Friday roundup: Zombie apocalypse in full effect, go and get a late pass

So as you all undoubtedly know by now, everything is shut down. The NBA is shut down for at least 30 days, the NHL is shut down indefinitely, MLB has canceled the first two weeks of the season, MLS is on hold for a month, this summer’s Euro 2020 tournament may be moved to 2021 so maybe the Champions League and Europa League can finish up in June and July, the XFL is shut down maybe for good, and even the Little League is on hold until April 6. And all those dates are just minimum wild-ass guesses: New York Mayor Bill de Blasio, a calming voice of reassurance as ever, said yesterday that this “could easily be a six-month crisis” — and even if you dismiss him as just a guy who gets his every stray thought printed in the newspaper because he’s an elected official, as I wrote yesterday for FAIR, it’s still very much true that nobody really knows how long this will last, or how to decide (or who will decide) that the curve has been effectively flattened and life can go back to normal(ish) now.

So instead of dwelling on that, let’s dwell instead on another aspect of plagueworld that overlaps somewhat with the mission of this site: the economic impacts of shutting stuff down. I’m sure somebody out there is thinking, “But Neil, you always say that economists say it doesn’t matter much to the economy whether one sporting event or another is played, because people will just spend their money on something else like going out to eat or to a bowling alley instead. So why won’t the substitution effect save us now?”

I am, as I have to take pains to remind journalist quoting me from time to time, not an economist, but I think I can explain this one well enough: There’s a huge difference between one sports team or league shutting down and everything shutting down. Once everyone has completed their panic-shopping therapy and stocked up on a lifetime supply of toilet paper, they’re mostly not going to be looking for other things to spend money on — they’re going to sit at home and watch the Netflix subscriptions that they already paid for. And meanwhile a bunch of them are going to be out of work, and still more will be out of work once restaurants and barber shops and the like have to close for lack of business, and that will mean even less business, and soon enough the entire economy has shut down in a cycle of fear.

I was lucky to get a first-hand example of this in high school, when my U.S. History teacher had each of her classes play a game where each student was one player in late-19th-century frontier society, either a farmer or a railroad company owner or a banker or I forget what else. This made for lots of fun experience with the consequences of unregulated capitalism — I remember one friend of mine contracted to make a loan to another friend, and set the interest rate but not the term of the loan, and our teacher refused to step in and rule on when it had to be paid back because a contract is a contract — but in another class some friends of mine were in, it got even more severe: There was only one banker, and he refused to loan anyone any money at less than usurious rates, and the entire class plunged into an economic depression.

Anyway, there are lots of reasons this is going to be really bad in many, many ways, even if all these closures aren’t too late to avoid the old people being left to die in ERs that has reportedly been taking place in Lombardy. (I do not make a very good voice of calm, either, sorry.) But eventually this crisis will be over, and it’s still worth thinking about what the world will look like when we come out the other side. After all, with no sports to watch we’ve got plenty of time on our hands.

Not that everything being shut down has brought sports subsidy demands to a halt, because some things are just too big to fail:

Plague world news: If it hasn’t been canceled yet, it will be by the time you finish reading this

If you blinked and missed it: The NBA season has been suspended indefinitely after a player tested positive for the new coronavirus right after jokingly touching all the microphones lined up to interview him; the NCAA tournament will be played behind closed doors; Washington, D.C., and the entire state of California became the latest places to call for banning large gatherings (defined as more than 1,000 people and more than 250 people, respectively) as social distancing measures; and concerts large and small and TV productions and pretty much anything else you can think of are being shut down left and right. Oh, and the White House has banned flights from Europe (but only if you’re a European) even though the U.S. may well already have nearly as many infected people as Europe, and Spain’s soccer league is suspended for at least the next two weeks, and both the Champions League and Europa League could be suspended at any moment now after matches were canceled when teams’ planes weren’t allowed to land in cities they were scheduled to play in, and movie theaters could be next. No word yet on MLB and the NHL and MLS but it’s hard to see them continuing play when all of California is shut down and anyway I’m still typing this sentence so check Google again to see if anything has changed in the interim.

