Here’s a bunch of ways rich sports owners are looking to get pandemic bailouts

The owners of the Los Angeles Lakers have voluntarily returned $4.6 million in refundable government loans they received as part of the Payroll Protection Program—

Hold up, let’s try that again.

The owners of the Los Angeles Lakers, a sports franchise worth an estimated $4.4 billion that turns an annual $178 million profit, asked for and received $4.6 million in federal government loans as part of its Payroll Protection Program for small businesses. (The loans convert to grants if recipients keep their current employees on payroll through the end of June.) Like other prominent companies that took advantage of the PPP program — Shake Shack, Potbelly, Ruth’s Chris friggin’ Steakhouse — the Buss family that owns the Lakers chose to return the money “so that financial support would be directed to those most in need” once they realized they’d bum-rushed the subsidy line and edged out actual small businesses, and also probably realized that the PR hit from doing so would have been worth way more than a relatively piddling $4.6 million in government grants.

That a billionaire sports family got approved for small-business loans should be alarming, but not surprising: The federal government has already approved more than $2 trillion in spending to help Americans hit by the coronavirus-spawned economic crash, and it’s all but inevitable that some less-needy Americans would put in applications as well — the feds define “small businesses” based in part on how many employees they have, and sports teams don’t employ a ton of people on payroll. And it’s also inevitable that they’d also be among the first to be approved, since programs like PPP are first-come first-served and rich folks are more likely to have lawyers on staff who know how to file paperwork fast, as well as established bank connections that made them more likely to get approved.

In fact, sports team owners are working many angles to get a cut of the Covid stimulus bailout cash, just as less-deep-pocketed individuals are as they try to figure out whether to consider themselves unemployed gig workers or entrepreneurs in need of cash to keep themselves on payroll. Among the ways:

  • The Sacramento Kings owners are renting out their old empty arena in Natomas for $500,000 a month to the state of California for use as a field hospital, which is the same rent the state is paying for other temporary facilities, but maybe a tad disingenuous given that Gov. Gavin Newsom previously praised Kings owner Vivek Ranadivé as “an example of people all stepping in to meet this moment head-on” without mentioning that he’d be getting paid for his selflessness.
  • The owners of the D.C. United MLS team are part of DC2021, an advocacy group of Washington, D.C. business leaders lobbying the district for “a massive new tax relief program” to help the local restaurant, hotel, and — apparently — soccer industries survive the economic shutdown.
  • The stimulus measures approved by Congress weren’t all expanded unemployment benefits and checks with Donald Trump’s name on them; they also reestablished a tax loophole involving what are known as “pass-through entities” that will allow mostly wealthy people to save $82 billion on their tax bills this year. The biggest beneficiaries will be hedge-fund investors and owners of real estate businesses, a list that obviously includes lots of sports moguls: Just owners of hedge funds who also control sports teams include Milwaukee Bucks co-owners Marc Lasry and Wesley Edens, Los Angeles Dodgers owner Mark Walter, Tampa Bay Lightning owner Jeffrey Vinik, and a pile of others.

Now, not all of this should be considered a fiasco: In the case of the PPP in particular, Pat Garofalo notes in his Boondoggle newsletter that the money is intended to keep low- and moderate-income workers from being laid off — the reimbursements top out at $100,000 per employee — and people who work for sports teams or chain restaurants are just as deserving of keeping their jobs as those who work at genuine small businesses. The main problem with PPP is that Congress massively underfunded it, then made it first-come first-served, then left it up to banks to decide who to approve — okay, there’s actually a lot here to consider a fiasco, but sports team owners deciding to fill their wallets at the same firehose of cash as everyone else is far from the worst part of it.

As for some of the other bailout proposals, though, sports owners come off looking a lot less innocent. That DC2021 plan pushed by D.C. United owner Jason Levien, for example, includes such things as tax holidays for corporate income taxes and property taxes, which Garofalo notes won’t help most small businesses that don’t turn large profits or own land.  (Levien, you will not be surprised to learn, is not just a sports mogul but also a real estate investor.) And the pass-through tax break is almost entirely a sop to millionaires and the Congresspeople who love them, which though it doesn’t single out sports team owners, certainly helps many of them given that they’re far more likely to invest in pass-through companies than you or I.

