In case you missed it, sports economist/meme master J.C. Bradbury has a new book on sports subsidy deals due out soon: This One Will Be Different details the latest in stadium and arena deals and why they never pay off for the public, with a particular focus on the Atlanta Braves‘ extraction of money from Cobb County for a new stadium just 17 years after getting their last one, which he had a front row seat for. And for the run up to the publication date, Bradbury has been building out his sports economics website with all sorts of fresh goodies: FAQs on stadium economics and how stadiums are funded, links to academic studies and presentations, and even a series of YouTube shorts on the lessons of past deals and the prospects for future ones. Check it out, it’s entertaining and eye-opening rabbit holes all the way down!
But don’t go just yet, because first we have another week of stadium and arena news to get through:
- The Plano, Texas city council voted unanimously to put a measure on the November ballot on spending $700 million on a new Dallas Stars arena, to be raised by surcharges on hotel and car rental taxes, arena parking taxes, ticket taxes, and $5,000 a game rent. “The proposed venue-related taxes would apply only to specific transactions and would not affect the existing property tax rate for Plano residents,” the city said in a statement — but the plan would also kick back property tax revenue from an arena district, and if cities can’t get property taxes from one place they have to raise them elsewhere. This election campaign is already doing great with transparency!
- The headline “Chicago Bears executives say NW Indiana ‘sole focus’ for new stadium, talks with Illinois continue” really tells you all you need to know about the Bears stadium situation, which remains in a superposition of states. There’s no target date for when the Bears will finally choose between Betty and Veronica, because, according to team CEO Kevin Warren, “My wife told me about six months ago don’t give any more target dates.”
- Tampa city councilmember and mayoral candidate Bill Carlson has explained more about his new mystery funding plan for a Tampa Bay Rays stadium, saying “the city is not involved in any of this” and he wants “the city to only put part of the property taxes from the development [into] govt owned infrastructure,” okay maybe “explained” was overstating things slightly.
- Orange County’s Tourist Development Tax Citizen Advisory Committee has advised against putting tax money into a $523 million expansion of Orlando’s convention center on the grounds that the county should try to “benefit more of the community and bring different kinds of visitors.” The committee also recommended against funding the Orlando Dreamers MLB expansion team (note: not actually an MLB expansion team yet) owners’ request for $1 billion for a stadium, which goes back on the back burner for the time being.
- Kansas Republican gubernatorial candidate Ty Masterson told KMBC that his state’s new Kansas City Chiefs stadium will bring in “hundreds of billions in income tax from the NFL alone,” which you don’t need an economics degree to LOL at, but if you want a credentialed source calling this statement “a f’ing joke,” Geoff Propheter has got you.
- The Los Angeles city council voted 10-4 on Wednesday to approve a long-overdue Enhanced City Resources Master Agreement on the 2028 Summer Olympics, which according to the Los Angeles Times “lays out the process for the city to seek reimbursement for the services it provides during the Games,” but according to councilmembers themselves only establishes that the city is at the mercy of the LA28 organizing committee and has no real way to ensure it’ll get its billions of dollars in expenses back. Don’t say I didn’t warn you.
- One of the architects of the Buffalo Bills‘ new $2.1 billion stadium explains that the obstructed views from many upper-deck seats were necessary in order to relocate stairways so fans could see the game while waiting on line for food, if not while sitting and eating it. And while we’re on the subject, no, a full renovation of the old Buffalo Bills stadium probably wouldn’t have cost anywhere near $1 billion, but thanks for playing!
- And rounding out this week’s renowned sports economist trifecta, Victor Matheson reports on this headline from Fox 26 Houston: “Add another entry to crazy economic impact stories. Houston reporting that World Cup is leaving a $500 million legacy because Houston spent $500 million paving roads and fixing sidewalks prior to event.” If only Houston had bought more asphalt, the World Cup could have had an even bigger economic impact!
A local news site in Canada raises the specter of the National Hockey League becoming even more bloated. The Daily Hive cites an NHL player agent saying expansion to Atlanta and Houston is a done deal because “TV markets”.
