Category: NHL

Friday roundup: Everybody needs a soccer stadium for a pillow

access_time personNeil deMause

Soccer! All the kids today are digging it! It’s the future! And also the past! Your city is nothing without a genuine, bona-fide, electrified, 10,000-seat soccer stadium, which is why Mesa is creating a “theme park district” to kick tax money back to a soccer stadium district that nobody wanted to give to the Arizona Coyotes but this is soccer, and Oklahoma City is spending $121 million on one so that Oklahomans can raise their fists to support of not nearly enough players spread out over way too much of the pitch, and MLS commissioner Don Garber says Vancouver had better give the Whitecaps a “better lease” or it’ll be “untenable” if you know what he means, and the co-chair of the Congressional Soccer Caucus — of course there’s a Congressional Soccer Caucus, get with the times, bruh — wants to allocate $50 million in federal tax money for cities to use for transit programs during big events like the (soccer) World Cup and the Olympics (one event: soccer)! Soccer!

There are only a limited number of soccer teams, though (a number that is thought to exceed the number of Planck volumes in the observable universe), so some cities still must, sadly, spend public money on pro teams in other sports instead. Not that elected officials are sad, they seem downright psyched:

  • The Columbus Blue Jackets have gone from thinking about maybe asking for public arena renovation money from the state now that the Browns and Bengals are getting it to receiving $200 million in state money plus $25 million each from the city and county, all in the course of less than five months. “I think this is an incredibly important community asset, and we have an opportunity to advance this …. and ensure the future of the facility for the next 30 years,” arena authority director Ken Paul said; if you think the Blue Jackets owners are going to wait 30 years for their next grab at the brass subsidy ring, you can place your prop bet at the arena’s gambling kiosks.
  • Cleveland Browns fans are not psyched about having to pay personal seat license fees for tickets at the new Browns stadium. Many say they’ll give up their season tickets before paying for PSLs, and yeah, that’s what Bills fans said too, and now the Bills PSLs have almost sold out, though to be fair things may be different once Browns fans realize that buying Browns tickets obligates them to actually watch Browns games.
  • YouTube channel entrepreneur (?) Ashkan Karbasfrooshan says he has a plan for bringing the Expos back to Montreal, and “money is not the constraint.” Rather, doing so “requires capital, political alignment, real estate vision, a winning outlook, patience, and a lot of humility.” Note to Karbasfrooshan: “Capital” is another word for “money.” (You can look up “humility” while you have your dictionary open.) Rob Manfred did say recently that he might like a second Canadian team, but reportedly he meant Vancouver and not Montreal, if baseball is even going to expand at all, maybe Karbasfrooshan meant that money is not the only constraint, that tracks.
  • The Philadelphia 76ers and Flyers owners are still planning on building a new arena … maybe? They’re not saying anything publicly about any moves to get legislative approval, what on earth could they be waiting fo — “[Governor’s office spokesperson Kayla Anderson] didn’t address questions regarding the state’s role in the project and whether incentives or tax breaks will be involved,” oh I see, never mind then.
  • The Tampa Bay Rays‘ Tropicana Field is starting to look more like itself again, which is, to be clear, to be taken as a good thing. The brown and white alternating roof panels are expected to be all bleached white by the sun by opening day, at least, so it will still look like the dome that Rays fans have come to know and, I’m going to go with “love.”
  • No disrespect to sports barons, but they still can’t hold a candle to Amazon when it comes to wielding monopoly power to get rich at someone else’s expense. This week: Forcing school systems to use dynamic pricing solely so Amazon can charge the public more for supplies, presumably only because the infinity gauntlet is no longer available.
  • The Athletics of Nowhere In Particular have opened a new Las Vegas “interactive space” (read: room) where fans can view a scale model of their planned stadium, plus also enter an “Immersive Cube” (read: room with lots of video screens on the walls) where they can view what it will look like from the inside, if it’s ever finished, and it will be, team execs swear. Early reviews on social media from fans who probably didn’t get personally immersed are that the design is “garbage” and an “abomination” and “the f*** is this ugly thing?” Me, I’m wondering how the A’s architects managed such a distant upper deck at a stadium with only 33,000 seats, plus whether at the real stadium everyone who enters will have to remove their shoes like in the simulation.
  • Sad, soft caves for indoor sportsmen, check.
  • Ex-AEG/Oak View Group stadium developer Tim Leiweke won’t be going to jail for bid rigging after all — no, not because he’s necessarily not guilty, the other reason this happens these days.
  • New York Mets owner Steve Cohen is getting his stadium-side casino, saw that coming.
  • The 2026 Winter Olympics hockey arena in Milan is running behind schedule and has the wrong rink dimensions for international standards. Defector doesn’t report whether this will lead to it going over budget, but c’mon, you know how this movie ends.
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Friday roundup: This Is So Dumb edition