I’ve said this before, but it really is worth harping on: The recovery from the pandemic is already involving a ton of government spending, and will unavoidably involve a ton more, since the feds are pretty much the only institution that has the power to keep food in people’s mouths during this crisis. (At least until the U.S. Mint is deemed a non-essential business.) This will invariably create winners and losers, both in terms of who gets what money and in terms of who ends up paying off the government debts that are being racked up now. There’s no way to avoid this involving subsidies — pretty much the whole idea of government spending to prevent an economic crash is about creative use of subsidies — so what you want to shoot for is fairness, where you have the most money going to companies and individuals who were most hurt by coronavirus shutdowns, and the least to companies and individuals that just were able to lawyer up the fastest.

Individuals who were most hurt except, of course, for Miami Heat and Carnival Cruises owner Micky Arison, who may have lost more than a billion dollars thanks to the collapse of the cruise industry, but who also lobbied the Trump White House to let them keep sailing even after it was clear that cruise ships were perfect Covid incubators. The cruise industry was notably left out of the stimulus bills, and while that’s more about the fact that they all registered as foreign businesses in order to duck U.S. taxes than their owners being money-grubbing jerks who prioritized profits over public health, I think we can all agree: Screw those guys.

Friday roundup: Battles over Blues arena, Vegas bond subsidy, Belmont land for Islanders

Let’s get right to this week’s remainders:

Lightning offer to stay in Tampa 16 more years, only demand $61m in tax money to do so

Here is a headline from the business section of the Tampa Bay Times, “winner of 12 Pulitzer Prizes”:

Hold on to your Bolts: Lightning in talks to stay in Tampa through 2037

And here is the fourth paragraph of said article:

In exchange, Hillsborough County will commit $61 million over the next two decades to maintenance and upgrades of Amalie Arena, home of the Lightning and Tampa Bay Storm and one of the area’s top entertainment and concert venues. The money will come from the fifth cent of the Tourist Development Tax, a fee assessed on each night’s stay at a hotel or motel.

In journalism circles, this is a trick known as “burying the lede,” spelled that way either in order to distinguish it from the actual word “lead” or because journalists are just nuts. It’s a very bad thing to do, because readers who only get as far as scanning the headline — which, having spent some time with web traffic numbers in the age of Facebook, I would say is likely most readers — come away thinking “yay, more years of hockey!” and miss the part where it’s going to cost them an extra $61 million over the next 20 years.

And it’s an extra $61 million, no doubt about that, because there’s even more lede buried even further down in graf (yes, “graf”) #7:

The county owns Amalie Arena, but under the existing contract Hillsborough is not under any obligation to pay for maintenance or upgrades. That onus falls on the team, which runs the day-to-day operations.

This is becoming a standard ploy for team owners getting to the end of their stadium and arenas leases who don’t actually want new buildings (or don’t think they can get away with demanding new buildings) but do want to extort some kind of cash handouts in exchange for their continued existence. So how does $3.8 million a year (that’s $61 million over 16 years, since the Lightning already committed to staying put through 2021 in exchange for a previous bundle of public kickbacks) compare to other recent lease extension shakedowns?

So Hillsborough County taxpayers can at least say they’re getting a better deal than some other cities, though not all, and not even quite as good a deal as they got a few years ago. More to the point, though, did they have to give up this much? Lightning owner Jeff Vinik has not only expressed no interest in leaving Tampa, he has operating rights to a money-making arena, and is investing in a $3 billion downtown development project in the city. So the guy already has innumerable reasons not to flee town, even before handing him $61 million as a bonus. Far be it from me to tell Hillsborough County officials how to do their job, but are you guys sure you’re good at this whole lease negotiations part of it?

Hurricane Irma fails to knock over any of Florida’s sports venues

Time for your “What damage did Florida sports facilities suffer during Hurricane Irma?” rundown!

Also, two-thirds of the state is without power and many residents could remain so for weeks, at least 11 people died in the U.S. and 38 in Caribbean nations, nobody knows how many people are currently trapped in the Florida Keys, and a whole island of 1,800 people is now evacuated and uninhabitable. The Jaguars may move Sunday’s game to Tennessee if they have to.

