Friday update: Bad D.C. arena math, bad Bucks arena math, bad Columbus ticket tax math

It must be September, because my TV is filled with Jim Cantore and Anderson Cooper standing ankle-deep in water. But anyway:

  • Washington, D.C., is about to open its new Mystics home arena and Wizards practice facility, and Mayor Muriel Bowser says it’s a model of how the city would build a new NFL stadium as well. “We know [sports] can help our bottom line by attracting people to our city, but it also has a big impact when we’re winning on our collective psyche,” says Bowser of an arena that got $50 million in public subsidies for two teams that were already playing in D.C. anyway. Maybe she should go back to using her terrible soccer stadium deal as a model instead.
  • People in Calgary are starting to ask whether, if the city is looking to spend $3 billion on hosting the 2026 Olympics, maybe it should build a new Flames arena as part of the deal? Camels, man.
  • Buffalo Bills co-owner Kim Pegula says she’s going to wait until after the gubernatorial elections this November to start negotiating a new stadium with whoever ends up in charge of the state. It won’t be the lox-and-raisin-bagel lady.
  • Speaking of the Pegulas and New York’s current governor, they’re planning an $18 million upgrade of Rochester’s arena that hosts the Rochester Americans minor-league hockey team (which the Pegulas also own), with costs to be split among the owners and city and state taxpayers. Split how? Sorry, no room in the Associated Press article, ask again later!
  • The AP did find time to fact-check Wisconsin Gov. Scott Walker’s claim that the new Milwaukee Bucks arena would return three dollars in new taxes for each one spent, and found that “Walker omits some of the state money spent on the 20-year arena deal and relies on income tax estimates that experts call unreliable.” I could’ve told them that — in fact, I did, three years ago.
  • “‘Ticket tax’ proposal could lead to higher prices on movies, theater, sports in Columbus” reads a headline on ‘s website, something that the station’s reporter asserts in the accompanying video without saying where he got it from. He’s at least partly wrong: Ticket prices are already set as high as the market will bear, so unless the ticket tax changes the market — in other words, unless people in Columbus are forced to spend more on movies and theater and such because the other options (staying at home and watching TV, going out to eat) aren’t good enough, mostly this will just mean prices will stay roughly the same but a bigger share will go to theater/team owner’s tax bills. (I could try to find an economist to estimate exactly how big a share, but isn’t that really WSYX’s job?)
  • Former Oakland A’s exec Andy Dolich says the team owners may be looking at buying both the Howard Terminal site and the Oakland Coliseum site, and using the revenues from one to pay the costs of prepping the other for baseball, which, if the Coliseum site is such a cash cow and Howard Terminal such a money pit, wouldn’t they be better off just buying the Coliseum site and developing that? Or is the idea that Oakland would somehow give up the Coliseum site at a discounted price in order to get a new A’s stadium done? I have a lot of math questions here.
  • With nobody wanting to spend $250 million on a major renovation of Hartford’s arena, the agency that manages the XL Center is now looking for a $100 million state-funded upgrade instead. Still waiting to hear whether this would actually generate $100 million worth of new revenues for the arena; if not, the state would be better off just giving the arena a pile of cash to subsidize its bottom line, no?
  • Cobb County is only letting the Atlanta Braves owners out of part of the $1.5 million they owed on water and sewer costs for their new stadium. Yay?

Flames demand secret arena offer from Calgary, city negotiator says yeah that seems fair

When the Calgary city council announced a new Flames arena negotiating committee without Mayor Naheed Nenshi, who was the guy on the old committee who clearly knew the most about negotiating arena deals, it was a worrisome sign. But hey, maybe the new committee was going to be smart, too, and they just wanted Nenshi out of the way because the Flames owners hated him and this way they could bargain without him being a lightning rod for criticism?

Turns out, not so much:

Reporters were told that on May 31, Coun. Jeff Davison sent a letter to Flames’ CEO Ken King, asking for a new round of talks.

King responded with a letter which started with: “While we would never decline your formal request for a meeting, we do have some concerns based on past practice.”

King requested a preliminary discussion so the Flames can see what’s changed in the city’s position, and then the team could decide if it’s worth returning to the table…

King’s letter also came with a caveat.

