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April 01, 2009
Portland Timbers won't join MLS unless more money is found
That stadium funding gap is turning out to be a bigger deal for the would-be Portland Timbers expansion MLS franchise than anyone wanted to admit: Not only is there $26.8 million in funding unaccounted for, but the city would need to sell $36 million in risky taxable zero-coupon bonds, a prospect that city officials are "pessimistic" about, according to the Portland Business Journal (article not online). If the funding isn't in place by August 1, the team's stadium deal falls apart, as does the franchise's entry into MLS.
Portland Mayor Sam Adams says he's considering either raising more city urban renewal money to fill the gap, or levying new taxes on alcohol and food in and around the stadium; Timbers owner Merritt Paulson, meanwhile, is exploring everything from asking for state aid to making the bonds tax-free to asking for federal stimulus funding — maybe he can see if his dad has any leftover TARP money in his coat pockets.
You forgot the money quote:
"From there, Paulson and the city are left trying to fill a $26.8 million gap.
Paulson, whose family's net worth has run into the nine figures, said bluntly: 'That will not be from me.' "
Sam Adams needs to lay off the beer.
The funding gap is $15 million from the original vote, not $26.8 million as reported (Paulson is on the hook for the other funds if they don't pan out). That hasn't changed, so there is really no story in that number itself.
What is more interesting is the the issue of selling the (zero coupon) bonds within the current environment... this could be a major problem.
If you don't think Harry Paulson has sufficient chits to call in, after writing the bailout for all his financial friends, well...
The part of the 26mil in this article refers to items that were already in the hopper and had support from the Leg--things like taxing player salaries, which wouldn't exist but for the franchise.
And the URD that was left out of the original agreement is still the leading candidate to fill the gap. No one is going to let this die on the vine at this point.
Where in your article do you support the claim made in your title?
Nowhere do you seem to establish that MLS would not be willing to make some concessions to accomodate a franchise they have already publicly announced.
There may be a funding gap. Let's say Paulson or the city cover some, but not all. Who sais MLS will not structure the deal a little differently to help Paulson pay and also avoid killing the momentum in the Northwest and the PR headache that would result. MLS doesn't want Fredy Montero, Beckham's exit and Portland's withdrawal to hit all within weeks or months of eachother. That would be their worst season off the pitch ever and avoiding further PR damage would be worth throwing a couple million Paulson's way to keep things going there.
Whether or not the full funding gap is covered, Portland WILL begin play in 2011.
That'd be back two weeks ago when Don Garber said without a new stadium, "then we won't be able to have an MLS team in Portland":
Paulson or the MLS may ultimately end up filling the funding gap, as you say, but the fact remains that without the missing funds, there's no team.
Neil, Bullshit - don't try to backpedal.
The criteria for whether Portland enters MLS is not covering some specific financial amount (which you said was $26.8 but actually the gap is $15m - you got that wrong too, and is technically $10m if you consider that the franchise fee was $35m in the end, not $40m), or that it has to even be public money. The issue is whether Portland has a suitable place to play.
MLS has full license to determine what is a suitable stadium and those rules are not hard and fast - for example, the new Seattle team play on turf and share an NFL stadium with an NFL team for a big chunk of the season. DC United shared with a baseball team in an NFL stadium for years. Kansas City is entering their second season in a minor league baseball park.
If MLS wants Portland in, they could decide to allow that in the current stadium sharing with Baseball if they wanted to.
And Garber's quote - you don't suppose he was, oh perhaps positioning to ensure that Paulson and MLS got as good a package they could get do you? Would he have said, eh, we don't really need that funding after all?
Reality is that tradeoffs can and will be made. They will try to get the money, but may not get the full $10-$15million, in which case adjustments will be made.
This is all pretty common sense. You seem to want to paint some doom and gloom picture, but not only do you get many of your facts wrong, you seem to purposely shun common sense.