Tampa homeless charity CEO on unpaid sports concessions labor: Who you gonna believe, “former addicts” or him?

The Tampa Bay unpaid homeless labor scandal fallout continues to fall out this week, with Hillsborough County officials calling for a federal investigation, the Rays and concessionaire Centerplate launching their own probe, and the Lightning saying hey, don’t blame them, they stopped using these guys in 2013 due to “reliability and consistency concerns.” (Though not “violating labor law” concerns, I guess.)

The charity at the center of the charges, meanwhile, New Beginnings, has responded with its own press release, and it is hi-larious. For starters:

“We don’t use homeless or the clients than are in our Emergency Shelter for sporting events”.

Assuming that “than” is a typo for “that,” this at first sounds like the dozens of homeless New Beginnings clients who the Tampa Bay Times witnessed lining up to work concessions at a Buccaneers game must have been imaginary. The key here, though, is that phrase “in our Emergency Shelter” — New Beginnings does use its clients to run sports concessions, it just does so with those in its “work therapy” program, where homeless people learn how to re-enter the work world by working and not getting paid for it! (Which, come to think of it, probably is a good acclimation to the work world these days.)

New Beginnings also posted a link to a softball radio interview with New Beginnings CEO Tom Atchison on a Christian radio station, in which he denied all the charges, mostly by saying, “Are you kidding me? Stop this nonsense!” Then he said this:

“Can you imagine using somebody that’s homeless off the street to cash out a register and serve hot dogs? They’d be eating the hot dogs, stealing the beer, taking the money out of the register, and running down the street!”

Your homelessness charity director, people!

Atchison went on to blame disgruntled ex-employees and “a few former addicts that are telling him how horrible we are” for the negative press coverage, without actually contesting the central point of the Times article, which is that New Beginnings is pimping out its homeless clients to Tampa Bay sports teams, not paying them anything beyond their food and shelter, and pocketing any proceeds. Instead, he appears to be falling back on the defense that he’s a good Christian, so why are you picking on him, already?

On first blush it will appear that New Beginnings is a horrible agency, but after the dust has settled the truth about the great work we do will prevail. We at New Beginnings feel like we are under attack by the powers of darkness, but God is at our side to walk us through this.

God better have one heck of a labor lawyer.

Concessionaire using unpaid homeless workers at Tampa sports venues, possibly illegally

And finally, this one really needed to run sometime other than Thanksgiving weekend:

Before every Tampa Bay Buccaneers home game, dozens of men gather in the yard at New Beginnings of Tampa, one of the city’s largest homeless programs.

The men — many of them recovering alcoholics and drug addicts — are about to work a concessions stand behind Raymond James Stadium’s iconic pirate ship, serving beer and food to football fans. First, a supervisor for New Beginnings tries to pump them up.

“Thank God we have these events,” he tells them. “They bring in the prime finances.”

But not for the workers. They leave the game sweat-soaked and as penniless as they arrived. The money for their labor goes to New Beginnings. The men receive only shelter and food.

That’s right: The Tampa Bay Buccaneers (as well as the Rays and Lightning) have been using indentured servants to run their concessions. (Okay, not quite indentured servants, since these workers can — and do — quit their unpaid jobs and give up their shelter, but still pretty close.) That’s probably a violation of the Fair Labor Standards Act — New Beginnings CEO Tom Atchison says the program is modeled on one used by the Salvation Army, but the Salvation Army doesn’t pimp its unpaid workers out to for-profit sports teams to make money — and undeniably skeevy. And it only gets skeevier:

[Victoria] Denton, the other New Beginnings employee who went to the FDLE, said she witnessed Atchison open homeless residents’ mail, take Social Security checks and deposit them in New Beginnings accounts, and use food stamp cards to buy food for himself…

“He would say, ‘They’re drug addicts, they’re alcoholics, they’re just going to spend it on cigarettes and booze,’ ” said Lee Hoffman, the formerly homeless minister who worked for Atchison off and on from 2007 to 2010. “The only way they get any of it is if they complain hard enough.”

Sports stadiums: your job-creation engines, everybody!

