Field of Schemes
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September 02, 2011

The Chargers and the gravy theory of stadium finance

For your consideration, we present today an article at the awkwardly named ESPNLosAngeles.com that begins like this:

In our romanticized view of football, all a team really needs to play a game is a field, a ball and an opponent. Everything else is gravy.
In the big-money world of the NFL, however, it's the gravy that pays the bills.
If all an NFL team needed to be lucrative was a solid field, nice uniforms and good weather, the San Diego Chargers would be the most profitable team in the league.
Sadly, perfectly trimmed Bermuda sod, crisp powder-blue-and-gold uniforms and sunny 75-degree afternoons don't pay the bills in the NFL. State-of-the-art stadiums complete with luxury suites, club seats and plush corporate lounges do.

The article — by columnist Arash Markazi — goes on to talk about how the Chargers' Qualcomm Stadium is a dump, how the Chargers need a new stadium in San Diego or they'll leave for Los Angeles, and so on.

Only one problem: The "gravy pays the bills" argument is 100% wrong. First off, this is the NFL we're talking about here: What pays the bills, first and foremost, are the league's mammoth TV contracts, which are shared by every team equally regardless of whether they play in a state-of-the-art palace or a shopping mall parking lot.

Still, corporate suites and the like do account for the main differences between the revenues of NFL teams, which is why team owners are so aggressive in pursuing new stadiums. So exactly how much more would a new stadium be worth to the Chargers?

Markazi's article cites a study by Conventions Sports & Leisure International that asserted that annual operating income for a team playing at Los Angeles' as-yet-unbuilt downtown stadium could be $53 million, more than double the Chargers' current estimated $24.7 million in annual profit. That sounds impressive. But even an extra $28 million a year wouldn't come close to paying off construction costs on the $800 million stadium that the Chargers want to build — which is why the team is asking for public money to do so.

Going back to that lede, then, it really should have read: "In the NFL, it's the gravy that pays the bills. So long as it's someone else paying for the gravy, that is. Because otherwise you'd have to be crazy to pay that much for friggin' gravy."

COMMENTS

Really I don't know why taxpayers aren't excited to help team owners make $53 million instead of $25 million?

I mean isn't that what taxes are for, enriching the already rich? You mean they aren't for that? I could swear my friends with the unmarked envelopes told me that was what they were for when they were donating to my campaign...

Posted by Joshua Northey on September 2, 2011 05:10 PM

As Glenn Dickey wrote in the SF Chron decades ago "Sports team owners: rugged individualists until it comes time for the next government handout."

Posted by SANTA CLARA JAY on September 2, 2011 09:59 PM

The problem really isn't that sports team owners are brash/shameless enough to ask for these outrageous subsidies, it's that a combination of our elected officials and brainless, math-challenged citizens don't just say no.

A spoiled child will always demand a new bike/pony/toy. Only a failed parent always says yes.

Posted by John Bladen on September 3, 2011 12:17 AM

In Santa Clara, CS&L was paid thousands of dollars to slather us with figures nearly as misleading as the ones they're peddling in San Diego right now.

If you're speaking of "operating income," please note that that dough goes only into the pockets of an NFL owner. That's because NO NFL owner pays anywhere near what it truly costs to "operate" his stadium for him.

Subsidizing moneyholes like NFL stadiums - and "operating" them year after year - isn't for smart operators like those guys.

It's only for rubes like us.

See now why Dr. John York "isn't in the stadium business"?


Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 3, 2011 02:21 AM

Yes, the majority of revenue for teams comes from the NFL's egalitarian model where all national revenues are equally divided. That goes without saying and really wasn't the point of the article. Where does a team make money after that base minimum of shared revenue? Can a team be successful and competitive if it plays in, say, the LA Coliseum which has no premium seats and was built in the 1920s? The "gravy pays the bills" argument is 100% correct outside of the revenue sharing.

You're also missing the point on the extra money the Chargers would make by playing in LA. That extra money wouldn't be used to pay off the construction of a new stadium. They wouldn't have to pay for the construction of a stadium in LA and they are only willing to pay a certain amount for the construction of a stadium in San Diego. That is why they will likely move and simply pocket that extra annual revenue.

Posted by Joey on September 3, 2011 09:29 AM

Somebody would have to pay for construction of a stadium in LA. (The CS&L study said that its increased revenue projections "don't include stadium debt payments," so it's not like this is profit off the top after the building is paid for.) Presumably this would include hefty rent payments from a team moving in, which is why I've been skeptical that an LA stadium will really look all that attractive to NFL owners.

More to the point, though, is that if a new San Diego stadium would produce similar revenue gains, then it's a matter of throwing $50 million a year at stadium bonds to generate $28 million a year in new revenues. Yes, if the Chargers are "only willing to pay a certain amount" then it can work for them, but then we're back to somebody else paying for the gravy.

