Oakland mayor losing recall vote after A’s departure, if anyone still cares

access_time personNeil deMause

I would love to report here on what the results of the U.S. presidential and congressional elections will mean for stadium and arena subsidies — and they are undoubtedly going to mean a lot, for a whole hell of a lot of things — but that’s going to have to wait until I can do a deeper analysis of the fine print of Project 2025. (And see what the likelihood is of even half its proposed economic policy changes happening, especially if the second Trump Administration gets bogged down in figuring out how to detain and deport 13 million people.) In the meantime, there looks to be one likely stadium-related outcome of the just-completed vote:

Early election results Tuesday evening showed 65% of voters favoring the recall of Oakland Mayor Sheng Thao, the labor-backed progressive who has struggled to build trust around the city during the first two years of her term…

The early returns indicated that Thao, who was elected in 2022 to a four-year term, was on her way to being removed from office, with voters supporting her recall by nearly a two-to-one margin — the culmination of an expensive recall effort that has focused primarily on Oakland’s crime woes.

Thao’s recall doubles the number of U.S. mayors who have seen sports teams leave their cities and then been removed from office during the next vote, to two. (Former Seattle Mayor Greg Nickels appreciates finally having some company.) While the A’s moving to Sacramento and thence to ¯\_(ツ)_/¯ was certainly a factor in the recall, most of the vote was drummed up by a recall campaign funded by a hedge fund billionaire who doesn’t even live in Oakland and inflamed by a moral panic about street crime; if Nickels’ epitaph will be “didn’t shovel the snow,” Thao’s will likely be “didn’t save In-N-Out Burger.”

Still! The A’s leaving clearly didn’t help Thao: It’s one of the top four accusations leveled against her on the recall’s campaign site. While it’s still more likely for elected officials to be removed from office for approving sports subsidies than opposing them — George Petak, Tim Lee, Carlos Alvarez, and several others have entered the chat — they both have their risks, as does pissing off the local coal baron, apparently.

More on this breaking story as news develops. Meantime, I gotta go read me some Heritage Foundation plans for world domination — banning unions for government workers and requiring states to report to the federal government who’s having abortions, you say? Cool, cool.

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St. Pete could seek FEMA money to help pay for new roof on Rays’ soon-to-be-demolished stadium

access_time personNeil deMause

The slow news drip about the Tampa Bay Rays stadium situation continues: On Thursday night, the St. Petersburg city council “reluctantly” agreed to spend $6 million on setting up a temporary drainage system at Tropicana Field and waterproofing some interior areas to keep damage from worsening at the stadium, whose roof was torn off in Hurricane Milton. The headline the Tampa Bay Times put on this is “St. Pete is betting millions that Tropicana Field can be salvaged,” but that’s a little misleading — the council actually approved the $6 million expense because the city’s insurance coverage includes a line requiring it to “take reasonable steps to protect any covered property from future damages,” and St. Pete officials were concerned that if they didn’t spend this money, their insurer could refuse to pay out entirely.

The Times’ John Romano goes on to report:

“I would not be here before you today asking to do this if I had any indication, at this moment, that there were serious, significant structural problems at the stadium,” said city administrator Rob Gerdes. “Now, it’s a fluid situation. Something could change, but we’re here because we believe that that’s most likely.”

The city’s position is understandable. With three years remaining on the Trop’s use agreement, St. Pete is responsible for providing the Rays a major league-quality facility. Should Tropicana be unusable the city would be in breach of the use agreement, and the team theoretically could seek damages for revenues lost and costs incurred in moving to a smaller stadium.

That “theoretically” is doing a lot of work there: As was covered here last week, the Rays’ lease only requires the city to use insurance proceeds to pay for stadium repairs, and the St. Pete council actually lowered its wind and flood insurance coverage on the stadium last March, even as councilmembers questioned whether it would be enough to cover damage to the Trop’s aging roof. If the Rays can’t play at their current home, the city is required to “reasonably assist the club in finding a substitute location for playing Home Games,” using money from an existing repair fund — or fronting the money and getting repaid out of future repair fund proceeds, which could be tricky if the lease that establishes the repair fund only continues for another three years.