Florida house speaker: No new sales tax “checks” for stadiums this year

Florida House Speaker Will Weatherford, who said earlier this week that he’d be introducing a bill to require sports teams to show they actually have a reason to ask for sales-tax kickbacks, upped the ante slightly yesterday by declaring that he doesn’t intend on approving any sports subsidies this year at all:

“Our focus right now is on a process that treats everyone equitably and not writing any checks,” Weatherford said during an interview with The News Service of Florida in his Capitol office.

Currently, the state of Florida pays $2 million a year to the Miami Dolphins, Jacksonville Jaguars, Tampa Bay Rays, Tampa Bay Lightning, Florida Panthers, Tampa Bay Buccaneers, Miami Heat, and Orlando Magic in exchange for the teams doing the state the favor of existing. (The Miami Marlins got left off this list after getting the $2 million a year break for their previous stadium, but did get everything else they wanted, so no complaining.) Right now the Orlando City Soccer Club, David Beckham’s as-yet-unnamed Miami MLS expansion team, and the Daytona International Speedway are all lining up to ask for sales-tax rebates as well, but it sounds like they’re going to have to wait — until next year, anyway, when Weatherford will, at the ripe old age of 35, be term-limited out of office. If Weatherford has his way, by then there will be new laws requiring team owners to “go through the process with the Department of Economic Opportunity just like everybody else does that wants to create jobs in Florida” to prove that their projects will provide a return on the state’s investment, though it remains to be seen whether he has a chance in hell of getting it through the state senate, which has historically been much more lenient about this kind of thing.

GOP to introduce “We Built This!” slogan in taxpayer-built arena

Most jaw-dropping story of the day:

“We Built This” (the GOP’s “Call Me Maybe”), is the catchphrase of the season, and it’ll be a major theme of the Republican National Convention at the end of this month. The irony? They’ll be holding that convention at the Tampa Bay Times Forum, formerly the Tampa Bay Ice Palace, which was publicly financed.  The Daily Dolt, a humor/politics site pointed out the irony first and according to the National Sports Law Institute of Marquette University Law School, 62 percent of the funding that built the Tampa Bay Times Forum a.k.a. The Tampa Bay Ice Palace in 1996 came from public funds to the tune of about $86 million. Kind of kills that idea that it doesn’t take a village, right?

(Actually, counting property tax breaks and other public costs, taxpayers put up $167 million towards the arena, or 103% of the construction cost, according to Judtih Grant Long’s figures.)

This promises to be so awesome that I almost hope the Republican convention isn’t creamed by a hurricane that leaves GOP leaders having to try to explain how this has nothing at all to do with fossil-fuel-induced climate change. Almost.

Lightning seeking $40m in public cash for arena upgrades

So here’s how my day is going so far: I finally finish posting this morning’s stadium news updates, then get a call from a Minneapolis Public Radio reporter wanting to set up a live appearance for me to talk about the ongoing Vikings stadium controversy. (It’ll be airing next Wednesday between 10 and 11 am CST, for those who want to tune in.) One of the questions asked is whether we’re really going to be tearing down 1990s-era stadiums like Camden Yards to build new ones only 20-30 years later; I allow that what’s probably more likely is teams demanding major publicly funded upgrades, a la the Kansas City Royals and Chiefs with their 30-something stadiums a few years back.

I return to my computer, and an email from a reader alerts me to this news item:

The Tampa Bay Lightning plans to announce roughly $40 million in renovations to the St. Pete Times Forum that the team hopes will significantly improve the hockey game and concert-going experience.

Documents obtained from Hillsborough County indicate that the team’s new owners want to get reimbursed for much of the work with tourist taxes.

The original deal for building the St. Pete Times Forum — in 1996 — included a provision for paying for future improvements with tax money, but apparently the Lightning owners want more than was provided then, so they’re looking to get added subsidies in exchange for a lease extension. Yet another example of how arena deals can be the gift that keeps on giving, if the people negotiating the lease from the public side are clueless enough.

Meanwhile, I’m looking forward to hearing how “replacing all of the seats within the arena with new blue ones to match the team’s new colors” (one of the new reno list items) would represent a “significant upgrade” to the concert experience. Unless they plan on requiring Justin Bieber to dye his hair blue and white to match.