Friday roundup: Saskatoon soccer frenzy, Phoenix hotel sale to fund Suns, and more!

And more!

This week in boondoggle vivisection: Plenty of good seats available in SF, Cleveland, Ottawa

We’ll get to the weekly news roundup in a minute, but first, I need to mention this editorial from yesterday’s Globe and Mail, which makes several eminently reasonable points about how Calgary shouldn’t capitulate to the Flames owners’ extortion attempts for arena cash (“using past bad decisions to justify terrible future decisions does not qualify as logic,” “arena financing is a hamster wheel, and here is an opportunity to jump off”), and then says this:

Everyone involved should take note of a remark this week by Neil deMause, renowned stadium boondoggle vivisectionist and creator of the fieldofschemes.com website: “The number of mayors who’ve been voted out of office for standing up to sports team subsidy demands remains zero.”

That’s right, I am a major-newspaper-certified renowned boondoggle vivisectionist, y’all. Clearly it’s time to order some new business cards.

Okay, the rest of the week’s news:

  • The Los Angeles Rams aren’t the only California team having trouble getting fans to turn out for games in the September heat: The San Francisco 49ers are seeing so many empty seats on the sunny side of their stadium that they’ve hired architects to see if it’d be possible to add a sun shade. One problem: The stadium can’t get any taller, as it’s in the flight path of San Jose’s airport. Until then, the 49ers are handing out free water bottles and sunscreen to fans on the hot side of the stadium, which is nice and all, but probably isn’t what you want for your big marketing push. This once again points up how smart the 49ers management was to stick fans with PSLs before the team got lousy and people noticed how crappy the new stadium was for actually watching football in.
  • And speaking of empty seats, the Cleveland Indians won their American League–record 22nd straight game yesterday, but they still can’t sell out their ballpark, which not that long ago saw a record sellout streak of 455 straight games. Indians GM Mike Chernoff blamed Cleveland’s small size, the start of the school year, and “weekdays,” three things that apparently didn’t exist in the ’90s. At least he didn’t blame the 23-year-old stadium or demand upgrades as a solution — yet, anyway.
  • And also speaking of empty seats, the Ottawa Senators have begun tarping over part of their upper deck for every game, because they can’t sell tickets there. The Senators owner is already blaming his 21-year-old arena for that one (apparently the last owner built it in the wrong place), so team president Tom Anselmi was left to say: “We just need more of us to come to more games more often.” Can’t argue with that!
  • And also also speaking of empty seats, the 2018 Pyeongchang Winter Olympics have only sold about 5% of available tickets so far to actual fans (ticket brokers have bought up another 18%), with less than five months to go before the games start. If you’re looking to snap up a bargain to watch curling, though, be forewarned: Not all the new hotels planned for the Olympics are finished yet.
  • And speaking of seats that a team hopes won’t be empty, the Oakland A’s will be letting in fans for free to a game next April against the White Sox. Make jokes all you want about how dismal an A’s-White Sox matchup will be, it’s still free baseball, and you never know what you might see that you’ve never seen before.
  • NHL commissioner Gary Bettman declared that that the scaled-down Nassau Coliseum is “not a viable option” for the New York Islanders, two weeks before the team is set to present plans to Nassau County for a new arena near Belmont Park. A total coincidence, I’m sure.
  • The Rhode Island state senate started hearings on a new Pawtucket Red Sox proposal yesterday, with the team owners and their allies noting that “the team’s 54-percent share of stadium costs is the highest portion of private investment in 14 AA and AAA ballparks built over the last decade,” according to the Providence Journal. What was that someone was just saying about using bad decisions to justify terrible future decisions?
  • Deadspin’s Drew Magary has come up with a new nickname for the Atlanta Falcons‘ new iris-roofed stadium: Megatron’s Butthole. Drew Magary needs to be put in charge of all stadium nicknames, starting immediately.

Friday roundup: Beckham sued over MLS land purchase, Browns’ flammable stadium, and more!

