Category: Reading Fightin Phils

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!