Category: Sacramento MLS team

Friday roundup: Bears owner bids to buy Arlington Park, plus do you really need anything else?

access_time personNeil deMause

Happy Friday, everyone! Unless you’re in the American West and currently melting from the heat, in which case, umm, try to stay indoors and hydrated, and don’t think about how in coming years it’s only likely to get worse. (This is maybe another reason why the Oakland A’s aren’t likely to move to Las Vegas, though building a new stadium right on San Francisco Bay is an equally bad idea in climate-proofing terms.)

Lots of news this week, so let’s get down to business:

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Billionaire bails on Sacramento MLS team, league may need a new sucker to pay $200m expansion fee

access_time personNeil deMause

Way back in 2017, University of Michigan economist and Soccernomics co-author Stefan Szymanski said to me of MLS’s ever-increasing expansion fees, “Why would you buy something for $150 million which is basically giving you a share of losing $100 million a year?” Since then, the fee per team has gone up to $200 million, which does not make the math any better, but still lots of rich people have been lining up to pay the price without balking at the cost.

Until now, that is:

Sacramento’s roller coaster journey to join Major League Soccer has taken a dramatic downward arc, with Mayor Darrell Steinberg announcing Friday that billionaire and lead investor Ron Burkle is no longer part of the bid…

Major League Soccer issued a statement after Steinberg’s confirming Burkle’s withdrawal, stating Burkle said issues with Covid-19 and the project prompted him to withdraw. Several media reports suggested costs involved with expansion, including the price tag for the stadium of $252 million and an expansion fee to MLS of $200 million, were factors in Burkle’s decision.

That always did sound like a terrible deal for Burkle, and apparently uncertainty about how he was going to earn back his money in a post-Covid world was enough to make him bail on the expansion plan, even if the team wasn’t set to take the pitch until 2022, by which time we should actually be back to full stadiums. (Or at least, as full as they get in MLS.) And apparently Burkle is free to do that despite Sacramento Republic F.C. having been formally awarded an expansion slot in November 2019, because Burkle never actually signed a final expansion agreement, whoopsie.

Anyway, with Burkle back to just co-owning the Pittsburgh Penguins and whatever else billionaire investors own, MLS is now going to have to figure out whether to find another moneybags eager to plunk down close to half a billion dollars for a Sacramento team and stadium, or to find a replacement expansion franchise. At last count, there were roughly 10,000 owners in other cities looking to get in on the totally-not-a-Ponzi-scheme, so MLS presumably has options, though you have to wonder if there’s something that spooked Burkle — maybe those 2022 league TV contract renewals weren’t going to be as lucrative as had been hoped? — that could give other owners pause as well.

For now, it’s officially still full speed ahead in Sacramento, but clearly this situation bears watching: Among other things, will the collapse of Burkle’s ownership group lead to fewer big-money stadiums being planned, or just to more demands that the money come from someone other than the new owners saddled with expansion fee expenses? (Three guesses.) If nothing else, it’s likely that whatever strange things the clip-art entourage were going to get up to at a new Sacramento stadium will have to put off for a while.

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Friday roundup: Lotsa soccer news, and oh yeah, saving the world

access_time personNeil deMause

Happy global climate strike day! As kids (and their adults) take to the streets today, it’s important to keep in mind two not-contradictory-though-they-may-seem-so things: We are seriously screwed even if we act now, but there’s still a lot we can do to keep ourselves from being even more seriously screwed. (And by “we” here I mostly mean governments, because it’s almost impossible for individuals alone to significantly impact carbon emissions just by shutting off lights and avoiding air travel, not that those aren’t important things to do, too.)

Anyway, enough about the fate of humanity, let’s talk about sports venues (and not even about the carbon footprints of building new ones and flying teams from city to city, which would be a whole other article):

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Friday roundup: New sports venues, new sports venue threats, and our dwindling journalistic resources

access_time personNeil deMause

Deadspin’s Albert Burneko is a national treasure whether he’s writing about sports or movies or punctuation, and his takedown this week of a Fivethirtyeight article that asserts there are too many minor-league baseball teams is very much no exception. Drop whatever you’re doing — which is reading this post, so okay, drop whatever you were going to do after that — and read it now, whether you care about the purpose of sports as entertainment or the role of the media in management-labor relations or the increasing propensity to reduce human beings to measures of technocratic efficiency. With the demise of the alt-weeklies, there are fewer and fewer outlets eager to combine tenacious reporting and big-picture analysis and engaging writing toward the end of helping us understand the world we live in beyond “here are some potentially viral things that happened today,” so we need to cherish those that remain while we can.