It’s Friday roundup time! Let’s get started:

  • A local Miami landowner is suing Miami-Dade County over its plan to sell land to David Beckham’s would-be MLS ownership group for a new stadium, arguing that the no-bid deal violates state law requiring public land to be sold to the “highest and best bidder.” Bruce Matheson, who owns land nearby the planned stadium site in the Overtown neighborhood but “spends most of his time aboard his 72-foot Argosy yacht,” according to Miami New Times, has previously blocked the use of a public park for expansion of the Miami Open tennis tournament, so he might just know what he’s doing here. Also, David Beckham is clearly cursed, so that can only help Matheson’s case.
  • In case it wasn’t clear that Louisville’s KFC Yum! Center subsidy deal was a complete disaster from last October’s report that the city was losing almost $10 million a year and the arena was in danger of going bankrupt, Louisville’s KFC Yum! Center is a complete disaster. One big reason why: sales-tax projections were based on past sales-tax growth, which included a sales-tax rate hike in 1990, which wasn’t going to happen again. Whoops! The latest plan is to have the city bail out the arena by taking on an extra $100 million in debt, which tenants the University of Louisville could pay off with less than four years’ worth of the profits they’re making on running the place, but won’t because finders keepers, losers weepers.
  • Wichita is about to spend $60 million on a new stadium for the indy-minor-league Wichita Wingnuts — slogan: If You’re Gonna Go, Then Go Nuts! — and the manager of nearby Picasso’s Pizza is excited about it: “People from all over the Wichita area love some Picasso’s,” says Efrain Ramirez. “Because we’re Picasso’s, you gotta make it look cool, it’s gotta be artistic. You gotta put your flair on it.” Well, excited about something, anyway. Spare a thought for the poor small-city reporter who has to wring a quote about economic development out of a pizzeria manager, okay?
  • Speaking of sports venues and local businesses, some bar owners near the Detroit Red Wings‘ new downtown arena are excited about it, while others are worried they’ll get “trampled” by the “big guys.” No interviews were conducted by the Detroit News with bar owners near the Red Wings’ old downtown arena, which will now close. This has been your moment in 21st-century journalism.
  • The Cleveland Browns‘ stadium is covered in the same flammable cladding that caused the deadly Grenfell Tower fire, but Cleveland’s top building official promises this poses “zero risk to the fans.” Presumably because if you’re watching a Browns game, death will come as sweet release.
  • The turf at the San Francisco 49ers stadium in Santa Clara continues to suck.
  • The Roma soccer club is owned by Americans, so they are naturally inclined to levy stadium threats. It also plays in Italy’s Serie A, which like all soccer leagues outside the U.S. works by promotion and relegation, so if the team threatened to move, Rome could just start a new team to replace it. So instead team president James Pallotta is threatening that if the ownership group doesn’t get approval to build a new stadium, they’ll sell the team to … someone who won’t demand a new stadium? You may not have thought this entirely through, James.
  • A Russian farmer has built a stadium out of straw to poke fun at the $700 million St. Petersburg is spending on a new World Cup soccer stadium. Cost of the straw stadium: $675. Be sure to click the link above for a truly bizarre Russian video for 2016 with a giant straw bear and a straw sphinx and … watermelons? Guys, I am slightly worried about whoever’s in charge of media links for ESPN.

Santa Clara declares 49ers in breach of lease, threatens to seize stadium three days before Xmas

The city of Santa Clara’s showdown with the San Francisco 49ers over handing over budget documents to show who’s spending what on running the place got kicked up a notch before Thanksgiving, with the city council voting to find the team in violation of its lease, a move that could lead the city to seize operational control of the stadium if the Niners owners don’t cough up the documents by December 22:

“We hired ManCo. They work for us. They don’t get to decide what is withheld from the owners of the stadium,” [Santa Clara Mayor Lisa] Gillmor said. “How do we know we are managing this public asset in the proper manner if we cannot get the documents from the management company that we hired to manage the stadium?”

Representatives for the 49ers countered that the team has been giving the city regular reports and has lived up to its end of the deal. They said the team is withholding information in two areas it considers confidential: security plans and financial information related to non-NFL events.

