Ugggggh, do I really gotta write about this San Francisco Chronicle article asking “financial experts” whether Oakland A’s owner John Fisher will be able to raise another billion dollars or so to pay for a new stadium in Las Vegas? Nobody really has any new insights, and we just talked last week about how nobody without access to the insides of Fisher’s stock portfolio and Fisher’s brain can really guess what he’s willing or able to do, can’t we talk about something else? Look, how about this Governing column making the remarkable claim that even though stadiums don’t produce any economic impact, they do have “tangible” benefits:
Yet there’s a flip side to the stadium argument that is rarely considered. There’s a real case that stadium and sports team subsidies actually have a positive return on investment when viewed as marketing expenses…
One of the best ways to think about stadium subsidies is as an implicit naming rights deal. What the city is really paying for is the right to have the team be named after itself.
There’s a novel concept: Maybe stadium spending is worth it because it gets your city more attention, drawing more tourists and business and stuff! If that’s true, it should be easy enough to see it in, say, per-capita income going up as a result of a team moving to a city, or down as a result of one moving out, and in fact that’s been studied and … oh. Well, then. That wasn’t much of a discussion, it turns out.
Fine, let’s talk about the Chronicle piece. Your dramatis personae:
- Andy Zimbalist, sports economist for hire: “I think it’s tough. If I had to make a prediction, Las Vegas isn’t going to happen.”
- David Carter, sports marketing professor: “His bankers are well respected and deeply connected, so a deal is certainly attainable.”
- Former A’s owner Lew Wolff: “I have been involved with John and his family for decades and never encountered any endeavor that they undertook where they were not committed and capable of implementing.”
Gotta say, this really reads like Chronicle columnist John Shea called up a few random people in his address book until he got enough quotes for a piece “balanced” by differing opinions. Are any of these opinions right? Who can say! That would require some sort of research about the actual finances of Fisher’s Vegas plan and whether he can make enough money from it to pay off its costs — or more specifically, as discussed here last week, about whether he can find either bankers or investors who he can convince that it’ll pay off. Even Fisher doesn’t know that yet, and we know he doesn’t know, because if he had firm commitments he would have announced them by now instead of hiring consultants to look for those bankers and investors.
(Or, to be fair, it’s possible he has bankers and investors but they’re driving too hard a bargain, so he hired the consultants to find him more options. But we can’t know that either.)
Conclusion: Fisher still needs over $1 billion to pay for the rest of his stadium plans, and still has three choices — borrow $1 billion and pay it back once revenues start pouring in from some theoretical revenue fountain; sell $1 billion worth of stuff, or at least what he can convince someone is worth $1 billion worth of stuff; or get his mother or one of his brothers to sell $1 billion worth of their stuff. You can express skepticism about this, or optimism about it, but “people differ on how rose-colored their glasses are” is not really an excuse for a news article, no matter how much I sympathize with having a deadline staring you in the face and not enough material to really justify a story. In fact, I feel kind of ashamed for even spending this much time on it myself, stop reading this now, please, get out and enjoy the spring weather or something, when there’s any real news, I promise to tell you.
Since I’m still riled up from the FC Dallas story a couple of headlines down, I’m curious how hosting FC DALLAS and the world headquarters for the DALLAS Cowboys and the practice rink for the DALLAS Stars and the AA team for the TEXAS Rangers and the HQ of PGA of AMERICA would be providing commensurate value in “awareness” for FRISCO, Texas.
Re: the “Governing” article, it’s very much a vibes-driven opinion piece, and it sounded like the author himself had second thoughts about whether any of his arguments would hold up against the slightest bit of scrutiny.
Now, with that said… if you don’t live in a one-horse pro sports city in North America — and I suspect more than a few of the regulars here don’t — then it’s almost impossible to understand how deeply the city leaders (both in business and in government) care about being seen as a “major league” city to the outside world. And how that mentality might explain why, say, the City of Jacksonville might throw close to $1 billion toward a stadium in spite of the fact that its Q rating has arguably *gone down* as a result of having the Jaguars around. Or why the City of Orlando/Orange County might take on a large majority of the costs of building a new arena for an NBA franchise with (in)arguably the most evil and hell-bound family ownership group of any of the four “major” sports leagues.
The levels of insecurity/inferiority complexes that exist in these types of cities, especially relative to the larger cities in the region (e.g. Orlando’s with Miami and Tampa/St Pete), and even in terms of things that have nothing to do with sports, can be hard to comprehend if you’re not living and breathing it in everyday.