Not much more to say about this, really, except that one big unknown is how long the suspension of all mass public life in the U.S. will last, or even how anyone will decide that it’s over. (If the spread of cases slows over the next week or two — assuming there’s even enough tests available to tell how many cases there are — is that a sign that the crisis is on the wane, or that social distancing is working and should be continued?) And the jury is also still out on whether this will get people even more used to staying home and consuming culture (including sports) remotely, or create a pent-up demand to get out of the house that will make everyone rush out to go see sports and concerts and whatnot as soon as they’re allowed again. Oh, and how many people will die, that’s another big question.

Writing this site will continue unchanged, since it doesn’t require leaving the house under any circumstances, except inasmuch as everything is changed right now so the scope of news being reported may be a little weird. Bear with me, and I promise you some sweet new vaportecture as soon as any is available — so far as I know, there hasn’t been a ban yet on mass gatherings of clip-art entourage.

It’s looking like a miracle if U.S. sports doesn’t shut down for a while, and maybe it really should

I feel a little weird that this is turning into the daily Field of Microbes report, but that’s probably where everything is headed anyway within the next couple of weeks (if not sooner), so may as well learn to live with it.

In any event, things have changed so much in the last 48 hours that Monday’s prediction that we could see lots of sports played behind closed doors is starting to sound impossibly quaint. Among the latest developments:

Now, all this could be taken as a sign more of the spread of coronavirus fear than of the actual virus, and there’s some truth to that. However, it’s becoming increasingly clear that if anything, fear is just catching up to the reality: The number of actual infections is almost certainly many, many times the number of confirmed cases, especially in nations like the U.S. where testing has been sporadic at best and impossible to access at worst. And with social distancing measures that slow the spread of the disease the best proven bulwark against an overwhelmed medical system that would cause deaths to skyrocket — closing schools, theaters, and other public places saved St. Louis during the 1918 flu epidemic! — we’re moving very quickly from “maybe some games should be played behind closed doors” to “maybe we need to rethink all major public events until we’ve flattened the curve.”

For those struggling to keep up with the morass of media coverage on this issue — which has been great in places but also terrible in others because the media is currently understaffed, underexperienced, and more prone than ever to making reporting decisions based on clicks and whatever the rich guy who owns the one remaining local news outlet wants — I wrote an article yesterday for Fairness & Accuracy In Reporting on how to read the coronavirus news without scaring yourself too much (or too little). In the 24 hours since, some of it has already begun to seem out of date, but hopefully the rest will still be useful for the next couple of days, which is starting to feel like as far as we can look into the future with any certainty. Stay safe out there, and stay away from crowds as much as possible.

And here come the coronavirus sports cancellations

Santa Clara County has followed France’s lead (how often do you get to write that sentence?) and banned all public gatherings of over 1,000 people through April 1, which means that the San Jose Sharks must choose between playing their next three home games elsewhere or playing them before empty seats. The Indian Wells tennis tournament set to start tomorrow has been canceled. And while the major U.S. sports leagues seem dead set on continuing business as much as usual as possible during the mitigation phase of the new coronavirus outbreak — mostly banning media from locker rooms on the theory this will protect athletes from picking up germs from recording devices or something, though I’m pretty sure cellphones can’t cough — it seems likely that more locales are going to start banning large public events to reduce contact with infectious individuals and flatten the curve.

That’s going to leave sports leagues with some tough decisions to make. Unlike concerts, which can easily be rescheduled for a later date, with sports there’s a limited window in which to play games, meaning either: postponing a short slate of games and hoping the outbreak ends quickly enough that you make them up later, as Italy’s Serie A soccer league has done; playing games before empty stands, as Spain’s La Liga and the European Champions League are doing; or eliminating games from the schedule outright. That last option isn’t available if you’re talking about playoff games, clearly, and the NBA and NHL will be headed toward the postseason soon enough; the middle option costs tons of money in reimbursed ticket costs; and the first one requires either extending the season later (which could be possible for the NBA and NHL, though if summer concerts aren’t canceled they’re going to start running into venues that are already booked up) or compressing the season into fewer days, which will run into union contract issues.

It’s a bad situation, and I can see why U.S. sports leagues are hoping to kick the can down the road and hope things gets clearer in a hurry. The concern, of course, is that packing a whole lot of people, many of them sick but not yet symptomatic, into tight confines of a public space will make the contagion a whole lot worse in the interim. In any case, it seems more likely than ever that we’re heading toward a massive experiment with the “just make money off people watching at home” model I predicted back on — man, was it only yesterday? Life comes at you fast during a pandemic.