“If we are to proceed, a simple and preemptive imperative is media silence. Public and/or media involvement must only be rendered in the event of an agreement,” wrote King.

So the Flames owners’ official position is: Tell us your offer, and we won’t tell you our offer, and then maybe we’ll consider discussing things with you. But nobody is to talk to the media about anything, because we will only negotiate — by which we mean listen to you negotiating against yourself — behind closed doors, with any open democratic debate to take place after the deal is already done.

That is … what’s Canadian for “batshit”? Surely Davison could see that, right?

Turns out, not so much:

He said the letter is a good sign.

“We haven’t heard officially from the Flames in months and getting moving on a conversation quickly was important,” said Davison.

Also, the CBC reports that Davison says he “understands the condition” of not revealing anything to the media.

If you want to bend over backwards to give Davison the benefit of the doubt: Maybe he’s just trying to nod and smile to get King and the Flames execs back to the table, and at that point he’ll start playing hardball. (And he did release the letter to the media, which shows he’s not going to negotiate totally in secret, though he also noted that the letter was going to be subject to freedom of information requests anyway.)

But still, why is he so eager to get the Flames execs back to the table, when it’s the team, not the city, that is desperate for a new arena? Nenshi’s approach — show me why we should build you an arena, and we’ll happily listen — may not have led to progress toward construction, but that’s largely because building an arena that the Flames would profit from would be a terrible deal for the city, while building an arena that wouldn’t cost the city much would be a terrible deal for the Flames. So yeah, there’s an impasse, but that’s only because $1 billion–plus arenas in medium-sized cities that already have perfectly okay if lacking new-car-smell arenas are terrible investments, something that no amount of smiling and nodding and negotiating is going to change. It’s still early, but “Please let us negotiate with you for this thing that you are demanding from us” seems like a very, very, very bad sign.

Friday roundup: The news media are collectively losing their goddamn minds edition

It’s a full slate this week, so let’s do this!

Calgary council forms new committee for Flames arena talks, without pesky mayor who knew how this stuff worked

As rumored last month, the Calgary city council has gone ahead and formed a committee to reopen talks with the Flames owners on a new arena, a committee that will edge Mayor Naheed Nenshi out of a central role in negotiations. Nenshi, though, either thinks the rest of the council will hold a hard line or is just making a brave face of it, because he had this to say:

“I think hitting the reset button is a good idea, but the reset button has to be hit on both sides,” Nenshi said.

“Given that we were not the party that walked away I think it’s important everyone come back to the table and maybe with new faces around the table as well.”…

“It will be hard for the committee to convince me to put a lot more public money on the table,” Nenshi said Monday. “I think it will be hard for the committee to convince council to do that.

“I think it will be hard for the committee to convince Calgarians to do that.”

The concern here, ultimately, isn’t who does the negotiating on behalf of Calgary residents, it’s whether they give away the store. Nenshi still wields influence on the council, and obviously still has the bully pulpit to embarrass all concerned with facts, so it’s not like the Flames owners have carte blanche now. Still, this is something to keep an eye on, to be sure that it’s genuinely the Calgary council telling the team, “We’re willing to talk so long as you’re not asking us to give away the store,” and not “Okay, we pushed out the guy who understood economics, when do you want us to jump and how high?”

Some Calgary council members want Mayor Nenshi out of Flames arena talks, because he’s not “gung ho” enough

This article from the Toronto Star is really weird and convoluted and lede-burying, but if I get the gist of it, it’s that some members of the Calgary city council are trying to find a way to freeze Mayor Naheed Nenshi out of future negotiations with the Flames over a new arena, because he’s been too good at not giving away the store. The evidence on hand:

At least 10 councillors are directly involved in or aware of recent meetings in which elected officials have discussed drafting a notice of motion calling on council to strike a new committee — one that may exclude past brokers from both parties.

“Initially, it should be new blood that’s on it to give it a different perspective than we’re getting now,” said Coun. Ray Jones.

“The longer we leave it, the more it just kind of goes away,” he explained. “Everybody right now is gung ho to get going on it, and I think we should take advantage of that.”

