Yup, media still suck at covering sports stadium subsidy debates

If I link to an article and only quote the part that quotes me, that’s not narcissism, it’s repurposing, right? I’m going with repurposing.

Anyway, David Uberti of the Columbia Journalism Review has an article up today about how local journalists drop the ball on covering sports stadium subsidy debates, a topic that you know is near and dear to my heart. After discussing how the Buffalo media has largely skipped over the question of whether the city should help fund a new Bills stadium in lieu of the question of where to build it — something that’s devolved into self-parody at this point — Uberti asks me why the hell this is:

“You might end up with sportswriters covering this, whose eyes glaze over when they see an economic-impact report,” said deMause, who co-authored a book, Field of Schemes, on the topic. “Or you have news people handling it, who might be able to handle the economic aspects, but they can easily get distracted by the sports aspect of this.”

He added, “When you have to fight against the fact that nobody has this issue as their beat, no one has the time. It’s easy to cover it in a very surfacey way.”

The CJR piece also cites some other friends of FoS (correspondent Bob Trumpbour of Penn State Altoona and Holy Cross economist Victor Matheson, among others), and is well worth reading for a reminder of how the news media really isn’t helping promote more intelligent public discourse on stadium issues. Though I’d still love to see an article digging into the dynamics of why individual reporters who get assigned to these stories end up punting on the bigger issues — lack of time, lack of expertise, lack of editorial support. Hey, David, I’ll race you to it!

NY Times still asking if the Olympics pay off, five years after answering own question

The New York Times investigated the pressing question of “Does Hosting the Olympics Actually Pay Off?” this week, and discovered exactly the same thing everyone else ever has found: There’s pretty much zero evidence that any Olympics has helped any city, ever, anywhere.

Even though Brazil, like other recent hosts, has sought to make stadium spending more palatable by also building general infrastructure, like highways and airports, the public would derive the same benefit at far less cost if the transportation projects were built and the stadiums were not. The Los Angeles Olympics were successful, after all, because planners avoided building new stadiums. Barcelona, long neglected under the rule of Francisco Franco, was in the midst of a renaissance that would have probably occurred without the Olympics.

Organizers and their supporters routinely neglect what economists call “opportunity costs” — in this case, what might have happened if a country didn’t host the Games. In some of the world’s most expensive cities, perhaps the greatest opportunity cost is the loss of scarce and valuable real estate. While many facilities remain in use after the Games or are converted for new purposes, quite a few sit virtually as empty as the original in Olympia, Greece. Tourists can ride a Segway around the Bird’s Nest in Beijing for $20.

Similarly, it’s misleading to calculate how much money is spent in a city during the Olympics. A fair comparison requires some estimate of how much would have been spent without them. When the Games come, after all, other kinds of tourism go. During the 2012 Games, the Adelphi Theatre in London’s West End suspended performances of “Sweeney Todd.” The British Museum received 480,000 visitors that August, down from 617,000 the previous year. Indeed, Britain received about 5 percent fewer foreign visitors in August 2012 than it did in the same month the previous year. Those who showed up spent more, sure, but London spent billions of dollars to lure them. “If Boston hosts the 2024 Olympics, there’s no doubt that [the city] is going to be overrun with sports tourists,” said Victor Matheson, an economist at the College of the Holy Cross in Massachusetts. “But Boston is already overrun with tourists in the summer.”

The article is actually a good overview of all the reasons why the Olympics are a massive money suck for host cities, but having the headline in the form of a question is pretty unforgivable — especially when the Times’ “Room for Debate” page asked the exact same question five years ago and came to the exact same conclusions. Here’s a suggestion for the next Times investigative story: “Can Overwhelming Evidence Get the Times to Make a Declarative Statement Even When It Might Anger Powerful People?” It would work just as well under Betteridge’s Law!

Sports on Earth blows up real good

Sorry for the lack of news posts yesterday, but I had some other stuff to work on this morning, then news broke that Sports on Earth, where I’ve written 2-3 times a month since last fall, was shutting down. Also not shutting down. Actually pretty much shutting down after all, even if the site will live on in name only.

This sucks for me as a journalist, because under editor Larry Burke, SoE had become a terrific place to explore important topics in-depth, and get paid an actual living wage while doing so. But it also sucks for me as a reader, because now I won’t be able to read all the great work being done by Patrick Hruby and Jeb Lund and Howard Megdal and … I’m going to stop there before I start worrying about who I’m leaving out, but so many other talented sportswriters who are suddenly out of a job. Or rather, I’m sure I’ll still get to read them somewhere, but not all in one place, and probably not with as much freedom to explore the nooks and crannies of the sports world as they were afforded at SoE.

Anyway, for the immediate future the bulk of my sportswriting will be here, though I do have one article in the pipeline for another outlet. Thanks to all of my supporters for helping pay the bills so I can devote time to this site (if you’d like to become one, that’s what this hotlink is for), and thanks to every Field of Schemes reader for reading, and commenting, and retweeting, and all that good stuff.

