November 01, 2002

USOC, St. Louis Votes Loom

With the USOC to make its final decision on the U.S. candidate for the 2012 Summer Olympics on Saturday, controversy continues to swirl around New York's ambitious construction plan, which would be funded using the untried method of tax increment financing. New York City's bid for the 2012 games would cost $6.5 billion, more than double the official estimate, thanks to billions for an Olympic stadium and subway line extension not included in the formal bid document - this according to a Bear Stearns report obtained by the New York Post. Not to say we told you so, but: we told you so. . . .

With St. Louis' Coalition Against Public Funding For Stadiums preparing for a November 5 referendum that would require a public vote on all stadium funding plans, city officials are scurrying to approve a deal for teh Cardinalsbefore the public can get involved. On October 18, the board of aldermen agreed to scrap the city's 5% tax on Cards' tickets if a new stadium is built, potentially providing $102 million over 30 years in funding for the planned $333 million project. The board is also considering exempting a new stadium for paying property taxes for 25 years, providing millions more in public subsidies. Since the tax breaks would not go into effect until 2006 at the earliest, backers of Proposition S could argue that they would still be subject to a public vote, assuming the referendum passes. . . .

Ohio's Hamilton County may sue the Bengals for a new lease deal on Paul Brown Stadium, arguing that the team's dismal record since moving into the publicly funded facility puts it in violation of lease requirements to field a competitive team. . . . An attempted referendum on the new Arizona Cardinals stadium planned for Glendale may be off, after a judge disqualified enough signatures to knock the measure off the November ballot. . . .

The Indianapolis Colts, saddled with a stadium built when Strom Thurmond was still an octogenarian, are heating up move threats. The team can opt out of its lease following the 2006 season by paying the city $77 million in damages, though owner Jim Irsay could attempt to void the clause by charging the RCA Dome is no longer a "first-class facility." . . . Just when you thought San Diego's lease with the Chargers (in which the city must buy unsold tickets at face value) couldn't get any worse: city councilmember Jim Madaffer reports that "sold out" signs have been posted for games for which the Chargers demanded city subsidies. The city is currently withholding a $100,000 payment to the team until the matter is resolved. "The free ride sports teams enjoyed in the 1990s is over," said Madaffer. "We're going to make it clear to the San Diego Chargers that they're dealing with a different animal. The tone today is a very different one than in 1997." . . .

After insisting a new stadium would make his club competitive, San Diego Padres owner John Moores backed off his predictions this month, saying only that the under-construction facility would put the team "in the middle of the pack" in revenues. "Without the new ballpark, I'm pretty confident we would have been the center for the bull's eye on contraction," added Moores, apparently unaware that MLB agreed to forgo eliminating teams as part of its new collective bargaining agreement with the players' union. . . . In other Moores news, the Pads' owner and scandal-ridden corporate exec (Moores is accused of selling $600 million of Peregrine Systems stock shortly before it went bankrupt, this after allegedly giving insider-trading tips to a city council member who voted on the Padres' stadium deal) announced he would cut off donations to San Diego State University after a student newspaper columnist suggested that the school should remove plaques honoring the man Fortune called the nation's 14th greediest executive. . . . And in other contraction non-threat news, Minnesota Twins owner Carl Pohlad told reporters following the team's first-round playoff win, "We have to win the next two rounds, and I'm not even going to talk about contraction until then," adding, "I don't feel guilty about anything. Why should I? If you had to pay the bills and they were $15 million to $20 million a year, you would make the same decision, too." Twins All-Star outfielder Torii Hunter, when told of Pohlad's remarks, replied: "I want to say something but I can't. Now you've made me mad." . . .

Meanwhile, with contraction off the table, the fate of the Montreal Expos for 2003 has yet to be decided. (MLB bought the club from then-owner Jeffrey Loria last winter, ostensibly to shut it down.) The latest rumors have had the team remaining in Montreal but playing some "home" games in such farflung locales at Portland, Oregon, and San Juan, Puerto Rico - though one report in the New York Daily News insisted that the team could be moved to Boston, where it would share Fenway Park with the Red Sox. In exchange for moving games to Puerto Rico, according to the Washington Post, the local government would be asked to "guarantee" $300,000 a game. . . .

John Henry, owner of the Boston Red Sox, is now thought to be leaning toward a minor renovation of Fenway Park, adding perhaps a few hundred seats on top of the Green Monster and the rightfield roof. No word on whether Henry would ask for public funding, though the citizen group Save Fenway Park! had proposed seeking federal landmarks preservation funds. . . . The Chicago Cubs' plans to expand Wrigley Field's bleachers appear to be stalled, as the team continues to wrangle with owners of buildings across the street whose valuable rooftop views would be obscured by the new seating. Mayor Richard Daley the Younger has so far taken a hard line with the ballclub, nixing sidewalk pillars that would have allowed the Cubs to expand by an additional 1,000 seats, and demanding that the team start paying rent on land adjacent to Wrigley that it's been using rent-free for years. . . .

The slumping economy continues to take its toll on luxury seat sales. Hit particularly hard is the NBA, where club seats remain unsold across the country; the Seattle Supersonics, according to the Boston Herald, have completely discontinued sale of club seats for lack of interest, and other teams are considering scaling back on the high-priced seating. . . . This month's Arthur Andersen award for creative accounting goes to the Atlanta Braves, who told the Atlanta Business Chronicle they would lose "millions" for the the third year in a row in 2002. The Braves, of course, are owned by AOL-Time Warner, which also owns the club's TV outlet, TBS. According to calculations by baseball business guru Doug Pappas, TBS underpays the Braves by as much as $35 million a year for its TV rights, an amount that would easily be enough to shift the team into the black.
--November 1, 2002





EDITOR'S NOTE: This will be the last long-form news update on this site. Starting next week, we'll be going to a continuously updated, blog-style format that will allow more timely coverage of breaking news. To receive news updates via e-mail, join the Field of Schemes e-mail list.