At this point, the city is looking at paying out a $22 million deductible for any repairs, at which point it will be eligible to collect $25 million in insurance money, assuming its insurer doesn’t challenge the claim. After that, said city administrator Rob Gerdes, the city could ask FEMA to cover additional costs; the federal agency “has notified us it’s an eligible project,” he said, but there’s no indication yet of whether federal funds will be available for its repair.

Obviously, a ton is riding here on how much it would cost to repair the dome, which is still a work in progress. (Ordering new fabric would only cost about $7 million, assuming that much can be found on short notice, but then there’s still the cost of installing it and doing any other needed repairs to, say, the support structure.) This looks like it will come down to deciding whether it’s cheaper for the city to spend the $22 million deductible and whatever added costs FEMA doesn’t cover on repairing a stadium that’s only set to last another three years anyway, or risk Rays owner Stu Sternberg trying to present taxpayers with a bill for upgrading a temporary home elsewhere — all amid the wild card of county leaders possibly holding up bond approval for a new stadium until Sternberg promises to stay in Pinellas County. It’s gamesmanship all the way down, and we should start to learn more once the engineers present a repair price tag — even MLB commissioner Rob Manfred has no clue when that might be, so I’m sure not going to venture a guess.

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Friday roundup: A’s exec says Fisher really does have Vegas stadium money (no, you can’t see it)

access_time personNeil deMause

Before we get to the bullet points, and I know how much you all love the bullet points, there is pressing news we have to discuss first, which is that Athletics owner John Fisher has the billion-dollars-plus he needs to build a stadium in Las Vegas. Sort of. Maybe. According to a guy:

Athletics owner John Fisher and his family will invest $1 billion into the construction of a stadium in Las Vegas and U.S. Bank and Goldman Sachs will offer a $300 million loan, club executive Sandy Dean said Thursday.

Dean made his remarks to a special meeting of the Las Vegas Stadium Authority board.

Dean said four letters will be presented at the Dec. 5 authority meeting asserting construction details and financing will be in place. Final approvals are expected to be made at that meeting to allow construction of the $1.5 billion, 30,000-seat domed ballpark with a capacity for up to 33,000 fans.

So it’s official: Fisher has financing in place for his Vegas stadium … well, no, he will have financing in place by December … or he’ll have a letter (or four) stating that financing is in place?

[One] letter, Dean said, asserts the Fisher and his family have the ability to meet their financial commitment. Dean said [another] letter from U.S. Bank will show that through a review of the owner’s finances that it “concludes the Fisher family has more than sufficient resources to fund the equity investment that’s required to build the stadium.”

Except! Here’s video of Dean saying that one of the letters will be “from John Fisher indicating that his family will invest a billion dollars in support of the project here in Las Vegas.” So which is it: Is the Fisher family committing to spend $1 billion on a Vegas stadium, or just avowing that it  is worth $1 billion? We already knew the latter — Vegas convention center authority chief and unregistered A’s lobbyist Steve Hill keeps saying it, among other things — but that’s not the same as actually figuring out what the family would liquidate to pay for the stadium: the San Jose Earthquakes? The Gap?.

(Dean also said Fisher is still looking to sell minority shares of the team at inflated prices because “it would be good coming to Las Vegas to have outside partners from Las Vegas,” but not because he needs the money, oh no: “The ability to finance the stadium is independent of that.”)

The question all this keeps coming back to isn’t “Where can a billionaire find a billion dollars?” but rather “Is the Fisher family ready to throw a billion dollars of its own money down a stadium hole?” The number of stadiums that can cover their own construction costs is slim; the number that have done so that are in their leagues’ smallest market and include a pricey dome is zero. Which is why people are eager to see Fisher put actual money on the table; promises of a letter next month that will maybe describe actual money on the table is not quite the same thing.

Sorry if all that was anticlimactic. And now, this week’s bullet points:

  • Ohio Attorney General Dave Yost wants to intervene in the Cleveland Browns‘ lawsuit against the city of Cleveland seeking to block the use of the Art Modell Law to block the team from moving to a new stadium in Brook Park. Yost says the team’s claim that the law, which requires that teams be offered up for sale to local owners before being relocated from their current home city, is “unconstitutionally vague” is “wrong,” and since Browns owners Jimmy and Dee Haslam only sued the city, he needed to file a motion to intervene on behalf of the state. Feel the excitement!
  • Philadelphia councilmember Mark Squilla may have come down in favor of letting the 76ers owners build an arena next door to Chinatown, but he has an idea for ensuring that the neighborhood isn’t disrupted: a zoning overlay to “require affordable housing, restrictions on types of businesses, and limits on the size of new storefronts to discourage chain restaurants from crowding out traditional Chinatown retail,” in the words of the Philadelphia Inquirer. Adds the Inquirer: “The precise language mandating how any of this would work has yet to be added to the bill.” This is on top of proposing a tax increment financing district to kick taxes collected in Chinatown back to local businesses to offset any rise in rents as the result of increased property values — pretty sure that would only risk encouraging landlords to increase rents more knowing businesses would be getting subsidies to help pay them, need to go back and check my Intro to Economics textbook chapter on microeconomics.
  • The World Series is over and I didn’t get around to discussing the New York City Economic Development Corporation’s claim that each Yankees and Mets home playoff game generated $20-25 million in economic activity, but suffice to say I talked to an EDC spokesperson who told me (on background, so I’m not supposed to quote them directly so I’m not) that the analysis was based off a previous model from 2022 that puts together assumptions from the city tourism board plus assumptions from the Yankees and then applies a multiplier. Also, they look at “anonymized cell phone data”? No, you and I are not allowed to see the actual model, so no further details about WTF this means will be available.
  • Spotlight on America has a piece on how Tempe, Arizona said no to funding an Arizona Coyotes arena and how other cities could follow its lead, which is all well and good until it concludes by lauding late Seattle Seahawks owner Paul Allen for his commitment to Seattle, when Allen actually paid the city to hold a referendum so he could get $300 million in public money for a football stadium, then refused to open his books like he promised in exchange for the money, seriously, what?
  • Perhaps you would prefer a deep dive into the toilets at the Los Angeles Clippers‘ new arena? Perhaps you would prefer I hadn’t phrased it that way? Sorry, you’re getting both!

 

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Uncertainty over Rays’ temporary home stalls county stadium bond approval, could lead to lease throwdown with city

access_time personNeil deMause

The Pinellas County commission was all set to approve the terms of bonds for the Tampa Bay Rays‘ new stadium — normally a formality, since back in July the commission approved using $312.5 million in hotel tax money to pay off the bonds — and then … didn’t. Instead, commissioners voted 6-1 to put off the bond measure until November 19.

And the reason, it appears, has to do with commissioners’ concerns about where the Rays will play now that their roof blew off in a hurricane. Per the St. Pete Catalyst:

“One could make the argument that they’re (the Rays) kind of violating the spirit of the agreement that we approved two months ago if they go across the bridge or go to Disney World to play for the next three years,” [Commissioner Chris] Latvala said. “If the hurricanes hit three years from now, they would have to play their games in Pinellas County.”…

[Commissioner Brian] Scott said, “This is when we need the Rays the most.” He expressed concern over the team’s lack of a public statement pledging to prioritize playing in Pinellas.

[Commissioners Dave] Eggers and Latvala, who voted against the stadium deal, shared that sentiment. As the latter commissioner noted, agreements state the team must make every effort to remain in the county after an act of God.

Yes, the same county commission that thought it was a great idea to give Rays owner Stuart Sternberg $1 billion in public money — counting city cash and county tax kickbacks — for a new domed stadium right next to his old domed stadium is having second thoughts because Sternberg might have his team play some games outside the county for a year or three. (To be fair, Eggers did say he might vote against the bond measure anyway because he thinks the county should save its money to repair storm damage, but then Eggers was against the stadium subsidies to begin with.) Or at the very least, some commissioners want to hold up the bonds as a leverage play to get Sternberg to agree to a temporary home in Pinellas County, though the options there are limited: Al Lang Stadium in St. Pete, which has been converted to soccer; the Philadelphia Phillies‘ spring stadium in Clearwater; the Toronto Blue Jays‘ spring stadium in Dunedin; and that’s about it.