Montreal public oversight board on nouveaux-Expos stadium: You call that a plan?

Montreal’s public consultation office — an organization set up to oversee public input into city decisions independent of local elected officials — has declined to rule on plans for a new baseball stadium at Peel Basin, writing that “it would be irresponsible to decide on this project on the basis of the partial information available to it.” And Montreal Mayor Valérie Plante appears to agree:

Speaking to reporters after a press conference, Mayor Valérie Plante said the stadium’s promoters should pay heed to the OCPM’s recommendations and confirmed that Montrealers would be consulted if and when a definite proposal is submitted to the city.

“They should take that report and read it very carefully,” she said, noting that the consultations showed opinions are sharply divided over the proposed stadium.

“I think it would be positive for Montreal to have a baseball team back. I think it would be great … but then the question is about how will it be financed, where it will be located and how it will integrate with the territory,” she said.

The OCPM report added, “No plan, nor any study measuring economic, social and environmental impacts have been brought to the attention of the commission.”

This is obviously a setback for Stephen Bronfman’s plans for a new baseball stadium, either for a Tampontreal Ex-Rays shared franchise or for a straight-up expansion team, but a reasonable one, given that so far Bronfman has only revealed that the stadium and mixed-use development around it would cost $2.5 billion, with no details about how it would be paid for, what the federal government would get for its land that the project would be built on, or any other financial specifics. But it would also be “green”! People like green, right?

The OCPM also noted that the project is “very controversial,” with more than half of respondents in an “online consultation” opposed to a baseball stadium. Mayor Plante added (per Google Translate), “There is no plan, no outline, nothing. I did not see anything. I don’t have a tangible project, it’s very difficult for me to decide. We expect to see impact and financial studies.”

The report doesn’t appear to be translated into English yet, is too large for Google Translate, and I can only speak bad high school French, so any further analysis will need to await more reporting in the Googleable media. Bronfman issued a press statement yesterday saying only, “The Montreal Baseball Group (MBG) will carefully review the report and will have no further comment at this time.”

Okay fine, let’s talk about coronavirus and stadiums

Since all anyone wants to read about right now is the spread of coronavirus — technically “the new coronavirus” or “COVID-19” since lots of things are already coronaviruses, including many common colds, but the peorple have spoken and far be it from me to argue — let’s talk about this new impending pandemic, the global reaction, and what it could mean for sports and sports venues, in both the short and long runs.

In short, it’s a giant mess, with no clear directives from either government officials or disease experts, in part because nobody knows yet which measures for preventing spread will be most effective, and in part because people are panicky and prone to making decisions more on the basis of what they think will get them in the least trouble rather than what’s good science. It should all shake out more clearly in the next few weeks, but until then it’s likely to remain fairly chaotic and contradictory, in both the sports world and elsewhere.

The more long-term question, meanwhile, is whether virus fears will create lasting changes in how people think about watching sports. Already we’ve seen indications that many fans would rather sit at home and watch on their hi-def TVs than deal with increased ticket prices — which has encouraged teams to target their marketing even more on selling fewer tickets at higher prices to fans for whom money is no object. Will this new virus scare only further encourage people to just watch sporting events (and concerts) on livestreams, since watching things in person will suddenly be seen as a health risk? If, say, NBA or NHL playoff games have to be played in front of empty seats, will sports leagues begin rethinking how they make their money, with an eye toward a business model based even more on charging viewers at home? And if so, will we see even more sports teams demanding smaller stadiums or arenas with fewer, more lavish seats (and six feet in between them) to fit the new normal?

There are still many, many different ways this can go, both epidemiologically and in terms of fan and league behavior, so I’m not going to pretend to have an answer to any of these questions. (Except that sports team owners will surely choose whatever route they think will make them the most money, because that’s their one job.) It’ll all worth keeping an eye on, though, and not just if you, like me, have baseball tickets for later this month and are wondering if you’re going to get to use them. Hopefully by then more rational heads will have prevailed and there will be a clear path to keep everyone healthy while minimizing disruption — though nobody ever went broke wagering on “people will do the dumbest thing possible in order to cover their own personal butts,” so maybe best not to hope too hard.

