Falcons stadium delayed again, because newfangled roof doesn’t have all its fangles worked out

The much-delayed opening of the Atlanta Falcons‘ new stadium, originally set for this past March, has been delayed again, this time to a preseason game on August 26. The stated reason? Building a retractable roof that operates like no other roof before turns out to be hard!

[Falcons CEO Steve] Cannon said the latest delay disclosed Tuesday was driven by “steel work that is taking longer than we anticipated” in the roof and an analysis of the construction timeline from this point forward.

He said AMB Group’s expectation is that the roof will be fully operable when the stadium opens.

But Cannon acknowledged that the eight roof petals have required some extra work to make them fit.

“You install a shim that closes a gap or addresses a gap,” he said. “So yes, there was a shimming process that took place, normal seal work on a project of this size and complexity. We have completed all of that work. … It went very well. And now we’re moving on.”

The latest delay means that three Atlanta United games have had to be moved (one to Georgia Tech’s stadium, two to later dates) and demolition of the Georgia Dome has been delayed just in case the Falcons need to play some games there. Not that they’re going to have to do that, heaven forfend, the stadium will absolutely be open by August 26 — just like before it was absolutely going to be open by March 1, and then June 1, and then July 30. It’s also always possible the stadium might open without a fully functional roof at first — that’s happened before, after all, though the Falcons owners might not like reminding of that particular precedent.

Dan Gilbert may actually manage to blow up his $70m Cavs arena subsidy deal after all

When last we checked in on Cleveland Cavaliers owner Dan Gilbert’s $70 million big glass wall subsidy, it looked set for passage, with a majority of the city council set to approve it and opponents mostly just demanding some kind of fund for “community benefits” to be added. Now, though, it appears to be … “falling apart” is probably overstating it, but definitely hitting a major speed bump. Detangling this informative yet slightly convoluted article from the Cleveland Scene, we get:

  • After the arena renovations bill passed the Cleveland city council 11-6 in a preliminary vote last week, it was expected to get final approval this week. Instead, city council president Kevin Kelley pulled it at the last minute, saying “some members requested more time to discuss it.”
  • One possibility is that the Cavs are concerned about getting a 12-vote supermajority, which would allow them to avoid a public referendum as well. Except that, according to the Scene, it would only allow them to avoid a referendum if the city were selling the bonds, and it’s the county, so, what the hell?
  • Gilbert is so desperate to turn more votes, for whatever reason, that he personally called Ward 2 councilmember Zack Reed to ask what he could do to win his support. Reed answered that he wanted a community benefits fund, a la what Greater Cleveland Congregations had proposed, and Gilbert presumably wouldn’t give in, because Reed remains opposed (and now publicly gripey about having to spend 40 minutes on the phone with the Cavs owner to no good end).

While it still seems likely that the arena subsidy will be passed by the council eventually, there’s a lot more grumbling from councilmembers than a couple of weeks ago, which isn’t going to help this thing win if it goes to a referendum as now appears it will. Gilbert, meanwhile, is apparently refusing to budge on the one thing that would make his opposition melt, which is to throw a few million dollars at some community groups as the price of getting $70 million in public funds. If so, that’ll be some quality grasping-defeat-from-the-jaws-of-victory stuff there — though given that this is a guy who responded to federal government charges that his loan company had lied about borrowers’ creditworthiness by countersuing the government and then having his suit immediately dismissed, playing hardball to spite your face does seem to be a bit of a Gilbert character trait.

Baltimore Sun claims Camden Yards pays own way, can’t even keep up pretense for whole article

And hey, look, another major media article that can’t do basic math! Let’s start with the headline:

Orioles payments to stadium authority exceed original cost of Camden Yards

Wow, that would indeed be impressive. Is perhaps Camden Yards one of those rare examples like the Minneapolis Metrodome, of a stadium where the public put up a bunch of money up front but then was repaid in full and more by lease payments over time? Spoiler: no.

Documents show the authority has received an average of $6.4 million in annual rent from the team, plus $4.1 million a year as its share of state admissions taxes. The total, through the fiscal year ending June 30, 2016, is $255 million.

That compares favorably with the stadium’s original $225 million price tag, including $100 million for land acquisition and $125 million for the stadium.

Yeah, no, that’s not how money works. Even if you count state admissions taxes as new state revenues (the Orioles would have been paying them if they’d stayed at Memorial Stadium, too), $10.5 million a year over 25 years is only worth about $140 million in present value, still far less than the $225 million price tag. Or if it helps, you could flip it around the other way and see if $10.5 million a year is enough to pay off the state’s annual debt payments — oh, look, the Sun actually did that:

The stadium authority said it pays about $15 million a year in debt service — principal plus interest — on the 30-year bonds issued to pay for Camden Yards.

