May 28, 2010
Ottawa park design to be full of generic storefonts, computer-rendered people
If you've been staying up nights wondering what Ottawa's redesigned Lansdowne Park would look like, well, wait no longer: You now have a selection of generic-looking renderings of various elements of the park to choose from. The revamped Frank Clair Stadium looks a bit freaky, merging an older structure on one side of the field with a modern one on the other, but at least now it's clear what that "cedar veil" wall will look like. (Pretty much a curvy wall. Made of cedar.)
While most of the media ooh and aah over the pretty pictures, the controversy remains whether spending $129 million and turning over a chunk of a public park rent-free to a mall developer is worth it in order to "revitalize" a downtown public space. "The issue becomes what is good use of public land," Michael Tiger of Friends of Lansdowne Park told CTV. "Should public land be given to four developers at no cost free over 30 years to build a shopping complex?" (The main shopping outlet is amusingly called "Pure Foods" in the renderings, but you can guess who it really is.)
The deal is expected to be voted on by the Ottawa city council on June 28, and then immediately proceed to a pitched court battle.
May 27, 2010
Rays stadium watch: When is a threat not a threat?
In the course of a long blog item at Creative Loafing on the Tampa Bay Rays stadium push (I'm quoted as well, though I don't say anything exactly earthshaking), Smith College economist Andy Zimbalist has this to say about Rays owner Stuart Sternberg:
"They haven't done what other teams have done, which is to make threats and give deadlines," says Zimbalist. "That's to be respected, since we do live in an environment where sports teams have a lot of economic power."
Well, sort of. Most team owners, as we've seen time and time again, don't make move threats directly, instead leaving it to league commissioners to do their dirty work for them. And Sternberg's track record here is actually pretty typical: First he said that Tropicana Field wouldn't "last" until 2020, then most recently he asserted that "we're not going to be there through 2027. It just can't happen. Baseball won't allow it."
That's a shade more oblique than your average threat, but it's still clearly both a threat and a deadline. Whether it's worthy of "respect" that Sternberg used slightly more polite language when making it is between you and your queen.
New York gets Super Bowl, promised rain of money, snowballs
In case you missed it, the NFL awarded the 2014 Super Bowl to the new New York Jets and Giants stadium on Tuesday night, setting off a media frenzy in the capital of what's left of the news media. For sheer hype, you'll of course want to turn to the New York Post, which asserted, among other things:
The Super Bowl could pump $500 million into the metro-New York economy, according to some estimates.
The vote was a clear nod of appreciation to the Giants and Jets for building a state-of-the-art, 82,500-seat stadium without having tapped public funds.
Errrr, it was certainly a reward for building a new stadium, which is what the NFL does to get these things built. But "without having tapped public funds" isn't exactly true, given that the stadium got free state land and property tax breaks — and in any case, since when does the NFL want to reward its teams for putting up more of their own money and extorting less from taxpayers?
On the subject of that $500 million for the "local economy," meanwhile, ESPN's Peter Keating talks to some economists who say it's a load of crap:
In 1999, for example, Phil Porter of the University of South Florida, looked at six Super Bowls at three different venues and concluded there was "no measurable impact on spending." In 2006, Robert Baade of Lake Forest College and Victor Matheson of the College of the Holy Cross found that on average, Super Bowls generate about one-fourth of the impact projected by the NFL, and that two cities -- Atlanta in 2000 and Tampa in 2001 -- actually lost money on the game.
I've talked to Porter frequently, so I know there's one caveat to these figures: He looked at warm-weather sites, and needless to say, hotel rooms in New York in February are slightly less packed to the gills than they are in Miami. Still, there's likely to be some crowding out of other visitors for the Super Bowl — New York is pretty hopping with tourists at all times of year — and Matheson's point holds true that "the magnitude of the economic impact would depend a lot on how willing fans were to get away from the game and spend money on things like Broadway shows."
Meanwhile, other outlets focused on different angles, with Bloomberg News noting that the announcement means the teams could get more money for naming rights to the stadium (which New Jersey gave up its stake in, you'll recall, as part of the final stadium deal), while the New York Times notes that it snows in New York in February, and fans might throw snowballs. Which is probably the weakest attempt of the day to find a Super Bowl-related excuse to rehash an old news story rattling around the archives, but at least it beats printing economic misinformation.
The slowly simmering San Diego Chargers stadium campaign has shown signs of heating up of late, with our old friend Mark Fabiani showing up on local radio to tout the team's latest plans for an $800-million-ish downtown stadium. Among Fabiani's arguments for the plan:
One, it costs, according to the grand jury, $17 million a year to operate and maintain that stadium. The City loses that amount of money every year. And, second, the City owns that 166 acres of land which could be put to better uses. It could be developed. It could be a park created along the riverfront. So there are all sorts of things that could be done that would be better for that piece of land.
These are legitimate arguments: There's always something else you could do with land and money, what economics geeks like to call "opportunity costs." Of course, though, a new stadium would take land and money as well, so the real question should be: Which is a better deal, the current one or spending upwards of $500 million to build a new stadium?
Right now it's hard to say without knowing more of the numbers — how much is the old stadium land worth, for example, as compared to the land that would be needed for the new stadium? — but Fabiani's case isn't helped by the revelation that the city's losses on Qualcomm Stadium are really only $12 million a year. Apparently his $17 million figure was what it would cost to run the old stadium if the Chargers left and no other events were held there, not even college football or monster truck rallies. At which point the city could always just knock down the place and build a park along the riverfront if they wanted.
