Category: Charlotte Hornets

Charlotte approves giving Michael Jordan $275m in exchange for agreeing to something, don’t bother them with details, okay?

access_time personNeil deMause

After just a single public hearing, the Charlotte city council last night approved spending $275 million on a new practice facility and arena renovations for the Hornets, in exchange for the team extending its lease for 15 years. As discussed here previously, $173 million in arena renovations were determined by the city to be required under the state-of-the-art clause in the team’s lease (by, presumably, some kind of higher math that they didn’t spell out publicly because it would be too daunting for mere laypersons), while the additional $42 million in renovations plus the $60 million practice facility were a sweetener to sign a new lease running from 2030 to 2045.

The Charlotte Observer reports that seven members of the public testified prior to the hearing, citing one who was in favor (“money well spent”) and two who were opposed (“laughable”). And that, along with that terrible, terrible excuse for a poll, was it for asking Charlotte residents what they thought, as those seven people were the entirety of the public comment period on the subsidy plan, which was only first announced three weeks ago; councilmember Malcolm Graham even complained that “the community should’ve been involved at the takeoff, not the landing,” before going ahead and voting for the deal anyway. (It passed 10-1.)

So, how terrible is this lobbing of nine figures’ worth of simoleons at the richest former athlete in the world? It’s hard to say exactly, thanks to all the unknowns: If the first $173 million in renovations was really required by the team-friendly lease, and the $60 million is really covered by the sale of naming rights to a new “sports and entertainment” district around the arena, then this is just $42 million to get a 15-year lease extension, which isn’t too terrible as these things go. On the other hand, if naming-rights revenue falls short and much of the renovation cost turns out not to be things required in the lease — the Observer cites a punch list that includes “entryways, bathrooms, escalators, elevators, new HVAC systems, plumbing repairs, and roof repairs,” but doesn’t break down what would be spent on what or if there are other upgrades included, which for $215 million you’d think there would have to be — then this could end up being much more of a giveaway to the man of a thousand hagiographic nicknames.

Also unknown is how ironclad that lease extension is, and whether it could end up leading to even more renovation subsidies by including a fresh state-of-the-art clause requiring additional publicly funded upgrades. The legislation passed last night in fact only says the council will drop an extra $215 million in a fund for the arena, with the only other document available on the council’s web page for the hearing being that spammy slideshow we’ve seen before. It doesn’t appear that the terms of the lease extension have actually been agreed on, and it doesn’t seem like the council has even put strings on what has to be in a new lease before Michael Jordan gets his suitcase full of Salmon Chases, so this could end up being a not-too-terrible deal or one of the most egregious in sports history, depending. Good thing there won’t be any more public hearings where legislators have to answer questions about this, that would just be a waste of everyone’s time! Now please sit back and enjoy your renderings of how you will travel to the new Hornets practice facility via the set of Logan’s Run.

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Charlotte officials tout $275m Hornets subsidy with worst shitty poll in the history of shitty polling

access_time personNeil deMause

Polling is garbage science. If you ever doubt it, please immediately read this 2015 Jill Lepore article in the New Yorker, in which she lays out how 1) the idea of scientific phone polling is laughable when hardly anyone is willing to talk to pollsters on the phone anymore; 2) it’s even more laughable since pollsters aren’t allowed to autodial cellphone numbers, and nobody has landlines anymore; 3) “Using methods designed for knocking on doors to measure public opinion on the Internet is like trying to shoe a horse with your operating system”; 4) even for the tiny sliver of non-randomly self-selected folks who choose to answer polls, they tend to get people to declare opinions on things that they either don’t know about or don’t have a decided position on; 5) the entire enterprise serves mostly to reify “public opinion” into a measurable metric when how people feel about things is way more complicated and elusive than pressing 1 or 2.

That said, there are better polls and worse polls, and then there are polls that are straight-up propaganda. Which brings us, at last, to the city of Charlotte’s recent poll on LinkedIn (see above re: shoeing horses) that goes like this:

That’s pretty straightforward, right? Just asking about whether the city should extend its lease with the Hornets or not, either you’r for it or agin’ it or you have no opinion. (“I have many questions” is not an allowable answer, but it never is.) Except, as the Charlotte Business Journal points out, if you click that little “see more,” the story changes:

Yep, the city of Charlotte polled residents — or actually just LinkedIn users, since I just responded to the poll, and I’ve never even been to Charlotte — about whether it should extend the Hornets’ lease without mentioning that it would mean spending $275 million on arena upgrades as part of the deal. And even the fine print is misleading: The “contractual obligation,” established with one of those dread state-of-the-art lease clauses that were all the rage when Charlotte spent $260 million to build a new arena for the Hornets in 2005, just applies to the first $173 million, while the other $102 million is just an enticement to get team owner Michael Jordan to extend that team-friendly lease for 15 years; and even the initial $173 million is only “obligated” in the sense that if the city doesn’t spent the money, Jordan can break his lease now instead of waiting till it ends in 2030 to threaten to move someplace, which could be tough given that the NBA seems set on granting expansion teams to Seattle and Las Vegas, leaving, I dunno, Greensboro?