Posted by Neil deMause on September 3, 2011 09:46 AM

Joey;

Don't forget that any franchise moving to LA will likely have to agree to share equity in the team with the stadium builder/owner (whether it's Roski or AEG).

So, really, if a new facility in that market would generate an extra $60-75M in profit, the existing owner of the team might pocket half of that (maybe slightly more if they are particularly shrewd negotiators... better than Roski or Anschutz...), but it's still splitting the pie - albeit a larger one.

I'm not aware of any stadium plan in LA that provides for construction of a new facility that would be gifted to a franchise willing to relocate. Since both present plans involve largely private ownership (with significant subsidies from the city, but still nowhere near half the construction cost), it seems unlikely that the Spanos, Wilf or Wilson families will be offered the opportunity to move in free of charge.


Posted by John Bladen on September 3, 2011 11:04 AM

In the case of Los Angeles, I think you'll find that it will be an even better deal than "free of charge.

The Farmers Field naming rights deal, claimed to be $700 million total? I'm betting that the $700 million will go mostly into the pockets of the NFL millionaire they can persuade to move in.

It most certainly isn't going toward stadium construction. If it were, AEG would never be demanding that the City of L.A. demolish a Convention Center on their own dime and sacrifice that CC business with no remuneration for the loss.

As for any true equity ownership, although no one's talking publicly, I wonder if the largest of developers are in fact demanding stakes in the teams that move in - but that the NFL Millionaire's Club isn't budging. Only the team owners can approve another team owner, and they even have strict rules for minimum percent shares that partners must hold. If it isn't close to 50/50, the league won't approve a change which adds partners.

And no current owner will want to share control anyway.

The Millionaire Owners Club doesn't like sharing any of the lovely NFL Revenue with anybody, either, a fact we learned here in Santa Clara. The outline of the deal we now have puts us down for easily $500,000,000 in subsidies for Jed York's stadium, but with Jed keeping nearly every million in NFL Revenues.

Payment into Santa Clara's General Fund the first year some NFL stadium might open in my city?

A stinking 180 THOU.

Anyway, if Edward Roski demanded that he be allowed to buy into a team just for helping to build them a stadium in Industry, was told no -- and then learned of the Farmers Field naming rights deal for a downtown L.A. stadium -- his job has just been made that much harder.

The NFL would love to get Majestic or AEG Money for free, but that probably isn't going to happen. This entire argument is exactly why the NFL would much rather get public subsidies for losing stadium deals from sucker elected officials with stars in their eyes.

The rules in No-Limit Stadium "Sold 'Em" are real simple: NFL TEAMS make money - NFL stadiums do not.

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 3, 2011 12:26 PM

Bill, why exactly do you think the Farmers naming-rights money would go to the team, not to the developer? What possible interest could AEG have in doing that?

Posted by Neil deMause on September 3, 2011 12:36 PM

Neil,

I say that because I absolutely don't believe that the $700 million is going to stadium construction.

But if you dangle part of that purse in front of an NFL team, then assure them that they can keep most if not all of the NFL Revenues, you will probably get the NFL's attention.

But I don't believe for a minute that anywhere near $700 million is going from Farmers directly toward the costs of stadium construction in Los Angeles.

If it were, there would have been no need to force residents of Los Angeles to pay once to tear down part of their Convention Center - and to pay again as they absorb the losses in CC business that AEG has refused to make up.

The mainstream press should be asking exactly what you just asked: Who really gets the $700 mil?

Thanks for doing it for them.

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 3, 2011 01:51 PM

Bill;

The billionaire developer will not roll over for the billionaire team owner as easily as the (near bankrupt) city and state will.

The difference in LA is that there is a private concern building the stadium (albeit with a healthy does of public money for associated projects). It's still splitting the pie, no matter how mistrustful one might be of the team owner, Roski or the current favourite AEG.

Add to that the fact that any team moving in is going to have to pay the league to move to LA, and suddenly the new cashflow from the larger centre doesn't seem so lucrative. From the league's perspective, LA can no longer be used as a lever once a team (or two) moves there... so there is a "cost" to filling that market as well as a benefit.

Posted by John Bladen on September 3, 2011 01:57 PM

The day I support taxpayer funded NFL stadiums is the day I'm turning $24.7+ million in personal profits. In other words, never.

You know, just like with Selig, I just shake my head every time I read articles like this and go, "how much god damn money do these leagues NEED?!"

I wonder if these sportswriters even care or believe the drivel they write. Who's driving behind these articles? - the editors?

Posted by Mark on September 3, 2011 02:15 PM

The Billionaire Team Owner isn't going to roll over, either.

