Someone in Seattle has been talking to the Maloofs since at least June of 2010.

Here's how I look at it: If Sacramento succeeds in leasing out its parking (which is a terrible idea, by the way; for $200M, some company will make over $2B over the next 50 years, to finance an arena that won't last 30 years -- simply selling bonds would be much cheaper, and would leave that parking revenue stream intact), it means the Maloofs, the NBA and the arena operator (probably AEG) still need to come up with around $300M (I doubt the parking lease-out will net Sacramento more than $200M).

If the Maloofs, the NBA and the arena operator can move from Sacramento to Seattle, which is a top 10 media market, for less than that $300M, I can think of no reason they wouldn't do that.

Sacramento, the ball's in your court. You are at a competitive disadvantage now (as you are also in Anaheim, too). What now?

I wonder if some of this isn't to light a fire under Anaheim, too. Maybe Samueli's loan to the Maloofs will increase in size now?

Between the Hornets, Kings, Sacramento, Anaheim, New Orleans and Seattle, we will have moves this summer.

And I still say this parking lease-out makes no sense. It strikes me as being the most expensive way possible to raise $200M. The estimates are that parking revenues over the next 50 years will be around $2.5B. Granted, that's not the present value; it factors in inflation.

But why would you do that when the payments on $200M in bonds would be about $600M over 30 years?

$2.5B over 50 years, vs $600M over 30 years.

I just can't see why anyone would take the 50 year option.

The Coyotes already play in a free arena, so presumably it will take something 'better than free' to induce a move to Seattle. Taxpayer subsidies are the only thing keeping the Coyotes in Glendale, so you gotta figure it will take even better subsidies to justify a move.

Although it could work out well for at least one city, even if the local politicos don't agree: Glendale could rid itself of the $25 million annual Danegeld it pays the NHL.

Right now, Dave, the City is effectively paying the Coyotes $25m annually to play in the arena, so it's a great deal better than "free".

I don't expect that practice to continue long term, but then, I never expected any city to be stupid enough to pay $25m a year toward the losses of a team that generates less than $20m a year in TOTAL GATE REVENUE, so I may not be the best judge of what dimwitted and shameless media whoring city councils will do...

Yeah, despite the sweetheart deal I don't think the NHL will keep them in Phoenix (Glendale) long if they can't find local ownership willing to play in that arena they built in the absolute worst place possible.

I would suggest buying a camera and filming that documentary that I suggested, NOW, lol.

Before I do it!

Neil, I bet there's a chapter that covers this in your book, too:

blogs.sacbee.com/city-beat/2012/02/sacramento-arena-talks-expected-to-heat-up.html

(RE Graswich, who for years was dead-set against any kind of ESC/Sports funding, now works for the Mayor... And has completely changed his mind on this.)

By the way, those talks BETTER be heating up. We're supposed to have a rough idea of the funding picture by February 14.

Aren't we forgetting one of the biggest ways teams make money? The TV deals! The opportunity to have a television deal in the next couple years with the Mariners would be very big! We are a large media market and we can support 4 major league teams. I can't help but think of Comcast having a local station that covers all of our teams. $$$$ Not to mention the benefits with the local economy in construction costs, new restaurants, apartments, bars, etc.. I think this city could truly benefit in many ways but building a new arena and bringing in the NBA and maybe even the NHL.

Aren't we forgetting one of the biggest ways teams make money? The TV deals! The opportunity to have a television deal in the next couple years with the Mariners would be very big! We are a large media market and we can support 4 major league teams. I can't help but think of Comcast having a local station that covers all of our teams. $$$$ Not to mention the benefits with the local economy in construction costs, new restaurants, apartments, bars, etc.. I think this city could truly benefit in many ways but building a new arena and bringing in the NBA and maybe even the NHL.

@heather, LOL.

It's entertainment money. Just like restaurant money, if people didn't spend their money there, they'd spend it somewhere else in the community. It doesn't create new jobs that pay good living wages. Get real. You probably saw that stupid ad that Goldman Sachs ran promoting Louisville's new arena. What a joke.

Sacramento City Council rejected a June vote last night, but the vote was a surprisingly close 5-4. Also, many Council members are showing signs of rejecting a 50 year lease term -- they want a 30 year deal, which would greatly reduce the revenues from the deal.

Seattle is still in the running, I think.

Roger, you're citing the substitution effect, which contradicts supply side economics (and thus makes no sense). If you follow the logic of the substitution effect to its end, then economic growth is impossible. Though that hasn't kept lots of smart people with fancy degrees from using it anyway.

On the city of Glendale, it's obvious that tenants of Westgare have been promised 50+ dates for sporting events. If losing 40 of those dates would allow tenants to void their leases and cause hundreds of millions of dollars of economic damage to the city, then the subsidy may make sense. Haven't any of you people seen "Roger & Me"?

"which contradicts supply side economics (and thus makes no sense)."

Which of Murphy's Laws is it that "evidence which does not conform to the theory must be disposed of"?

In any event, the substitution effect is not 100% for all cases, and I don't know any economist who says it is. In particular, if you draw a circle small enough, you can avoid substitution - which is another way of saying that if your goal is to get people to spent their money on this side of the street instead of that side of the street, subsidizing development on this side of the street will work fine. But it won't do much to boost spending in your city overall, or in your state.

There is tons of evidence at this point that when a new sports facility is built, it barely pushes the needle on how much money people are willing to spend on entertainment overall, so people end up cutting back elsewhere. There are probably industries where this isn't the case - I'd be willing to bet the rise of smartphones got people spending more of their income, not that that's necessarily a good thing - but for sports and concerts, it's much closer to a zero-sum game. Or as Allen Sanderson likes to say, "take the economic claims and move the decimal point over one place, and you're probably pretty close."

Neil,

Yes, I should have worded that differently. Supply side in and of itself does not prove or disprove something.

I think we generally agree that some spending on a local sports team is displacing other entertainment spending in a given locality, but we differ on how much of an impact sports facilities have. I believe that a heck of a lot of money that gets spent on tickets, concessions, sports bars, merchandise, etc. for a local sports team is careless money. I think in a lot of cases people either work more because they've already spent on credit or they work more in anticipation of wanting to spend. In either of those cases the end result is more productivity, which I think we would agree is the true engine of economic growth.

"In either of those cases the end result is more productivity, which I think we would agree is the true engine of economic growth."

But having a government entity subsidize businesses that are looking to grab some of that "careless money" is about as anti-supply-side as you can get.

"In particular, if you draw a circle small enough, you can avoid substitution..."

We'd all be better off if we drew that circle to cover the whole country.

No, clearly what I think Ben is arguing for is the "drunk sailor" economic model...