Making security information available would put the public at risk, while disclosing the details of the non-NFL events would damage ManCo’s ability to effectively negotiate with promoters such as LiveNation and AEG Live, the team says.

This is a weird dispute to crop up just two years into a team’s move to a new city, needless to say, though Gillmor and friends have a point that it’s hard to determine revenue-sharing shares when your partner won’t fess up to what their total revenues are. That it’s coming up now seems to come down to a bunch of factors: new city officials elected since the stadium project was approved who are less starry-eyed about the arrival of the NFL; a crappily written lease that didn’t specify what documents the 49ers would turn over or how the city would audit their finances; and a team that’s so dismal on the field that even 49ers fans are probably happy (or indifferent) enough for the city to take them to task. (“The 49ers are broken all around the place,” resident Dorothy Rosa told last week’s council hearing. “They don’t know how to run a football team. They don’t know how to run anything.”)

And speaking of the Niners’ on-field woes, the terrible team continues to be terrible news for people who bought the high-priced personal seat licenses that helped fund the new Santa Clara stadium, only to find themselves forced to choose between paying through the nose for near-worthless tickets every year or unloading their PSLs at a huge loss:

[Tom] Addison wanted out after the 2015 season. He wanted to sell what the team called his Stadium Builder Licenses so he did not have to keep spending $5,000 annually for four season tickets in the corner of an end zone, a requirement to maintain the licenses.

He was able to sell all four on the secondary market, but at $2,000 apiece after dropping his asking price, and recouped only $8,000 of the original $20,000 investment. The alternative would have been walking away from the licenses and getting none of the money back.

“I was relieved to get rid of them,” Addison said in the dining room of his Burlingame home. “I was so happy when the guy wanted to buy all four. I was happy to get out.”

Which, you know, there’s that thing that P.T. Barnum never said about suckers — plus, about half of the PSLs were bought up by ticket brokers, who will just write this off as a bad bet. Still, with things so bad that 6% of all PSL holders have just defaulted on their annual payments and walked away with nothing rather than have to keep plunking down money for tickets every year, you have to wonder how eager, say, Los Angeles Rams fans will be to put down cash for PSLs once those go on sale next year.

Santa Clara mayor to 49ers: Cough up budget docs, or we’ll seize your stadium

The squabble between Santa Clara Mayor Lisa Gillmor and the owners of the San Francisco 49ers over whose money is being spent on what at Levi’s Stadium heated up considerably on Friday, when Gillmor declared that if the 49ers don’t cough up more budget documents, she’ll move to take over management of the stadium:

“We have to stop the bleeding of the General Fund money into the stadium,” she said. “It’s against the law.”

According to Gillmor, city leaders are prepared to manage Levi’s Stadium if the 49ers don’t comply with their current contract with Santa Clara.

“If they don’t cure the breach, we are going to take steps to take back management of the stadium,” she said.

The argument here, as I understand it, is that the 49ers’ contract requires them to itemize spending of city dollars (one possible misuse of public funds was for reseeding the famously problematic field, according to an audit presented to the city on Thursday), so if they don’t provide the documents, they’re in breach of contract, and Santa Clara can take over management of the stadium. That doesn’t seem likely to happen — 49ers execs said they’d provide the missing budget documents by today — but it’s certainly an interesting way to force more transparency. The real test will come if those documents show questionable uses of city funds, and Gillmor demands that they be repaid by the team; stay tuned for much more bookkeeping excitement, I’m sure.

Santa Clara, 49ers involved in epic battle over proper filing of police overtime bills

There is a throwdown going on between Santa Clara Mayor Lisa Gillmor and the owners of the San Francisco 49ers about whether the team is using general fund money for stadium costs, and both the total amount of money (maybe a couple hundred thousand dollars) and the details are fairly trivial, but since it’s being talked about: The 49ers pay the city $170,000 per game for police and fire department costs, and when the city sends more officers and firefighters to a game than that, they’re supposed to bill the team. But they haven’t been, or the team hasn’t been paying it, or something. It hardly seems worth the $200,000 audit that Gillmore has ordered, to me, but if that’s what it takes to get the accounts receivable department in order, okay then.