Possibly the best summation of the situation comes from Voice of San Diego writer Liam Dillon (author of the last article linked above), who told KPBS radio that "the argument for a new stadium is simply coming down to the fact that taxpayers have such a lousy deal with the Chargers that they basically need to make a new deal with the Chargers. ... If the City keeps making bad deals with the Chargers, who's to say that this time the City is going to make a good deal with the Chargers?"
At this point, you have to wonder if the best option for San Diego would be for the Chargers to just move to Los Angeles, letting them keep their city money and reclaim the Qualcomm site as well. And anyway, a 116-mile drive is just a trip to the grocery store for most Southern Californians, right?
May 24, 2010
NHL to Glendale: Local buyer this year, or Coyotes go to Winnipeg
Glendale's agreement to keep the Phoenix Coyotes in town just gets worse and worse: Not only has the city agreed to pay Jerry Reinsdorf $165 million if he buys the team from the NHL, and subsidize up to $25 million in team losses this year if he doesn't and the team remains in league hands, but now, it turns out, if no buyer is in place by December 31, the NHL will move the team to Winnipeg, where it originally played until moving to Arizona in 1996.
The clause in the agreement — officially completed on Friday, and leaked to the Globe and Mail — actually only says that if no local owner is found by the end of the year, the NHL can take advantage of a "bona-fide offer from a viable purchaser who would relocate the hockey team to another market." But according to the Globe and Mail, the only other buyer who the NHL has spoken to is True North Sports and Entertainment, which just happens to own Winnipeg's hockey arena.
While you can see why the NHL would want this clause — if the search for a Coyotes owner goes on much longer, it'll outlast Law and Order — but it leaves Glendale in an awful pickle: The city now must either give in to the demands of Reinsdorf (or his competitors for the team, Ice Edge), or else face spending $25 million to keep the team in town and then still losing the team. And even if one of the "local" buyers (one is from Chicago, the other from Canada) does sign on the dotted line, there's still an excellent chance that the team will be moved anyway a few years (and tens of millions more in taxpayer dollars) down the line.
At this point, you have to wonder if it wouldn't make sense for Glendale to just cut its losses and let the team go, already — after all, if Arizona is a viable hockey market, the NHL will be back eventually (Phoenix Predators, anyone?), and if not, it's going to be hard to keep the team there long-term. And besides, it'd make all the Winnipeg Jets fans happy.
Everybody but Falcons still loves Georgia Dome
The Atlanta Falcons may insist that the Georgia Dome is lacking in "fan experience," but the 17-year-old stadium is getting plenty of love elsewhere.
Frank Poe, executive director of the Georgia World Congress Center that operates the dome, insists that it won't be torn down even if a new Falcons stadium is built because it would still be needed for college bowl games and NCAA basketball tournaments. That seems a bit dubious — can you really profitably run a stadium on a few college football games a year and an occasional basketball tournament? — but at least it's nice to see that somebody can run a dome without running up red ink just in operating costs.
Meanwhile, former Georgia Dome GM Khalil Johnson was even more blunt about the state of the Falcons' current home, and what he thinks of their demands for a new one:
Said Johnson, who now works out of Douglasville as a consultant regarding events and venues: "What's the pressing need? More money for the ownership. I don't know how that lines up with what the public wants ... I just question whether the public needs to give more when most of the benefits will go to a private owner."
About the Dome, Johnson said: "It may not be a great building but it's a damn good building. And improvements can be made … The bones of Georgia Dome are good. Ask anybody in the business, and they'll tell you that. It would make more economic sense to improve the Georgia Dome."
Falcons president Rich McKay says that the team is "extremely sensitive to the current economic environment" and that they hope to have a new stadium built in the "next six or seven years." Which should give them plenty of time to find a way to get Poe and Johnson to shut up.
May 20, 2010
Falcons want new stadium (repeat, 2009)
Throw another stadium demand on the fire: Atlanta Falcons team president Rich McKay declared yesterday that his team wants a new stadium to replace the Georgia Dome in the next ... hang on, didn't I write this story already? Wait here.
(Google google.)
Atlanta Falcons owner Arthur Blank ... yesterday reiterated that he wants a new home to replace the 17-year-old Georgia Dome, ideally as soon as the dome's bonds are paid off, which could be as soon as 2015. "The Falcons are falling behind other teams in the NFL in terms of the experience for our fans," Blank told reporters.
The news here, I guess, if there is any, is that McKay said the Falcons want an open-air stadium now, saying a retractable roof would cost too much, and, well, they already have a dome. Not that this excuses USA Today for not even reading the fershlugginer Atlanta Journal-Constitution article they were ripping off before writing their headline.
Even still yet another half-baked Rays stadium plan emerges
This should give the Tampa Tribune headline fodder for months to come: A seven-person investment team called "BuildItDowntownTampa" says it's looking to buy land in downtown Tampa for a Rays stadium.
Among the things the new group doesn't have: a stadium financing plan, a way around St. Petersburg's threatened lawsuit to hold the team to its current lease, spaces in its name, or people who are willing to be publicly identified as the seven investors.
It does, however, have a website, and a press release. And do you really need any more than that to get major media coverage?
May 19, 2010
Vegas officials, MGM Mirage cool to arena subsidies
Clark County held its first public hearing on competing Las Vegas arena proposals yesterday (there are now four, up from two in March), and county commissioners weren't exactly thrilled at the plans, especially the bit where all four would require public subsidies.
"I'm not against an arena," said commissioner Susan Brager. "I just don't think the funding mechanism is where it needs to be at this time." Added her colleague Larry Brown: "Public financing — it takes away the private competition. A pro team is not the panacea for Las Vegas."