So by the Sun’s own calculations, Maryland is actually losing money on Camden Yards. Anything else?

The debt service, however, is paid with Maryland Lottery proceeds appropriated each year by the General Assembly. The authority uses the team’s rent money for ballpark operations.

Oh, right, ballpark operations costs. So really the Orioles’ rent payments pay nothing towards the public’s debt on Camden Yards. Lovely headline, though — beautiful plumage.

No, USA Today, NFL teams aren’t moving because of revenue disparities, you got snookered

An exec for the Cincinnati Bengals said a thing! A USA Today reporter believed him! Let’s investigate whether any of it makes sense.

First, the thing:

The revenue disparity between teams is “the largest it’s ever been in NFL history,” [Bengals vice president Troy] Blackburn told USA TODAY Sports. Even though teams equally share the revenues of NFL television contracts and a portion of ticket sales, they don’t share other local stadium revenues with each other, leading to the rising gap…

“Right now, you’ve got many of the small markets paying over 60-plus percent of their revenues on players, and many of the large markets are paying 40 percent of revenue on players,” said Blackburn, who previously was the team’s director of stadium development and is the son-in-law of Bengals owner Mike Brown. “Something that could be done that narrowed that gap would be helpful, and it would make it easier for the small-market teams to stay where they are and not have to explore relocation.”

USA Today’s took that and spun it into an article claiming that the reason the St. Louis Rams, San Diego Chargers, and Oakland Raiders have all moved in the last year is because of these rising disparities between small- and large-market NFL teams, and more (unspecified, but presumably including the Bengals) teams could relocate if nothing is done about it.

Now, this is an odd premise to begin with, seeing as that it’s well known why these three teams moved now: Rams owner Stan Kroenke finally pulled the trigger on calling dibs on the long-vacant Los Angeles market, then the Chargers and Raiders owners rushed to get in on it too lest their only leverage on their current cities disappear, then the Chargers agreed to move in with the Rams because they couldn’t get a big-ass new stadium subsidy in San Diego while the Raiders got a big-ass stadium subsidy from Las Vegas, the end. But let’s set aside everything that our eyes tell us and see if the notion that NFL revenues are unsustainably unequal is supported by the data.

Here’s the latest Forbes team value and revenue figureshttps://www.forbes.com/nfl-valuations/list/#tab:overall. If you take a look at the “Revenue” column (we want gross revenues, not profits, which is what the “Operating Income” column shows), you’ll see that the Dallas Cowboys are crazy outliers at $700 million a year, while the rest of the league sits between $523 million and $301 million a year, meaning the top non-Dallas team earned 74% more than the lowest-revenue team.

If we go back to, say, 2011, the Cowboys are still outliers at $406 million, and the spread for the rest of the NFL is $352 million to $217 million, for a 62% disparity. So the distance between the haves and have-nots is increasing, yes, but note hugely. (You’ll also notice that every team in the league currently turns at least a $26 million profit, so while small-market team owners may be sad that they don’t own the New England Patriots, they can still be happy that they own an NFL team and not pretty much anything else.)

Now, let’s take a look at other sports. For baseball, lopping off the New York Yankees as the Cowboys analogue, we get a $462 million to $205 million revenue spread — a whopping 125%. For the NBA, taking out the New York Knicks, it’s $333 million to $140 million, 137%. For the NHL, omitting the New York Rangers, it’s $202 million to $99 million, 104%.

So while you can quibble with the Forbes numbers (or my methodology), it’s pretty clear that NFL revenue disparities aren’t any worse than those of other leagues that aren’t seeing massive team defections. Which is as to be expected, since the NFL has the strongest revenue-sharing program of any major sports league in North America, in the form of the national TV contract system put together by Pete Rozelle way back in the 1960s. In the NFL, owners get whopping checks just by virtue of owning a team — the only way to get ahead of your competitors isn’t to be in a bigger city with the chance for big cable contracts (the reason why all those New York teams sit atop the revenue charts for other leagues), but to get a more lucrative stadium deal. Which predicts that you’ll see more city-hopping in search of those, which is precisely what’s been happening.

So now that we’ve established that USA Today doesn’t have any fact-checkers on staff, what’s Blackburn’s angle? Is he just feeling whiny that the Bengals play in Cincinnati in a stadium that was a gift from taxpayers 17 whole years ago? Or does he have a specific play in mind:

“If the league is serious about franchise stability, maybe it should consider a new G-3 styled program that would help keep teams in small markets,” Blackburn said. “If it did it once, it can certainly do it again, if it truly cares about the issue.”