access_time personNeil deMause

For U.S. Thanksgiving week, let’s take a moment to give thanks for the continuing gift of having lots of stupid to laugh and point at. We are truly in the golden age of laughing and pointing, which is … good? Better than nothing? All that separates us from spiraling into despair?

Whichever, this was a very good week for stupid, please enjoy a heaping helping:

  • Detroit City F.C. is set to get $88 million in property tax breaks for its planned $193 million stadium after the Detroit city council voted to give it the green light. “The stadium is expected to generate $25 million in annual economic impact for the area,” reports WXYZ-TV, no source given or needed, nobody would just make up a number like that, right?
  • The Dallas News has explored how cities in the Dallas area could spend money on a new Stars arena, and came up with “grants” and “loans” and “tax breaks,” that’s pretty much the way cities spend money, yes. Possible sources of the funding include pulling funding from regional mass transit and giving it to the Stars, or tax increment financing, or borrowing the money and paying it off by some means undisclosed in the article. At least economist Nola Agha shows up to give her evaluation of some of the possible options — TIFs, she notes, are “popular because [they’re] relatively hidden, meaning the taxpayers don’t have to know that a city is using property tax and giving it back to a developer,” which is really as much indictment as endorsement.
  • The Chicago Architecture Center assembling a team of “business executives, civic leaders, urban planners, architects and others” to spend three months seeing how stadiums can be a “Win/Win” is pretty dumb given that the premise assumes there’s a way to do so. For the resulting report to then conclude that “instead of treating stadiums as
    standalone facilities requiring public support, we propose thinking about them as anchors for thriving neighborhoods” without establishing whether stadiums are good anchors for thriving neighborhoods — they’re not — is, well, you know.
  • New York Gov. Kathy Hochul is looking to spend $200 million on Albany “revitalization” with part of that going toward a $75 million minor-league soccer stadium, but nobody’s saying how much. “I don’t understand the secrecy,” said a former staffer for the state’s Empire State Development agency who is trying to research the soccer project. “I think it would be good to have a public discussion about this.” So far the local development authority, Capitalize Albany, has responded by repeatedly denying Freedom of Information requests for information, with a spokesperson adding that “we expect there to be many opportunities for public input” once officials decide what they tell the public they can have input on.
  • Denver held a public event to see what residents think of plans for a new Broncos stadium (projected public cost: at least $140 million and likely a lot more) as expressed entirely through colored stickers and Post-It notes, because that’s just how democracy goes now.
  • The owners of the Union Omaha USL League One team can’t build a new 6,500-seat soccer stadium until they get kickbacks of state sales tax money that are being “bottlenecked” by Gov. Jim Pillen, that sounds awfully judgy, Nebraska Examiner. Pillen did get to say that he sees his job as to “look out for ALL taxpayers, not give subsidies to lobbyist and politician-supported special projects which could not move forward without them,” but Omaha Mayor John Ewing says spending tax money on a soccer stadium would be “great,” surely not just because it would be state tax money that wouldn’t affect his city budget.
  • Hamilton, Ontario’s arena just got a $300 million renovation, conducted by operators Oak View Group but aided by an unspecified amount of tax breaks, but the truly dumb part is the CBC headline that specifies the rehabbed arena’s opening concert as being by “Beatles, Wings artist Paul McCartney,” just in case readers weren’t sure which Paul McCartney they meant.
  • The prize for the dumbest headline of the week, though, has to go to Secret Los Angeles for its “California’s SoFi Stadium Is The Fifth Most Iconic Stadium To Host The 2026 World Cup.” That’s meaningless enough, but add in that the “iconic status” scores were compiled by a ticket broker using factors from capacity to measuring “each stadium’s roof using Google Earth to get a Golden Ratio score,” and we have a winner! Please select the trophy of your choosing.
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Mavericks, Stars owners launch war for Dallas arena supremacy, taxpayers hold on to your wallets