Not helping matters was the stated opposition to public arena subsidies by MGM Mirage, which is not only one of the largest casino operators in Vegas, but also runs two arenas of its own at MGM Grand and Mandalay Bay. MGM Mirage officials complained that giving subsidies to a new arena while theirs go subsidy-free would create an uneven playing field; according to the Las Vegas Review-Journal, "a couple of commissioners seemed less inclined to back public funding" after MGM chief marketing officer Bill Hornbuckle testified.
Hornbuckle also warned that as the arena has no tenant lined up, Vegas could end up with an arena but no team, like Kansas City. Which is a point that many people, yours truly included, have made; but when the guy pointing it out is the big dog in your local economy, elected officials tend to sit up more and take notice.
Vikings on stadium bill: Wait till next year!
With the Minnesota legislative session having rolled to a close on Sunday night, the Vikings have thrown in the towel on getting a stadium bill this year — something their lobbyists could have told them weeks ago, but whatever.
Not to be deterred, the Vikings owners promptly set their sights on 2011:
The Vikings organization is extremely disappointed that the Governor and State Legislature did not move the stadium issue forward this year. While we greatly respect the challenges and priorities faced by the State of Minnesota, resolution of this issue has now been pushed to the final year of the lease. This lack of action will only increase the costs of the project for everyone, plus we missed the opportunity to put thousands of Minnesotans back to work.
Added the team press statement: "This solution must be finalized in the 2011 Session." Or, you know, else.
That's going to be tricky, though, what with the state facing an expected $6 billion deficit next budget season. Not to mention that the NFL will likely be preparing to lock out its players for the 2011 season, which is never a good way to get fans clamoring to throw stadium money your way.
Consultant: Kings arena site too small for state fairgrounds
Still playing catchup from the weekend here — if you want to see what else I've been occupied with, head thataway — but the tentative Sacramento Kings three-way land swap arena plan took a hit on Sunday with the revelation that the site currently housing Arco Arena is too small to fit the state fairgrounds as currently constituted.
Now, this isn't exactly news — as one FoS reader wrote, "How many consultants does it take to convince you that 185 < 412?" — and Cal Expo says it's looking at "new design techniques" to squeeze a state fair into fewer acres. But that could be tricky: Even if they were to eliminate the racetrack currently located at the Cal Expo site, the Arco site would be more than 100 acres short, according to the state's consultants.
The Sacramento Bee reports that owners of about 25 vacant acres near Arco Arena say they'd be willing to sell to bulk up the parcel, but they haven't said what their asking price would be. And this for a project where it's already unclear where the money is going to come from.
In short: There are still many, many ways for this deal to blow up. Wake me when there's an actual financing plan.
May 18, 2010
Noll: 49ers stadium public cost could triple
The always thoughtful sports economist Roger Noll had an op-ed in Sunday's San Francisco Chronicle analyzing the upcoming Santa Clara vote on a 49ers stadium. His conclusion: The promised taxpayer subsidy level is low by NFL standards, but risks rising by as much as 200% if some of the financing turns sour.
This is a point I've harped on before, but Noll goes into more detail. In particular:
Seat licenses played a major role in the plan to renovate the Oakland Coliseum to lure the Raiders back from Los Angeles. Sales of Raiders licenses were less than expected, which increased the public cost of the renovation. A scary feature of the Santa Clara proposal is that it repeats a flaw in the Coliseum plan: the stadium authority, not the team, will sell the seat licenses.
The stake in license sales is huge. If 30,000 are sold at an average price of $4,000, the stadium authority will collect $120 million, but this estimate could be off by 50 percent or more. Without a marketing study, the revenue from license sales cannot be reliably estimated.
Noll adds that the city of Santa Clara has promised in its stadium FAQ that the 49ers will pay any shortfalls or else the project will be killed. However, he adds, "the problem with this answer is that the Stadium Authority must borrow and pay its commitment to finance the stadium before tickets, naming rights, seat licenses and pouring rights are sold."
Noll concludes by cautioning voters: "Santa Clara residents should realize that the stadium is public consumption with an uncertain price tag, not a lucrative investment." That sums it up pretty well — if you vote for a 49ers stadium, be sure that you want it at $409 million, not just at $79 million.
May 14, 2010
Mets' league-leading attendance drop: Sign bloom is off stadium rose?
The New York Mets have seen the largest drop in attendance from last year of any MLB team, and somebody thinks they've spotted a trend:
"The problem is last year the tickets were really expensive and the team stunk and that can really stick with fans for a while," said Jon Greenberg, the executive editor of Team Marketing Report, an industry publication.
In the mid-1990s, Greenberg said, teams could count on new stadiums to help them boost ticket sales for several years, but that trend has ended.
"Stadium fatigue sets in much faster than it did before," Greenberg said, noting that new stadiums built in Baltimore and Cleveland in the early 1990s led to long periods of increased attendance for both franchises. "When Camden Yards and Jacobs Field were built, they were a big deal and were a complete change. The novelty has worn off."
That last note about stadium fatigue isn't entirely untrue, but it's also worth noting that the Orioles and Indians both got really good on the field around the same time they opened their new stadiums, which is the main reason their attendance honeymoons were so long. Cellar-dwelling teams have not been so lucky: The Pittsburgh Pirates jumped 41% in attendance the year they opened PNC Park, then fell 28% the next year after losing 100 games in 2001; the Cincinnati Reds had a similar but less-dramatic drop two years later.
