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!

New York City probably won’t evict MSG in 2023, but it sure would be fun if they tried

Madison Square Garden’s 10-year extension of its operating permit — designed ostensibly to give the arena time to find a new home that’s not atop Penn Station — is halfway over with no sign of the Garden departing, leaving the possibility that New York City might have to evict the New York Knicks and Rangers come 2023. What would that actually look like? I did a deepish dive for Gothamist, and came up with this:

“We cannot think of other examples of special permits for building use with expiration dates,” Department of Buildings spokesperson Andrew Rudansky tells Gothamist. “Hypothetically, if a building’s special permit expired, causing the use of that building to be contrary to zoning, the Department may take enforcement actions to compel the owners to return the building to a previous Code and zoning-complaint use.”

The typical enforcement actions available to the DOB, Rudansky explains, include imposing civil penalties or fines. In cases of more routine violations, the department maintains a Padlock Unit that, true to its name, is authorized to padlock a premises and issue criminal charges against anyone who enters. (Cue visions of the Rangers being hauled off to The Tombs in full uniform and pads.)

To be clear, everyone I spoke to was pretty firm that they don’t expect this to happen: Lots of people may want the Garden gone to make way for a new above-ground Penn Station (either modern or retro), but that doesn’t mean anyone on the city council wants to be the target of headlines about forcing the Knicks and Rangers to leave town. (Not that they would leave town, since they’re the centerpieces of a New York–based cable network; the levels of gamesmanship here go all the way down.) But the threat of being able to shutter the garden if they wanted to has to be a part of negotiations for MSG to relocate, if those ever get started. (Neither council officials nor MSG officials would so much as tell me whether talks have even taken place.)

The concern here, obviously, is that MSG will come back with, “It’s going to cost us around $2 billion to acquire land and build a new arena, and we’re going to need city help with that, plus we need to be able to take our $50 million a year tax exemption to any new site,” and that the council will feel obligated to listen to make the Garden leave quietly. Not that they would be obligated to listen — they do have the hammer here of applying padlocks — but the fear of nasty tabloid headlines could end up putting New Yorkers on the hook for billions of dollars in new arena costs, which would be an extremely bittersweet way of undoing the city’s original sin.

Friday roundup: Nobody wants the Olympics, nobody wants the Marlins home run sculpture, nobody wants the Chargers (but L.A. is stuck with them through 2040)

So what else happened this week? Glad you asked:

  • Stockholm’s new city government said it won’t provide any public funding for a possible 2026 Winter Olympics. That would leave only Milan and Calgary as bidders, and the former hasn’t committed to public spending either, while the latter is set to hold a public referendum next month on hosting in the midst of complaints that no one knows how much it would cost. It’s still a longshot, but there’s a real chance here we could see our long-awaited “What if they held an Olympic bidding war and nobody showed up?” moment, or at least that the IOC will have to consider bids that don’t include its usual requirement that local government promise to backstop any losses.
  • “Several dozen” Long Island residents marched in protest last week against the New York Islanders‘ proposed arena near Belmont Park, saying it would create too much traffic and construction noise. Those aren’t the best reasons to be concerned about it in my book — I’d be more upset about the crazy discount on land New York state is giving the team, if I were a New York taxpayer, which I am — but maybe the protestors are worried about that too but it didn’t fit easily on a sign.
  • The owners of the Miami Marlins (i.e., Derek Jeter and the money men behind him) are going to have to pay $2.5 million to Miami-Dade County for moving Red Grooms’ home run sculpture outside their stadium, since relocating it means that Grooms will disavow the work and make it worthless. They should’ve just traded it to Milwaukee for some lousy prospects.
  • Oklahoma City is looking for capital projects to spend the next iteration of its sales-tax hike on, and Mayor David Holt says if a maybe-MLS-caliber soccer stadium isn’t included, “the Energy won’t be here forever.” The Energy, if that name draws a blank for you, is the city’s beloved USL franchise that’s been there since … 2014? It’s only a matter of time before teams start threatening to move before they even exist, isn’t it?
  • Bwahahahaha, the Los Angeles Chargers are reportedly locked into their lease at a new Inglewood stadium through 2040, so there’s no way they’re moving back to San Diego or elsewhere no matter how terrible their ticket sales are. Dean Spanos is so screwed! Uh, until he sells the team for a multibillion-dollar profit, but he’ll be crying the whole way to the bank, I promise you!

Friday roundup: Vegas MLB rumors, North American soccer superleague rumors, and everything just costs untold billions of dollars now, get used to it

I published two long articles yesterday — one on sports stadium and arena deals that haven’t sucked too badly, one on a particular non-sports subsidy deal that looks to be sucking pretty hard — so I wasn’t able to post anything here, despite a couple of news items that might have warranted their own FoS posts. But as the saying goes, Thursday omissions bring a shower of Friday news briefs (please don’t tell me that’s not a saying, because it is now), so let’s dig in:

Calgary releases terrifying new arena renderings in advance of terrifying new arena vote

The Calgary city council is set to vote today on reopening talks with the Flames owners about a new hockey arena as part of an “entertainment district” — presumably this won’t include discussions just yet on how much the city would have to pay for one, since that only gets people upset — and just in time, the city-owned Calgary Municipal Land Corporation has issued some fresh renderings: Okay, that looks like an arena of some kind, certainly. It’s an unusual touch for renderings to show passersby bundled up against a driving snowstorm, but I guess that’s how we know that it’s Canada, if the Canadian flag didn’t tip us off.