He does not have to, because he knows that there are other cities and other suckers willing to get fleeced in that game of No-League Stadium "Sold'Em."

I would question also your claim that that any team is going to have to pay tribute to the League for the privilege. You will find that they will not only be paying no penalties to the cities they leave behind, but that the NFL will be more than happy to have a team in that huge television market. The NFL will probably not be charging that relocating NFL Team Owner a single penny.

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Again, the $700 million question still stands. Please don't believe that it goes entirely for stadium development until someone is actually willing to sign their names to that.
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The Pop Press spent two weeks - more - gushing about the Farmers Field deal, but asked virtually none of he most basic questions about where all of that money is really going.

I say at least a major portion of it will go to the team that moves to L.A. I invite anyone from AEG, the L.A. Mayor's Office, or the NFL to prove me wrong, but to do so in a public forum.

Angelenos will probably pay, over time, $400 million for the loss of the Convention Center services it won't be able to use - all so that an NFL Owner can fill his pockets with NFL Revenues and walk out the door with them.

And we already know that not one penny of the $700 mil will compensate Angelenos for that.


Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 3, 2011 02:18 PM

Bill;

The billionaire developer will not roll over for the billionaire team owner as easily as the (near bankrupt) city and state will.

The difference in LA is that there is a private concern building the stadium (albeit with a healthy does of public money for associated projects). It's still splitting the pie, no matter how mistrustful one might be of the team owner, Roski or the current favourite AEG.

Add to that the fact that any team moving in is going to have to pay the league to move to LA, and suddenly the new cashflow from the larger centre doesn't seem so lucrative. From the league's perspective, LA can no longer be used as a lever once a team (or two) moves there... so there is a "cost" to filling that market as well as a benefit.

Posted by John Bladen on September 3, 2011 05:00 PM

Sorry for the double post everyone, no idea how it happened as I just logged back on now (maybe a cache thing?).

Anyway... Bill, I can't argue with your 'belief' that the moving team would not pay. You are of course free to believe what you want. However, the NFL does have a history (and a formula for calculating relative market values) of charging teams a fee based on the value of the old vs new market (see Raiders II).

I don't think anyone outside of the league office actually knows how much money they make out of LA right now (including ad revenues, direct tv subs - no blackouts of course, stadium extortion in other markets leveraged by the LA "vacuum", merchandise and other factors). It's very hard for me to see the league giving that up and not requiring any payment in exchange.

As with the idea that the NBA will warmly welcome a third team into the LA basin, it would only do so if it believes there are presently "non fans" who can be converted by having a(nother) team in the area. If it can't add new fans, then the league would simply be cannibalizing it's existing fan base to benefit a single owner.

I don't believe the NFL has lost even $1 in ad revenue by not having a team in the nation's second largest media market. Do you?

Posted by John Bladen on September 3, 2011 05:10 PM

"I don't believe the NFL has lost even $1 in ad revenue by not having a team in the nation's second largest media market. Do you?"

I most certainly do believe that they HAVE, because of the lost opportunity of being in precisely that market.

Another consideration is that broadcast royalties are equally shared by the 32 NFL teams. If I'm the owner of the Pats or the 'Skins, it is not in my interest to obstruct the Jaguars or the Titans if they're considering a deal with AEG. That rising tide of dough from Fox/ESPN/CBS/NBC is a tide that lifts all of their billion-dollar yachts.

The NBA doesn't apply here, and no NFL team is cannibalizing anything.

It's real simple: Tell us where the $700 million is GOING, not where it's coming FROM.

But of this, I am certain: The entire $700 million is certainly NOT being used 100% to give Angelenos a stadium.


Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 3, 2011 06:19 PM

I think that the NFL certainly *thinks* that it's losing money by not having a team in LA. Otherwise it never would have approved the G-3 loan fund, which was originally intended to keep teams in big markets.

As for where the $700 million is going, that's an unanswerable question, ultimately. If AEG uses part of it to lure a team that will then pay sizeable rent that will be used toward stadium costs, is that any different than AEG using it all on the stadium and charging less rent to a team?

This reminds me of the days of the Congressional ban on funding the Nicaraguan contras, when the Reagan Administration swore that no U.S. money was going to their military operations - it was just that U.S. money was going to their political arm, which then freed up other cash for military uses. (This was before we learned that Ollie North was gun-running to get them funds.) All money is fungible.

Posted by Neil deMause on September 3, 2011 07:20 PM

Ah, I recall those good old days of the freedom fighters blowing up hospitals for democracy well...

The main point not to lose sight of is that any self respecting NFL owner believes it's his divine right to "put it" to the city unfortunate to be his host. Deals owners extract get compared between themselves like tricked out cars between teenage boys. Bill is rightly skeptical about the builders/owners willingness to share a supposed naming rights windfall with the host city.