And with that, here are some potentially viral (in the not especially infectious sense) things that happened this week:

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Friday roundup: IRS hands sports owners another tax break, A’s accused of skimping on Coliseum land price, Rays could decide this summer on … something

access_time personNeil deMause

Happy Friday! Here is a fatberg of stadium and arena news to clog up your weekend:

  • San Jose Mercury News columnist Daniel Borenstein says the Oakland A’s owners could be getting a discount of between $15 million and $65 million on their purchase of half the Oakland Coliseum site from Alameda County, which is hard to tell without opening up the site to other bids, which Alameda County didn’t do. You could also look at comparable land sale prices and try to guess, which shows that the A’s owners’ offer is maybe closer to fair value; it’s not a tremendous subsidy either way, but still oh go ahead, just write us a check for whatever you think is fair is probably not the best way to sell off public assets, yeah.
  • St. Petersburg Mayor Rick Kriseman says he expects to hear by this summer from Tampa Bay Rays owner Stuart Sternberg whether Sternberg will seek to build a stadium in St. Pete or across the bay in Tampa. Of course, Sternberg already announced once that he was picking Tampa and then gave up when nobody in Tampa wanted to pay for his $900 million stadium, so what an announcement this summer would exactly mean, other than who Sternberg will next go to hat in hand, remains unclear.
  • Fred Lindecke, who helped get an ordinance passed in St. Louis in 2002 that requires a voter referendum before spending public sports venues, would like to remind you that the soccer stadium deal approved last December still has to clear that hurdle, not that anybody is talking about it. Since the soccer subsidies would all be tax kickbacks and discounted land, not straight-up cash, I suspect this could be headed for another lawsuit.
  • Cory Booker and James Lankford have reintroduced their bill to block the use of federal tax-exempt bonds for sports venues, but only Booker got in the headline because Lankford isn’t running for president. (Okay, also it’s from a New Jersey news site, and Booker is from New Jersey.) Meanwhile, the IRS just handed sports team owners an exemption from an obscure provision of the Trump tax law that would have forced them to pay taxes on player trades; now teams can freely trade their employees like chattel without having to worry about taxes that all other business owners have to, thank god that’s resolved.
  • Golden State Warriors star Kevin Durant, for some reason, revealed that “Seattle is having a meeting to try to bring back the Sonics,” but turns out it’s just Chris Hansen meeting with a bunch of his partners and allies from his failed Sodo arena plan, not anyone from city government at all, so everybody please calm down.
  • The rival soccer team that lost out to David Beckham’s Inter Miami for the Lockhart Stadium site in Fort Lauderdale is now suing to block Beckham’s plans for a temporary stadium and permanent practice facility there, because this is David Beckham so of course they are.
  • Publicly owned Wayne State University is helping to build a $25 million arena for the Detroit Pistons‘ minor-league affiliate, and Henderson, Nevada could pay half the cost of a $22 million Las Vegas Golden Knights practice facility, and clearly cities will just hand out money if you put “SPORTZ” on the name of your project, even if it will draw pretty much zero new tourists or spending or anything. Which, yeah, I know is the entire premise of this site, but sometimes the craziness of it all just leaps up and smacks you in the face, you know?
  • The Philadelphia Union owners have hired architects to develop a “master plan” for development around their stadium in Chester, because they promised the city development and there hasn’t been any development and maybe drawing a picture of some development will make it appear, couldn’t hurt, right?
  • Wannabe Halifax CFL owner Anthony LeBlanc insisted that “we are moving things along, yeah” on getting federal land to build a stadium on, while showing no actual evidence that things are moving along. “The only direction that council has ever given on this is ‘dear staff, please analyze the business case when it comes,’” countered Halifax regional councillor Sam Austin. “Everything else is media swirl.”
  • Never mind that bill that could have repealed the Austin F.C. stadium’s property tax break, because its sponsor has grandfathered in the stadium and any other property tax breaks that were already approved.
  • Hamilton, Ontario, could be putting its arena up for sale, if you’re in the market for an arena in Hamilton, Ontario.
  • And finally, here’s an article by the Sacramento Bee’s Tony Bizjak on how an MLS franchise would be great for Sacramento because MLS offers cheap tickets and a diverse crowd who like public transportation and MILLENNIALS!!!, plus also maybe it could help incubate the next Google, somehow! And will it cost anything or have any other negative impacts? Yes, including $33 million in public subsidies, but Tony Bizjak doesn’t worry about such trivialities. MILLENNIALS, people!!!
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MLS commissioner doubles down on giving teams to whichever cities cough up stadiums

access_time personNeil deMause

MLS commissioner Don Garber has issued his latest missive on the league’s never-ending campaign to create an endless carpet of soccer teams across the United States (and an endless carpet of expansion fees), and it has several points:

  • St. Louis and Sacramento are the frontrunners to become the league’s 28th team, with a verdict to be handed down by the end of this year. And the price of admission is clear: While a stadium subsidy package got preliminary approval from St. Louis in December, “It would really help their bid if they had stadium naming rights and a jersey sponsor in place,” Garber told the St. Louis Post-Dispatch. “So there is a specific level of financial corporate support.”
  • Other cities, of which the commissioner specifically named Charlotte, Las Vegas, and Phoenix, will have to await the next round of expansion, which league officials have previously indicated could be completed by 2026.
  • Detroit is apparently out of the running for now, with Garber saying, “I’ve been in regular conversations with them. And we still struggle with their stadium plan. … We think that in order for us to be successful in that city, we need a soccer-specific stadium. And the options that we’re presented with today are only at Ford Field.”

This is all in keeping with MLS’s long-established business model: Keep handing out new teams every year or two, at a pace geared to ensure a steady flow of expansion fees while still keeping enough cities interested that the league can levy demands — namely, for new publicly subsidized soccer-only stadiums — in exchange for granting franchises. (Lucrative naming rights deals, apparently, will be the new tiebreaker.) At least, except when it’s presented with owners it craves enough to be worth waiving that rule, which was the case with NYC F.C. and Atlanta United but not with Detroit for some reason.

If anything, the main advance made by Garber is that he pretty much just straight-up admits the game he’s playing now:

Garber called the competition good for the league.

“Life is good when you have options,” he said. “I believe that there are many cities in our country today that can support an MLS team. We’ve got to get this last one over the finish line and then sit down and figure out what happens to those cities that were not part of the 28 that we set out to finalize a couple of years ago.”

“Life is good when you have options.” That one really needs to go alongside Jerry Reinsdorf’s “A savvy negotiator creates leverage” in the sports shakedown Hall of Fame.

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Sacramento Bee says city must “hold line” on MLS subsidies by providing MLS subsidies

access_time personNeil deMause

Back during the Kings arena debate, the Sacramento Bee had a pretty consistently terrible record of being a booster for spending public money on the project, and never mind what the actual numbers showed about whether it would be worth it. So it was encouraging to see this editorial yesterday about the city’s proposed MLS stadium:

Sacramento City Council must hold the line on public money for MLS stadium
One big draw about the proposed Sacramento soccer stadium is that it doesn’t call for a large, direct taxpayer subsidy.

That is a line that shouldn’t be crossed as city officials and Republic FC owners try to beef up their bid for a Major League Soccer franchise.

Now that’s more like it! The team owners promised to build a stadium themselves, and City Hall shouldn’t let them back down on that just because MLS is withholding a franchise in hopes that the ownership group can come up with more cash. (Their cash, new investors’ cash, the public’s cash, MLS seems pretty agnostic on which they prefer.) This is good stuff, what does the next paragraph say?

Mayor Darrell Steinberg is on the money: It could make sense for City Hall to reduce or defer some building fees, to donate land for a training facility, to give the team the revenue from new digital billboards, or to help with roads, sewers and other infrastructure near the stadium.

(DEEP SIGH)

Let’s say it all together: MONEY IS MONEY, SPORTS TEAM OWNERS DON’T CARE HOW THEY GET IT. If very rich dude Kevin Nagle can get a pile of tax or fee breaks or free land or a pile of billboard revenue that would otherwise go into city coffers, that’s going to be just as fine with him as getting city checks with “4 STADM BLDG” written in the memo field. To pretend there is any moral or fiscal difference is, well, the kind of thing you do when you’re a mayor and want to propose a sports team subsidy but don’t want it to look like one. Or if you’re a newspaper that wants to do the same, I suppose, but you’d think their copy editing department might have balked at using “hold the line” to describe it — if the Bee still has a copy editing department, that is.

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Sacramento mulling public subsidies for MLS stadium so that rich owner can stay rich

access_time personNeil deMause

If there’s been one given in the insane world of MLS expansion, it’s been that the Sacramento bidders were promising to come up with private money to pay for the entire cost of a $245 million stadium. Except that Sacramento didn’t win a expansion franchise last month as had been anticipated, reportedly because the league was worried that the prospective owners couldn’t afford a stadium on top of a $150 million expansion fee, and you know where this is headed, right?