None of this stopped city marketing and communications director Jason Schneider from presenting the poll results to the Charlotte city council’s economic development committee this week as some sort of evidence for the lease extension being popular with somebody. “Obviously, the lede was buried, as you say in your industry,” committee chair Malcolm Graham told the CBJ; Schneider replied that “the LinkedIn poll isn’t meant to be scientific — I included the screen grab to show council/people as [an] example of the social-media engagement efforts,” which seems to be marketingese for “sure, the numbers are meaningless, but I just wanted to show the council our ability to generate meaningless numbers using the internet.”

The full council is set to vote on the Hornets subsidy in three weeks, and still the council website doesn’t provide any details of what the actual language of a lease extension would look like, just this shitty marketing slideshow. There are many, many ways that democracy is broken in this country, but “city officials only present legislators with cherry-picked data before a vote and then say it’s okay because it’s ‘not meant to be scientific'” has got to be near the top of the list.

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Hornets set to get $173m in public cash thanks to zombie lease clause, another $102m just because

access_time personNeil deMause

The Charlotte city council is preparing to vote on $275 million in spending to upgrade the Hornets‘ arena — which is less than 17 years old, cost $260 million total to build in the first place, and already received $24 million in taxpayer-funded renovations a few years ago, if you’re scoring at home — and build the team a new practice facility. But, the Charlotte Business Journal reassures us, most of this is “necessary” thanks to the dead hand of Charlotte officials who negotiated one of those dread state-of-the-art clauses to insure that the public would be on the hook for an unending stream of anything other NBA teams could extract from their cities first:

Terms of the existing lease call for periodic city-funded renovations to keep the arena up to date with peer NBA venues. That’s based on having features included in 50% of rival teams’ arenas. The city’s lease with the Hornets ends in 2030.

The state-of-the-art upgrades, calculated lord knows how, are estimated by the city to amount to $173 million. The rest of the money will go toward an additional $42 million in upgrades plus $60 million to build a new practice facility across the street. In exchange for the added funds, the Hornets will agree to a lease extension through 2045, during which time the team will start paying rent — that’s right, the team got a $260 million arena in 2005 and hasn’t even had to pay rent on it — amounting to $32 million, plus $20 million in maintenance expenses, though the CBJ doesn’t indicate whether this is present value or whatever pittance dollars are still worth in the 2040s.

I know what you’re asking — or, at least, I know what I’m asking: Does the lease extension include 15 more years of this horrible state-of-the-art clause, requiring future Charlotte city councils to pay for nanobot charging stations or what have you? Despite expending more than 2,000 words on this, including quoting Hornets president Fred Whitfield calling city economic development chief Tracy Dodson ” a visionary,” the CBJ doesn’t bother to answer this, and neither does the crappy slideshow that is all the Charlotte council included in its meeting documents. So we’ll just have to wait and see if the 2022 council follows the lead of its predecessors and issues another blank check to the current billionaire Hornets owner, who happens to be this guy.

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Friday roundup: Rays focused on Tampa Bay (for now), Anaheim officials say Angels stadium sale got illegal secret approval

access_time personNeil deMause

Lots of news this week, starting with the continuing reaction to yesterday’s tragic death of the Tampontreal Ex-Rays:

  • While the rejection of his split-city plan by his fellow MLB owners would seem to leave Rays owner Stuart Sternberg in a position to play Tampa, St. Petersburg, and Montreal — and maybe other cities as well like Nashville or Portland — off against each other in a bidding war, he says he intends to focus on Tampa and St. Pete, at least for now, saying during yesterday’s bonkers Zoom press conference, “I’ve never threatened to move the team out of the region. That seems to be 101 in the playbook of getting stadiums and arenas built. It just hasn’t been my way to this point. And people have advised me to do that.” (Yahoo Sports’ Hannah Keyser astutely observes that “telling someone you haven’t threatened them yet — and, indeed, have magnanimously resisted the obvious and apparently advisable temptation to do so — can read a little like a threat.”) Meanwhile, would-be Montreal investor Stephen Bronfman responded like Montreal is out of the running, saying during his own Zoom call, “It’s like a bloody eulogy. I’m just tired. I’m a little upset. We had something so good. We would have proved [to] everyone, we would have made a mark. I think a lot of people in sport would have been listening to us.” Prediction: Sternberg works on getting whatever bidding war going that he can between the two sides of Tampa Bay, since that seems to be what MLB prefers, and if that falters then he can decide which city to start ostentatiously attending hockey games in.
  • Speaking of the Oakland A’s, their Howard Terminal stadium environmental impact statement passed a planning commission vote this week, which means the environmental signoff could be headed for a final council vote in February. Of course, there’s still a potential half-billion-dollar budget gap even after the Oakland council gave preliminary approval to $495 million in tax kickbacks, all of which would need to be resolved before a final council vote later this year. Meanwhile, a new poll shows that Oakland residents oppose spending public money on an A’s stadium by 46-37% margin, though given that the maybe-billion-dollars in proposed public money is all for “infrastructure” and not the stadium per se, stadium advocates are claiming that the plan meets this provision anyway. The A’s seem to have backed away from threats to trade all their good young players this winter, which is probably a good idea as it’s tough to build support for public funding for a terrible team, but we could well see this whole threatdown reemerge after the 2022 season, if there is one.
  • That lawsuit announced back in March 2020 against the city of Anaheim for selling its stadium land to the Los Angeles Angels without sufficient public meetings is finally underway, with former city manager Chris Zapata and councilmember Jose Moreno filing testimony that the council secretly made the sale decision before holding any public hearings at all. The trial is set to begin on February 14, and man do I hope it will be televised.
  • The Buffalo Bills are currently getting about $13 million a year in state money to fund stadium operations under their current lease, while paying only $900,000 a year in rent, according to an Investigative Post report. The Bills lease, which was signed in 1998, is “not much worse than a lot of the other leases out there, but given that the average lease is pretty bad, that’s not really a compliment,” says one stadium blogger whose name you can probably guess even without clicking through to the article.
  • The new head of Charlotte’s economic development committee, councilmember Malcolm Graham, said that “Public-private partnership is one that’s obviously going to get a lot of attention over the next 18 to 24 months in terms of some of the things we are working on with some of our local partners,” and indicated that taxpayer money for the Panthers and Hornets could be two of those things. The latest ask from Panthers owner David Tepper was for around $500 million, while Hornets owner Michael Jordan hasn’t put a dollar figure on his request so far that I can tell.
  • Las Vegas’ top tourism marketer says that more than half of all Vegas visitors will add an extra visit or stay longer thanks to the presence of the Raiders and Golden Knights, citing … no actual data at all that I can tell? It’s going to be tough in any case to determine economic impact of the new teams given that the pandemic has turned both sports spending and travel spending upside down, but I hope that once we can manage a relatively normal year, the usual economist suspects will do some studies to see if the substitution effect holds for Vegas the same as everywhere else.
  • The Single-A Hillsboro Hops want a $60-100 million stadium upgrade, because all the minor-league baseball kids are doing it. No word yet on who would pay for what, but the city of Hillsboro issued an RFP for design and construction work.
  • This week’s non-sports-stadium subsidy report: West Virginia is giving $1.7 billion to a steel company for a new plant that will largely employ residents of neighboring Ohio and Kentucky, read all about it.
  • A sewage pipe burst at the Los Angeles Rams‘ stadium, time to build a new one!
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Trump threatens to move convention out of Charlotte if demands not met, like former sports owner he is

access_time personNeil deMause

A former sports team owner threatened yesterday to move a planned event out of town if his arena demands weren’t met, and the only surprise, really, is that the culprit was the president of the United States:

Let’s for the moment ignore the bit where the nation’s leader is demanding to pack 20,000 people into an indoor arena during a pandemic where the one thing we know is that packing people into indoor spaces is the worst possible thing you can do. (And the bit about “building the Arena to a very high standard,” since in fact it was Charlotte taxpayers who just spent $27.5 million on upgrading the Hornets‘ arena.) Instead, I’d like to focus on Trump’s claim that if he isn’t allowed to fill the Charlotte arena to capacity, he will take his “jobs and economic development” and go elsewhere. How many jobs do political conventions create, anyway?

The usual lazy way (or self-interested way, if you’re in the business of staging conventions) of calculating convention economic impact is to add up all the visitors to a city and multiply it by how much you think they spend, which results in numbers as high as $230 million. The better way would be to look at all the cities that have hosted conventions and see if there was any discernable change in job growth or personal income as a result — and sports economists Robert Baade, Robert Baumann, and Victor Matheson did just that in 2008, finding that “the presence of the Republican or Democratic National Convention has no discernable impact on employment, personal income, or personal income per capita in the cities where the events were held confirming the results of other ex post analyses of mega-events.”