Posted by santa clara jay on September 3, 2011 08:21 PM

I don't think anyone is talking about sharing the naming rights money with the host city. AEG is collecting the Farmers money and AEG is building the stadium, so it's just a question of giving the money to an NFL team or keeping it.

Posted by Neil deMause on September 3, 2011 09:10 PM

"...so it's just a question of giving the money to an NFL team or keeping it."

Thank you, Neil.


Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 3, 2011 09:37 PM

Of AEG giving the money to an NFL team or keeping it, I mean. The city of Los Angeles doesn't enter into this at all - you could argue that it should get a cut of naming-rights money since it's putting up a sizable chunk of the construction costs, but that's not the deal on the table now.

Posted by Neil deMause on September 3, 2011 10:32 PM

I agree, Neil - the City of L.A. isn't a party to what AEG concludes with [pick one: | Raiders | Jaguars | Titans | Rams ].

Los Angeles is only there to operate the stadium for the NFL team that AEG persuades to move in, and to do that at a loss year after year.

In other words, The L.A. deal is shaping up to be like Santa Clara's.


Bests,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 3, 2011 11:48 PM

The difference with the LA "deal" (such as it is) is that there are two pigs at the trough.

That is why many of us aren't convinced that LA is "next" - because the team relocating isn't free to take all profit while pushing all costs onto the host city. For one thing, the stadium will be effectively owned/controlled by the developer, not the team owner.

Unlike other situations, the team moving in will be dealing with AEG (or perhaps Roski). Neither party is going to be willing to build a stadium and pass on all economic benefit to a team owner.


Bill: Can you point to anything in the NFL's tv deals that suggests putting a team in LA would lead to a renegotiation of the TV or advertising rates (for their own broadcasts)?

The NFL may believe they are losing money (or at least losing an earning opportunity) by not having a team in Los Angeles. That doesn't make it so.

The 'wide open' market of LA has been very profitable for the league in the stadium extortion game. If they fill that market, I doubt other cities will feel a vacant Jacksonville market, for example, poses a legitimate (much less equal) threat.

Posted by John Bladen on September 4, 2011 03:32 PM

Well put JB.

Take a look at the Sprint Center in Kansas City - it's the white elephant that scares most civic governments when it comes to arena financing. They know if they host a mid-market team that KC could possibly be a suitable substitution leaving a real threat for councillors.

The one loose thread I can see in your argument is that an LA stadium might constitute two stadiums since LA can probably support two teams. Get one team to move into there with the threat that a second team is welcome and it could be the scare into scores of other cities with stadium "issues" to pony up the cash to keep their teams happy with new stadiums - happily built and managed by AEG.

Posted by Andrew T on September 4, 2011 06:15 PM

John, if you're claiming that AEG and some NFL team are the two pigs, agreed.

However, NFL teams *ARE* absolutely free to take out all of the profits, in the form of NFL Revenues. If you analyze any stadium deal in this country, virtually none commits any NFL team to share what the League calls "NFL revenues." The teams do, in fact, keep nearly all of that money for themselves.

Again, the NFL comes out ahead if they are in that L.A. television market, and for the exact reasons I cited in my earlier comment.

If your 'belief' is that the NFL is going to penalize the very NFL team that signs up to deliver that extra broadcast revenue, then you'll need to cite your sources.

And if you're claiming that the NFL *wouldn't* renegotiate that very broadcast royalty agreement - then you've taken away a big reason even to have an NFL team in Los Angeles.

If that's what you're claiming: I'd say that AEG is in big trouble.

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 4, 2011 06:42 PM

I highly doubt AEG would be doing this or would have gone this far if there wasn't a profit in it for them!

Posted by bottomline on September 5, 2011 01:16 PM

There most certainly is a profit in it for AEG - but they only get it with an NFL team in place. AEG certainly would not be blowing all this money on a concert venue.

They're not going to get there if they don't have a really sweet package to offer an **NFL team** - and very possibly one which can be shared with the NFL itself.

(There will be even more of a profit for AEG if the city of Los Angeles can get euchred into taking ownership of the stadium and operating it for AEG and for the team. It's a cinch that no NFL team is going take on stadium operating losses.)

That's why I'm convinced that a huge chunk of the naming rights dough will go to into the pockets of an NFL team, and not necessarily towards stadium construction.


Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 5, 2011 02:27 PM

Regardless, any way u slice the pie, there will be a profit! Furthermore, it is my personal opinion that there is already a deal in place with an NFL team(chargers)! We wouldn't be this far down the road if there wasn't!

Posted by bottomline on September 5, 2011 03:13 PM

You should be far more concerned about who gets that profit, because it most certainly is not going to be the city of Los Angeles.