Some of this is no doubt stadium fatigue &mdash Camden Yards could have drawn fans in the early '90s even if the Orioles had been playing like, well, the Orioles — but mostly it's just an expression of the same principle at work as always: If your team is winning, you can stretch a honeymoon out for a few years; if not, it'll likely fizzle in two to three. Every stadium draws curiosity-seekers its first season, and every stadium is pretty much back to baseline attendance levels ten years down the road. Florida Marlins, you have been warned.
Seattle residents on NBA arena: Meh
A new poll of Seattle residents by SurveyUSA has found that ... well, mostly that pollsters really need to work harder at coming up with questions where they don't already know the answers:
- Unsurprising finding #1: Most Seattleites would be fine with a new NBA arena if they didn't have to pay for it. Asked "If an arena could be built for a new NBA team without using any taxpayer dollars, would you support? or oppose? building an arena?" 72% of respondents said "support."
- Unsurprising finding #2: Most Seattleites don't actually care about basketball. Asked "Do you want a professional NBA basketball team in Seattle? Do you want Seattle to NOT have a professional basketball team? Or do you not care one way or the other?" 60% said either "no team" or "don't care."
This may be a nice way to kill time if you're a pollster, but what does it really tell us about how serious prospects are for a new or rehabbed arena in Seattle? Seattle news blog Publicola sums it up best:
The Stranger's post took the most positive scenario, a stadium built with no tax dollars, and used it to characterize the poll as strongly favorable to a new or rebuilt stadium. In contrast, the P-I took the most straightforward question—do you want a new NBA team?—and concluded that voters were opposed or indifferent to the prospect.
The "free stadium" proposal also benefits from being entirely hypothetical. Arena boosters say the cost of a new or rebuilt arena—approximately $300 million, according to the most recent estimate—would be paid back entirely by user fees. With just over 1 million attendees a year before the Sonics left (600,000 of them Sonics fans), it's hard to see how user fees alone would pay to renovate or replace the arena.
Former Seattle city councilmember Judy Nicastro tells the Stranger that one way of resolving this problem would be to add an NHL franchise as well — not that Seattle has an NHL franchise, or has ever had one. And as certain other cities have discovered, in order to lure an NHL (or NBA) team, you pretty much have to offer such a sweetheart lease that it doesn't actually provide you with any new revenues, for paying off construction debt or anything else.
No word on whether Seattle residents are as indifferent to hockey as they are to basketball. Hey, more poll contracts for SurveyUSA! Score!
May 13, 2010
Jets at least 10,000 short on PSL sales, risking blackouts
The simmering New York Jets PSL crisis finally blew up bigtime today, when team owner Woody Johnson told the New York Post that the Jets have more than 10,000 personal seat licenses still unsold with three months to go before opening day. A "league source" told the Post that the figure was actually 17,000; Johnson denied that but said it was more than 10,000, which I guess means it could be 16,999.
Either way, it's not exactly a sign that PSL sales are "going well," as Jets officials insisted back in March. If the information in the Post story is correct, the Jets have sold out most of their club seats and non-PSLed upper deck seats, but lower-deck non-club seats without PSLs are staying on the shelves.
As discussed here previously, this puts the Jets in a bind: They can't start selling lower-deck seats without requiring PSLs, because fans who'd already bought PSLs after being told they were the only way to get those seats would be outraged. Yet if the seats don't sell, the team gets blacked out on TV — which makes all Jets fans outraged.
Conceivably they could do some selective discounting of PSLs in the hopes that the outrage would at least be diminished then, but Johnson insisted to the Post that he'll consider nothing of the sort:
"[They are] fairly priced right now. [They're] selling, and [they're] selling right along our trendlines, so we're good to go. ... We'll eventually sell [the remaining PSLs]. I'm 100-percent confident that we'll sell them. Whether it's exactly in the timeline that we predict now, we're going to sell them. I think our product is too good. And when people see the stadium and come see [non-football] events here, they will sell."
The one other option here: Newsday's Neil Best reports (crazy-expensive subscription required, but summarized here) that the Jets could write a check to the NFL for the visiting team's share (34%) of the unsold tickets, and the blackout, at least, would be lifted. That seems a pretty expensive way to avoid admitting that your pricing plan is farkakte, but this is why I don't run an NFL team.
May 12, 2010
Coyotes sale off, on, back off, back on?
I have been sadly negligent in covering the last few days of twists and turns in the Phoenix Coyotes saga, which was already more convoluted than New York's 12th Congressional District. Since Friday:
- Designated buyer Jerry Reinsdorf reportedly dropped his bid again, leading Glendale to go back to Ice Edge Holdings and ask them to submit a new bid.
- Talks with Ice Edge collapsed, leaving the Coyotes with no potential buyers at all.
- The Glendale city council voted to pay up to $25 million in team losses for 2010-11 if the NHL still owns the team, in order to keep it in town.
Reinsdorf's group now says that it's still in the running for the team, with one source telling AP that talks aren't dead, they're "probably more like taking a nap." But there's still no final purchase deal in place.
Best guess from here is that there's some aspect of the team's lease that Reinsdorf and Glendale are still dickering over, something not spelled out in the memorandum of understanding they signed last month. Glendale officials now say they still expect the sale of the team to go through by the end of June; don't be too surprised to see a few more curveballs like this latest one between now and then.
Mets "talking" with Islanders, MLS about Queens move
More rumors of rumors, but: New York Mets owner Fred Wilpon tells Newsday (via its new sister publication Gothamist, since Newsday has hidden all its articles behind a $5/week paywall) that he's "had conversations with Islanders owner Charles [Wang] and we've talked about Queens," and that he's also talked to MLS commissioner Don Garber about a soccer stadium, though "we probably can't do both."