access_time personNeil deMause

A shooting war has broken out between the owners of the Dallas Mavericks and Stars, with the Mavs owners filing suit yesterday against the Stars owners for … well, it’s complicated. But suffice to say that it all looks to have to do with two elements that are increasingly common factors in sports arena scheming: an expiring lease, plus a battle for dominance between a city’s NBA and NHL franchise owners.

When the Minnesota North Stars first relocated to Dallas in 1993, they shacked up with the Mavericks in Reunion Arena, a then 13-year-old arena owned by the city. The two teams convinced the city to spend $420 million to replace that arena with the American Airlines Center in 2001, and have been co-tenants there ever since, paying $2.2 million a year each in rent and other payments. (No, you are correct, that does not come close to paying off a $420 million construction cost.)

Ever since Sands casino owners Patrick and Sivan Dumont (along with Miriam Adelson) bought majority control of the Mavericks from Mark Cuban in 2023, however, they’ve been increasingly focused on building a new arena-and-casino complex somewhere in the Dallas area. (Casinos aren’t legal in Texas, but the Mavs owners aren’t sweating that part just yet.) Stars CEO Brad Alberts said at the time of the sale that he was fine with going it alone at the current arena, possibly with some renovations, but needed to wait to hear the new Mavs owners’ plans first.

Since then, things have deteriorated fast. Late last year, the two teams failed to reach agreement on a planned $300 million renovation of the current arena — to be paid for half by the city of Dallas, the rest either by the two teams jointly or the Mavs owners alone, depending on who you ask. This was immediately followed by the Mavs seizing the Stars’ half of the arena operating company and withholding their arena revenues. The conflict only escalated with yesterday’s lawsuit filing, in which the Mavs owners charged the Stars owners with breach of contract for moving their corporate headquarters from Dallas to nearby Frisco — in 2003 — and with obstructing improvements to the current arena.

Why the Mavs owners would want to pay to renovate an arena they want to move out of is an excellent question; there’s some speculation that they were simply hoping to lock the Stars into the current arena to keep them from building their own new one. And sure enough, since everything fell apart the Stars owners have begun talking up the possibility of building a new arena themselves, possibly in nearby Plano, or possibly in Frisco, The Colony, Arlington, or Fort Worth.

If all this is starting to sound familiar, it’s likely because of the recent throwdown in Philadelphia between the Flyers and 76ers owners. That was a slightly different scenario — their arena is privately owned, solely by the Flyers owners — but it played out similarly: Sixers owner Josh Harris launched plans to build his own new arena to outcompete the Flyers for concerts, and eventually used this as leverage to get the Flyers owners to agree to jointly build a new arena at the current site. (There’s since been talk of a similar possible dispute in Boston between the Celtics and Bruins.) Two arenas in even a moderately large market can be tough on the owners, who are left needing to compete for concert dates and may even have to offer discounts to land them; but threatening to build competing arenas can be a lucrative game of chicken if you think you can force your fellow team owner to agree to an arena deal that benefits you to avoid being second fiddle in their own city.