In other words, political conventions are much like the Super Bowl: They bring a ton of people into town, but they also drive away other potential visitors who steer clear of the convention week crowds (and convention week hotel prices), as well as local residents who may stay at home if they think restaurants and such will be too crowded. As Baade, Baumann, and Matheson noted, “During the week of the 2004 Republican National Convention in New York City, for example, attendance at Broadway shows fell more than 20 percent compared with the same week a year earlier despite the presence of tens of thousands of visiting conventioneers and journalists.”

(Matheson and Baade also previously crunched the numbers for the NCAA tournament, another brief “mega-event” similar to political conventions, and found that the men’s tournament appeared to have a small negative impact on host cities’ economies, which is impressively bad.)

Reached via email, Matheson further observes that political conventions don’t even provide the “feel-good” effects of a major sporting event, where residents at least report an increase in warm fuzzies from having been in proximity to greatness. (The 2016 Rio de Janeiro Olympics, he notes, seem to have been an exception.) Political conventions, by contrast, are generally remembered in story and song for less cheery reasons.

Now, there’s an obvious caveat here, which is that a pandemic economy is not a normal economy; hotel stays in North Carolina are way down what with much of America not leaving the house, so there may not be many tourists to drive away with a convention (though that’s already starting to change as the state slowly reopens). Matheson writes:

No one is going to fill those rooms up if the convention were to not take place. Hotel occupancy across the country has essentially fallen to zero, so the crowding out effect of mega events has disappeared during COVID-19, leading to real economic damage done by the cancellation of sporting (and political) events.
This also gives Trump’s threat slightly more teeth. In normal times, Trump’s threat to move the convention would be just another inane bit of bluster from a guy who likes to make threats he has no ability to carry out. There would be no city in the country with available hotel rooms and convention space that you could move the event to with this little notice. Nowadays, however, there are probably 30 different cities that actually have availability to host an event like this with last minute notice.

A chunk of the convention spending that advocates like to crow about, however, is from going out on the town during the event: Another paper by Matheson (with co-authors Lauren Heller and Frank Stephenson) found that convention-goers would have to spend seven times as much on food and entertainment as on hotel rooms to justify the most common economic impact claims. Restaurants, though, remain limited to 50% capacity in North Carolina, and if my experience getting takeout food in Brooklyn last night is any guide, there’s plenty of demand for restaurant food from bored, hungry locals right now, so it’s extremely likely that at least some Charlotte residents would choose to stay home rather than line up to sit six feet from Republican convention visitors from who knows where, with their icky who-knows-where germs.

Gov. Cooper hasn’t yet responded to Trump’s demands beyond a brief press statement saying North Carolina will make its decisions based on “data and science,” which certainly could be read as “Yeah, yeah, the president is tweeting at us, give him 24 hours and he’ll be off tweeting at clouds instead.” But don’t sell Donald Trump short: In his time as New Jersey Generals owner, he surely learned something about ways to leverage his power to get concessions from his foes. Or, you know, not.

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Las Vegas Raiders to have fans park in Idaho, and other Friday stadium news

access_time personNeil deMause

I’ve been busy this morning working on further research into Jeffrey Loria’s Miami Marlins windfall for an article set to run at Vice Sports on Monday, so rather than let the day slip away entirely, let’s do another round of news briefs:

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Here’s the Hornets’ new scoreboards, also my Brooklyn book is out in two weeks

access_time personNeil deMause

Want to see $24 million worth of scoreboards (okay, all that money didn’t go to scoreboards, but some of it did) that the Charlotte Hornets built with public money? Here you go!

hornets-scoreboard-mk009750xx5642-3174-0-294And there’s a whole slideshow full of more of them here, though most of them aren’t very interesting.

In almost but quite entirely unrelated news, today my publisher Second System Press and I announced that my book The Brooklyn Wars will be available for purchase starting Tuesday, September 27. This is somewhat related because one-quarter of The Brooklyn Wars is dedicated to a recounting of the planning, construction, and aftermath of the Brooklyn Nets’ Barclays Center and its surrounding Atlantic Yards development project — any Field of Schemes readers who are members of the press and would like an electronic review copy right now, drop me an email and we’ll talk. Kickstarter funders, meanwhile, should check their email inboxes for immediate download codes. For everyone else, cool your jets for another 15 days.

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Three sports venues get new corporate names that you’re going to forget immediately

access_time personNeil deMause

Lots of old sports venues getting new names this week!