And:

In addition to Jones, councillors Ward Sutherland, George Chahal, Sean Chu, Shane Keating, Peter Demong, Diane Colley-Urquhart, Joe Magliocca, Evan Woolley and Jeff Davison are directly involved in or aware of discussions to restart talks and form a new committee.

“We’ve got to get a few oars in the water here and moving in the same direction before we really can make any headway with it,” said Davison, who is leading the charge.

“Overall, you’re just seeing a different makeup on council,” he said. “There’s a lot of us that are new, and sometimes some of the ideas that failed in the past get rejuvenated.”

And:

Lori Williams, associate professor of policy studies at Mount Royal University, said councillors might be wary of voter backlash given many Calgarians supported Nenshi’s position.

“I suppose it does make sense to try to get new people to the negotiating table so that any animosities that may be lingering from the breakdown of negotiations in the past would not be part of this,” Williams said.

Okay, sure, “new blood” and “new ideas,” but otherwise this is just weird: The last round of negotiations “broke down” not because of any problems on the council side, but because Nenshi pointed out that the Flames owners’ plan could cost the city more than a billion dollars, and then the Flames walked away from the table and put all their energies into trying to defeat Nenshi in last fall’s mayoral election. When that didn’t work, they mostly sighed a lot about how now what were they gonna do with a mayor in power who didn’t want to give them lots of taxpayer money, and deployed NHL commissioner Gary Bettman to say that the Flames will lose money without a new arena, when that’s patently not true.

While Nenshi has been possibly the most prominent city mayor anywhere in holding the line on sports subsidies, he’s always been limited by Calgary’s weak-mayor system, in which he’s only one vote on the 15-member council. Given that the Star report only talked to a couple of council members, it’s hard to say whether this is an actual major revolt or just some people trying to trash-talk the mayor into getting out of the way and letting them get down to the business of shoveling money at the Flames — one councillor, Shane Keating, is cited as having said of Nenshi, “I’ll never be as intelligent as you are, but I’ve been smarter than you many times,” which is described as a “stinging rebuke.” Maybe it sounds different in the original Canadian?

Flames arena wasn’t built to last like in Charles Dickens’ day, writes confused Canadian columnist

Here’s an article from the Globe and Mail on the Calgary Saddledome that starts with an extended Charles Dickens reference, because man, oh man, does sportswriting get boring after a while if you don’t mix it up.

Once columnist Roy McGregor gets to the point, it turns out to be that unlike the things Charles Dickens saw on his visit to Canada — and, presumably, Dickens’ works themselves — the Flames‘ arena wasn’t built to last, or at least “wasn’t made to produce revenue in the deep streams demanded these days by professional hockey.” (Whereas Canadian buildings in 1842 were? Hey, it’s not my metaphor.)

This is an assertion we can actually check! Hey, Forbes magazine, how does the Calgary arena compare to the rest of the NHL in revenues? Unfortunately, Forbes doesn’t break down the NHL by venue revenues, but the Flames rank 21st out of 30 overall in the league in total revenues, which is neither great nor awful. They’re about $22 million in annual revenue behind the Edmonton Oilers, the team that’s most often held up as an example of a nearby franchise that got a new arena and is now thriving — spending $1.2 billion on a new arena to get back $22 million a year in new revenue would be spectacularly stupid, which is no doubt why the Flames’ owners want the city of Calgary to spend much of the money instead. And if that strikes you as spectacularly stupid in turn, McGregor has an answer for that: revitalization!

In this era of what he calls “sportainment,” André Richelieu says that, increasingly, arenas are being built as entertainment hubs, the “jewel box,” so to speak of massive developments that go far beyond any sporting event.

Richelieu, who has taught sports marketing at Laval University and is currently a professor at École des sciences de la gestion in Montreal, says “The rationale behind these real estate projects is to trigger traffic all year round in order for the new stadium complex to become a point of convergence for the community and, in some instances, revitalize a neighbourhood.”

Yeah, no, not so much. With numbers like this, maybe it’s understandable that you’d reach for the Dickens quotes instead.