Sure, Garber's statement could have been positioning — but then what does he get for folding and saying, fine, play in the baseball stadium instead? Especially with half a dozen other cities clamoring to get into MLS (and no urgency to expand), he loses nothing by sticking to his guns. A far more likely scenario is that Paulson decides he'd rather pay the missing construction funds out of his pocket if it means getting a team promptly — but backing off the soccer-only stadium demand entirely? I don't see it.
Paulson has already said previously that he would cover the $5 million from player payroll taxes if that doesn't pass the state legislature.
As far as the original $15 million goes, one of commissioners (Leonard) and the mayor have already given assurance that they will find the money and Paulson won't be on the hook for it (they may have to do some horse trading with the county or the schools to get a third vote).
Neil's headline is correct, but I would be shocked if it fell apart after getting this far.
I am a Portland resident who is bummed that we don't have MLB and dreading the three hour drive to Seattle for opening day next week... but at the same time I have to say thank heaven that we aren't Indianapolis (or New York or Miami or about 25 other metro areas that have been absolutely reamed for public funding of sports stadia).
[Neil Wrote]"Sure, Garber's statement could have been positioning but then what does he get for folding and saying, fine, play in the baseball stadium instead?"
The same thing MLS got last year when they said 'fine, play in Seahawks Stadium' to the Sounders. You are acting like they have credibility to lose on this issue.
[Neil Wrote]"he loses nothing by sticking to his guns."
False. There are but a handful of markets dominated by the demographic MLS dubbs 'New America' that is favorable to their sport. Portland has already demonstrated a disproportionate receptiveness to soccer spectating and coincidently is ripe with the MLS target segment. So MLS would lose access to an attractive market, an existing rivalry with Seattle, and travel efficiencies for west coast teams. Is MLS going to give that up by telling Paulson 'you must spend the original stadium budget - you may not take the restaurant out of the plan to save a couple million or we walk'
[Neil Wrote]"A far more likely scenario is that Paulson decides he'd rather pay the missing construction funds out of his pocket if it means getting a team promptly � but backing off the soccer-only stadium demand entirely? I don't see it."
You have created a nice straw man there. It's not 'soccer only' or 'shared stadium'. When we are only talking about $10 million (or less if public money is found for just some of the gap), the options include plan modifications such as removal of the restaurant, don't move seats lower to the field, etc. You would still get a "soccer specific stadium", but just not soccer specific with a restaurant, or all the other modifications. I offered the Seahawks and KC stadium situations so as to say, 'If MLS is cool with these teams sharing with Football and Baseball respectively, they surely wouldn't walk if Paulson had to cut a few corners or defer some work to save $10m on an otherwise soccer specific facility.
By the way, do some reasearch and you'll find that Paulson already is paying for a portion of the construction.
Don't you write books about stadium deals? A great read I'm sure.
I reported that Paulson was paying for a portion of construction when I first wrote about this, a month ago:
^^^^ Good for you. You'll excuse me if I haven't committed all of your submissions to memory.
Am I to assume that is the only point of mine you can refute?
If so, don't you think it's appropriate to print a partial retraction? After all, the situation is not at all as dire as you have tried to paint it.
Why do I doubt you have the integrety and objectivity to do that though? Maybe because you are a hack sir.
Whoever had "13 hours" in the pool for when the name-calling would begin, please come collect your prize.
I suppose I could retroactively change the headline to "Portland Timbers won't join MLS unless more money is found, if you believe league commissioner Don Garber, though there's always the chance that he's lying." But it's kind of standard journalistic practice to have the story be longer than the headline.
Name-calling? I see - instead of addressing my points (which you haven't done) your approach is to try to position my use of strong language as juvenile.
Come on - this starts to feel very Valerie Plame. Have some integrity and address my points instead of trying to discredit me.
Sure, you certainly can avoid mentioning that MLS has a history of accomodating modifications to original stadim plans for expansion clubs (if you didn't know, Seattle was recently allowed in with Turf instead of Grass, which had been a requirement).
A generic journalist might be able to get away with not presenting that context, but this is stuff you are supposed to know because you have apparently written a book on stadium deals.
By providing journalistic content like this you have a duty to present the big picture and provide the proper context.