That’s splendid, base your presence on TV markets when local television is collapsing past the point of no return.
https://dailyhive.com/vancouver/next-nhl-expansion-cities-poorly-kept-secret
Those cities would still need to build NHL arenas, because the current NBA teams, (at least the one in Houston) are not interested in sharing. And the NHL would then be dividing their national TV pie into 34 slices.
IIRC, the NBA team owner in Houston said he is interested in owning an NHL team there, implying that the NHL can share the arena as long as he owns the team.
To which the NBA has predictably responded, “Well, in that case, maybe we’ll just move to (glances quickly at map of Texas) Austin!”
https://www.texasmonthly.com/culture/new-texas-hockey-team/
They would be dividing their national tv deals and other league wide sponsorships/merch etc into 34 instead of 32 ‘slices’. They would also be receiving somewhere between $1.8 – $2.5 Bn in expansion fees… which per team roughly equals the revenue from the TV deals (depending on HRR calculations and how the TV revenues are split – something the NHL keeps changing…).
So, effectively, they are getting a ‘bonus’ 1 year tv revenue payment in return for a drop in annual tv revenues of 4-6% on a medium term series of TV deals. And that is money up front, not money earned over the next 8-10 years.
I’d make that trade. Especially knowing that the next set of TV deals will increase in price at least enough to offset the short term loss from expansion. In addition, if you were an owner (or private equity firm) readying to sell, expansion cash is just a parting gift.
A bird in hand, etc.
Owners in crap markets who might be legitimately losing money if not for NHL revenue sharing will never vote against the league office’s wishes, nor against receiving one time balloon payments from expansion.
This is why across most sports, expansion will just keep happening. Professional sports is rapidly approaching it’s #shoeeventhorizon moment. The strongest leagues will likely survive in some (much reduced) form. Not all will make it though.
The NHL wants to expand into the largest US media markets it does not already occupy. That makes sense, at least superficially, but I don’t see how anyone can confidentially guess how the TV business, or entertainment industry in general, is going to work in 15 years, so I would not bet on an old strategy working in the future.
And they need to be extremely careful about who they let own one of those teams. It should not be too hard to for an NHL team to make money in markets that large if the team is well-run, but we know from the Thrashers and Coyotes experience that it is not too difficult to screw it up if the owners are more interested in real-estate swindles than running a pro hockey team.
As the franchise price/expansion fees go up, the number of people willing and able pay that number goes down. That increases the chances that the only owner who will pay it is actually not somebody the league ought to want as an owner.
That’s been a problem for the NHL in particular. But now it appears to be happening in the NBA too.
They don’t have to worry about what the tv landscape will look like in 15 years if they don’t plan to be an NHL owner for more than 5 years.
The NHL has always let scumbags into the club. In fact, it was mostly scumbags that started the NHL (look up the Norris family’s ‘contributions’ to the game for evidence).
Having guys like Dundon in the club is nothing new. I would certainly agree that the NHL has been notable for it’s lackadaisical background checks in the past (the Rigas’, John Spano, McNall… the list is endless!)
It’s been a rogue’s gallery more or less since the beginning. I mentioned the Norris family (which once owned three of the league’s six teams). Add Ballard. Pocklington.
That’s old news. They’re still a long way from getting arenas (or owners) in those cities.
To some extent, Orange County’s decision to not throw money at the wannabe baseball team underscores the reality that Orlando would’ve made an even worse MLB market than Miami and Tampa Bay. I don’t need to rehash the whole ensemble of reasons why an MLB franchise would have never worked here, but it was obvious to all but the loudest cheerleaders of the city that it would’ve ended in a disaster one way or another.
If anything, the county’s decision to not fund the 5,000th expansion of the convention center was the real surprise — though I suspect that’s mostly because the 4,999th expansion project is currently in progress.
I live in Middle Tennessee, and I keep having the media and many people in the area telling me Nashville is a done deal for a MLB expansion team. How is that going to happen without public money?
Prediction: it won’t.
SnarlOR beat me to it.
Thank you both. I thought that was the case. And get this, right now Spotify is playing “Out of Touch” by Hall& Oates. Fits the reporting on Nashville and MLB.