Any hockey or soccer venue would presumably be built in the Citi Field parking lot, though Willets Point is always a possibility as well if New York City follows through with its redevelopment plans. The bigger question — who would pay for it — Wilpon and Newsday left undiscussed.
If nothing else, anyway, this gives Wang some added leverage on his move threats to kick Nassau County into approving his plans there. And who knows, maybe Wilpon is just doing his fellow owner a favor by tossing out some red meat to the tabloids — though right now it's not like his team doesn't have its own ways to get itself into the paper.
Tampa Bay cities mull considering talking about building Rays stadium, maybe
Here's how much speculation over a new Tampa Bay Rays stadium is at a fever pitch: The Tampa Sports Authority just makes a brief reference to the possibility of building a sports stadium in its long-range plan, and that's enough to make headlines. Though, to be fair, some of the headlines also addressed the fact that Pinellas County is thinking about starting a new sports authority, though so far without even a specific mention of baseball.
None of this should come as any surprise, or really be news: Obviously, if the Rays can extricate themselves from their lease with the city of St. Petersburg, other localities are going to be interested in talking with them about a new stadium — though given the likely public costs that'd come along with that, you could make a fair case that whatever city doesn't end up with the Rays would be the real winner.
In other Rays news, the St. Petersburg Times reports that the first-place team's TV ratings are up, but their TV revenue isn't especially, since their contract mostly gives them a flat fee regardless of how many people are tuning in. Also, the article notes that since 31% of team revenue must be shared with the league, the marginal value of increasing revenues isn't as great as it might be in any case — the Times estimates that the Rays currently get about $30-40 million a year in league revenue-sharing money, cash that would disappear if the team significantly boosted its revenues. It's all making the supposed benefits of a new stadium look more and more dubious — though obviously the Rays would take one if somebody else were footing the bill.
UPDATE: The intrepid Noah Pransky reports that the Tampa Trib was apparently so excited about the Pinellas sports authority that it put it on its front page, despite the fact that the county had already voted down the idea the night before. Some days the death of newspapers just can't come fast enough.
Proposed D.C. ticket tax would fall mostly on team owners
A committee of the Washington, D.C., council is pushing a plan to add a ticket tax to sporting events in the District to fund parks and recreation programs: Tickets over $25 would get a $1 surcharge, those from $10 to $25 would get a 50 cent surcharge, and those under $10 would be spared. Also, the Washington Nationals would be exempt, as their lease with the city prohibits any additional ticket taxes — yet another argument in favor of the Nats' lease being among the sweetest of sweetheart deals.
The Washington Post, perhaps predictably, says the new tax "would come out of fans' pockets," but that's not entirely true: Most of the cost of ticket taxes end up getting folded into the face value of tickets, meaning local sports team owners would have to take a lower cut in order to keep from pricing themselves out of the market. (Team owners already price tickets as high as the market will bear, unless they're really, really dumb.) And the higher surcharge on high-priced tickets might actually help keep some ticket prices down, as teams would have an incentive to keep tickets priced right at $25 or $10 without going over, to avoid triggering the higher levies.
The tax is expected to be voted on by the full council on May 26. Expect to hear plenty of howling from D.C. United and the Washington Wizards between now and then.
NBA approves Nets sale to Prokhorov
So much for that whole Zimbabwe thing: The NBA Board of Governors (in other words, the league's owners) voted yesterday to approve Mikhail Prokhorov as owner of the New Jersey Nets. Prokhorov now becomes the league's first non-North American owner, as well as its second richest after the Portland Trail Blazers' Paul Allen.
The final tally: Prokhorov pays $200 million, plus assumed $180 million in team debt, in exchange for 80% of the team and 45% of their new Brooklyn arena. Prokhorov also agrees to buy $100 million worth of arena bonds, something that looks like a worse deal for him now that the bonds may fall below junk status. As for how much Prokhorov will reap from the deal, that's hard to say without knowing how revenues will be shared between the Nets and the arena; in any case, this deal is more about face time with the American public than a few extra rubles in his bank account.
The sale probably marks the last major hurdle for the Atlantic Yards arena project in Brooklyn; despite the bond downgrade and a couple of lawsuits still kicking around, there's not much that can stop the project now that the residents of the arena site have all been removed and the financing is in place. So figure on them becoming the Brooklyn Nets by 2012, or 2013 at the latest.
May 11, 2010
Pacers' economic study: Pay our operating costs, or we won't!
A consulting group issued an economic impact study of what the Indiana Pacers are worth to Indianapolis yesterday, an event so awaited that there were entire news articles just about the issuing of the press statement announcing the study's release. And the findings are (drumroll, please):
- If the Pacers left, the city would lose $55 million in annual economic activity.
- The Pacers' presence is worth 909 jobs.
- The city would lose $17.8 million in annual revenue without its basketball team.
Economic impact, as I've covered here previously, is a meaningless figure, and 909 jobs isn't an especially impressive number, especially if those include part-timers. That $17.8 million a year in actual revenues, though, is pretty substantial, especially on just $55 million in money changing hands overall. Does Indianapolis have a 30% sales tax that I didn't know about?
No, as it turns out: The arena consultants estimated that the city would lose just $5.6 million in tax revenues without the Pacers (no word on whether they noticed that Indianapolitans might still spend their money elsewhere in town if denied NBA tickets), but would also lose $12.2 million if forced to run Conseco Fieldhouse, and pay its operating expenses — which the Pacers currently pay for, and are trying to get out of, which is the whole point of this exercise.
Let's follow the bouncing logic here: The Pacers shouldn't have to pay operating costs because if they didn't pay them, the city would have to. So if they left, the city would be on the hook for operating costs anyway, so why not just let them stay and pretend they'd left, and have them pay nothing? I can't wait to try this argument out on my landlord!