If I recall from the other thread on just this topic, you're among the stadium boosters who advocate Los Angeles tearing down a portion of their own Convention Center after issuing between $200 million and $300 million in bonded debt to do so - all so that AEG and an NFL team can take out all of the profits year after year.

AEG refuses to make up even a penny of the city's losses from that Convention Center rubble.

The L.A. deal's good only for the team and for AEG.

It's no good at all for L.A.

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 5, 2011 06:11 PM

U recall correctly, I was/am a proponent of this particular development. However, contrary to popular belief, I am not in favor of corporate welfare or anything of the kind. What I am in favor of is continual development & improvements in our cities(thru private/public investments) throughout our state and stop creating obstacles for private companies to do business in our state! Businesses r leaving California in droves due to the complexities of doing business here, not to mention our unemployment rate!

Posted by bottomline on September 5, 2011 06:39 PM

If you do not like corporate welfare: Why do you support Los Angeles issuing bonds for the demolition of portions of a convention center...

...only for the benefit of an NFL football team?

Remember: Year after year, only AEG and some NFL team will take profits out of that facility.

That makes the demolition of the Convention Center - and the bonds that Angelenos must pay off over 20 to 30 years - nothing more than a public subsidy which benefits two private corporations.

As for your claims about job creation, those are easy to demolish - stadium jobs pay easily less than $10,000 a year. That casual employment averages only about 8 hours a week per year.

NFL stadiums don't drive economic progress. Claims to the contrary are sheer myth.

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 5, 2011 06:51 PM

First of all, the stadium wouldnt be built only for football! Secondly, assuming everything u say is true & on point, again i ask u mr treasurer, what/how do u propose going about improving/expanding our convention center??! Or any other city-owned facility for that matter that's in dire need of upgrading??!

Posted by bottomline on September 5, 2011 07:00 PM

You certainly do NOT do that by putting the city of Los Angeles even further into debt with projects which benefit only two private corporations and not the city or any of its residents.

In other words, 'bottomline,' you actually read the bottom line. You reject corporate welfare when you find it.

And the Los Angeles stadium deal is exactly that corporate welfare - generating substandard jobs, miniscule economic activity, and virtually no benefit to Angelenos other than bragging rights.

AEG and the NFL take it all.

Los Angeles and Angelenos get nothing. It's that simple.

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 5, 2011 07:14 PM

U r absolutely correct mr treasurer! So, for the last time, how do u propose going about improving /expanding our convention center(or any other city-owned facility in need of repair)??! U have been quite eloquent & clear about how terrible this project is but as of now, I havent heard anything from u in regards to remedying the situation?! Please, feel free.......

Posted by bottomline on September 5, 2011 07:53 PM

"how do u propose going about improving /expanding our convention center"

Ummm, maybe by not tearing it down to begin with?

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 5, 2011 08:02 PM

Typical political answer from a typical politician. U know as well as i do that is no solution at all.... Feel free to offer a real solution to the problem.

Posted by bottomline on September 5, 2011 09:12 PM

Maybe the city can pay to have the convention center bombed and then issue bonds to rebuild a new better one.

Posted by santa clara jay on September 5, 2011 09:30 PM

Maybe the city can pay to have the convention center bombed and then issue bonds to rebuild a new better one.

Posted by santa clara jay on September 5, 2011 09:31 PM

"Feel free to offer a real solution to the problem."

My answer was the real solution: If you don't want to lose the Convention Center business you have, then don't tear down the Convention Center you have.

The problem is yours, Bottomline.

It's up to you to fix your problem.

Not me.

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 5, 2011 09:45 PM

That is precisely where yur wrong mr treasurer! I do not own the convention center, it is city-owned, which means the problem is "ours"! Hence, it is incumbent upon us to find a solution to the problem. Criticizing & condemning possible positive proposals is no way to resolving anything! But then again, I don't expect u to understand that....

Posted by bottomline on September 5, 2011 10:47 PM

But you're the L.A. resident that just got through telling us that it was OK to tear down part of that same Convention Center...

...so that you could give corporate welfare to AEG and to some NFL team.

The problem is indeed your own, and not mine.

And you just managed to prove that you have no solution for it.

Other than corporate welfare.

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 5, 2011 10:52 PM

Finally, there's a reason y so many businesses r leaving California! U, being a treasurer, ought to know better than I as to y that is.... Obviously, the people in charge r not doing their job! It doesn't take a rocket scientist to figure that out....

Posted by bottomline on September 5, 2011 10:59 PM

Those business leaders are leaving California precisely because of the public policies you just got through advocating: Giving corporate welfare to sports teams, spending public coffers dry, and then attempting to bleed the job creation done by medium-scale employers in order to pay the bills.