The price tags on the Buffalo deal was $40 million for seven years; no money changed hands in Charlotte, obviously, while the Dolphins declined to say how much they got for 18 years of their stadium name. I’m guessing not much, since nobody is going to remember this corporate name any better than the last five or six, but maybe since they just did a renovation, people will think of it as a new building with a new name?

Anyway, the fact that naming rights are worth more for a brand-new, nameless venue continues to be an incentive for teams to demand them. It’s probably not the best thing from an environmental sustainability standpoint that teams and cities are building stadiums partly just to act as giant billboards, but I can’t complain too much so long as it does allow them to fob off some costs on another sucker.

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Inventor of PSLs says he never meant them to be a mere cash grab from fans

access_time personNeil deMause

My Vice Sports colleague Aaron Gordon has a fascinating interview up today with sports marketer Max Muhleman, best known as the inventor of personal seat licenses. And he gets Muhleman to reveal something that I hadn’t heard before: The original idea for PSLs was not to charge for them at all, but rather use them as a reward for fan loyalty.

As the story goes, Muhleman’s first PSLs were developed for the then-expansion Charlotte Hornets, when owner George Shinn suggesting buying leather jackets for fans who’d put down non-refundable season ticket deposits without knowing if there would even be a team. Muhleman, who’d run the ticket drive, countered by suggesting that fans be allowed to pass their seats on to someone else if they gave them up, rather than having them go to the next person on the waitlist as was usual practice. He called this “charter seat rights.”

Then, history happened:

Muhleman never meant for the PSL to become an investment. It was simply about thanking the fans who pledged their own money to help support a new team or stadium. The idea of re-selling Charter Seat Rights didn’t even occur to Muhleman until he saw a classified ad in the paper after the Hornets’ incredibly successful inaugural season, when they sold out every game in the 23,000 seat arena. The ad read: “‘Leaving town. Two charter seat rights. $5000.” When Muhleman called the number, the person on the other end said they had already received about a dozen calls and they regretted not asking for $10,000.

Four years later, when Jerry Richardson was trying to raise money for a Carolina Panthers stadium, he turned to Muhleman, who remembered that classified ad. Eventually, the rebranded PSLs raised $92 million for Richardson at zero cost to him, and a revolution was born.

The Vice headline claims that Muhleman now “hates PSLs as much as you do,” and while I love a grabby headline as much as the next guy, it’s not quite accurate: He actually tells Gordon that he feels like PSLs have gotten so pricey that they’re just a money grab, losing the necessary balance of also building fan loyalty by offering them something in exchange for their fandom:

“I thought we were on to something that worked, that it made good music with the sport, the fan, the owners, we could all come together in a harmonious, mutually productive, helpful way,” he said. “But these programs I see, so many of them I can only say are unilateral, and unilateral in favor of ‘how much can we get out of these people?’ And I do not believe the path to success in sports is maximum leverage of fans.”

Of course, it depends on your meaning of “success.” When it’s a choice between hundreds of millions of dollars in cash now and potential good will down the road, that hasn’t been a decision that most NFL owners have had to think too hard about.

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Charlotte to pay for $34m in Hornets arena upgrades, Michael Jordan kept at bay a few more years

access_time personNeil deMause

The Charlotte city council voted 9-2 last night to spend $34 million on renovations to the Hornets‘ Time Warner Cable Arena, which opened in 2005 and is the third-newest building in the NBA. Of course they did, because they (or their predecessors nine years ago) included a “state-of-the-art” clause in the Hornets’ (then Bobcats) lease, which means the city must go on spending indefinitely to keep the arena as up-to-date as the newest NBA arenas:

“It is a contractual obligation,” said council member Claire Fallon, a Democrat. “If we break the contract, who will believe our word anymore?”

At this point it’s worth asking — not that any of the media outlets who were actually at the council vote seem to have asked it, but I’ll ask it to the winds, anyway — how much Charlotte will likely have to put up for renovations over the life of the arena, whatever that may turn out to be. You have to expect that the Hornets will come back for more upgrades in another nine years or so — it’s in their contract, why wouldn’t they? — and that those will be more expensive, since by then there will be even more new arenas to keep up with. And nine years after that … well, by then the arena will be 27 years old, so you have to expect the Hornets will be looking to tear it down and build a new one.

As a reminder, the Hornets are owned by the billionaire most famous former athlete on earth, and got the arena scot-free when Charlotte covered all $260 million in construction costs. Add in the gift-that-keeps-on-giving state-of-the-art clause, and this is a serious contender for “worst arena deal ever,” though at least Michael Jordan isn’t getting negative rent. Yet.

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