And that might not be the only leverage play to come. I’ve been spending some time poking around the Rays’ Tropicana Field lease and its subsequent amendments, and a few things have become apparent:

  • The city of St. Petersburg is only on the hook for paying off damage that can be covered by its insurance policy. Anything after that has to be covered by the Rays, who have a repairs fund in place for this purpose.
  • However, the “force majeure” clause about events such as hurricanes says if the stadium is damaged so badly as to be unplayable, the “city shall begin to repair or rebuild the dome using the proceeds from the property insurance for that purpose and shall diligently pursue such repair or rebuilding until completed.”
  • Yes, the Rays have to continue to play home games in St. Pete through 2027. However, the force majeure clause also says that if the stadium in unplayable, “the city will reasonably assist the club in finding a substitute location for playing Home Games.” Any city costs from this are to be paid out of the team’s repairs fund, or if the repairs fund runs dry, repaid from future team payments into the fund.

This raises a lot of questions. If the city has to pay for stadium repairs out of insurance proceeds, but insurance proceeds aren’t enough to cover the tab, what happens then? Could Sternberg sue the city for reducing its insurance coverage earlier this year to save on premiums, if that was supposed to cover the city’s obligated repair costs? Could Sternberg demand that the city cover his relocation costs, even if there aren’t enough future repairs fund payments remaining under the current lease to repay the city? Did anybody bother to beta-test this lease by role playing various scenarios, or did they just scribble down a bunch of stuff and go, “We’re sure nothing will come up that isn’t covered here, no worries”?

We are deep into “I am not a lawyer” territory, but plenty of people on both the team and city sides are lawyers, and are no doubt looking into who is on the hook for what in that terribly written lease. So it’s fair to expect even more leverage plays: If you’re trying to stay out of a courtroom, one way to do it is to threaten the people across the table into settling first. But either way it could get ugly, and the county kerfuffle over where the Rays play temporarily could be only the warning shot.

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County proposes sticking $1B roof on Bengals stadium, to be paid for by, uh, WrestleMania?

access_time personNeil deMause

As if proposing $1.2 billion in upgrades to the Cincinnati Bengals stadium with no idea how to pay for them wasn’t enough, Hamilton County officials have now also run the thought experiment “What if we built a dome on it, too?”

That is indeed what the Bengals’ stadium could look like with a dome on it, thanks, crack renderers for the Gensler architecture firm! And how much would this add to the price tag?

Construction companies Turner, Messer, Mortenson, AECOM and Hunt pitched their estimated costs of how much putting an enclosure on Paycor Stadium could be. The answer: Anywhere between $903 million and $1.05 billion.

Hrm, yes, well. Thank you for your time, but surely Hamilton County doesn’t have a billion dollars lying around just to put a dome on a stadium that’s used maybe a dozen times a year—

Bringing in additional major events could help cover the operating costs, [Hamilton County Administrator Jeff] Aluotto explained, such as WrestleMania, NCAA basketball tournaments or large-scale concerts.

I’m sorry, what? To pay off a billion dollars in expense, Hamilton County would need to bring in maybe $70 million a year in new tax revenue, on top of what it currently gets. WrestleMania and the NCAA tournament each happen only once a year, and rotate to different cities each year. Maybe if you’re lucky you could get two or three additional concerts a year from artists afraid of rain because they’re made of sugar. The local share of sales tax in Hamilton County is 2.05%, and 0.5% of that already goes to the Bengals and Reds to pay off stadium construction costs. So the new events alone would need to generate something like $4 billion in annual spending to make the math pencil out, something that doesn’t seem likely even if Taylor Swift clones herself and goes on ten tours at once.

And county commissioners can do math too, apparently, with county vice president Denise Driehaus saying at a presentation yesterday, “From my standpoint, we just can’t afford it.” Commission president Alicia Reece said she wants to keep discussing the idea, though — hey, maybe if you talk about it long enough, math will change, it could happen!

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Guardians, Cavs owners ask for $40m in added public cash for upgrades, because Clevelanders aren’t smoking enough

access_time personNeil deMause

When Cuyahoga County voters in 2014 approved extending a cigarette and alcohol surcharge for 20 years to provide $13 million a year to the Cleveland Guardians, Cavaliers, and Browns for stadium and arena repairs and upgrades, they were told it was necessary to keep the teams from breaking their leases and moving elsewhere. (They were also told it would “Keep Cleveland Strong,” via stickers that Guardians stadium ushers had to wear on their uniforms under penalty of firing.)