Friday roundup: Dolphins owner seeks Formula One tax break, Tacoma okays soccer subsidies, plus vaportecture from around the globe!

Happy coronavirus panic week! What with stadiums in Europe being closed to fans and stadium workers in the U.S. testing positive for the virus, it’s tough to think of much right now other than what song to wash your hands to for 20 seconds (this is my personal preference). But long after we’re done with our self-quarantines, the consequences of sports venue spending will live on, so to the week’s news we go:

  • Miami Dolphins owner Stephen Ross is seeking a sales-tax exemption for tickets to Formula One racing events at his stadium, saying that without it, Miami might not get a Grand Prix. The tax break is expected to cost the state between $1.5 million and $2 million per event, but Formula One officials say each race would generate an economic impact of more than $400 million, and what possible reason would they have to lie about a thing like that?
  • The Tacoma city council voted 8-1 on Monday to approve spending on a $60 million, 5,000-seat stadium for the Reign F.C. women’s pro soccer team. According to a letter of intent approved by the council, the city will provide $15 million, while the city parks agency will provide $7.5 million more, with perhaps another $20 million to come from federal tax credits for investing in low-income communities. The parks body still has to vote on the plan on Monday as well; given that Metro Parks commissioner Aaron Pointer — who is also a former Houston Astro and a brother of the Pointer Sisters — said he doesn’t see “really any benefits at all” for the city or its parks, it’s fair to say that the vote there will be more contentious than the one in the city council.
  • Brett Johnson, the developer behind a proposed $400 million development in Pawtucket centered around a pro soccer stadium, says he has lots of investors eager to parks their capital gains in his project tax-free under the Trump administration’s Opportunity Zone program, but it might take a while to work out all the details because reasons. But, he added, “My confidence is very high,” and confidence is what it’s all about, right?
  • Nashville’s Save Our Fairgrounds has filed for a court injunction to stop work on a new Nashville S.C. stadium, on the grounds that no redevelopment of the state fairgrounds can take place without a public voter referendum. This brings the total number of lawsuits against the project to … umpteen? I’m gonna go with umpteen.
  • There’s now an official lawsuit against the Anaheim city council for voting on a Los Angeles Angels stadium land sale without sufficient public meetings. The People’s Homeless Task Force is charging that holding most of the sale talks in private violated the state’s Brown Act on transparency; the city’s lawyers responded that “there could be a myriad of reasons” why the council was able to vote on the sale at a single meeting in December despite never discussing it in public before that, though they didn’t suggest any specific reasons.
  • Wondering what vaportecture looks like outside of North America? Here’s an article on Watford F.C.‘s proposed new stadium, though if you aren’t an Athletic subscriber you’ll be stuck with just the one image, though given that it’s an image of Watford fans stumbling zombie-like into the stadium out of what appears to be an open field, really what more do you need?
  • There are some new renderings of the St. Louis MLS team‘s proposed stadium, and once again they mostly feature people crossing the street, not anything having to do with watching soccer. Are the clip art images of people throwing their hands in the air for no reason temporarily out of stock or something?
  • Here are photos of a 31-year-old arena being demolished, because America.
  • The Minnesota Vikings‘ four-year-old stadium needs $21 million in new paneling on its exterior, because the old paneling was leaking. At least the stadium’s construction contractors will be footing the bill, but it’s still an important reminder that “state of the art” isn’t necessarily better than “outmoded,” especially when it comes to new and unproven designs.
  • And speaking of COVID-19, here’s an article on how travel restrictions thanks to the new coronavirus will cost the European tourism industry more than $1 billion per month, without wondering what else Europeans (and erstwhile travelers to Europe from other continents) will do with the money they’re saving on plane tickets and hotel rooms. Where’s my article on how pandemics are a boost to the hand sanitizer and canned soup industries?

