It’s Friday again, so let’s go spanning the world:
- The Los Angeles Rams are considering charging a top personal seat license price of as much as $225,000, just for the right to then buy season tickets for $350-400 per game. This seems like a bit of a reach when the payoff is just that you get to watch Rams games, but I guess Stan Kroenke needs to try to recoup his $2 billion in stadium costs somehow — and at least if it all goes south, he’ll be the one on the hook, not taxpayers.
- Some Canadian bank bought the naming rights to the Toronto Maple Leafs arena away from some Canadian airline. Is this going to buy it valuable market exposure and name recognition that will justify the $40 million a year expense? Not on this blog!
- The LED lights at the Atlanta Falcons‘ new stadium make football look all weird.
- Shreveport Mayor Ollie Tyler says spending $30 million on an arena for a minor-league basketball team is a great idea that only “naysayers” don’t appreciate. “I think sometimes we don’t believe in ourselves and some of our urban areas we don’t believe that we are able to make things happen,” she says. If Mayor Tyler needs a reelection campaign theme song, I have a suggestion.
- “The Federal Aviation Administration has determined that the Oakland Raiders‘ proposed stadium in Las Vegas would not be a hazard to aircraft.” Huzzah!
- Would-be St. Louis MLS owner Paul Edgerley says he’s still ready to pay $150 million for a franchise, and $100 million toward a stadium, as soon as someone comes up with the other $60 million in construction costs. Noted.
- Cleveland Cavaliers owner Dan Gilbert has officially reinstated his plan to do $140 million of renovation work to the team’s arena, with Cuyahoga County paying for half the cost. ”This is corporate welfare at its worst,” said Steve Holecko of the Cuyahoga County Progressive Caucus, after his erstwhile coalition partners the Greater Cleveland Congregations withdrew petitions against the arena subsidy after getting a promise of two mental health crisis centers from the county. Holecko’s group doesn’t plan to mount another ballot challenge on their own, though, so construction work is set to begin later this month.
- Mikhail Prokhorov is ready to sell the Brooklyn Nets, but will hold onto the Barclays Center, after renegotiating the team’s lease so that it will pay less rent to the arena. This … does not seem like the smartest way of going about things, but maybe Prokhorov is figuring he’ll give up future rent revenue in exchange for a higher sale price now on the team? Or maybe he’s just not very smart.
A headline like “Why are NHL tickets expensive in Toronto? Because they’re cheap in Phoenix” has got to be pretty much irresistable if you’re an editor at the Globe and Mail. But does columnist Tony Keller actually make that case? Let’s follow the bouncing argument:
- The Toronto Maple Leafs can charge through the nose for tickets because demand for hockey in Ontario exceeds the supply.
- The Arizona Coyotes can’t charge squat for tickets because demand for hockey in Arizona is a sad joke.
- If the Coyotes moved to Toronto or even Hamilton, it would cut into the Leafs’ market, and they’d be forced to lower ticket prices.
- Since the Coyotes don’t make money, they have to be subsidized by revenue sharing from teams like the Leafs.
- “The MLSE golden goose helps subsidize a squad of American lame duck franchises; those lame ducks, stuck in dry ponds, make necessary a golden goose in Toronto.”
All of this is technically true, but there are some leaps of logic here: There’s no reason to think that the NHL would allow the Coyotes to move to within spitting distance of Toronto if they left Arizona, and that Toronto “golden goose” is something the league presumably would want to keep around (and the Leafs owners would absolutely want to keep around) with or without the Coyotes’ revenue issues. There’s a difference between “the Maple Leafs owners are willing to send some money to the Coyotes’ owners to maintain their monopoly” and “this is all part of a grand conspiracy to screw hockey fans both coming and going.” (Except inasmuch as trying to use your monopoly power as the only major pro league to jack up ticket prices is the plan for pretty much every sports league that doesn’t have open promotion and relegation.)
That said, it is undeniably true that if territorial rights were eliminated and teams could move wherever they wanted, it would be arguably good for hockey fans (except those in lousy hockey markets like Phoenix) and maybe even good for the league as a whole — just the same as it would be for MLB if the Steinbrenners and Wilpons didn’t have monopoly rights to New York City. But then, sports leagues aren’t really monolithic corporations, but rather cartels of individual business owners, each in it for themselves. The only conspiracy at work here is the profit motive combined with the failure to enforce antitrust laws, which is a bigger problem than just for hockey.
Hallelujah! After years of waiting, Harvard stadium researcher Judith Grant Long’s book is finally out, and while I haven’t seen a copy yet, Bloomberg News has and provides some highlights of her findings:
- The 121 sports facilities in use during 2010 cost taxpayers about $10 billion more than is commonly reported, thanks to hidden subsidies for things like land, infrastructure, operations, and lost property taxes.
- Once hidden costs are taken into account, the average sports facility split is 78% public, 22% private.
- The worst deals for the public include stadiums for the Indianapolis Colts, Cincinnati Bengals, and Milwaukee Brewers, each of which managed to rack up more in subsidies than the stadiums themselves cost to build. Best deals include venues for the Columbus Crew, Toronto Maple Leafs, and Ottawa Senators.
- Arenas are generally better deals than stadiums, because they cost less to build. And small cities tend to get get worse deals than larger ones, since they have less leverage to keep a team in town without large payoffs.
If you’re not familiar with Long, she’s been a favorite reference of FoS ever since she first started publishing her “Full Count” data on the true costs of sports facilities close to a decade ago. (At one point her book was also going to be called “Full Count,” I believe, but it ended up with the slightly less pithy title “Public/Private Partnerships for Major League Sports Facilities.”) Until Long came along, for example, it wasn’t clear that the Minneapolis Metrodome was actually one of the best deals for the public, thanks to a lease that forced the teams to actually share revenues; you can read more about her work in a profile I wrote of her for Baseball Prospectus back in 2005.
Needless to say, I’ll have much more to say about this once I’ve actually gotten my hands on a copy. (Which will have to wait until Routledge starts sending out either review copies or e-books, because $125 isn’t in my research budget.) But suffice to say that this is big, big news, and will be a huge boon to anyone trying to suss out the true public costs of stadium and arena deals after all the parts have stopped moving.