Unfortunately, Cleveland area residents aren’t sinning like they were projected to, and earlier this year it was reported that Cavs owner Dan Gilbert had been fronting money to pay for such “repairs” as upgraded elevators and escalators and a film on the arena’s new glass wall to keep birds from flying into it, while waiting for tax proceeds to come in. And now the Guardians and Cavs owners and the Gateway Economic Development Corp., the quasi-public agency that owns the sports venues, have asked the city of Cleveland and Cuyahoga County for an extra $40 million to fill in for the missing tax money:

Cleveland’s share of the money would come from the general fund, which covers basic services. The city can afford to pay the $20 million thanks to numerous unfilled vacancies, Finance Director Jim Hartley said.

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Roof firm expressed willingness to attempt “monumental task” of repairing Rays stadium

access_time personNeil deMause

Finally some actual news about the Tampa Bay Rays stadium roof situation, courtesy of the St. Pete Catalyst, one of those nonprofit news sites springing up that could no doubt use your subscription money if you have some burning a hole in your pocket for other reasons. The Catalyst got hold of emails (it didn’t say, whether via a public records request or leaks) revealing that city building officials met with representatives of roof construction firm Dunn Lightweight the day after Hurricane Milton tore the roof off of Tropicana Field, and that company was at least initially ready to take a shot at having the roof replaced by Opening Day 2025:

In a Friday, Oct. 11 email sent after visiting the site, Javier Rattia, partner director for Dunn Lightweight, noted that his firm was under a “very tight schedule” to dismantle and replace Tropicana Field’s roof in time for the 2025 season.

“We will airfreight some of the materials and use most of our stock to achieve this monumental task,” Rattia wrote.

The next day, Dunn signed an agreement with the city to just dismantle and remove the existing roof, at a cost not to exceed $548,534. Nine days later, however, the city hired Global Rope Access to provide seven “rope technicians” to remove the roof at a cost of $416,353. (The Catalyst didn’t attempt to explain the discrepancy; I’ve reached out to Dunn and GRA to try to clarify.)

All this could either mean 1) St. Pete is giving up on trying to replace the roof, despite Dunn’s willingness to give it a go, 2) St. Pete is just working on cleaning up the debris for now while it evaluates the possibility of repair, or 3) something else, probably, this is one of the hazards of writing articles based entirely on email records. But it definitely tracks with the idea that nobody has yet figured out if the stadium roof is reparable, what it would cost, or how long it would take, though presumably Rays and city officials are working on that.

Speaking of which, somebody asked MLB commissioner Rob Manfred during World Series batting practice what he thought the timeline was, and he came up with a date:

“I think by Christmas they gotta have a pretty good plan in place, and there’s a lot to that.”…

“They’re still in the damage assessment mode,” Manfred said. “That needs to get done and obviously, it’s not just the roof, there was damage internally as well. Won’t know exactly what’s going to happen until they complete that process. … It’s just a guess as to how long it’s going to be.”

That’s hardly definitive, even before Manfred got to “just a guess”: What does that even mean to “have a pretty good plan in place”? Do Rays execs have to know for sure where they’ll be playing at the start of 2025, or just have various contingencies in place? When to MLB’s schedule makers need to know, so they can adjust game and travel times if necessary? Quick, somebody ask Manfred some followups — nope, he’s already on to the next thing:

“We can make it work in a minor-league park,” Manfred said. “I think there’s probably some flexibility in terms of what we do with the big-league schedule.”

Probably! This is not really helpful at all, even if it did get the Athletic some quotes to justify an article to lure you behind the New York Times’ paywall. Somebody get the St. Pete Catalyst (or Hell Gate, they’re in town already) a World Series press pass already so we can get some actual damn answers.

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Friday roundup: Browns owners sue to block Modell Law, still no Vegas stadium finance plan from Fisher

access_time personNeil deMause

We have a lot to cover today, but first I would like to encourage you to donate to Matthew Sweet’s GoFundMe for stroke recovery if you’re a fan of his music and haven’t yet — he sounds like he’s in a bad way, he couldn’t afford health insurance on a musician’s income (especially being off the road for much of the last four years thanks to the pandemic), and needing to have health insurance is still a thing in the U.S. for some reason. Here’s hoping that the money raised will help allow him to make a significant recovery, and that someday even people without hit songs will be able to afford medical care and the Pentagon will need to hold a bake sale.

