Hi, all! I’ll be traveling next week to one of the parts of the globe where things happen a bit later in the day (because of time zones, not because everyone sleeps in — but wouldn’t that be a great place?), so anticipate posts to be a bit tardier and possibly more sporadic. I’ll be back in plenty of time for that big Oakland A’s stadium hearing on the 20th, though, so expect a report on that one bright and early. (Unless you live in, say, Europe, in which case you’re already taking an afternoon siesta by the time FoS wakes up, lucky you.)
But enough about living on a spherical planet, let’s get to this week’s news:
- That five-year lease extension that Carolina Hurricanes owner Tom Dundon supposedly signed more than a year ago actually just got finalized by the state-run Centennial Authority yesterday, and we now have some more details on the terms: In exchange for agreeing to stay put from 2024-29, Dundon, a billionaire subprime auto loan baron who just completed his purchase of 100% of the hockey team, will pay zero rent starting this year, plus will get paid $9 million a year in City of Raleigh and Wake County food and hotel tax money through 2029 to cover both operating costs and arena upgrades. There’s also an out clause in the lease where the ‘Canes owner can pay a termination fee and leave early anyway, starting at $31 million in 2024, and sinking to $3 million in 2028. Authority board member and resume-padding yacht salesman Randy Ramsey worried aloud that “I can see us getting to about 2029 and the Hurricanes, or whomever our partners are at that point, saying the building is dilapidated” and needs to be replaced — and Ramsey was one of the board members voting for the lease extension. This is hardly the first case of a team getting paid to play games in its home arena — it’s practically an annual tradition in, say, Indiana — but it’s still a pretty egregious one, especially since North Carolina taxpayers will end up sending enough money Dundon’s way to pay any relocation fee for him, which isn’t quite what a lease guarantee is supposed to do.
- The Calgary Flames arena project is now $50-60 million over budget, and the CBC reports that “adjustments are now being made to control the costs, which include interior finishings and parts of the building’s exterior.” That seems like an awful lot of money to try to save just by eliminating some sconces, but more power to them if they can do it without value-engineering the place right out of working for hockey. (In case you’re wondering, it would take a two-thirds vote of the Calgary council to approve more money beyond the $250 million-ish already approved.)
- ProPublica yesterday ran a long article (the only kind it ever runs) about the special tax dodges that sports team owners use to cut their tax bills, in particular the ability to depreciate the value of your players as if they were machine parts that wear out. (ProPublica, as some of you may know, is currently my day job, but I had no involvement with this story.) This is an old, old dodge in sports circles, having been first invented, as ProPublica notes, by then-Cleveland Indians owner Bill Veeck in the late 1940s; here’s a good Sports Illustrated article about it from 1978. I first read about it in (checks Field of Schemes endnotes, I knew there was a reason we included those) Andrew Zimbalist’s 1992 book Baseball and Billions, and then later talked with sports economist Rod Fort about how he and fellow economist Roger Noll had exposed how then-Milwaukee Brewers owner Bud Selig had assigned 94% of the value of his team to the player contracts he’d bought along with the rest of the Seattle Pilots franchise in 1970, thus allowing him to take almost the entire $10.8 million purchase price as a double-dip deduction — only to be told by a judge, in Fort’s recollection, that “well, that’s a good piece of work, but I can see no reason that Selig’s choice violates the accepted rules of accounting in Major League Baseball.” (ProPublica also didn’t mention that the depreciation tax break only really works when the capital-gains tax rate is lower than the income tax rate, as it is now, or else you end up paying the same taxes anyway when you sell the team, something that helped keep Veeck from ever taking advantage of the tax dodge he concocted — but I think this bullet point has already exceeded its maximum allowable parentheticals, so you’ll have to look that one up yourself.)
- Tokyo has finally given in to reality and barred spectators from the upcoming Olympics, in the face of a virus surge there. (Japan’s vaccination rate is surprisingly crappy, thanks to slow vaccine approvals and something about not allowing pharmacists to give shots but allowing dentists to.) If there’s good news, it’s that once Japan barred foreign fans from attending, spending billions of dollars to host the Olympics looked like an even worse deal once locals wouldn’t even get tourists’ filthy lucre; though I guess now they’re still spending the money and not getting either filthy lucre or the chance to watch Greco-Roman wrestling in person, so maybe there is no good news at all. (For anybody, anywhere.)