Ah, now we’re talking — the Bengals owners are upset that big-market teams are getting league grant money (or were, since both the G-3 fund and its successor G-4 are now depleted), and they’re not. So this whole exercise turns out to have been one NFL owner using the pages of USA Today to convince his fellow NFL owners to give him some of their money, because c’mon guys, you have so much of it!

Of course, the original G-3 program was actually limited to teams in the six biggest markets, in order to provide a check against teams moving to smaller cities in search of those sweet stadium deals mentioned above — with #6 included specifically because Patriots owner Robert Kraft played in the 6th-biggest market, and was threatening to move to Hartford at the time, and was the chair of the committee that designed G-3. So, pretty much the exact opposite of what Blackburn says it was. Oh, fact-checking.

Top Florida economic advisor lacks econ degree, avoided using real data because it’d look bad

I’ve made fun of Florida’s propensity for giving its sports teams lots of money based on doofy economic impact studies before, such as when Pinellas County moved forward with a plan for giving the Toronto Blue Jays $65 million for a new spring training facility in Dunedin based on an economic report that assumed that every single ticket sold went to a different person who traveled to Florida just for that game. But this, this, from WTSP’s Noah Pransky, takes the damn cake:

10Investigates found the author of so many economic impact reports that support public sports subsidies may not be the expert economist state leaders believe he is.

The resume of Mark Bonn, Ph.D., a professor at Florida State University’s Dedman School of Hospitality, boasts of dozens of reports compiled for municipalities all across Florida, including some statewide organizations.

Bonn’s side company, Bonn Marketing Inc., recently received $23,000 from just one study, commissioned by the Toronto Blue Jays and city of Dunedin to show the economic impact of spring training…

Nobody on the committee questioned Bonn’s qualifications.

But 10Investigates did, asking if Bonn considered himself an economist.

Pacers owner demands “a lot of money” for renovations, because he has everything else already

So what do you get for the sports team owner who already got a free $183 million arena, $33 million in operating subsidies, another $160 million in operating subsidies when those ran out, a free $3.5 million roof repair, free land for a a free $50 million practice facility, and a free $2 million tunnel to connect the free practice facility with the new arena? How about a “major” renovation of your now 18-year-old arena:

“For me to sign a long-term lease, which is what I really want to do for the city, we’re going to have to plan it for the 21st century,” [Indiana Pacers owner Herb Simon] said. “Things have changed. People’s viewing habits are different with more social environments. It takes a major redo because the bones are great and we want to keep it here. We love the feel that people get, but we want to enhance the fan experience and keep us current. That’s going to take a lot of money.”

That’s not quite a move threat, you’ll notice, but it is at least a glancing non-threat threat, since Simon is saying he won’t sign a long-term lease once his current one expires in 2024 unless he gets these “major” arena renovations. (If you’re wondering why the Pacers will be on their third lease renewal just 25 years after moving into a new arena, blame Stephen Goldsmith.) He also cleverly didn’t say how much money the renovations would cost beyond “a lot,” or how much of that he’d be requesting Indiana to pay for, though “a lot” seems like a fair bet there as well.

Given that the Pacers are already up around $430 million $380 million in subsidies for an arena that cost less than $200 million to build, getting even more public money for upgrades would easily push them into “sweetheartest arena deal in history” territory. I would say that the local government’s appetite for subsidies has to wear thin someday, but this is Indiana, so apparently not. At least the city of Indianapolis didn’t have to cut funding for arts programs and close public pools to pay for all this — oh wait, never mind.

Braves’ new home seeks to add new circle of hell to the stadium business model

The Atlanta Braves held their official opening day for their new stadium on Friday, two weeks after holding their unofficial opening day, and all was mostly uneventful, unless you count the massive traffic tieup from a foam tomahawk spill two days earlier.

While most of the media coverage focused on the new stadium’s food options and other amenities (1,300 televisions! blackened catfish po’ boy tacos! beer aged from bat shavings!), ESPN’s Bradford Doolittle took a harder look at what makes the new Cobb County stadium different. And, as you might imagine, much of it has to do with being in Cobb County, far from the city center:

The last time I saw so many people slow-walking on bridges over an Atlanta highway it was on “The Walking Dead.”

They spilled in from everywhere Friday, on concrete bridges slung over highways they had successfully traversed to get to SunTrust Park. They crowded in a wide line, on concrete suspensions, above a morass of multilaned freeways. They found their way into the New Urbanist neighborhood. Then they crowded into the brand-new stadium for the first regular-season game.