But enough about the unfairness of the modern American economic system, on to … well, you know:

  • With the city of Cleveland considering whether to file suit under the Art Modell Law to force Cleveland Browns owners Jimmy and Dee Haslam to offer the team for sale to local buyers before decamping to suburban Brook Park, the Haslams have taken the preemptive step of suing to block the Modell law on the grounds it violates the U.S. Constitution’s Commerce Clause and is too vague and probably a bunch of other things, the typography on the PDF is really hard to read. “Today’s action for declaratory judgment was filed to take this matter out of the political domain and ensure we can move this transformative project forward to make a new domed Huntington Bank Field in Brook Park a reality,” said Browns COO Dave Jenkins, which is a nice way of saying, “These damn ‘laws’ and ‘democratic procedures’ were getting in the way of our stadium plans, that could not be allowed.”
  • Speaking of things getting in the way of the Browns’ Brook Park dome plans, Cuyahoga County executive Chris Ronayne has reiterated that he doesn’t want Ohio taxpayers footing $1.2 billion of the stadium bill, saying, “We have looked at the facts, and the facts are that, and I said it before, that the Brook Park play just doesn’t work. It doesn’t work from a financial standpoint, and it’s frankly very detrimental to our future.” Added Cleveland city law director Mark Griffin: “I want to say this to our state legislature … and to this court system: If you make moves to try to gut this city of one of our key corporate partners and money maker, all of us will remember. You will be up for reelection. You would have to deal with the city of Cleveland in some way, shape, form, or fashion, and none of us will ever forget it.”
  • John Fisher will not be presenting any financial details of his Las Vegas Athletics stadium plan at the Las Vegas Stadium Authority’s October 31 meeting, I’m sure you’re all shocked to hear. The authority will discuss his proposed lease agreement for the stadium, but the actual language doesn’t appear to have been posted yet on the authority’s website, guess it’ll be a surprise! Marc Normandin has more on the Vegas clown show at Baseball Prospectus.
  • The Green Bay Packers have agreed to future rent increases at Lambeau Field after previously demanding a rent freeze so it could instead put the rent savings into paying for stadium upgrades. The Green Bay council unanimously rejected that proposal, and Packers execs agreed to annual 2.75% rent increases worth about $30 million in total present value — turns out sometimes pro sports franchise owners do take “no” for an answer, though obviously the Packers are a bit of a special case in terms of franchise ownership.
  • WTOP-TV quotes University of Maryland business professor Michael Faulkender as saying a renovated Washington Capitals and Wizards arena could benefit the surrounding Chinatown because “Generally when people come down for an event, they’re not just going to go straight to the event. They’re also going to, perhaps, come in early, go to restaurants, maybe stay afterward, go to bars,” which 1) they really don’t that much, 2) those that do are already there, since the arena is already in place. Faulkender added, “It may, on the margin, attract people to live closer to it, if they’re regular fans of one of those teams,” and attracting new residents to displace existing ones is exactly why people say the arena has been bad for D.C.’s Chinatown, Faulkender can just stop now, I think.
  • If you were wondering what former Arizona Coyotes owner Alex Meruelo was up to and had your money on asking for tax kickbacks for a proposed $1 billion minor-league and college hockey arena in Reno, Nevada, you’re a winner!
  • New York Gov. Kathy Hochul says her $1 billion Buffalo Bills stadium subsidy was necessary because five other cities were trying to steal the Bills otherwise. She didn’t name any of the cities, of course, but we know what one of them must have been.
  • I wrote a long explainer for Defector this week on where the proposed Philadelphia 76ers arena deal falls on the bad-to-awful spectrum, if you’ve been wanting a long explainer on that. And I did an interview with ABC Tampa about where the Tampa Bay Rays might play next year with their stadium roof in tatters, if you want to hear me expound on that, or just missed seeing what I have on my living room walls.
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Is Fisher’s sale of 25% of A’s for $500m to raise Vegas stadium money for real? An investimagation

access_time personNeil deMause

I am promising myself I’m going to limit myself to one post today, after three straight multi-post days thanks to things that keep happening, what’s the deal with this world anyway? So, hmm, let’s see, so much to choose from, but gotta go with the anonymously sourced story in the nation’s worst newspaper about everybody’s favorite owner assclown:

Billionaire Oakland A’s owner John Fisher is looking to cash in on the team’s move to Las Vegas by selling off a minority stake that values the franchise at $2 billion — a whopping 66% increase from its most recent valuation, The Post has learned.