Of course, I didn't agree to pay my landlord's electric bills in exchange for getting to pay only $1 in rent and keep every penny from the basketball games I play in his backyard, but the Pacers seem to be conveniently forgetting that taking on operating costs was already a tradeoff on their part. As does the Marion County Capital Improvement Board, whose president Ann Lathrop told the AP yesterday that absolving the Pacers of operating costs is "the primary basis of a lot of our discussions right now." It's like taking candy from a baby...
Seattle arena plans rise from dead, but not very far
The Seattle basketball arena wars are ba-a-ack:
Former city council member Judy Nicastro and a team of cohorts are in the planning stages of an initiative that could, she says, bring the NBA back to Seattle. If passed by King County voters this fall, the measure would create a stadium district to fund the renovation of Key Arena or build a new stadium.
"I want basketball back in Seattle and this is the only way we can do it," says Nicastro.
And what way is that, exactly? Turns out Nicastro is looking at using user fees (read: ticket surcharges) and entertainment surcharges for performers to fund a rehabbed or new arena. Good luck: Unless I'm mistaken, no arena in the U.S. has been built solely with user fees, for the simple reason that those cut into the arena operator's profits, which are the whole point of the exercise. Or to put it more simply: If an NBA team has to give a cut off the top of each ticket sale to pay the city back for the arena, they might as well just build it themselves.
Nicastro also suggested seeing if Microsoft CEO Steve Ballmer is still interested inkicking in $150 million, and called Key Arena, which was just completely renovated by the city in 1994, "a crap hole." Is this how you're raising your city councilmembers to talk, Seattle?
SF Chronicle: Niners stadium opponents say — oh, who cares about them?
The San Francisco Chronicle chimed in yesterday with a long report on the Santa Clara 49ers stadium battle; unfortunately, it largely left out the "news" part, instead opting for a he-said-she-said recounting of the two sides' arguments (opponents: "It'll cost taxpayers more than they're saying!"; 49ers: "Nuh-uh!") without any attempt to determine whose numbers are correct. C'mon, people — I already did all the math for you.
In any case, though, the Chron soon moved on to its main point, which was that it doesn't much matter who's right, as the opponents are doomed to failure in any case:
It's going to be an uphill battle for the stadium opponents. A poll released late last month by the San Jose Mercury News and KGO-TV found that 52 percent of likely voters in Santa Clara supported the stadium plan while 36 percent intended to vote against the measure, and there has been little to suggest the numbers have moved much since then.
The stadium also has the enthusiastic support of government, business and labor leaders in the community, including five of the seven council members, the trustees of the Santa Clara Unified School District, the president of the city's Chamber of Commerce and a variety of other officials.
Curbed immediately picked up on this message, calling the Niners stadium "inevitable." It's so much less work to cover the ponies than the news.
May 07, 2010
Vikings stadium bill is pining for the fjords
Things just really aren't going that well for the Minnesota Vikings' brand-spanking-new stadium bill. Proposed by four state legislators on Monday, immediately attacked by the governor the same day, and then gutted of its biggest revenue sources in committee the following evening, the bill has since been hit with even more indignities:
- On Wednesday morning, the Minnesota House State and Local Government Operations Reform, Technology and Elections committee voted down the revised bill that was approved by another house committee just hours before, rejecting the bill on a 10-9 vote.
- Later that day, the Senate State and Local Government Committee approved the bill, but stripped out its last two remaining funding streams: Minneapolis city taxes and a state sports lottery game. With only one-third of the stadium costs still assigned to the Vikings owners, the additional nearly half-billion-dollars would apparently have to be raised by selling personal seat licenses.
Let's be blunt: That ain't gonna happen, not given the troubles that even bigger-market teams have had selling PSLs. And that's even if the Vikings went for it, which they won't — if they wanted to fund a stadium by charging their fans, they would have done it by now without waiting on the state legislature. But even if they could pull it off, that would mean less revenue for them, which would defeat the whole purpose of this exercise.
The Associated Press described this week's events as "setbacks," which is a bit like saying that Lynn Redgrave has taken a turn for the worse. Stadium supporters are now trying to muster a last-ditch defense of the bill with a campaign to "like" their Facebook page. This can't end well.
Montreal MLS team approved, to play some games at Big Owe
The Montreal Impact have been officially designated as MLS' 19th franchise, starting in 2012.
As part of the elevation of the team from its current second-tier league (which has a crazy-long name that you really don't want to try to understand) to the bigs, its brand-new Saputo Stadium will be expanded to hold 20,000 fans; as a condition of being granted the expansion team by MLS, the $23 million Canadian cost is being paid for by the province of Quebec, even though the stadium itself is owned by team.
The promotion of the Impact will also mark the return of regular pro sports to Olympic Stadium, which has been mostly vacant since the Expos left town after 2004, and will now be used to host "select matches" of the soccer team. Now, to bring back Youppi!
MSG renovations on for 2011, sending Liberty into three-year exile
The on-again, off-again renovations to Madison Square Garden are back on again, slated to begin next summer and be completed by Fall 2013, a full year later than at last report. By limiting work to the summer, MSG will be able to avoid disruptions to the New York Knicks and Rangers schedules, but as I wrote on the Village Voice website yesterday, the New York Liberty WNBA franchise won't be so lucky:
This won't be the first time that the Liberty will be forced to relocate: The orange-teal-and-black were displaced to Radio City Music Hall for part of their 2004 season so that George W. Bush could be re-coronated on their home court. But there's a big difference between shifting a few home games 20 blocks north and completely pulling up shop for three seasons...