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Again: Your Los Angeles stadium subsidy is no solution for the problem you claim. You shouldn't need a rocket scientist to explain that concept.
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When you have a stadium plan that doesn't rip off Los Angeles and its residents, let's hear your solution.

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 5, 2011 11:05 PM

Believe it or not, structures need maintenance & upgrading in order to continue to be viable & safe! When that time comes around & a city-owned building needs to be upgraded or expanded, who do u suggest should pay for it mr treasurer??! Stop being coy & evasive and try answering the question! Condemning & criticizing projects is no solution & u know that. So, let's hear it..........

Posted by bottomline on September 5, 2011 11:11 PM

Hmmm. Tear down a structure that your city can barely afford to rebuild?

What on earth does that have to do with building maintenance?

And you still have not answered the basic question: How does your Los Angeles stadium subsidy help L.A. or its residents?

Jobs that pay less than $10K a year?

All of the profits going into the pockets of AEG and an NFL team?

You asked how to increase Convention Center business. I said, 'how about leaving that same Convention Center wing standing instead of demolishing it?'

Looks like your stadium subsidy scheme doesn't work.

If you think you can salvage it - and prove that it in any way benefits Los Angeles residents - I'm all ears.


Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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Posted by Bill Bailey on September 5, 2011 11:23 PM

Have u been to the L.A Sports Arena lately mr treasurer?! That is a prime example of what happens to a structure when left unattended and bascially letting it go to waste. It is completely obsolete & it has become a civic-eyesore!! Most of our beloved politicians r hoping that if enough time goes by we can eventually proclaim it a landmark just like the L.A Coliseum! If that is what u r insinuating we continue to do, thanks but no thanks!

Posted by bottomline on September 5, 2011 11:35 PM

Have u been to the L.A Sports Arena lately mr treasurer?! That is a prime example of what happens to a structure when left unattended and bascially letting it go to waste. It is completely obsolete & it has become a civic-eyesore!! Most of our beloved politicians r hoping that if enough time goes by we can eventually proclaim it a landmark just like the L.A Coliseum! If that is what u r insinuating we continue to do, thanks but no thanks!

Posted by bottomline on September 5, 2011 11:35 PM

How does your NFL stadium subsidy give you a single penny for any of that maintenance?

You just got through admitting that it was OK for Los Angeles to service ten to twenty years of bonds associated with the Convention Center wing demolition.

If you're paying off those debts - you're not paying for the maintenance of just those buildings you claim you're trying to preserve.

Your plan doesn't work. It isn't my job to fix it.

That's your job.


Posted by Bill Bailey on September 5, 2011 11:49 PM

Lets be clear on something mr treasurer, there is no subsidy for the stadium! The subsidy would be used to tear down, rebuild & update the existing west-wing of the convention center, which is city-owned! It would cost $1.2billion to build the stadium.... Now, if my plan doesnt work, what is your plan??!

Posted by bottomline on September 6, 2011 12:19 AM

Yes, there IS a subsidy for the stadium.

AEG expects Los Angeles to foot the bill for the demolition of the Convention Center's West Wing, and to eat the losses caused by that lack of Convention Center Business.

Cost? The face amount and debt service on up to $250 million in bonds.

That IS a subsidy.

Your plan doesn't work.


Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

-=0=-

Posted by Bill Bailey on September 6, 2011 12:23 AM

Finally, if it isnt yur job to fix it, can u enlighten us & tell us what exactly is yur job??!

Posted by bottomline on September 6, 2011 12:24 AM

Again: Your faulty proposal, your problem.

I'm not responsible your problem.

You fix it.

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

-=0=-

Posted by Bill Bailey on September 6, 2011 12:26 AM

Wow, incredible........

Posted by bottomline on September 6, 2011 12:34 AM

Typical political rhetoric at its finest! "Its not my problem, its yours"! But it is yur job to criticize & condemn, huh??! Keep it up, yur doing a great job!

Posted by bottomline on September 6, 2011 12:39 AM

Let me recap your own argument for you, Bottomline:

"We're going to have Los Angeles blow probably $400,000,000 over time to demolish a convention center wing it clearly should not be tearing down...

...all so that an entertainment company and an NFL team can suck hundreds of millions of dollars out of a stadium we're subsidizing with that demolition debt...

...and THEN, we're going to whine and weep bitter tears that we have no public money left to maintain our arena or any of our other public buildings."

Logic like that is pretty much why we're now in the soup we are in - deluding ourselves that NFL stadiums are economic generators when they simply are not.

Again, your problem.

You fix it.

Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

-=0=-

Posted by Bill Bailey on September 6, 2011 12:39 AM

Typical political rhetoric at its finest! "Its not my problem, its yours"! But it is yur job to criticize & condemn, huh??! Keep it up, yur doing a great job!