The interesting bit here is that Santa Clara is even getting to make a stink about proper payment of police and fire overtime, since very few other teams pay for these costs at all — they’re a big part of why Judith Grant Long found that unreported stadium costs typically inflate the total public price tag by about 40%. So really, this isn’t so much a sign that the 49ers are ripping off the public (though they might be, in a very, very small way) as that the deal that Santa Clara cut protects taxpayers to a degree that’s unheard of in much of the nation. California really is a different world for stadium and arena deals, at least if you don’t count Sacramento as part of California.

49ers “withhold” $5.5m in “rent” on new “stadium,” everyone gets in a needless tizzy

Why is it that just when you’re about to go and declare a new stadium a rare financial success for the public (or at least a rare non-sea of red ink, even if there may be numerous other problems), the team’s owners have to go and ruin it by asking to renegotiate the deal once the place is up and running. Seriously, what’s the deal, San Francisco 49ers?

The Niners agreed to $24.5 million per year for the first two years, but its contract provides a one-time “rent reset” — adjusting the rent based on changes in revenue, updated development costs and expenses.

But the two sides aren’t agreeing on a new rent amount. The team wants to pay $20.25 million. City leaders say they’re still figuring out if that’s enough and are asking for $24.5 million again just to pass a fiscal budget and continue negotiations.

The thing to remember here is that the “rent” involved isn’t actually rent: It’s actually money that the 49ers owners are paying to the Santa Clara stadium authority that the authority will use to repay money that the 49ers loaned to the authority to pay off bank loans for stadium construction that the team took out but the authority is paying for. (If you didn’t understand all that, don’t worry, that’s really only for the tax lawyers to comprehend.) So this is all just a complicated Rube Goldberg scheme for the 49ers to get a federal tax break on paying off their own construction debt.

What’s going on now is that the stadium has been bringing in money at a slightly higher-than-expected pace: Personal seat license holders may be wanting to dump them, but they’re also asking for fewer payment plans than projected, and operating costs have been below expectations as well. So the 49ers, reasonably enough, are saying, “Hey, you don’t need all this money we said we’d give you to pay off our loan, we’re taking some of it back.”

The Santa Clara stadium authority, equally reasonably, is saying that they’re not sure yet what the cash flow is going to look like, so please make your full rent payments so we can balance our budget, and if there’s any left over, we’ll write you a check for the difference. Which the 49ers then agreed to do, sending over a pair of checks worth $5.5 million.

So … what’s the big drama here? Nothing, really, unless abstruse accounting gimmicks are your cup of tea. The rent squabble is just a matter of how the team will pay off its loans — which is a headache for some Santa Clara bean counters, I imagine, but nothing that taxpayers should be worried about. Everything else that’s dysfunctional about Levi’s Stadium is another story, but at least if Santa Clara got a stadium where fans broil, the turf is a disaster, and the team is awful, they’re not stuck with a bill for it as well.

Super Bowl tourists drove away usual visitors to South Bay, just as economists predicted

It’s been a month since Santa Clara welcomed the Super Bowl to the San Francisco 49ersslippery turf, so how did the South Bay make out in terms of that $800 million in economic impact that the NFL projected? Take it away, Team San Jose, the tourism bureau with the instantly dated name:

Even with room rates falling below astronomical predictions, they were still high enough above normal to make the three-day Super Bowl weekend “the best weekend of hotel performance in San Jose history,” said Ben Roschke, Team San Jose’s director of business development.

Sounds great! And what are the actual numbers?

Instead of selling out every single room during Super Bowl week, as the city projected, San Jose hotels actually welcomed fewer guests than the same week last year, preliminary figures released Monday show.

With three out of every 10 rooms vacant, the city won’t reap the nearly $1.9 million in additional hotel taxes it forecast Super Bowl week would deliver. Instead, a report submitted by Smith Travel Research shows the city will likely receive about $600,000 in extra hotel taxes, said Victor Matheson, an economist at College of the Holy Cross, who studies the economics of Super Bowls.