As for future summers, it's as yet unclear where Maddie will be parking her doghouse. Newark's Prudential Center, as the Times suggested, is the most accessible big arena to city Liberty fans, and would if nothing else lead to a rise in the average Kinsey number among PATH ridership. (It could also make for a nice low-cost option for hoops fans in one of the tristate area's most impoverished cities; Liberty games at the Garden are already distinct from Knicks games for drawing a large number of African-American teens of all genders.) And with MSG renovations slated to last through 2013, there's even the possibility of a one-season stay in Brooklyn, given that Bruce Ratner's Atlantic Yards is still — officially, at least supposed to be complete by late 2012. Liberty officials didn't immediately return calls seeking more info on the team's plans.
The renovation itself, which will essentially end up gutting the Garden and building a new seating bowl inside the existing shell, are now estimated to cost between $775 million and $850 million, all of which will be paid for by MSG's corporate owners. MSG's corporate owners who already get an $11 million a year tax break from the city of New York, mind you, but it's still a pleasant change to see a sports team not asking for new subsidies on top of the ones they've already received.
May 05, 2010
A's say they're not to blame for disappearing fans
The San Francisco Chronicle has taken notice of the Oakland A's attendance woes, with fewer than 9,000 tickets sold for Monday night's game (and even fewer actual fans in the seats). Who's to blame? Chronicle reporter John Shea sticks the blame squarely everywhere:
- The Oakland Coliseum is "antiquated."
- The team "hasn't been in playoff contention since 2006" (though he fails to mention that at the moment they're actually one-half game out of first place.
- Fans have been driven away by owner Lew Wolff's description of the Coliseum as "despicable" and his subsequent insistance that he wants to move the team to San Jose. (A's reliever Brad Ziegler even tweeted that "A's fans boycott our games [because] ownership has threatened to move the team" and "the lack of fans gives them all the more reason to seek other alternatives for a new home city," though he later clarified his remarks.)
The A's marketing chief retorted that the team is too trying to draw fans, noting that they only charge $5 for a beer. Though it can't be helping that the team is kicking out the few fans they have when they bring in signs critical of the owner.
One-day-old Vikings stadium funding plan is axed
That was even faster than I expected: A Minnesota state house committee late last night removed the provisions for memorabilia, hotel, and rental car taxes from a Vikings stadium bill, after those same provisions were just introduced with much fanfare the day before. That leaves the bill with only Plan B: Using Minneapolis city taxes currently designated to paying off debt on the city's convention center, once those bills are paid off in 2020, to build a new stadium on the site of the Metrodome.
The Minneapolis Star Tribune called this an "initial victory," but it's hard to see how: Minneapolis city officials aren't even in support of this plan, and since the money wouldn't begin to flow for another decade, a workaround would need to be devised to figure out how to bridge the financing gap until then. And then there's that little matter of the Minneapolis law that requires a public referendum on any use of more than $10 million in public money on a stadium. From the sound of things, the only reason the convention-center money came to a vote was because the committee had to wrap up its business by midnight — and as they've shown in the past, the Minnesota legislature likes bills that only require other people's money.
Meanwhile, St. Paul Mayor Chris Coleman chimed in on the Vikings issue yesterday, saying if Minneapolis gets a football stadium, he wants a new hockey practice rink and St. Paul Saints stadium for his city. This increasingly doesn't sound like something that's going to get resolved in the two weeks remaining before the legislature goes on break.
May 04, 2010
MN chamber, Vikings gripe about new stadium bill
More on yesterday's last-ditch Minnesota Vikings stadium funding proposal:
- It is "both an option play and a Hail Mary pass." (Thanks, St. Paul Pioneer Press writers addicted to forced sports metaphors!)
- The Minnesota Chamber of Commerce opposed the memorabilia, rental car, and hotel taxes that would be used to fund the new stadium, instead calling on the team to find a "local partner" — though the chamber didn't say how this local government would pay for a stadium without raising taxes.
- The bill's backers say that even though the Vikings play only 10 home games each season, a stadium could host 200 events a year. (I was about to make a Bon Jovi joke, but even they mostly play arenas, so I honestly have no idea who'd fill the other 190 days a year. Monster trucks?)
- The Vikings are already griping about both the 40-year lease that would be required, and the fact that they'd be asked to put up a whole third of the construction costs. Vikings stadium chief Lester Bagley said the team would be willing to chip in one-third the cost of an open-air stadium (which would be $210 million), but didn't want to pay for a roof: "We're not saying the roof isn't important, but the roof doesn't benefit the Vikings. It benefits the state and the community."
- Two hearings on the bill are set for tomorrow, with six more lined up before the bill can be voted on.
Meanwhile, also noted in passing in the Pioneer Press article: "The St. Paul Saints are looking for a new home." Et tu, Mike?
Nashville flood sinks arena, stadium
For some reason the Great Nashville Flood has been getting short shrift in the national media compared to the Great Gulf Coast Oil Slick and the Great Times Square SUV Bomb With Non-Exploding Fertilizer — though the flood does have its own website, so that's something.
In any event, among the buildings that are currently part of the Cumberland River are the homes of the Tennessee Titans and Nashville Predators: LP Field (named for, um, the Titans' favorite form of analog audio media? man, these naming-rights deals are a gold mine for corporate publicity!) has had its field submerged, while Bridgestone Arena has had its dressing rooms and arena floor submerged.
Both buildings are owned by the city and Davidson County, though the arena is operated by the Predators. I haven't seen any reporting yet on who'll be responsible to pay for cleanup, though you have to hope that somebody involved had flood insurance.