Posted by bottomline on September 6, 2011 12:40 AM

It's not "rhetoric," Bottomline - it's reality. I've giving you exactly what you've given us all here.

Your scheme doesn't work, and it does not help the people of Los Angeles.

So: What you are going to do to fix your faulty stadium subsidy scheme?


Bests,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

-=0=-

Posted by Bill Bailey on September 6, 2011 12:43 AM

I'm going to go out on a limb and guess that bottomline is a big football fan.

Our former assistant city manager, Ron Garrett, said that the rarity of NFL stadiums meant that you couldn't use normal considerations like "does this make economic sense [for the city]" when evaluating a proposal. (Mr. Garrett now has retired and double dips as a stadium consultant for Santa Clara).

I think we're at the point here where one party needs to say that the intangibles of having an NFL team outweigh other considerations. (Which I think you can argue if you really, really like pro-football.)

Posted by santa clara jay on September 6, 2011 12:45 AM

Can u finalize by atleast telling us what yur job is mr treasurer?! Other than condemning & criticizing future proposals.

Posted by bottomline on September 6, 2011 12:46 AM

Your faulty idea is your problem.

Not mine.


Bests,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

-=0=-

Posted by Bill Bailey on September 6, 2011 12:47 AM

Reality??!! The shovel isnt expected to hit dirt until june of next year(at the earliest) & yur calling it a reality??!! Mr treasurer, nothing has happened yet, NOTHING! In fact, many things can still go wrong & u will get exactly what yur spewing! Now, for the last time, can u tell us what exactly yur job entails mr treasurer? Other than sabotaging future projects in yur area.

Posted by bottomline on September 6, 2011 12:55 AM

Have u done anything constructive/positive lately?! My guess is "NO".

Posted by bottomline on September 6, 2011 12:57 AM

Bottomline, it does not matter to me when or if a shovel ever turns on a subsidized stadium in your city.

What matters to me is the faultiness of your argument.

And not once have you been able to justify a thing you've stated here.

Again: What are you doing to fix your proposal for a massive subsidy for AEG that benefits not one single Los Angeles resident?


Bests,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

-=0=-

Posted by Bill Bailey on September 6, 2011 12:59 AM

Santa Clara Jay raises a really good point about intangibles.

This is where arguments such as Bottomline's fall apart: Everybody wants the bragging rights of an NFL stadium, but nobody wants to pay for it.

First comes the denial: Saying that it's OK to tear down an entire convention center wing, but at the same time, claiming that the quarter of billion dollars, **in face amount alone**, isn't real money. It IS real money.

Then comes the rationalization: Say that it's OK for a multi-billon dollar entertainment combine and the NFL team with whom they partner to take all of the profits out of that subsidized stadium year and year and leave Los Angeles residents with menial job creation and absolutely none of the proceeds.

Finally, there's the incredible whining that our infrastructure is broken, there's no money to maintain the local arena because we have to service the "demolition debt" for what used to be where the new stadium is not.

The problem is that taxpayers who think that way vote that way.

Is it any surprise that not one single NFL stadium earns more than a few pennies for their host cities - and that in fact cities like Indianapolis and Cincinnati are going broke because their NFL teams take all of the money and they're left with none?

Supporters of subsidized stadiums are trading tangible dollars for intangible benefits.

And that's the real problem.


Bests,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

-=0=-

Posted by Bill Bailey on September 6, 2011 01:03 AM

Bottomline,

To give you an example of why your stadium subsidies don't work, consider some real numbers from right here in Santa Clara.

Stadium Boosters here like to brag about "job creation" - but when you pin them down, not one person among them can point to a single decent job. Here's the reality:

The city's own consultants have been telling us for over four years that the best payroll you'll ever see from a subsidized NFL stadium in Santa Clara is a miserable $17 million a year. One single technology business a block away from the stadium site will pay it's people twenty to thirty times that.

But wait, we're not done yet.

In one of their slick "Yes on J" brochures last May, the 49ers themselves finally admitted that the number of game day jobs was about 2,600.

Meaning that the average stadium worker will probably get about $6,540 dollars a year. And that's all.

The reason those stadium workers will get less than $7,000 a year is that they're going to average about eight hours per week year round. And that's all.

Now get this: The San Francisco 49ers plan to contribute only 15-25% of the development costs of a ONE-BILLION-DOLLAR stadium - less than the amount they "estimated" when they were demanding our votes on Measure J last May and June.

The rest?

Let's be conservative - just about $500,000,000 will have to raised by the Santa Clara Stadium Authority to subsidize the 49ers.

=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
All so that 2,600 people can earn less than $7,000 a year.
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=

Bottomline, if you want to know exactly why your stadium subsidies don't work - just do those numbers.

You can apply them to some subsidized stadium in Los Angeles - but I'd be willing to bet that you won't do much better than stadium workers will up here.