But by selectively choosing the facts you present, you are perpetrating biased journalism at best and blatant misrepresentation of the situation at worst.
I have to say I am shocked that someone who claims to be knowledgeable on stadium deals would either not know the history of MLS and stadium deals OR choose to suppress that information.
Based on what I have seen in this article alone as well as the way you have responded to me, I question the objectivity of your book and doubt that it offers anything valuable to the discourse on stadium deals at all.
Okay, seriously, no jokes this time: I'm going to address your points one by one, and then I need to get some work done.
"If MLS wants Portland in, they could decide to allow that in the current stadium sharing with Baseball if they wanted to."
Yes, but Garber's said he won't. Is he blowing smoke? You say probably, I say probably not — that's a matter of analysis, not of fact.
"Portland has already demonstrated a disproportionate receptiveness to soccer spectating and coincidently is ripe with the MLS target segment. So MLS would lose access to an attractive market, an existing rivalry with Seattle, and travel efficiencies for west coast teams."
Sure, but Portland also isn't going anywhere. I realize that MLS has operated a bit differently from other sports leagues in structuring their stadium deals — in part because they're not considered a "Big Four" sport and so don't have the leverage, in part because the stadiums are generally a bit cheaper and so easier to finance with more private money — but still, Garber would be a very unusual league commissioner if he didn't at least let Portland sway in the breeze for a year or two if they didn't come up with the requested funds. A year's travel budget isn't much to spend when there's $15 million or so at stake.
"When we are only talking about $10 million (or less if public money is found for just some of the gap), the options include plan modifications such as removal of the restaurant, don't move seats lower to the field, etc."
Even $10 million is a lot of corners to cut on a $34 million renovation. Also keep in mind that if they eliminate the restaurant, say, then Paulson loses the revenues that go along with that, so that's effectively going to cost him money.
"MLS has a history of accomodating modifications to original stadim plans for expansion clubs"
Sure, and I expect there to be plenty more haggling before whatever happens happens — stadium deals invariably go through a ton of iterations before they're finalized. But the fact remains that MLS has said the franchise is dependent on getting a stadium, and right now there isn't enough money to pay for it. So that has to be resolved for Portland to get the team — unless, as you say, Garber doesn't really mean what he says.
I don't think we're actually in disagreement on anything here, except in our interpretation of what we think is going to happen from here, which we're both guessing at. Well, that and the quality of my book, but you're welcome to your opinion on that, too.
Thank you! Neil wrote:
"I expect there to be plenty more haggling before whatever happens happens ? stadium deals invariably go through a ton of iterations before they're finalized"
See, you yourself know that it's not as cut and dried as "No Money, No MLS" as you presented it in the title and body of your article
Since yours was not an opinion piece, you could have provided some facts about MLS' previous stadium concessions as proper context.
Again, my issue with your article is that it painted a doom and gloom scenario without even hinting at the way MLS has historically done business where stadiums are concerned.
Yes, there is Garber's quote, but surely you understand what that is right? It doesn't take an author of a book on the subject to understand that this is the only thing he would say given that he wants to support Paulson in getting as much money from the city as possible.
I don't doubt you understand that, but you failed to present that context OR as I said, the history of Garber taking a hard line and then ending up with Seattle in an NFL stadium or Houston in a college football venue. These are recent stadium deicisons by the way.
So yes, we are in agreement given what you explained about in your latest response, but I still believe your original article was sensationalist, irresponsible and one dimensional.
I just expected more from an authority on the subject.
Ummmm... you do know that this site is called "Field of Schemes", right? And you do know that most of the posts simply reflect the tone of the article, with a humorous, snarky, double entendre remark in the last sentence, right?
Yes I'm annoyed with a lot of the knee jerk reactions about MLS2PDX as well, but this website is nothing compared to a lot of blatant lying hatchet jobs I've seen elsewhere. If anything, you can see through the coverage in here that Portland's deal is comparatively tiny in terms of public outlay and public risk as opposed to the blatant pillaging going on in most other cities.