May 03, 2010
Vikings stadium funding plan thrown to the wolves
Four Minnesota Democrats announced today that they'll soon be introducing legislation to fund two-thirds of a $791 million Vikings stadium with tax dollars. What kind of tax dollars, you ask? Why, that'd be taxes on hotel rooms, car rentals, and sports memorabilia, plus revenues from a sports-themed lottery.
In other words, everything that's been run up the flagpole so far, including ideas that were endorsed by Gov. Tim Pawlenty (a lottery) and those that were considered unworkable because the governor doesn't like them (a state sports memorabilia tax). And how does the guv feel about them now?
Gov. Tim Pawlenty, in Washington, D.C. on Monday for a U.S. Chamber of Commerce forum, said that while he is open to new ideas to help build a Vikings stadium he reiterated that "we're not going to be raising or dealing with state taxes to subsidize that."
His office, through spokeman Brian McClung, was even more critical of Monday's stadium proposal. "We remain opposed to any stadium plan that includes tax increases, including the hotel tax, jersey tax, and rental car tax in one of the plans unveiled today," McClung said.
Okay, then. Given that state senator Tom Bakk, one of the foursome putting forward the bill today, said the legislation was all but written a month ago, and it still has plenty of poison pills in it as far as drawing Pawlenty's veto pen, you have to figure this is more a matter of trying to kick-start Vikings stadium talks from the "should we pay for it?" to the "how do we pay for it?" stage than actually putting forward passable legislation.
Vikes stadium czar Lester Bagley certainly seems to feel that way, telling the Minneapolis Star Tribune that the team isn't endorsing the bill, but considers it "a great start to the conversation." With two weeks to go in the legislative session, it's any conversation starter in a storm...
UPDATE: Reuters has the breakdown of funding streams: "$39.1 million raised annually from a 1.5 percent area hotel surtax, a 6.875 percent tax on sports jersey purchases, a sports team scratch-off game and a 2.5 percent rental car surtax." The wire service adds that "lawmakers stressed that no state funds would be used for the stadium," which, unless we're talking a county sports jersey tax, seems more than a bit misleading.
Tampa Bay radio, today at 4:05 pm
I'm going to be on 1010 AM CBS Sports Radio in Tampa Bay this afternoon from 4:05 to 4:20 pm, discussing the Rays stadium mess. If you're not in the Tampa area, you can still listen live online; I've been promised that the show will be a "debate" on the Rays' situation, so I'll be bringing my back hump.
UPDATE: This has been rescheduled for tomorrow, Tuesday, May 4, same time and station.
Ottawa stadium fight: Architectural models vs. YouTube videos!
Ottawa is headed toward a June 23 city council vote on whether to build a new football-and-soccer stadium as part of an overhaul of Lansdowne Park, and now it has a design for the new park, which includes lots of cedar and "laminar space." Architect Rob Claiborne says he can do this while coming in under the stadium's $85 million budget, which sounds crazy cheap by U.S. stadium standards, but they do do things different up in Canada.
The whole park project is budgeted at $129 million, but that's still drawn criticism that it's too much public money to benefit a private team. (The team itself would likely be an as-yet-unnamed expansion team, as Ottawa has been without a CFL team since the Renegades folded in 2006.) Carleton University professor Ian Lee even has a YouTube video out making the case against it, complete with jump cuts and focus shifts and all the other gimmicks the kids today love. (Sadly, though, no Kimya Dawson soundtrack.)
Blue Jackets find $1m a year, still seeking $11m more
In case you've been wondering, the Columbus Blue Jackets are still looking for that lease bailout, but for now they'll have to settle for this: The team and Ohio State University have agreed to merge their booking and operations units for the arena, each saving about $1 million a year in the process.
"This could be an important step, but it represents only about a 10 percent fix to our problem," Blue Jackets president Mike Priest told the Columbus Dispatch. "If we have a $12 million problem and we fix it by $1 million, that's at least a step in the right direction."
Other steps the Blue Jackets owners could be seeking, according to the Dispatch: having the government take over the privately owned Nationwide Arena, and absolve the team of paying rent; having Nationwide, the current arena owner, accept a cut-rate buyout and pay for naming rights; or just Ohio giving the hockey team a bunch of tax money, like they're an auto company or something.
Columbus Mayor Michael Coleman cautioned that none of these ideas were close to becoming reality, saying: "It's not soup yet." You gotta love a mayor who knows his classics.
NFL dangles Super Bowl as Santa Clara stadium reward
The NFL did that thing the NFL does on Friday, promising a Super Bowl for Santa Clara if the city builds a stadium for the San Francisco 49ers. Or rather, promising to "support and encourage a Super Bowl bid," which isn't quite the same thing, though it works the same for generating headlines.
Meanwhile, the San Francisco Examiner examines what the 49ers have meant to San Francisco (economically, not emotionally), and comes up with this list:
- They pay $5.5 million a year in rent, but the Recreation and Park Department spends $4.1 million on stadium upkeep.
- San Francisco gets about $2.4 million a year in taxes from the team.
- Some jobs are created, but mostly they're only ten days a year, as the team's full-time staff is already located in Santa Clara.
- The city gets free exposure when images of San Francisco landmarks appear on national TV broadcasts, but probably still would even if the team moved, as Santa Clara doesn't have any landmarks.
Thus having downplayed the 49ers' economic value, the Examiner nonetheless insists that a new stadium would be "play a crucial role in stimulating the economy," citing "business and tourism officials" and a 1997 report that bringing a Super Bowl to town would "generate $300 million for The City." Do we really have to go over this again?