Both team owners are playing their arena leverage plans close to the vest, but this whole situation is well worth watching, especially as the teams’ leases expire in 2031 and they’re both hoping to use that to their advantage. Each has several Dallas-area cities they can try to play off against each other for arena subsidies, but at the same time both need to outmaneuver each other, something that the city governments could themselves use as leverage, if they play it smart. Hoping that city officials play things smart is usually a bad bet and early indications aren’t great, but there’s at least a chance here, so fingers crossed!

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Friday roundup: Spurs owner wants arena subsidies so he can be “scrappy,” A’s owner gets closer to unlocking county stadium cash

access_time personNeil deMause

Some weeks, when all the work of this website feels like an endless repetition of the same stories over and over and over again, I try to remind myself that while the general shape of the stadium swindle has remained the same over the last 30 years — boy meets stadium dream, boy uses standard playbook to demand that someone else to pay for stadium dream, elected officials cough up the dough to boy — there have been some discoveries and innovations along the way: The Casino Night Fallacy. The grift that keeps on giving. The kitchen sink gambit. Reusable entourage. Sure, it would be nice for whatever showrunner is in charge of this accursed timeline to quit reusing the same plotlines — helicopter registration fraud was a surprise season-ending twist, but that was three years ago already — but if nothing else we’re getting a deeper understanding of the intricacies of how sports billionaires funnel taxpayer money into their own pockets, and who can put a price on that? Other than the literal price of “billions of dollars of tax money a year,” obviously, but enlightenment doesn’t come cheap.

Also, no one has taken away our god-given right to point and laugh (yet), so may as well enjoy it. And on that note, here’s some fresh meat for your inner Nelson Muntz:

  • San Antonio’s KSAT-TV asked Spurs owner Peter Holt why he can’t just pay for his own arena his damn self, and Holt said “it’s a great question” and San Antonio’s small market size has “pushed us to be scrappy” and “the underdog” and “we want to continue [our] partnership with the county and the city” and the arena project will use “visitor taxes that have no impact on our local citizens” and “there’s no extra fees.” That’s neither really an answer nor exactly true, but Holt is already off and not-answering whether the team would potentially move without a new arena: “You know, we’re not focused on this election not passing. I mean, I think our belief has always been, whether it’s on the court or off the court, we have excellence and we have winning in our DNA. And so we’re confident and optimistic that this will pass, and that’s our plan.” It’s easy to be confident when you’re spending $2 million on ad campaigns to convince voters to go your way, but just in case, may as well employ the “You don’t want to find out what’ll happen if you make Dad mad” strategy as well.
  • The Clark County Commission officially approved the Athletics‘ ballpark development agreement for Las Vegas(ish), which is mostly notable because it allows A’s owner John Fisher to finally tap into $380 million in public funds that was approved way back in June 2023. Or at least Fisher can get the money once he sets a guaranteed maximum price for the stadium and spend $100 million out of his own pocket first, maybe that’s what all the concrete pillars are about? Would Fisher really shell out $100 million of his own money in order to get $380 million in public money in hopes all that will somehow unlock another $1 billion or so of somebody else’s money? He’s done dumber things before, don’t put it past him!
  • Interim Jackson County Executive Kay Barnes says she doesn’t see herself as “taking on any kind of strong initiative” on major issues during her short time back in office, but that’s not stopping her from saying she wants to see stadium projects for the Kansas City Chiefs and Royals move forward, she’s not made of stone, people.
  • The St. Petersburg city council is looking at ending the city’s Community Redevelopment Area (i.e., a TIF that kicks back property taxes to developers) for the Historic Gas Plant District now that the Tampa Bay Rays aren’t using it for a stadium development, probably. “I was very hesitant to do this,” said council chair Copley Gerdes. “More and more, I’m becoming open to it.” What’s next, hugging?
  • A couple of big-market MLB teams might be showing openness to increased revenue sharing to make MLB TV deals more like the NFL’s, which would reduce budget disparities between rich and even-richer teams but also make it easier for teams to threaten to move from big markets to smaller ones like in the NFL. Color me skeptical — big-market team owners have never willingly given up revenue before, and this could all just be openness to new kinds of TV deals while still trying to preserve the biggest slice for themselves, but we’ll see where things go once negotiations for the next collective bargaining agreement begin in earnest after next season.
  • Yes, the latest owner of the Ottawa Senators is still hoping to build a new arena at LeBreton Flats and still hoping for a taxpayer “investment” to help him along, let’s all check back in another decade or so and see if anything has changed.
  • Camden Yards’ public owners won’t get any money from the Los Angeles Rams renting out the stadium for practice before their game in London, just like they didn’t get any money when Paul McCartney played there, who needs money when you have a pro baseball team whose owner wants money more than you do?
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Dallas Stars owners start shopping for new arena, that’s officially everybody now