- Looks like the Reading city council is down with giving $3 million to the Fightin Phils for stadium renovations. Now all they need is $3 million from the county and $7.5 million from the state of Pennsylvania, and they’ll be all set, at least until the next time the Fightin Phils owners — which would be the Philadelphia Phillies owners, who are demanding upgrades as necessary thanks to new MLB rules on minor-league facility minimum standards that they themselves voted to impose — decide their stadium is obsolete because their weight room isn’t roomy enough.
- The … the Phoenix … Suns are in the NBA Finals, so of course someone’s going to write an article about how great this is for the Arizona economy. Two Arizona economists say so, arguing that people might see images of Phoenix on TV during the finals and decide to move there. Or, you know, decide that Arizona on the fast track to being an uninhabitable hellscape. Definitely one of those two!
“…people might see images of Phoenix on TV during the finals and decide to move there…”
I frequently hear that statement about winter sports like the Super Bowl, but it’s hard to imagine someone seeing the puddled remains of humans on our 150-degree sidewalks and yearning to join them. But even the wintertime argument makes little sense. Do people really look at the pictures and think “Holy cow! It’s warm and sunny in Arizona in January?!?”
I’m not sure if you’ve ever lived “up north” Dave. I used to live in a community (not a research or military outpost in the arctic…) where for six weeks surrounding the winter solstice the sun would rise around 10am and be setting behind the mountains by 2 or 2:30pm. The place I worked at the time was in a valley along a mountain river, which meant that for the latter half of December the sun would rise over the mountain around 12:45 and effectively set less than an hour later. One of my coworkers used to document the sunrise and set times on his calendar… I believe the shortest “day” he recorded was about 44 minutes… and he was on the third floor of the building. If you worked outside or on the ground floor, there was no sunrise at all for a couple of weeks.
That sort of gloom (and lack of Vitamin D) has an effect on humans that is hard to characterize to someone who hasn’t experienced it. So, in short, yes, there are some people who would find a reason to vacation in Arizona in December or January. I made the mistake of going in early November one year and late February another, and Arizona was just too hot for me even then…
I’m not saying it makes all the “tourism” related spending justified, and the NBA finals argument is ludicrous (I would imagine the locals are looking for trips to cooler areas about now). But the invasion of pale people (who wear shorts, tee shirts and sandals while all you locals are wearing jackets and hats) from Nov – Jan is a real thing.
The days in winter in Arizona don’t get shorter like here up north? It’s in the northern hemisphere? Right?
Basic science. The further north you go, the shorter they get (and once you get “far enough”, the sun doesn’t rise at all).
They do get shorter in Arizona, but they are still dramatically longer than those up north.
Just thinking about the Surfside condo collapse. That building was 40 years old but the stories say people were kinda meh about spending money to fix it. Sports stadiums that are 20 years old however get showered in cash for updates.
Yeah AZ can be great if you live in the higher elevations which are typically only for the independently wealthy and their servants as well as the govbots. The plus side is the dryness but that means with greed based growth, water and power will be more and more expensive for the pleibs so google/fb/intel etc etc can get free land and low low low cost power and water for their data/manuf centers which are in no way “carbon neutral” as their deceptive marketing claims. This greed growth is all made possible by the ecological disaster of the govmafia’s greed based colorado river dam system. You know the guys you believe implicitly on everything OTHER than the sports world for some reason.
Weren’t the Phillies recently complaining that they couldn’t afford Realmuto this year? And now the parent company is pocketing (maybe) $13m+ from it’s minor league hostages?
Hmmmn.
Watch the sock puppet on my hand, not my mouth.
If the Japanese spectators just use the 100% fail safe, Fauci approved cloth face masks, have plexiglass installed between every seat, and thoroughly wash, sanitize and disinfect the grandstands every hour, they can have a back to normal Olympics, just like we in America, by using these measures, are nearly back to normal after only a short 15 month emergency period! It might cost a few more billion, but “A billion here, a billion there, and pretty soon you’re talking real yen.”
I read somewhere that the organizers (alright, the Japanese taxpayers…) of the Tokyo games will lose some $800m on ticket sales.
Typically we hear that the security costs for the Olympics range from $1-2Bn depending on the location (and whether it’s summer or winter, of course).
I’m sure they will still have security despite no fans, but is it possible they could save enough on reduced security to offset the loss of ticket sales?
Maybe the olympics would be more cost effective if they never allowed (or built facilities for) spectators at all?
Sure, there’d be no spinoff travel and accommodation revenues… But if you can save a billion on security and another billion or two on building smaller facilities???