 

Gary Bettman to hold breath and turn blue if Flames don’t get arena subsidies

The Calgary Flames arena squabble has remained fairly quiet since the Flames owners failed in their attempts to displace Mayor Naheed Nenshi in last fall’s elections, except for NHL commissioner Gary Bettman, who won’t shut up about it. Since October, Bettman has declared that the Flames’ “sustainability” was being jeopardized by stupid economists who don’t believe arenas revitalize cities just because numbers show they don’t, said the Flames can’t be “viable for the long term” without a publicly subsidized arena, called the lack of forthcoming public funds “very frustrating,” and said that Calgary will never get the Olympics without a new arena, even if the IOC says the exact opposite. As on Friday, he was back on the sustainability tip:

“It’s clear that this building is the oldest building in the league. It’s clear that the team needs a new building. Calgary’s a great market, there are great fans here, but a building is as important a factor as anything else. The team’s competitive situation, financial stability is obviously being impacted with each season that they stay here.”

Bettman said that Calgary used to be a top 10 team that made money for the league, but now over the past few years, the NHL has been the one writing cheques.

“The cheques are getting bigger and that means the situation, financially, continues to deteriorate and that will affect, I suppose, the competitiveness of the organization.”

What does the evidence say? Let’s check out Forbes’ team revenue numbers, which are estimates but have been right on the money when actual revenue data is leaked. Here are the most recent charts from the Forbes Flames page (time moves right to left, so the most recent year, 2017, is at left):

So revenue has in fact been going up pretty steadily, though operating income (profits) has taken a dip as the team ownership started spending more money on players. The Flames have dipped from 13th to 19th among most valuable NHL franchises since 2010, but that’s more owing to other teams boosting their value in the interim than to anything going wrong for the Flames — “they’re still making money, just other teams are making even more now” isn’t usually what normal humans mean by “unsustainable.”

Bettman also said Friday that the Saddledome is costing Calgary concerts that it could otherwise get, because like the Olympics, that is totally the concern of an NHL commissioner:

“I was told that there were 27 acts, some of them multiple days, that have played in Edmonton since the building opened that haven’t played here,” Bettman said. “That goes to the quality of life of the city and that’s an indication as to the differences in the buildings.”

I have other news fish to fry this morning, so I’ll leave this to readers to fact-check. Be sure to check for acts that played Calgary but not Edmonton, too!

Bettman says Calgary needs new arena to host Olympics, IOC begs to differ

Gary Bettman reeeeeeally wants a new arena for the Calgary Flames that is paid for by somebody other than the Flames owners, yet despite having declared the money-making team can’t be “viable” without one and insisted that “academicians” are wrong about arenas not revitalizing cities just because their “numbers” show that they don’t, he still hasn’t convinced Calgary mayor Naheed Nenshi to cough up the dough. So now he’s taken to a time-honored sports tradition: whining.

“The whole problem is, no matter how the city dresses it up, the fact of the matter is they’re looking for the Flames to pay for the whole thing,” Bettman said Sunday.

This is just reiterating last fall’s Flames talking point that because the team would be paying property taxes like any normal property owner, all that money should be counted as a “contribution” to the arena costs, and not just, you know, paying your taxes, because of the Casino Night Principle. That didn’t go over too well the last time Bettman said it, and honestly “You just want us to pay for our own arena that we’ll get all the money from!” doesn’t sound like that much of a complaint, but I guess when you have one arrow in your quiver, you keep going back to it.

Though that’s not really fair, because Bettman has at least one other trick up his sleeve, which is threats — in this case, that Calgary will never get the 2026 winter Olympics without a new arena:

“It may be that an Olympic bid fails cause there’s not going to be a new arena, and clearly if there’s going to be an Olympics in Calgary, which would be great again, they need a new arena,” Bettman said.

Not that hosting the Olympics is necessarily a prize you want to win, but still, that’s an interesting point if tru—

Last Wednesday, the International Olympic Committee assured the city, after examining the facilities, that the Saddledome would be an acceptable venue for both hockey and figure skating at the Olympics.

Oh, Gary. You try so hard. and all you get in return is a $9.6 million a year salary. At least you’ll always have Glendale.

 

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!

Friday roundup: Trump rescued stadium tax break, Sacramento MLS group needs more cash, more!