And now for the news…

Buffalo op-ed says new Bills owners could threaten selves with moving team

Yesterday’s Buffalo News had an op-ed by an economic development consultant about building a new Bills stadium, and “op-ed by an economic development consultant” should tell you all you need to know about it. But I just want to call attention to it to show how op-eds can make it into the newspaper without making a damn bit of sense. Follow the bouncing logic here:

The Bills’ new owner will likely have to come up with at least $1 billion. The average NFL team is worth $1.17 billion, according to a 2013 Forbes analysis.

Yes, NFL teams are super expensive, because they’re super valuable. Even in Buffalo.

Once a deal is struck and the NFL approves, the new owner will have to deal with the expensive – and politically sensitive – issue of a new stadium.

Okay, “need” is a bit strong, since the Bills’ current stadium is already getting $130 million in taxpayer-funded renovations, but certainly if they want a new stadium they’ll need to deal with the politics of it.

But NFL Commissioner Roger Goodell wants more. He told ESPN that without a new stadium, the Bills might leave.

Oh, okay, so if the new Bills owners don’t get a new stadium, then the team might get moved … by the new Bills owners. So they totally have to deal with this, because there’s nothing so awful as spending $1 billion on an NFL team and then having your own self threaten to move the team out from under you.

There is a teeny point here somewhere, which I suppose would go something like “Whoever buys the Bills for $1 billion is going to want to maximize their profits, and the best way to do that might be to move the team to a bigger market, even though market size in the NFL doesn’t matter much and there are no huge markets with NFL stadiums ready to go, and Roger Goodell will stand behind them on any such threat.” But that’s not what this op-ed says at all, which makes you wonder who at the Buffalo News is bothering to vet submissions for making any damn sense. Unless, I suppose, making any damn sense is less important than espousing opinions that don’t anger the powers that be. Nah, couldn’t be that.

If you want to sell a sports subsidy plan, state it in terms of cups of coffee

There was yet another Milwaukee Journal-Sentinel column arguing for public funding for a Bucks arena on Friday, and I wouldn’t even take notice, but columnist James E. Causey brought back the dreaded coffee analogy:

The annual cost to regional taxpayers for Miller Park is about $10, or the cost of two venti Caramel Macchiatos at the local Starbucks.

Even if the figure was $25 a year, it still would be a bargain.

Pricing stadium costs in cups of coffee has a long tradition, most notably back in 2005 when it was the Minnesota Twins seeking public subsidies, and the Minneapolis Star Tribune’s Jim Souhan wrote approvingly, “Twins owner Carl Pohlad will pay $125 million. You’ll pay less than you leave in the tip jar at Dunn Bros.” (That’s a coffee place, FYI.) The problem — other than that the annual cost of Miller Park is repeated over 30 years, so really every man, woman, and child in the Milwaukee area (Causey divides by total population, not just adult taxpayers) is out $300 — is that you can do this trick with just about any public expense you can think of and make it sound reasonable:

Anyway, the point isn’t that big expenditures spread over enough people average out to a small amount — though no doubt writers like Causey are counting on readers’ innumeracy to obscure that realization. (He also buries deep in his article the news that a Bucks arena would cost more like $25 per person per year, or five Macchiatos.) The point should be what else could you be doing with that money. For the estimated $250 million cost of a new arena, Milwaukee could open another 19 libraries, or provide financial aid to an additional 18,000 college students, or, if you prefer, cut the average Milwaukee homeowner’s property taxes by $284 a year.

Not that any of these are necessarily the best uses of $250 million. But you’re talking about how to spend public money, you need to be comparing apples to apples, not to Macchiatos.

Virginia Beach approves “private” arena plan that would use $7m/year in public money

The Virginia Beach city council voted last night on which of two arena plans to pursue, and according to the Virginian-Pilot, it “chose United States Management’s privately financed proposal” over a competing bid that would have “relied almost exclusively on taxpayer money from the city and state and would have forced the city to pay $262.5 million in debt service over the next 25 years.”

Well, that’s a no-brainer, right? So how does USM intend to pay for the arena without public money? Let’s see:

USM’s plan calls for it to spend more than $200 million of its own money to build the arena, then receive up to $7 million annually in tax revenue to pay down its debt.

Um, excuse me, what?

People, people. I understand that this whole “money” thing is hard to wrap your brains around. There’s money now, and money next week, and my money, and your money, and it can all be so confusing sometimes. But even elected officials and journalists have to understand that $7 million a year in tax revenue isn’t private money, right?

Actually, it could be more or less than $7 million a year — USM is asking to get 1% of the city’s hotel tax, plus a full kickback of all “taxes generated by the operation of the arena,” which presumably means sales, income, and property taxes, though don’t go looking in the Virginian-Pilot archives for an explanation of any of this. If tax revenues go up, USM gets more money; if they go down, USM has to cover the shortfall.

This is still likely better for the city than the competing W.M. Jordan plan, which would have required the public to pay off $10.5 million in annual bond payments, plus other costs. (The city would own the arena under the Jordan plan, but as we’ve covered here before, the last thing a city wants is to own an arena; it’s owning the arena’s revenue streams that’s the important part.) Of course, the USM plan could still fall apart — which given that it relies on getting a $200 million loan from a bank in China, seems like a pretty likely scenario — in which case the Jordan plan would be back on the table.