Fisher — an heir to The Gap clothing empire co-founded by his parents, Donald and Doris Fisher — plans to start shopping a 25% chunk of the team with a price tag of $500 million in the coming days, two sources close to the situation told The Post.

That’s the New York Post, which doesn’t even capitalize the “The” on its own paper, but does when referring to itself, I guess, because that’s what fancy people do. The $500 million price tag isn’t new news — Fisher himself said it back in March, back when he was waxing poetic about spherical armadillos — but the share of the team a buyer would get in exchange appears to — oh, no, wait, that was reported by the Los Angeles Times last November. No hints at all from the Post about who passed along this information, though the only possible options would seem to be either an Athletics employee or maybe someone with whatever company is being hired to negotiate the sale, either of whom could clearly have lots of ulterior motives for leaking this information to the one newspaper that is guaranteed to run with an “exclusive” without asking too many questions.

On the surface, it makes sense for Fisher to try to raise $500 million toward the $1.15 billion he still needs for his new Las Vegas stadium by selling a quarter of the team: Can’t get if you don’t ask. Whether it makes any sense for anyone to buy 25% of the A’s at that price is another story, given that 1) the team is set to play the next three years in a minor-league stadium before moving to MLB’s smallest market and being saddled with hundreds of millions of dollars in stadium debt, 2) the Baltimore Orioles, who have none of those drawbacks, just sold for a total valuation of just $1.725 million, and 3) whoever ends up with a minority share would have to deal with a majority owner who is John Fisher. The prospectus on this sale is going to have to say “For sale: share of MLB franchise, as-is, serious bidders only, comes with existing roommate” — and while it’s always possible some billionaire will bite in hopes of being able to leverage their slice into majority ownership once Fisher drops an anvil on his own head, it doesn’t seem likely.

Or to put it more succinctly:

Meanwhile over at SI, which isn’t doing much better than the Post these days but which does still have a handful of good human writers remaining, Jason Burke observes:

The one person that could even potentially value the A’s at $2 billion isn’t in Las Vegas, and isn’t interested in becoming a minority shareholder in the franchise. That person would be Golden State Warriors owner Joe Lacob. It has been reported that he has a standing offer to buy the A’s from John Fisher, though what that price is set at is unknown. If that price is close to $2 billion, it would be have to be tantalizing for Fisher to get the post-ballpark valuation as a sale price without having to build the actual ballpark first.

He’s not wrong! As Burke acknowledges, there’s no guarantee Fisher will see it that way, but a sale of the whole team, to someone in a market bigger than Las Vegas, does seem to make the most sense financially. He concludes:

Something is going on with this Las Vegas deal, and it sure doesn’t appear that it’s smooth sailing at this point. What if the re-report of the A’s valuation was a negotiation tactic done by Fisher/MLB for someone attempting to actually buy the team behind the scenes? It’s not too often that the A’s end up in the NY Post, which could mean that MLB was involved in this report getting out there.

Too many people are reassuring the public that everything is just fine for everything to be just fine. This feels more like a last ditch effort to get the funding lined up before either Fisher digs into his own pockets for the first time, or finally decides to sell the team.

That’s speculation, absolutely. But it’s speculation with at least as much information behind it as the Post’s “exclusive.” Maybe I should be giving more credit to SI — sorry, I mean The SI. When there’s no good information out there, informed guesswork is sometimes the best journalism possible.

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DC arena lease-back deal isn’t as bad as it first looked, at least

access_time personNeil deMause

An email from Anu Rangappa, senior VP for communications for Ted Leonsis’ Monumental Sports & Entertainment, rolled in this morning, claiming a bunch of inaccuracies in yesterday’s post about the proposed arena sale and lease-back deal between Washington, D.C. and the Wizards and Capitals. Some of his objections were correct, some were not, and some are in between, so let’s address them one by one (all of the italic quotes below were provided by Rangappa and cited to Monica Dixon, President of External Affairs & Chief Administrative Officer for Monumental Sports):

DC mayor’s lease-back plan could add $110m in public costs to Caps/Wizards arena

Inaccurate: this is not additional funding on top of the $515M. That $515M was split across 3 payments: Year 1 = $117.8M, Year 2 = $171.8M and Year 3 = $171.3M. Upon approval by Council, $87.5M would be counted as funds to pay for the sale, and added to that is the remainder $84.3M ($171.8M total), which is the Year 1 disbursement amount.