Yes, the bridge to nowhere opened just in time for Friday’s game, though I haven’t been able to find any photos of what it actually looked like with people on it. (Here it is with no people on it.) But the more interesting aspect of the stadium, and of Doolittle’s article, is that New Urbanist neighborhood:

Any reviews of the new park wouldn’t be complete without mentioning The Battery, a mixed-used development that combines a yet-to-open hotel that looms over center field, bars, restaurants, office buildings and apartments, of which some are still vacant.

The Battery’s hotel will have high-dollar rooms on its stadium side, where guests can chill on a balcony and take in the ballgame. Really, The Battery is what marks this particular stadium project as distinct as any that came before it, and the success of it will likely determine the success of the entire endeavor…

It’s more than a park. It’s an experiment, one where a sports franchise attempts to create a bubble. And once a fan enters it, there is no reason for him or her to spend money outside of it. And if it works, the ramifications will be noticed by baseball owners from coast to coast. If it works, it could change a lot of things. But we won’t know if it works for a long time.

Creating a bubble in which sports fans spend all their money isn’t new, of course — it’s the same reason the Baltimore Orioles have the Eutaw Street shopping strip inside the Camden Yards gates, and the Boston Red Sox insisted on the right to close off Yawkey Way on game days, and the New York Yankees built their “five-star hotel with a ballfield in the middle.” But no one has gone as far as the Braves in building an entire faux neighborhood around their new stadium, hoping that fans will want to spend enough money there before and after games that they can build a booming shopping district — one where the team owners control all the revenue.

Color me skeptical, at least for now: “Ballpark villages” haven’t tended to be huge successes, in part because ballparks are closed most of the year, making running a restaurant based on ballpark clientele a tricky matter; and in part because when you’re already sitting through a three-hour ballgame that you have to fight your way through Atlanta traffic to get to, going out for dinner before or after the game isn’t always the first thing on your mind. If the Braves owners do beat the odds, though, it’s potentially a game changer for the stadium business, in that team owners will no longer be satisfied merely with a new stadium jammed with bells and whistles and steakhouses, but will want to get to run their own pretend urban neighborhood around it. That’s not something that’d necessarily be limited to suburban areas, and I really hope it’s a demand we never see becoming standard business practice — but who am I kidding, somebody’s going to ask for it regardless, because you can’t get if you don’t ask, right?

Ottawa mayor says he’ll consider public money for arena that’s supposed to use no public money

And meanwhile, in Ottawa, where Senators owner Eugene Melnyk promised last year that he’d build a new arena and surrounding development with “no government money” … you know where the rest of this sentence is going already, don’t you?

Mayor Jim Watson isn’t ruling out investing public money into a downtown NHL arena at LeBreton Flats.

“I don’t know if they’re going to come forward and ask for any of those dollars,” the mayor told reporters after Wednesday’s council meeting. “Certainly I want to make sure that whatever happens there is to the benefit of the taxpayers of Ottawa.”…

While the mayor repeated that he wasn’t going “to speculate on something that hasn’t been asked,” it is the first time he has seemed open to the possibility of putting taxpayers money into the arena.

“My bottom line is, whatever is being asked from us, does it make sense and is there a return on our investment whether it be through property or development charges or the increased market value assessment of the property,” Watson said.

Yeah, you know, if you don’t want to speculate about something that hasn’t been asked, maybe openly speculating about it isn’t the best way to go about it. To be fair, Watson was probably asked about this by a reporter, and felt like he had to say something, and so he improvised a line about “return on investment” based on something he vaguely remembered Naheed Nenshi saying, and it ended up as a headline. So cut Mayor Paralipsis a break, okay? This whole talking-while-governing thing is hard.

Two developers propose KeyArena redo with no public money, except for maybe some public money

As promised, the city of Seattle received two proposals for renovating KeyArena this week, and—

One of the groups interested in renovating KeyArena for NBA and NHL is prepared to spend more than $500 million on a complete overhaul of the 55-year-old facility.

The Oak View Group (OVG), based in Los Angeles, has produced a $564 million plan it says can have the arena renovated by approximately October 2020 – leaving it ready for the 2020-21 NBA or NHL season – spokesperson Steven Gottlieb said—

Hey, hey, Seattle Times, thanks for reporting what one of the developer spokespeople said, but the city of Seattle has made available the actual proposals, so let’s just go read those, shall we, and see what’s actually in them?