access_time personNeil deMause

It’s rare for a major pro sports team to have no entries in the Field of Schemes “posts by topic” list, given that pretty much every team owner out there has at least hinted at demanding some kind of public money for something at some time. That’s the situation for the Dallas Stars, though — or was until this post, because we just can’t have nice things:

The Stars’ 21-person ownership advisory group met on Wednesday night and zeroed in on Plano as one of the likeliest destinations, Front Office Sports has learned.

The team is eyeing a purchase of land in Plano, but has not signed anything yet. It operates a youth hockey facility there, and has a practice facility in Frisco. Arlington is also in the mix, and has appeal as it’s already home to an MLB and NFL team. Each of those cities is roughly 20 miles from the team’s current home.

Team ownership also hasn’t ruled out staying in Dallas, either in the American Airlines Center or in a new arena.

So, the Stars are moving to Plano, unless they’re moving to Arlington, unless they’re moving to The Colony or Fort Worth, unless they’re building an arena in Dallas or staying in their old Dallas arena while the Mavericks build their own arena maybe. That’s pretty much all the options other than Greensboro, so maybe not really rising to the level of “news,” but you do you, Front Office Sports.

The news, such as it is, is that Stars owner Tom Gaglardi is clearly entering the kicking-tires-to-gin-up-a-bidding-war phase of his arena dreams, especially given that the team CEO followed up with some decidedly on-the-record comments:

“I don’t deny we are in discussions with Plano,” team president and CEO Brad Alberts told FOS when reached by phone Friday. “Have we decided on where our future is? No. We’ve gotta decide, are we staying or are we going to build somewhere. Certainly Plano is part of that, but we haven’t decided. We are going through due diligence to make sure that if we are going to leave, we have the right spot.”

And to the Dallas Morning News:

“We do not have a deal with Plano,” Alberts said. “We don’t have any of that. We are in discussions with them. We’re also in discussions with other cities. Arlington would love us to come to Arlington. They’ve got two of the four already. We’ve got a really good relationship with those two franchises there and the city.

“There’s no favorites at this point. We’re all just doing our work.”

The Stars’ lease expires in 2031, but there’s nothing stopping them from extending it, and in fact team officials have previously suggested that as one option. So beyond vague “discussions,” there’s not much going on here, so hopefully Dallas officials won’t be suckered into bidding against themsel—

Said council member Chad West, chairman of the ad hoc committee on professional sports recruitment and retention: “Dallas needs to [do its] part to ensure we keep our teams in the city.”

Hope you enjoyed that blank space on the topic list while it lasted, because https://www.fieldofschemes.com/category/nhl/dallas-stars/ is almost certainly about to start growing like crazy.