The important thing is, though, that whether you have the city paying to build an arena and “repaying” itself through the taxes paid by arena patrons that would normally go to the general fund, or the team paying to build an arena and repaying itself with those exact same taxes, it’s pretty much the same kind of tax subsidy. The Virginian-Pilot could have run a headline like “Council chooses less risky arena proposal,” but instead it went with “Va. Beach council picks privately funded arena plan,” which has the advantage of being more grabby, if the disadvantage of not actually being true.

Everything that’s wrong with sports stadium coverage, in one sentence

I’ve made no secret of how unimpressed I’ve been with the Milwaukee Journal Sentinel’s coverage of the Bucks arena debate, but this, from today’s column by Michael Hunt, really takes the cake:

So now it becomes a matter of trust that the extraordinary financial commitments by Kohl and the new owners toward the building won’t languish on the table in another unseemly political fight.

So, to recap: The owners of a professional sports team offering to pay for less than half of the cost of their new arena is “extraordinary.” Public officials not wanting to pay for the other half, meanwhile, is “unseemly.” Got that?

(For those who would like an alternate perspective, I have a longer piece on the Bucks situation up at Sports on Earth, hot off the presses.)

Hey, it’s a dog-bites-man story that isn’t from Sochi!

Oh, Mike Florio, what have you written now?

With cities suddenly less relucntant to cough up the cash, the looming effort to build the next generation of stadiums could be aided by the promise of a Super Bowl.

Right, because that never happens currently.

I can only assume that Florio was stuck for a column idea on a boring Friday (the Super Bowl is too far in the past to recap, and somebody else already covered the Olympic cross-country skiing stray barking dog story), and dug into the back of his desk drawer for an old story idea he stopped working on in about 1993. To be fair, he seems to be implying that the success of the New Jersey Super Bowl (it didn’t snow, and people only got stuck changing trains for two hours!) will lead more cold-weather teams seeking stadiums to dangle a Super Bowl as a carrot, but the only cold-weather NFL teams without new or newly renovated stadiums are … hmm. Buffalo, I guess, but they’re about to get a pile of renovation money from the state. Does St. Louis count as “cold-weather”? Washington? And haven’t team owners been using this promise anyway, but using it as  additional leverage to try to pry loose a roof as well? How are poor NFL owners going to get their retractable roofs now, huh, Mike Florio? There, I just wrote next Friday’s column for you. No charge.

ESPN’s profits boosted by $260m in state tax breaks

And in the stories I initially missed over the holiday break department, here’s a lovely piece from the New York Times about how ESPN has gotten $260 million in state tax breaks to remain in Connecticut over the past 12 years:

That includes $84.7 million in development tax credits because of a film and digital media program, as well as savings of about $15 million a year since the network successfully lobbied the state for a tax code change in 2000.

For Mr. Malloy and other public officials in Connecticut, the conventional wisdom is that any business with ESPN is good business. After all, ESPN is Connecticut’s most celebrated brand and a homegrown success story, employing more than 4,000 workers in the state.

“After I was elected, this was one of the first companies that I came to,” Mr. Malloy told reporters after the groundbreaking ceremony, standing next to a senior ESPN executive, according to a recording of the event. “I made it clear that ESPN’s needs were not going to be ignored by my administration.”

At $260 million (and counting) for 4,000 jobs, that’s a ratio of $65,000 per job retained, which is far from a record, but still pretty bad. And that’s assuming that ESPN was actually a risk to move — it just built a new $25 million studio in Bristol, after all. And the network also just laid off 100 employees last spring, something it’s allowed to do because the Connecticut tax breaks apparently don’t come with clawbacks. You know, people, it’s not as if no one has spelled out how to do this right or anything.

Cable companies love sports, but even love has its limits

The always-terrific Matthew Futterman has a great piece up at the Wall Street Journal laying out the details of the brewing war between sports leagues and cable carriers. (It’s behind their paywall, but if you’re not a subscriber you can go through the Google News link instead.) Among his findings:

  • Most televised sporting events bring in a relatively tiny audience, 4% or less of all households. Yet sports channels account for 19.5% of fees paid by cable and satellite operators.
  • Advertisers disproportionately love TV sports because 97% of viewers watch live (and so don’t skip commercials), as opposed to just 75% of viewers for non-sports programming.
  • Nonetheless, some cable carriers are balking at exorbitant fees. AT&T has decided not to carry a new regional sports network launched by the Houston Astros and Rockets, and networks started by the Kansas City Royals, Minnesota Twins and Charlotte Bobcats all failed to be picked up in recent years, leading those teams to give up and sell their TV rights to existing channels.
  • The number of TV households is growing, but the number with cable or satellite subscriptions is not, as more and more people choose to cut the cord. According to Nielsen, five million households in the U.S. now lack pay TV subscriptions, up from two million in 2007.

Add it all up, and it’s still not really clear where the cable price bubble is headed. But for any owners counting on ever-soaring TV revenue to fund their exorbitant purchase prices — or their pricey stadium or arena deals — it’s probably best not to bet too heavily on that.