Bests,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

-=0=-

Posted by Bill Bailey on September 6, 2011 01:20 AM

I would greatly appreciate it if u would make up yur mind one way or the other. First u say, and I quote "its not my problem, its yours", then u go on to say "what matters to me is the faultiness of your argument"! That mr treasurer, is a contradiction in terms! For arguments sake, y does the faultiness of my argument matter to u if its not yur problem?! Its mine, remember?! U, sir, r a walking, talking contradiction who has nothing better to do but to criticize & slam future potential proposals. As hard as it may be for u, try and have a nice day tomorrow.....

Posted by bottomline on September 6, 2011 01:28 AM

There's nothing contradictory in that at all.

Your stadium subsidy is not my problem. It is your problem.

And the arguments you are using to justify your stadium subsidy are as faulty here at the bottom of this thread as they were at the top.

Again: What are you doing to fix your defective argument? It's obvious that it doesn't work, and that it is not logical.

Do the numbers, Bottomline - prove to us that it "works."

I've already proven that it doesn't.


Bests,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

-=0=-

Posted by Bill Bailey on September 6, 2011 01:35 AM

I think this stopped being productive about 30 comments ago.

Please go get a room, you two, or I'll have to close comments on this thread.

Posted by Neil deMause on September 6, 2011 08:38 AM

bottomline,

I happen to be in favor of stadium subsidies in many - if not most - cases, but please avoid talking about the LA Sports Arena. That's a perfect example of why publicly funded arenas are risky. If pols are negligent and the upkeep lags, you eventually are stuck with an eyesore.

One other general note is that I see people bashing KC'a Sprint Center all the time, but when I was in KC last year for work I asked every sports fan I met and they all loved it. They loved getting the Big 12 bball tournament and having a nice local venue for concerts. They could've cared less that the taxes on my rental car an hotel stay were Dallas-esque.

Posted by Ben Miller on September 6, 2011 08:44 AM

What's even more galling about the Chargers is that in order to get their stadium built, they want to do something that would do significant economic damage to the city. They want to tie the expansion of the convention center -- which is a money maker for the city -- into the stadium.

So on top of the $1.3 billion we San Diegans would be asked to pay to build the Spanos monument to corporate welfare, we would be asked to scuttle something that would generate lots of revenue and create jobs for the city.

The convention center brings around a billion and a half in revenue to the city and is responsible for 12,000 jobs. For Spanos to push for his monument to corporate welfare and scuttle the expansion of this economic engine is disgusting.

Posted by Tony on September 21, 2011 12:08 AM

They'll tell you that it's way too early to talk about it, but please ask and ask often about stadium operations as well as about the construction costs.

You may want to prepare yourself: No developer is going to take on NFL stadium operations costing $20 million to $30 million a year, because no one makes any money running an NFL stadium. Only NFL TEAMS make money.

I'm betting that Spanos needs the Convention Center so that he can shove money-losing stadium operations onto you San Diegan taxpayers - and so that the team can keep all of that lovely NFL lucre in their own pockets.

L.A. Story: When the issue of the loss of LA Conv. Ctr. revenues during stadium construction for AEG was raised, AEG's response was, "Not our problem."

--- Meaning that L.A. floats up to $300 million in taxpayer bonds just to demolish the old wing of the CC, THEN loses that CC revenue while the stadium is being built. When they're done, the NFL team that moves in and AEG will be taking virtually every last penny out of the stadium, leaving crumbs for Angelenos, who will be paying off scores of millions of dollars in interest on top of the original $300 million.

Search this blog for "AEG," as Neil has covered it extensively.

Santa Clara: The San Francisco 49ers will make up NO stadium operating losses, even though they are virtually the only ones who benefit from the "deal." Not only is the Santa Clara Stadium Authority a repository for debt paper that the team won't pay off itself, the Stadium Authority will operate the stadium very likely at a loss for as long as the 49ers can squeeze us to death. That's at least until the year 2053.

That doesn't even include the $500,000,000 that the Stadium Authority must raise simply to *build* the stadium.

In your neighborhood, you'll probably get a bit more of the true story from the Voice of San Diego than you will from the Union-Tribune:

voiceofsandiego.org/government/thehall/article_2c74c9f6-be26-11e0-ad88-001cc4c002e0.html

But you'll still probably end up digging up much of the truth on your own by asking the hard questions at your City Hall and in your City Council meetings.

At the end of the day, you're still entitled to know exactly what Mr. Spanos and the Chargers front office have in mind for you.

Good luck to you,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

-=0=-
It's about the money - it's never about the football:

forbes.com/lists/2010/30/football-valuations-10_San-Diego-Chargers_308205.html

Posted by Bill Bailey on September 25, 2011 04:05 PM

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