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Detroit could levy tax on tickets and not give that money to team owners, stop the presses

access_time personNeil deMause

One of the basic concepts that economists and budget experts like to try to point out about sports funding deals is that taxes are fungible — that is, if you don’t use them on a stadium or arena, you can use them to pay for something else. So if your city is, oh, I dunno, proposing to funnel off hundreds of millions of dollars in stadium sales taxes and car rental and hotel taxes on the grounds that those are “tourism-related,” it’s important to remember that once you give that money to the owner of the local sports team, you can’t use it for anything else.

Which brings us to Detroit, where local politicians and budget watch groups are looking at a common means of funding sports venues — a ticket tax — but for a very different use:

A new Citizens Research Council of Michigan study found an admissions tax on Detroit sports and entertainment venues could raise between $14 million and $47 million annually, depending on the tax rate. … The extra revenue could offset a property tax cut between 1.7 and 5.7 mills.

Detroit is one of only a handful of cities without a ticket tax, notes the report, and there’s a reason for that: The city used to impose a 10% tax on tickets at Joe Louis Arena when the Red Wings played there, but that was eliminated as part of the deal giving team owners the Ilitch family a new arena plus $261.5 milion in state and city funds to build it, plus $400 million in subsidies for development around the arena, plus another $783 million for in subsidies for more development when the first development didn’t happen, plus possibly another billion dollars more. Clawing back $47 million a year from a new 10% ticket tax wouldn’t make Detroit taxpayers whole on all the tax money they’ve pumped into sports projects (including those for the Tigers and Lions) over the years, but it would at least be a start.

All the ticket tax talk is being spurred by a mayoral race between council president Mary Sheffield, who favors one, and pastor Solomon Kinloch Jr., whose position appears to be that it’s a bad idea because Sheffield came up with it. (Both Sheffield and Kinloch, incidentally, have expressed enthusiasm for continuing to hand out tax breaks in order to promote development.) It does at least look like there’s nothing in the teams’ leases that would block such a tax — Bridge Detroit reports that if the state legislature passed a law allowing cities to impose them, then the city council enacted an ordinance, then a majority of Detroit voters approved it, it could happen.

The report does also raise the issue of whether it’s fair to create higher ticket prices in order to fund city priorities, but doesn’t appear to have examined whether in other cities that have ticket taxes, team owners have largely ended up eating the cost because they’re already charging the most that the market will bear, as economists project that they should. I did some initial asking around and found that while it’s really hard to calculate the effects — if a new stadium opens with a new ticket tax and prices soar, who’s to say if it’s the fault of the tax or of all the shiny new cupholders? — the best study of this appears to be by Stefan Szymanski of Soccernomics fame: He looked at what happened when to soccer ticket prices when the United Kingdom added a 10% VAT sales tax in 1973, and found that around 25% of the cost was passed through to ticket buyers.

More research needed, clearly, but this supports the general idea that ticket taxes mostly hit the wallets of sports team owners, unlike other taxes that can be passed along more fully to regular consumers. Whether ticket taxes should be used for property tax relief is another question, but at least we can dispense with the idea that this would be charging sports fans to bail out property owners — it would mostly be charging sports team owners to do so. Michigan and Detroit legislators and voters, take note.

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San Jose council rubber-stamps plan to give Sharks $325m in arena upgrades plus new arena on top of that, pay for it somehow

access_time personNeil deMause

The San Jose city council didn’t waste any time in signing off on Mayor Matt Mahan’s city’s offer to spend $325 million on upgrading the Sharks‘ home arena, voting unanimously on Tuesday to approve the deal just one week after it was first announced. The subsidy deal will come with an extension on the team’s lease through 2051 — though the team’s owners can buy out the remainder of the lease for a smaller and smaller amount as that date approaches — and with a guarantee that the city will start planning an even newer arena by September 2027.

The San Jose Spotlight article on all this includes a stunningly bothsidesy paragraph:

Some have questioned why taxpayers have to foot the bulk of renovation costs at a time of economic hardship and threats to social safety net programs. Sharks owner and SAP Chairman Hasso Plattner possessed a net worth of $15 billion as of this month, according to Forbes. But there were more proponents than critics at the podium on Tuesday who saw the Sharks as an invaluable part of the city — and a no-brainer investment.