NYC F.C. Bronx stadium plans get muddier, could face long public approval process

The Urban Land Institute, a nonprofit that has consulted on other sports venue deals in the past, yesterday issued a report for Bronx Community Board 4 on the prospect of a new soccer stadium for NYC F.C. on the current site of city-owned parking garages being used by the New York Yankees, the soccer team’s part-owner. And while there’s nothing definitive in the report — both the city and NYC F.C. continue to say that no deal is in place, or imminent — it does make the case for ways in which a soccer stadium could be more beneficial to the surrounding neighborhood than the baseball stadium that was opened atop a former public park in 2009:

  • A new soccer stadium “could be the touchstone for enhanced community programming, the catalyst for improved pedestrian connections and walkable experiences, and the foundation upon which other community improvements may be built,” writes ULI. This seems to be a reference to the fact that a soccer stadium would require the neighborhood to be rezoned by the city — as confirmed in an article yesterday in the Commercial Observer — which ULI thinks could be an opportunity to add trees and more walkable sidewalks to the surrounding blocks, which could maybe happen, though the city doesn’t exactly have a long and glorious history of rezoning low-income neighborhoods in ways that benefit current residents.
  • The report further suggests that any soccer stadium plans take care (somehow) to meet the needs of local small business owners, noting that while Yankees-related retail outlets have opened around the baseball stadium, “these stores largely remain closed on the other 280+ days of the year when the Yankees are not playing. These closed storefronts leave the streetscape in a state of perceived desolation and interrupt what could otherwise be an active retail corridor.”

That Commercial Observer piece, meanwhile, sheds light (of a sort) on one important piece of the soccer stadium financial puzzle, which is how exactly NYC F.C. and its developer partners, Maddd Equities, would obtain the parking garage properties — and 153rd Street itself, which would be closed to make way for the stadium — from the city. While the New York Times reported last month that Maddd would pay $54 million for the land, the Commercial Observer cites the city Economic Development Corporation as saying that “the city will continue to own the land on which the garages and parking lots were developed, and the stadium development team will buy out the remainder of the 99-year leases for the garages” from the Bronx Parking Development Corporation, the nonprofit that was set up by the city to run parking for the Yankees and has since stiffed taxpayers and bondholders alike on expected payments. If the city continues to own the land, that would raise the possibility of Maddd getting to subsidize its proposed mixed-use development alongside the stadium by getting an exemption from property taxes — though it could also be asked to pay payments in lieu of taxes (PILOTs), though those have their own inglorious local history as well.

Reading tea leaves furiously, the mere fact of CB4 engaging ULI to find out what it can ask of a new soccer stadium indicates that the community board is eager to be more demanding than it was in 2005 when the Yankees came knocking for approval of their new home. (Though it’s worth noting that CB4 voted to oppose that plan, and the city summarily ignored them.) If the stadium becomes wrapped up in a larger rezoning effort, that would drag out the approval process by a year or more at minimum, especially in a climate where New York City neighborhoods and local officials are increasingly pushing back against rezonings that are seen as giveaways to developers, sometimes killing them outright. More on this story as it develops, but it looks like NYC F.C. fans should probably get used to attending home games at farflung sites for a while longer — while that’s no fun, nobody held a gun to MLS’s head and forced them to approve an expansion team without a guarantee of a stadium to play in, either.

Did Mark Davis really turn a 2900% profit on Raiders’ practice facility?

This story showed up late last week, but it was just too weird for me to quite know what to do with:

Raiders sell Vegas-area facility for 30 times what they paid for it 2 years ago

In a move that raised some eyebrows in Nevada, the Raiders sold their unfinished Henderson, Nev. headquarters and practice facility for $191 million and immediately leased it back, the Las Vegas Review-Journal reported Wednesday.

By flipping the 55.6 acres of land they purchased at a cut rate two years ago from the city of Henderson for about $6 million (about half the property’s value), the Raiders turned a profit of $185 million, more than 30 times what they originally paid for the land.

Okay, so there are only two reasons to flip a piece of land in only two years: Either you happened upon a chance to buy low and sell high, or there’s some other kind of fiscal shenanigans going on.

The Los Angeles Daily News story above (and the original Las Vegas Review-Journal article that first reported it) focuses on the 2900% profit and suggest that this is the former. But while Henderson no doubt gave Raiders owner Mark Davis a sweet deal, even the appraised value of the land was only around $12 million — it’s possible that was a low estimate as well, but the difference between $12 million and $191 million seems too much even for a government appraiser to miss.

The other possibility lurks in this language in the Review-Journal article:

Chicago-based Mesirow Financial purchased the under-construction football facility across from Henderson Executive Airport and leased it back to the NFL team for 29 years, with seven 10-year extension options, filings with the Clark County recorder’s office show.