That’s not enough to offset the $1.25 million in costs mostly for police services during Super Bowl week.

How could hotel occupancy rates be both above normal and below normal? The trick is in what timespan you look at: For Super Bowl weekend, even sky-high hotel rates weren’t enough to keep people away, which makes sense given that if you’re already dropping obscene amounts of money on Super Bowl tickets, getting gouged on a hotel stay isn’t that big a deal. However, for the entire week before the game, occupancy rates were down 9% from the same week last year, presumably because business travelers steered clear of the hiked room fees (by 64%, according to the Smith Travel report), while football fans didn’t show up until closer to game time.

This is probably fine for the hotels, since they ended up making more money from the increased room rates, even if they hosted fewer people overall. In terms of overall local economic impact, though, it’s terrible, because it means for the first half of Super Bowl week, there were far fewer hotel visitors knocking around San Jose and spending their luscious out-of-town dollars elsewhere in town, something that gamegoers couldn’t make up for during their relatively short stays. (Sales tax receipt figures for Super Bowl week haven’t been released yet, but anecdotal reports from San Jose business owners were that Super Bowl week was “kind of a letdown” and “wasn’t too much different from a normal week.”)

If all that sounds familiar, it should, because economists like Phil Porter have been noting this trend for more than 15 years already. Matheson ended up telling the San Jose Mercury News that the Bay Area as a whole could break even on its Super Bowl hosting costs, which is nice, but isn’t exactly an $800 million windfall.

 

Davis says parking sucks in Santa Clara, will keep looking for “right place” for Raiders

And the hating on Levi’s Stadium continues: Oakland Raiders owner Mark Davis says his team won’t move there to share digs with the San Francisco 49ers because the parking lots are too small and traffic is too awful:

“I just don’t think it fits the Raiders,” Davis said Friday. “I’ve said it all along, that there are three words that mean something to me regarding a stadium location. That’s ingress, egress and parking. On game day, our parking lot probably holds the largest non-denominational gathering on Sunday morning that you’ll find. I’m not going to give that up. That’s part of the Raiders in-game experience.”

Given that Davis is in the middle of trying to negotiate a new lease with Oakland, you’d think he’d want to dangle at least the threat of a Santa Clara move to get better terms in his current location. But no, because Mark Davis is either terminally honest, terminally dumb, or just really can’t stand that new stadium the 49ers built:

“The next stadium we build will be around for the next 40 years or so, and that will be for the rest of my life,” Davis said on Saturday. “I want to make sure that, wherever we are, it’s going to be the right place. It can’t be just any place. It has to be the right place.”

At least the San Jose Mercury News’s Mark Purdy loves the Santa Clara stadium, spinning a remark that the head of the Super Bowl committee claims he heard from an unnamed NFL owner into a theory of how Santa Clara will get another Super Bowl sooner than later. Maybe the NFL owners have decided that if football players spend the whole game slipping and falling, at least they won’t be injuring their brains so much by getting tackled?

What if they built a new stadium and nobody showed up — oh, hi, 49ers!

Today in empty stadium porn, we present to you the third quarter at yesterday’s San Francisco 49ers home game:

Okay, so maybe that’s the unbearably sunny side of the field, and new stadiums have all kinds of other things for people to do other than actualy sit in your seats and watch the game (I was at Game 2 of the NLCS last night, and the seats behind home plate were empty for most of the game because it was cold and there’s a club where you can sit inside and watch on TV just steps away), and nobody actually goes to football games to watch with their own eyes anymore anyway. Still, it doesn’t exactly show why this place is $1.2 billion preferable to the place they just blew up. Especially not when the game also featured this, courtesy of the still-crappy stadium turf:

Ah, well, the 49ers owners already got their money from fans to pay for the place, so it’s not their problem. If you own a 49ers personal seat license, though, I’ll be wishing on your behalf for the team to get better, and some quirk of climate change to somehow bring rainclouds to the South Bay, I guess.