I well remember when I was in college in Connecticut and the Hartford Courant sports section referred to the Royals’ manager, apropos of nothing, as “New London native Billy Gardner.” There are strong “They mentioned our name on the telly!” vibes, for sure.
None of which excuses Governing for perpetuating this idea. If a writer submits such a quarter-assed column, it’s the editor’s job to say “How about you put this back in the oven for a while and see if it can become a real article?” Or else all becomes the gray goo of clown journalism.
With apologies for the indignity/offensive title… isn’t this really just the “trophy wife/husband” argument redressed as a sporting issue?
You are absolutely right that many (including me) don’t live in a city desperately clinging to it’s franchise (which isn’t “it’s” of course). But it doesn’t change the fundamental nature of the bargain, and it’s a bad one.
As much as I am sad that the Athletics are leaving Oakland, it is because of their history and pre-Fisher ownership bond with the city’s people that I am sad. Not because the A’s actually benefit the city in any quantifiable economic, marketing or quasi-financial way (just like the Raiders). They do not.
One can easily make the argument that the best option for Oakland was for all of their parasitic professional sports franchises to leave. And the same argument can be made for KC or New York or LA. (what could have been better for New York than the Yankees following the Giants/Jets to the Meadowlands or thereabouts? For a significant percentage of the people the commute would be the same or shorter and NJ would be footing the subsidy bill, not New York. Ditto the Bears in Arlington Heights!).
Desperately clinging to “your” last franchise is just another term for weak leadership. They are worried about being “blamed” for the loss, when in fact the location of sports franchises is a decision completely outside of the purview of any elected government. A decision to pay ransom – which is what sports stadia funding is – to an extortionist and/or their cohorts should not be considered any more seriously than a decision to pay ransom to kidnappers.
And yet here we are.
These are all valid points, and just personally, I still do believe that Orlando would’ve been better off letting this incarnation of the Magic franchise go somewhere else and ridding itself of the deVos family stench for good.
And yet, it’s been almost 30 years since a single-team pro sports city lost its one and only franchise. And if you don’t count Oakland (which I don’t, since it’s only been one for a few years), every city fitting that description has ultimately chosen to cough up massive sums of public money on building or renovating its primary venue. Even in the face of the obvious holes in the aforementioned vibes-based argument, people who run these types of towns have convinced themselves, time and again, that losing a team would be a far worse fate than having never had that team in the first place.
Obviously a much different (lower) level of subsidies at play, but it’s not too dissimilar to cities paying a few million bucks a year to European airlines in exchange for them opening a new route to its local airport. Even if the airlines pull the plug after a few years because the subsidies aren’t enough to cover the hefty losses, the cities could convince themselves that just getting its name out to the international consciousness will eventually make the “venture” worth it for them — and if you look at the list of cities that do this (or did this previously), you’d find that a who’s who of “small market” cities.
I totally agree on the deVos family. Losing the NBA just to rid yourselves of that group is well worth it IMO. They may or may not be the absolute worst, but they are in any conversation about the same (just when I think I have found the absolute worst humans on the planet, suddenly there is a new contender…)
Would they sell if they don’t get their Vig? A relocation? What do you think?
They’re probably content at this point to keep cashing in on the Magic’s status as the only “big-name” sports team in town, at least until the Kia Center* inevitably becomes a talking point by the end of this decade. Orlando/Orange County is still very much paying for NBA’s decision to allow that family into its ownership circle many years ago, and there’s no incentive (yet) for them to seek out a buyer.
* Amway had been the arena name “sponsor” for years before it was replaced by Kia earlier this year. Whether that was out of a desire for more revenue, or a belated realization that both “Amway” and the “deVos family” carried negative connotations — even within certain Orlando circles — we’ll probably never know. But it was better late than never.
The city naming thing is funny. When H Wayne Huizenga started the marlins they were “Florida Marlins” even though they technically played in the Miami suburbs. When they moved to their publicly funded stadium in Miami proper, they became the “Miami marlins”
Meanwhile he also got the “Florida panthers” and they were in downtown Miami. Until a stadium was built (again with public funds) in sunrise. One of the main sticking points was that they had to always refer to the area *as sunrise* not Miami or Fort Lauderdale.
The thing about Wayne was that he wanted the teams to have a south florida flavor, not one specific town. But then again, he wanted to build the giant blockbuster park (in sunrise very near where the panthers wound up) which would accommodate both teams and be in a central-ish location to palm beach, broward, and dade counties (aka south Florida) so I guess he had his own spin on it.