The sale closed Friday. Public records obtained by the Review-Journal do not show the Raiders’ annual rent.

One common reason for lease-out, lease-in deals, or LILOs as they’re known, is to get out of a tax obligation: If the new owner of the land were a nonprofit or a church or school, say, the Raiders could use this to get out of paying property taxes on the site. That doesn’t appear to be the case, though, as Mesirow is a giant financial services firm, so not likely to be just a conduit for a tax dodge.

That unknown annual rent figure, on the other hand, is a major red flag. Let’s say the Raiders are paying, say, $10 million a year in lease payments. At that point, this is less a property sale than a mechanism for a long-term private loan at a 3% interest rate. That the practice facility ends up in the hands of Mesirow is all but irrelevant, as it almost certainly is, since a 30-year-old NFL practice facility isn’t likely to be worth much in the year 2050, if Las Vegas even has a water supply by then.

Now, we don’t know that Davis is paying out a high annual lease fee — we don’t know anything about how much he’s paying at all. (Though Mesirow must be getting a decent chunk of change, because owning an NFL practice facility otherwise doesn’t provide much in the way of either profits or glory.) But it’s one possible scenario, and one that the media really should be considering before jumping to conclusions on who got ripped off over what. If nothing else, call a LILO expert and ask them what they think might be going on. Sometimes the most that journalism can do is ask the right questions and reveal that there isn’t enough information available to provide all the answers, whether or not that makes for the snappiest headlines.

 

Islanders to play at Nassau Coliseum while waiting for new wine bar to open

New York Gov. Andrew Cuomo announced Saturday that the Islanders will play all home games at Nassau Coliseum for this year’s playoffs and all of next season as they await their new Belmont Park arena’s opening in 2021. Thus brings to an end the Brooklyn Islanders experiment, which everyone knew was a terrible idea at the time as the Brooklyn Nets‘ arena was designed to be too small for hockey and also Brooklyn is not in Nassau County where the Islanders’ fan base lives, but everyone also pretended it made total sense because then-owner Charles Wang wanted to give a middle finger to Nassau County for not approving his arena plans there, revenge really isn’t the best way to run a railroad, is it?

(And yes, it’s a little weird that the governor announced this, but also not that weird, because Cuomo has a long history of swooping in to show up in places where he can take credit for changes of plans. We should probably be glad that the announcement wasn’t made by Billy Joel.)

The state of New York has provided $6 million toward an $8.5 million renovation of the Coliseum to make it more NHL-ready for its single season as sole home ice, because, as the state said at the time, this will “build momentum and excitement for the transformational redevelopment of Belmont Park,” and why should either the Islanders or the Coliseum’s owner, Nassau County, or operator, Mikhail Prokhorov, pay for that when taxpayers in Buffalo can foot the bill?

Anyway, all this is leading up to today’s news, which is that some new renderings of the Islanders’ planned Belmont Park arena have dropped, and they are, um, interesting:

Now, I know we’ve been over how the artists paid to draw renderings are just pulling from a bucket of clip-art “entourage” people, but these people are exceptionally odd. The ones in the lobby image appear to be on their way to job interviews, and they’re almost all choosing to take the nearly-empty stairs over the even-more-empty escalator. The people in the other images at least include a few Islanders jerseys, but everyone seems far more interested in chatting and drinking than watching hockey (there is, in fact, no hockey to be seen anywhere except on video screens). And everyone is preternaturally young and slim, which have you seen what actual Islanders fans look like? The whole scene looks more like a high-end wine bar with an odd hockey theme, except of course at a bar way more people than this would be looking at their phones.

Maybe it all means nothing more than the mood the renderer was in that day, but it’s hard not to come away from these images with a sense that somebody is trying to sell a new hockey arena as hip and trendy and not a place where people go to drink beer and shout at people on ice skates. I have no idea who the audience for this might be — stores that might want to locate at the mall being built nearby? people who’ve heard about this “hockey” thing but never gone to a game because they didn’t think it was Instagrammable enough? — but clearly somebody signed off on it. While I’m generally a fan of Hanlon’s Razor, sometimes reading too much into things is the only way to make our own fun.