  • The Oak View Group (aka Tim Leiweke and friends) is proposing that $564 million redo, expanding the underground part of the arena — which is most of it — to modernize it for basketball, hockey, and concerts. (And probably change the whole seating bowl, since that’s necessary for hockey.) Oak View promises that the project “will not require any City investment,” with the developer covering all constructions, operations, and capital improvements, as well as paying $1 million a year rent; however, it does note that the city will still own the land (so presumably it will remain property-tax-free) and that “OVG will work with the City to identify a mechanism for reinvestment of new revenue streams back into the project,” which is just vague enough to be slightly ominous.
  • Seattle Partners, aka AEG and friends, aka Leiweke’s former employer, doesn’t put a dollar amount on its renovation plans, except to say that it will be “world-class.” As for funding, the only promise (in the executive summary, anyway, which is all that the city seems to have made available) is that the developers will “guarantee all financing, public and private, through revenues that would not exist but for the renovations proposed for the Seattle Coliseum,” which is usually code for tax increment financing or some similar scheme to kick back taxes that can be claimed to be due to the renovated arena, even if they’re ultimately cannibalized from spending elsewhere in the city.

Neither of these is quite a “no public money” promise, which is what the city was requesting. But they’re potentially close, which is kind of crazy, given that everything we know about arena operations is that spending half a billion or so on upgrading these buildings doesn’t usually generate a great return on investment. But this is a weird moment in the arena biz, what with AEG, Live Nation, and Madison Square Garden (who would be Leiweke’s financial backers) engaged in a nationwide war for control of the concert industry, meaning that they could be more likely to overbid in an attempt to lock their competitors out of the Seattle market. That’s an opportunity for anyone doing business with them, and Seattle is smart to be trying to play this for all it’s worth.

In short: This still needs way more analysis of the competing groups’ funding plans, and in particular of how weaselly those weasel words are about arena-related revenue streams. But it’s well worth exploring, since this might be a rare chance for a city to be in the driver’s seat when it comes to getting a new or renovated arena. Getting a team will be another story — hello, Kansas City — but cross one hardball negotiation at a time.

St. Louis city, county sue Rams and NFL for breach of anything they can think of

Back when St. Louis Rams owner Stan Kroenke picked up his team and moved it to Los Angeles, I noted here that hey, I wondered if PSL holders could sue for breach of contract, since they now held the right to buy tickets that didn’t exist? As it turned out, they could, and did, and won, sorta. I did not suggest that the city of St. Louis could sue as well, and for 15 months I was right — until yesterday:

The city, the county and the Regional Convention and Sports Complex Authority are suing the National Football League over the relocation of the Rams 15 months ago.

The 52-page suit filed Wednesday in St. Louis Circuit Court lists the National Football League and all 32 NFL clubs as defendants and seeks damages and restitution of profits.

If you’re wondering, “Hey, isn’t the NFL one of those cartel thingies where franchises have the right to move wherever, so long as the other owners say it’s okay?”, why yes. it is. But St. Louis’s lawyers have thought of that, arguing that the Rams “failed to satisfy the obligations imposed by the League’s relocation rules,” and so therefore the public is entitled to damages for:

  • Breach of contract (against all defendants).
  • Unjust enrichment (against all defendants).
  • Fraudulent misrepresentation (against the Rams and team owner Stan Kroenke).
  • Fraudulent misrepresentation (against all defendants).
  • Tortious interference with business expectancy (against all defendants except the Rams). This last count basically alleges that the NFL and the other 31 teams “intentionally interfered” with the business relationship between the St. Louis plaintiffs and the Rams by approving the relocation.

The suit says that the city of St. Louis is losing an estimated $1.85 million to $3.5 million a year in amusement and ticket tax revenue (true as far as it goes, though if bereft Rams fans are spending some of their entertainment dollars on other amusements, the city is getting some of that tax money back) plus about $7.5 million in property tax (whuh?), $1.4 million in sales tax revenue (again, not so much if some fans spend that money on other St. Louis activities), and “millions in earning taxes,” whatever those are. The city and county aren’t saying how much they’re looking for in damages, but if the above is any guide, it would have to be in excess of $100 million.

In essence, the city and county are saying, “Hey, no fair, you said you weren’t gonna move the team unless you had to, and then you did anyway, you cheaters” — which doesn’t seem particularly like a legal argument, but then, I am extremely not a lawyer. Whatever happens in the end, though, the discovery phase of this suit promises to be oh, so tasty, as St. Louis tries to dredge up every last detail of how the relocation decision was made and whether it followed the league’s rules that the NFL totally doesn’t just make up whenever it feels like it. We may get to be a fly on that wall after all.