I’m not in that business, but I have to assume that highly-speculative and/or entirely fictional articles about expansion and relocation possibilities are reliable clickbait for various online outlets.
Maybe that will change as AI kills of SEO and instead we’ll just get loads of total slop telling us that Greensboro is building an NFL stadium – complete with renderings of that stadium.
I’d also guess that businesspeople have found that being associated with these efforts, even if they’re entirely quixotic, helps them make connections in their local political and business scene. “I’ll show you all. I’m going to spearhead the hell out of this expansion bid.” That sort of thing.
And maybe some of these people just long for the simpler times when they were a kid and getting one’s name in the local newspaper, for whatever reason, was a big deal. Claiming you’re trying to bring an MLB team to your city is an easier and less costly way to do that than committing murder.
The Bears are annoying their fan base with this Indiana nonsense. Everything is wrong with the Indiana site, access is restricted to the Skyway and Indiana Toll Road, and the area within 5 miles is a swamp or industrial wasteland. Route 53 is being rebuilt through Arlington Heights, and infrastructure for the Bears will be far more expensive than if the Bears worked with IDOT years ago. The Bears wanted the current Soldier Field, after rejecting McDome, so live with your open air stadium on Lake Michigan.
The Meadowlands were also swampland in an adjacent state, and the Giants and Jets don’t seem to have missed a beat since leaving NYC. Doubt the McCaskeys can turn down a free billion dollars from Indiana if there is nothing on offer in Illinois. Fans will hate driving the Chicago expressways to get to Hammond, as I’m sure NYC residents do when heading to East Rutherford, but the next time a sports team makes a decision based on what’s best for fans will be the first.
It will be a terrible deal for Hammond and Indiana, but according to coverage on this site, Indiana has never seen a terrible deal for a sports team that they didn’t fall all over themselves to extend.
Then again, Illinois has come up with two terrible deals to subsidize the Bears, and the governor now is asking the Bears to announce which one they prefer!
“Everything is wrong with the Indiana site…”
But…. that’s the genius of the plan…
The McCaskeys may be paying Indiana leaders to create false interest in luring the Bears! Illinois and Chicago should call their bluff and let the Bears get hosed by the Hoosiers.
Florida has an interesting history with the MLB. If you don’t recall the story, the suncoast dome (now Tropicana) was built in 1990, in the hopes that they could lure a team to move to Tampa.
That failed, but the proportions of the stadium meant it could host a pro football team, so they made overtures to get one from the nfl or the world football league … with no luck.
So for a while it as mostly vacant, then the nhl Lightning played there for a while.
Persistence paid off and they were finally awarded an mlb expansion team in 1995.
So Orlando’s dreams (!!) are familiar.
* this is to the best of my recollection
Pretty much, with one big missing piece: Bob Lurie tried to move the Giants to St. Petersburg (or at least threaten to), MLB stopped him, and then gave Tampa Bay the Rays to forestall any possibility of a suit that might kill MLB’s antitrust exemption.
Oh yeah! I had forgotten that rather important detail.
I did recall that several prominent mlb voices were lobbying for an expansion team. But I couldn’t recall the “why”
It’s not “the MLB.” It’s never “the MLB.”
And I don’t believe the Suncoast Dome folks ever tried to get a pro football team from the NFL, given there has been one just on the other side of that body of water since 1976.
They obviously DID get an arena football team. And one guy said maybe possibly they could think about a CFL team back when the CFL was into the US, but nothing came of it.
The owner of the Raleigh-Durham Skyhawks did meet with dome officials about moving there, but nothing came of that, either.
I agree on “the” MLB business. It hurts me when I read it.
The Plano tax election is largely pointless. The vast majority of the funding is going to come from a huge TIF district, and the city has made it clear that a ‘no’ vote will not stop the project.
… ah, democracy… good thing we don’t have it or professional franchise owners would never get their welfare payments…
But hey, the Stars will be paying around $275,000 a year in rent! (42 home games, 4-8 playoff games on avg, and preseason)
Yay! At that rate, the $700m investment will be recouped (without interest) in about 2,600 years. The Stars will still be playing in the new arena then, right?