Sacramento city leaders and the local ownership group seeking an expansion spot in Major League Soccer are discussing public contributions to a new $250 million soccer stadium planned for the downtown railyard – conversations that eventually may include a request for a direct public subsidy to the project’s construction.

(DEEP SIGH)

This was probably inevitable given the way MLS was running its expansion bidding: Setting expansion fees as high as possible, then picking winners based less on what’s the best soccer market than on which was offering the biggest guaranteed subsidies. (While two expansion teams were supposed to be announced last month, only Nashville got the nod, and it can’t be coincidence that Nashville was the only city among the finalists that had approved $75 million in public cash.) For a while it looked like Sacramento would sneak through on the basis of having a new stadium even if the owners were paying out of their own pockets, but MLS’s determination that “No, we want a team that can afford to pay us $150 million so we can keep funding our league by selling rights to more teams for big bucks, and yet still have lots of money left over for team profits, which isn’t going to happen if you’re on the hook for all stadium costs” put a fork in that, so now it’s back to the subsidy drawing board.

What that subsidy could look like is anyone’s guess: Mayor Darrell Steinberg mentioned reduced building fees and free land for a training facility as possibilities, which don’t sound too bad until you remember that Steinberg was formerly the California state senator who wrote a bill to fast-track the Kings arena by exempting it from environmental challenges, so he doesn’t exactly have a great track record in protecting the public interest. Steinberg also said, “I’m confident we can get Major League Soccer without a major public construction or operating subsidy,” and if you’re concerned by that qualifier “major,” you’re not the only one.

As for prospective team owner Kevin Nagle, who sold his prescription-drug-benefit company two years ago for $2 billion and estimated his net worth in the hundreds of millions, the Sacramento Bee reported this:

Asked if he would request a direct construction subsidy from the city, Republic FC CEO and Chairman Kevin Nagle said the team remains “incredibly appreciative to Mayor Steinberg and the City Council for their support and are committed to continuing to work with them to explore any and all paths that will help win this for Sacramento.”

No, you’re right, that’s not an answer at all. California’s tough laws allowing referendums to block sports stadium spending may be an obstacle to any team subsidy demands here, but it might be a good idea for Sacramento residents to put one hand on their wallets, just as a precaution.

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Friday roundup: Trump rescued stadium tax break, Sacramento MLS group needs more cash, more!

access_time personNeil deMause

Happy interval between Hanukkah and Christmas! If anyone is out there reading this and not getting on a plane from somewhere to somewhere else — or is reading this while waiting for a plane from somewhere to somewhere else — enjoy your lightning-round news of the week:

  • San Diego Union-Tribune columnist Kevin Acee, who never met a stadium or arena deal he didn’t love to bits, says that several people are interested in building a new arena in San Diego, including the owners of the Padres and new Brooklyn Nets minority owner Joe Tsai. Acee adds, “Several people insisted in recent weeks the Nets will remain in Brooklyn long-term and there are no plans to ever move the team to San Diego,” which, given the relative size of the markets, is possibly the least surprising sentence ever written in the English language. Also, Acee includes zero attributed quotes in his story, and says nothing about how such an arena would be paid for, so take it with a large grain of salt for the moment.
  • Donald Trump made retaining the tax-exempt bond subsidy for sports stadiums in the tax bill “a priority,” according to one GOP aide. So when he tweeted in October, “Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country? Change tax law!”, either he didn’t mean anyone to take him seriously just because he was the president of the United States speaking out on a matter of public policy, or more likely he just forgot to check with his funders before clicking Tweet.
  • “The Miami Open tennis tournament won permission to move to the Miami Dolphins’ stadium, with the kickoff planned in 2019,” reports the Associated Press, which seems to be slightly confused about how a tennis match starts.
  • After the NBA used the promise of an All-Star Game for Cleveland in 2020 or 2021 if it approved publicly funded arena renovations for the Cavaliers, and the city approved $70 million worth, the league gave those games to Chicago and Indianapolis. Not that there’s really that much value in hosting an NBA All-Star Game, but still, HA ha, suckers.
  • Apparently the reason why Sacramento didn’t get an MLS expansion team along with Nashville this week is the league is worried the city’s ownership group doesn’t have enough cash for a $150 million expansion fee and a $250 million stadium. All they need is to find someone with deep pockets who thinks the best thing to do with their money is to invest it in a U.S. soccer franchise that will start off $400 million in the hole, and, well, good thing that P.T. Barnum movie is opening this week, that’s all I can say.
  • There’s a “Plan B” stadium proposal for the Pawtucket Red Sox, where instead of helping to fund the stadium directly, the state would instead give the city all income and sales taxes collected at the stadium and let the city use the money on construction costs. Rhode Island state senate president Dominick Ruggerio says he doesn’t “see that as being a viable alternative,” and plans to submit his own stadium-financing bill, which probably won’t pass the state house. This could go on for a while, until somebody remembers where they stored the money generating machine.
  • The Arena Football League is now down to four teams, in part because the Cleveland Gladiators had to suspend operations for the next two seasons thanks to renovations to the Cavaliers’ arena. This was reported in the Albany Times-Union, which has to care because Albany is supposed to be getting an AFL expansion team this year, and man, do I feel sorry for whoever got stuck with being the Times-Union beat reporter on this team, because this is looking like a sad year ahead for them.
  • Deadspin’s Drew Magary weighed in this week on arena and stadium subsidies and concluded that “Arenas Are Important And Football Stadiums Are Not,” according to his headline, but really he meant “if you’re going to waste money on something, at least arenas can be used more days of the year,” which, fair enough. Or as Magary puts it as only he can: “We are entering an age of horrific corruption, and so I have accepted the fact that living in a fraud-free America is a hilarious pipe dream. All I can do is hope for the least of all corruptions, and pray that a bare scrap of public good accidentally comes out of it. If you are some ambitious dickbag city councilman looking to make his name for himself, an arena should be your priority when it comes to getting worked over.”
  • NHL commissioner Gary Bettman spoke out again about the Calgary Flames arena situation, calling it “very frustrating” and saying that “they’ll hang out and hang on as long as they can and we’ll just have to deal with those things as they come up,” but insisting that “yes, Quebec City has a building, but nobody’s moving right now, we’re not expanding East.” Which either means the Flames owners really don’t want to threaten to move right now (or ever), since making overt move threats is usually Bettman’s job, or it means even Bettman is sick of trying to pretend that the Flames have a viable threat to go anywhere.
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MLS picks four expansion finalists, only two (or three!) will win the prize

access_time personNeil deMause

Major League Soccer announced four finalist cities for expansion franchises yesterday, and the results are both unsurprising and kind of intriguing, for reasons I’ll get to in a minute. The four remaining contenders:

These are the four frontrunners predicted by Soccer Stadium Digest last week, so no shockers there. It’s an interesting mix of candidates, though: two with stadium plans in place, one with strong fan support but a funding gap, and one with a prominent ownership group but only an NFL stadium to play in, which the league has said previously it would consider, but it seems kind of suboptimal if your goal is to extract as many new stadiums as possible. Only two winners will be chosen later this month (December 14 will reportedly be the vote), so one would think that this will come down to Sacramento and Nashville, with Cincinnati and Detroit getting a “thanks for your efforts, try again next year once your stadium plans are more firmed up.”

Unless MLS could actually pick three winners. Because don’t forget, David Beckham’s previously announced franchise still doesn’t have a home, and his stadium partner Tim Leiweke told the Toronto Star on Tuesday that he’s not super optimistic:

“I’m helping any way I can with David,” Leiweke told the Sun. “I hope it gets done, but it’s not done. I have my fears as to whether it’s going to get done because things like this that drag on this long that’s always tough on a process. But for David I hope he lands somewhere.”

So, Cincinnati and Detroit could be in there as fallbacks in case MLS needs a last-minute sub for Miami. Or, Leiweke could just be saying this as leverage to get the final hurdles cleared for a Miami stadium, and this really is still a four-to-get-two situation. In which case the final verdict will say a lot about MLS’s business model: If it’s Sacramento and Nashville, we know that anybody with a $150 million check and a soccer-only stadium deal will get the nod; if it’s Sacramento and Cincinnati, we know that MLS is looking to where there’s the most established fan support; and if Detroit is involved at all it’s either because of the allure of a more major media market, or the allure of some big-money owners who can increase the league’s ties to the NBA, or who knows.

A lot is likely to depend on how things play out the next two weeks in Cincinnati, where both the city council and the county commission approved $50 million in public stadium subsidies yesterday, but still nobody’s saying how that additional $25 million would be paid for. (Or even what the total stadium cost would be; the gap could end more than that.) And also in Nashville, where the group Save Our Fairgrounds filed suit yesterday to block construction of a new stadium at Fairgrounds Nashville. Maybe hedging with four finalists isn’t a bad idea, in other words, but picking a final two (or three) two weeks from now is going to be anything but an easy task — I guess asking the four bidders to throw money on the table until two have emptied their pockets would be too unseemly?

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