him enough money for stadium upgrades:

“I don’t know that there’s a real commitment here from our landlord to do what’s necessary and work with us in a way that’s cooperative,” Mr. Rooney told the Pittsburgh Post-Gazette. “It’s hard for me to explain what the reason is. It’s been something that’s becoming more difficult as the years have gone on in our lease.”

Rooney’s gripe is that he wants to expand capacity by another 2,000 seats (after already adding 3,000 in an expansion set to be completed this year), build a new scoreboard and expanded museum and concessions space, and pay for new sound and Wi-Fi systems that have already been installed, all using money from a capital reserve fund being paid into by ticket surcharges. The sports authority is pushing back on that, and Mayor Bill Peduto was even more vocal on the subject yesterday:

“What they’re asking for is tens of millions of dollars in public money, out of a fund that doesn’t have nearly enough,” Peduto said. “They want to have a state-of-the-art wifi system for eight games a year. I want a state-of-the-art wifi in every one of my schools for 180 days a year. I want to have the ability to reinvest in neighborhoods, not just reinvest in a Jumbotron.”

That’s a little unfair, as the capital reserve fund won’t be available to pay for schools funding if it’s not used on stadium upgrades. If the capital reserve fund runs dry, though, and the city ends up having to pay for other maintenance costs out of its own pocket because it used all the money on a new Steelers scoreboard, Peduto has a bit of a point. (It would take a deep dive into the Steelers’ lease to determine how exactly the capital reserve fund can and can’t be used, and all I can find at the moment is this summary, which doesn’t go into that level of detail.)

Peduto has played hardball with sports team demands before — he was elected in 2013 after campaigning against public funding being used for the last round of Steelers upgrades, and managed to successfully get the team owners to pay for them with increased rent payments. And the Pirates owners have threatened to sue the stadium authority over a similar issue about tapping a capital reserve fund for improvements to their stadium.

Ultimately, this is a minor squabble that mostly points up the importance of having good lawyers write up your leases so everyone doesn’t end up in court a few years later to determine what the heck they mean. Peduto and the stadium authority, though, are doing their job, which is to protect money controlled by the public from being used on anything that it doesn’t have to be. It seems a little harsh to report on that with headlines about “The dream of holding a Super Bowl at Heinz Field has come to a halt,” but I suppose it could be worse.

St. Pete mayor ousted, Astrodome rehab defeated, and other stadium-related election returns

Travis Waldron of ThinkProgress thoughtfully ran down five elections yesterday with stadium implications, from a vote on rehabbing the Astrodome to decisions on new mayors for cities facing sports venue battles. And the results are:

The big one to watch immediately is clearly the St. Pete mayoral situation, given that Sternberg is undoubtedly going to be one of the first to call on Kriseman wishing to start those promised “conversations.” There are still a heck of a lot of obstacles to the Rays getting a new building — how on earth to pay for it, mostly — but Foster, at least, is no longer one of them.

Steelers demand $20m for new seats, because all the other kids have them already

To the list of “state-of-the-art” accoutrements that sports teams can demand public money for as part of their leases — a list that previously included such items as giant scoreboards and holographic replay systems — we can now add a new item: chairs. The Pittsburgh Steelers are asking a judge to issue a summary judgment on their lawsuit to get the public stadium authority to pay for two-thirds of the costof a 10,000-seat stadium expansion, on the grounds that their leaser equires that taxpayers must supply any addition or modification that, in the words of the Pittsburgh Post-Gazette, has “been installed in at least half of all NFL stadiums with at least 25 percent of the cost covered by federal, state or local governments.”

The cost of the public’s share of the expansion is expected to be about $20 million, which is roughly $16 million more than the stadium authority has in its capital reserve fund. As Deadspin reports, the Steelers and the stadium authority were looking into paying for the expansion — which will cost $40 million total, including the addition of a new (presumably non-holographic) scoreboard — with ticket and parking surcharges, but that didn’t work out:

The Steelers and the SEA had an agreement in place to fund the expansion by passing the cost on to those who attend games. The plan called for raising an existing surcharge on ticket prices in addition to implementing a parking surcharge. When the deal fell through, the Steelers took the SEA to court. There was a hearing today in front of a county judge—who happens to be a Steelers season-ticket holder, natch—and a ruling is expected within a week.

According to Judith Grant Long’s book, Pittsburgh, Alleghany County, and the state of Pennsylvania already spent $338 million (adjusted to 2010 dollars) on building Heinz Field, so this would raise the total cost to more like $358 million. At least, until more than half of all NFL stadiums get retractable roofs, which may not be that far off.

Steelers to sue Pittsburgh for not paying more for stadium expansion

The Pittsburgh Steelers want to add 3,000 seats in the end zone of Heinz Field, and the City-Allegheny County Sports & Exhibition Authority has agreed to look into doing so. The problem? The sports authority wants the Steelers to pay for about half the approximate $39 million cost, while county-backed bonds would be repaid by new ticket and parking surcharges. The Steelers, pointing to a lease clause that requires the public to pay two-thirds of the cost of a “designated expansion,” now say they’ll go to court to demand that the public pay more. Notwithstanding that two years ago, the team said it would foot the whole bill.

It’s the latest example of a stadium lease that keeps on giving, though some of the sting would be taken out of it if the authority can use ticket and parking fees to repay itself, since economists agree that most of that ends up coming out of team owners’ pockets. (Basically, if there are ticket surcharges, it means teams can’t raise ticket face values as high as they’d otherwise like.) But it’s still another example, along with the notorious state-of-the-art clauses, that it’s really important for legislators to read the damn lease before voting to approve it. Agreeing to build a stadium is one thing; agreeing to build a stadium and then expand it by up to 10,000 more seats (as the Steelers say their lease requires) is a potentially expensive something else. We’ll see if other cities have learned this lesson yet … yes, I’m looking at you, Atlanta.

Steelers explore stadium expansion, say they’d need more parking

The Pittsburgh Steelers, unhappy with the 65,000-seat capacity at nine-year-old Heinz Field, are looking into adding several thousand seats. The good news is that the Steelers are willing to pay for it:

The Steelers lease of the stadium, owned by the joint city-county Sports & Exhibition Authority, contemplates additions. This one would be privately funded, though some revenue from a surcharge on tickets could conceivably be used.

The bad news: Team owner Art Rooney notes, “If we’re going to have that many more seats, there’s obviously got to be somewhere for them to park,” and there currently aren’t enough parking spaces to go around near the stadium. It’s unclear at the moment whether the city is going to be asked to chip in for more parking to go along with the privately funded stadium expansion, but it’s definitely worth watching.