Happy interval between Hanukkah and Christmas! If anyone is out there reading this and not getting on a plane from somewhere to somewhere else — or is reading this while waiting for a plane from somewhere to somewhere else — enjoy your lightning-round news of the week:

  • San Diego Union-Tribune columnist Kevin Acee, who never met a stadium or arena deal he didn’t love to bits, says that several people are interested in building a new arena in San Diego, including the owners of the Padres and new Brooklyn Nets minority owner Joe Tsai. Acee adds, “Several people insisted in recent weeks the Nets will remain in Brooklyn long-term and there are no plans to ever move the team to San Diego,” which, given the relative size of the markets, is possibly the least surprising sentence ever written in the English language. Also, Acee includes zero attributed quotes in his story, and says nothing about how such an arena would be paid for, so take it with a large grain of salt for the moment.
  • Donald Trump made retaining the tax-exempt bond subsidy for sports stadiums in the tax bill “a priority,” according to one GOP aide. So when he tweeted in October, “Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country? Change tax law!”, either he didn’t mean anyone to take him seriously just because he was the president of the United States speaking out on a matter of public policy, or more likely he just forgot to check with his funders before clicking Tweet.
  • “The Miami Open tennis tournament won permission to move to the Miami Dolphins’ stadium, with the kickoff planned in 2019,” reports the Associated Press, which seems to be slightly confused about how a tennis match starts.
  • After the NBA used the promise of an All-Star Game for Cleveland in 2020 or 2021 if it approved publicly funded arena renovations for the Cavaliers, and the city approved $70 million worth, the league gave those games to Chicago and Indianapolis. Not that there’s really that much value in hosting an NBA All-Star Game, but still, HA ha, suckers.
  • Apparently the reason why Sacramento didn’t get an MLS expansion team along with Nashville this week is the league is worried the city’s ownership group doesn’t have enough cash for a $150 million expansion fee and a $250 million stadium. All they need is to find someone with deep pockets who thinks the best thing to do with their money is to invest it in a U.S. soccer franchise that will start off $400 million in the hole, and, well, good thing that P.T. Barnum movie is opening this week, that’s all I can say.
  • There’s a “Plan B” stadium proposal for the Pawtucket Red Sox, where instead of helping to fund the stadium directly, the state would instead give the city all income and sales taxes collected at the stadium and let the city use the money on construction costs. Rhode Island state senate president Dominick Ruggerio says he doesn’t “see that as being a viable alternative,” and plans to submit his own stadium-financing bill, which probably won’t pass the state house. This could go on for a while, until somebody remembers where they stored the money generating machine.
  • The Arena Football League is now down to four teams, in part because the Cleveland Gladiators had to suspend operations for the next two seasons thanks to renovations to the Cavaliers’ arena. This was reported in the Albany Times-Union, which has to care because Albany is supposed to be getting an AFL expansion team this year, and man, do I feel sorry for whoever got stuck with being the Times-Union beat reporter on this team, because this is looking like a sad year ahead for them.
  • Deadspin’s Drew Magary weighed in this week on arena and stadium subsidies and concluded that “Arenas Are Important And Football Stadiums Are Not,” according to his headline, but really he meant “if you’re going to waste money on something, at least arenas can be used more days of the year,” which, fair enough. Or as Magary puts it as only he can: “We are entering an age of horrific corruption, and so I have accepted the fact that living in a fraud-free America is a hilarious pipe dream. All I can do is hope for the least of all corruptions, and pray that a bare scrap of public good accidentally comes out of it. If you are some ambitious dickbag city councilman looking to make his name for himself, an arena should be your priority when it comes to getting worked over.”
  • NHL commissioner Gary Bettman spoke out again about the Calgary Flames arena situation, calling it “very frustrating” and saying that “they’ll hang out and hang on as long as they can and we’ll just have to deal with those things as they come up,” but insisting that “yes, Quebec City has a building, but nobody’s moving right now, we’re not expanding East.” Which either means the Flames owners really don’t want to threaten to move right now (or ever), since making overt move threats is usually Bettman’s job, or it means even Bettman is sick of trying to pretend that the Flames have a viable threat to go anywhere.