After going back and forth with Rangappa and reading over the proposed sale legislation, which he kindly sent over, I can confirm: He’s right, the $87.5 million sale price would be part of the $515 million already approved by the city council, not on top of it. This is explained in the legislation in the most obscure way possible:

It is understood and agreed between DCALP and the District that, except as set forth below, the Project is being funded pari passu by the District Contribution and the Minimum Developer Contribution in accordance with the Project Budget (up to the respective limits of each), and the District shall have no obligation to disburse any amount of the District Contribution until a corresponding amount of the Minimum Developer Contribution has been spent by DCALP for Costs of the Project.

In other words, the district will indeed pay $87.5 million to Monumental — but not until Monumental first pays $87.5 million (“a corresponding amount”) back to the district as a “Minimum Developer Contribution.” That term “Minimum Developer Contribution” doesn’t actually appear to be defined anywhere in the legislation, but Monumental has confirmed that this is the upshot of what would be happening.

Obviously, removing that $87.5 million as an added cost makes this deal a lot less detrimental to D.C. Whether it’s actually good, let’s wait until we’ve reviewed some of the other pieces:

Economist Geoffrey Propheter, the guru of all things sports and property tax, notes that by a previous agreement, all of the arena’s real property (the building itself) is already exempt from property tax. What would be exempted would be personal property (all the stuff in the arena), which Propheter estimates would make the new tax break worth about $1-1.5 million a year, or $18-27 million in present value.

Inaccurate: Geoffrey Propheter assumes that tangible personal property is included in the possessory interest exemption under the lease. A tangible personal property exemption is part of neither the Existing Lease nor the A&R Lease’s real estate tax exemption. Transferring ownership of the personal property to the District will not reduce MSE’s liability under the tax since it applies to leasehold property.

Propheter replies: “Finally I get an answer to this question??” As he said to me in his original email — and I should have made clearer above, which was my bad — he was speculating about what the personal property tax exemption would amount to if there was one, which multiple people with knowledge of the deal hadn’t been able to provide him with an answer about. Monumental has now confirmed that it won’t be leasing back any personal property (the stuff in the arena), so there’s no additional tax break here.

Propheter further notes that Leonsis would get rights to an alleyway and a strip of street frontage as part of the deal, plus arena air rights. Total value: “chump change but still non-zero.”

Inaccurate: This is not free. MSE is paying additional rent. The strip of street frontage is the only new air rights being granted to MSE. The lease always included air rights to the extent on the Arena land.

Nobody said it was free. Both the existing air rights and the new strip of street frontage would be provided to Monumental in exchange for no increased rent, so the subsidy here is indeed “chump change but still non-zero.”

Also, though the teams’ rent would go up under the new deal, it would go up slightly more under the old deal, costing the city about $5 million in present value.

Inaccurate: The math is wrong. From 2024 through 2047 (the end of the Existing Lease term including renewals), the total Rent is $37.2M. From 2024 through 2047 under the A&R Lease, total Rent is $43.6M.

Propheter says this is apples and oranges: The $5 million discount in the new lease is because the lease term is reduced by five years, so the city gets less money overall. Whether that’s a benefit or not depends on whether you think the teams are likely to sign a deal that’s better for taxpayers for years 46-50, or an even worse one.

There’s also the issue of how much of a sweetheart lease Leonsis’s teams were set to get in their existing deal — Propheter estimates they’re getting about a $22-74 million discount in present value dollars over the course of the lease compared to other comparable teams. Most of that, though, Leonsis would be getting under either the new sweetheart deal or the old one; the main difference is that the teams would be getting more square footage now for roughly the same money.

Add it all up, and you’re probably only talking a few million additional dollars that Monumental would gain from D.C. as part of this latest deal. So that’s certainly not terrible, but it still may be WTF: The district has now approved $515 million in taxpayer renovation spending on Leonsis’ private arena — plus around another $50 million in rent breaks —in exchange for a new lease deal that at best is no better for city taxpayers than the one it replaced. Verdict: Mayor Muriel Bowser isn’t throwing good money after bad, but she does appear to be doubling down on making sure the bad money stays bad.

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