Anything of the interior?

GAHHHHHHHHHHHHHH!

Okay, so the plan is apparently for Calgary to build an arena not just for hockey, but also for portals into adjacent dimensions, from which will extrude a warped version of space-time that will inexorably start to cover the walls and ceiling of the new venue, en route to engulfing all of Calgary, and eventually, our entire universe. Fortunately a lucky few fans will be able to use their glowing wrist bracelets to teleport to safety just in time, but for the rest of us, there will be no escape. Also, those upper-deck seats look like they have terrible sightlines.

Newspaper sends reporter to look at Detroit’s arena district renaissance, finds mostly vacant lots

Hey, remember how the Detroit Free Press reported the week before last that the new Red Wings and Pistons arena had turned its neighborhood into “a dynamic, connected stretch that has grown and attracted new businesses and investment with the promise of much more to come”? Well, the Guardian actually sent a reporter to look at the arena district, and found that the reality doesn’t match up with the press release:

There are few places to live in the District, and little to eat. Vacant, decaying buildings make up entire city blocks. There are almost no lights, save for those illuminating surface lots and parking garages.

Okay, then! But what do Detroiters themselves think?

Sean Swierkosz, general manager of the longstanding sports bar Harry’s, watched the Ilitches make progress, “but then it stalled”, he said. “I feel like I’m looking over the fence at my neighbor’s yard at his half-finished project or garage.”

Sure, but, you know, it’s Detroit, right? Isn’t a half-finished project better than none?

Notably, the landscape looks much different just a few blocks across The District’s borders, where Detroit’s neighborhoods are alive with redevelopment. Lofts list for as much as $650,000, and large residential projects are under way in the adjacent historic Brush Park neighborhood. Further up Cass Avenue, new restaurants, bars, and shops flourish on streets resembling the Ilitches’ banners’ renderings.

Holy Cross economist Victor Matheson remarks that while it’s common for sports venues to have little or no impact on their surrounding neighborhoods, “it is extremely rare to see a stadium cause a neighborhood to go backwards.” But then, it’s also extremely rare for a new arena to replace all its seats just one year after it opened because the original ones made it too obvious when nobody was sitting in them.

Friday roundup: Chargers L.A. move still a disaster, Raiders still lack 2019 home, Rays still short of stadium cash

I’ve been busy getting my post-Village Voice life rolling this week — here’s my first article for Gothamist, on how to fight Amazon’s monopoly power, and I’ve also started a Twitter account for following ex-Voice news writers as we keep up our work for other outlets — but Friday mornings are sacred, for they are stadium and arena news roundup time:

Friday roundup: Bad MLB attendance, bad CFL loans, bad temporary Raiders relocation ideas

And in other news:

Seattle arena finally finalized, NHL team could be next, and nobody had to get screwed to make it happen

The Seattle city council finally cast its final vote to approve the privately funded reconstruction of KeyArena yesterday — notwithstanding that it had already voted to approve the plan last December — which means we can all rejoice in an arena deal that doesn’t suck too badly, thanks to a combination of citizen activism and relatively forward-thinking elected officials. (Those are the city officials; county officials are still wackadoodle, as the recent Mariners lease extension made clear.)

And it also means that now we can freely speculate about an NHL expansion team in Seattle, since part of the deal is that renovations won’t start until a franchise is in place:

Local investors will present to the NHL’s executive committee on October 2. Then, the full NHL Board of Governors will vote in December on whether to approve an expansion franchise for Seattle for the 2020-2021 season. A Seattle NHL team would be owned by billionaire David Bonderman, movie producer Jerry Bruckheimer and a handful of local owners.

Sports leagues are in a weird place right now with regard to expansion, with some looking to cash as many expansion fee checks as possible (MLS), while others are sitting on their hands and figuring that a one-time windfall isn’t worth the tradeoff of having to share the revenue pie with more owners (the NBA and NFL, pretty much). Baseball has been kicking the tires on expansion without making much of a commitment — my gut sense is that they’ll only do so if bowled over by expansion fees of around $1 billion per team, which may not be feasible for the size of the cities involved, something that I told Matthew Kory of the Athletic for this article (paywalled), though Twitter somehow turned it into me hating Montreal.

The NHL has been somewhere in between MLS and MLB, eager to expand if someone wants to throw money at them, but not so eager as to approve more than one team at a time. Seattle seems like as sure a bet for the league as possible — moderately big media market, more of an existing hockey fan base than some of the cities from Gary Bettman’s famed Sunbelt Strategy that didn’t work out so well — so if Bruckheimer and friends are willing to pay $650 million for a team in league where only 10 out of 31 existing teams are worth that much, hell yeah, grab the cash.

The calculus of expansion really comes down to whether you think the future revenues you’re giving up (by slicing the pie into smaller pieces) are worth more or less than the expansion fee check, and that’s going to vary based on everything from what you expect the future holds in terms of league revenues (is the cable bubble bursting yet?) to how your league’s revenue-sharing determines the size of your existing slice. None of which has much to do with whether a city “deserves” a team, whether in terms of Nielsen demographics or of how rabid their fan base is, so it’s nice when they all line up and a city like Seattle lands a team that should fit in well with existing NHL cities. And not having to put in public arena subsidies is the cherry on the top. Wow, I really have nothing overly cynical or pessimistic to say about this news item — mark this day down, because you shan’t see its like again.

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?