The Spotlight then goes on to quote the testimony of exactly one person, Mayor Mahan, who opined that a yes vote would make “a real statement [that] San Jose is a major world-class city that deserves to have the very best … events, performances and experiences, and should be recognized as the largest city in Northern California.” Rand McNally, you’re on notice!

The council vote doesn’t actually determine how San Jose, which is facing budget deficits and slowing property tax revenues, will actually come up with the $325 million. The Spotlight reports that city leaders could seek to use “bonds and higher hotel taxes,” but 1) both of these would need to go before voters and 2) “bonds” isn’t actually a way to pay for anything, it just kicks the can down the road to figuring out how to pay off the bonds. They’ll surely figure out something, though, there are always more social safety net programs to cut!

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San Jose offers Sharks $357m to renovate arena, after which they’ll tear it down and build a new one

access_time personNeil deMause

The city of San Jose and Sharks owner Hasso Plattner have agreed to a new lease in which the city would spend $325 million on an upgrade of the team’s arena, in exchange for which the Sharks would keep playing there until 2051.

I know what you all want to know: Is this, you know, bad? The current Sharks lease expired this year, though the team has a series of one-year options for extending it. If we treat this as a 26-year lease extension, though, that’s $12.5 million in taxpayer money per additional year of the Sharks sticking around, which is a bargain compared to some other much pricier deals. But the devil is always in the details with sports leases, so let’s dig into the city memo and see what it spells out:

  • The commitment by the Sharks to stay in San Jose through 2051 isn’t actually quite that: The new lease establishes penalties for leaving early, but these will only equal the city’s outstanding debt on the renovations — meaning an equally accurate reading is “New Sharks lease will allow team to move in the 2040s by paying small buyout.”
  • On top of the $325 million for renovations, he city will put in another $32 million for future “ongoing capital repairs.” (Plattner will match the $32 million, but will only put in $100 million toward the initial renovations.)
  • The renovations are needed, according to the memo, to bring the 32-year-old arena into compliance with “NHL standards.” (One example given: The visiting clubhouse is on the opposite side of the ice from the visiting bench, so the coaching staff has to walk across the ice to get to it.) But it doesn’t appear that an upgraded arena will come with upgraded rent payments — in fact, under the old lease the team owners were expected to pay $4 million a year into a capital reserve fund (they don’t appear to have been paying anything to the actual city treasury), whereas now that figure will fall initially to $500,000 a year before rising eventually to $2 million a year.
  • As the city and team have agreed that even a renovated arena will no longer be usable after 2051 (because reasons), there will be a new deadline of September 1, 2027, by which time the city and team will conclude “identifying a Future Arena Location and executing an Arena District Agreement” for the next arena to replace the just-upgraded one.

The memo is largely a PR document — it includes a section on how “reinvesting in the SAP Center is about more than bricks and mortar — it’s about honoring a civic legacy, supporting the next generation of athletes and artists, and reaffirming our place as a destination for world-class entertainment” — so we’ll need to see the actual lease language before attempting to assess how much this will cost San Jose residents in total. But “$357 million plus we reduce your rent plus the year after next we start planning for a whole new arenat” is already heading in a pretty spendy direction.

It’s definitely a proposal ripe for further analysis, so it’s a good thing the San Jose City Council isn’t planning to vote on the deal until — uhhhh, next Tuesday? Six business days, to decide on committing San Jose to rebuilding one arena and committing to build a whole new one, sure, that seems like plenty.

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Friday roundup: Reading the fine print on stadium and arena deals is a lost art

access_time personNeil deMause

A note to all of you Field of Schemes supporters who signed up to receive the daily posts in email — I’ve been made aware of a glitch that may have been keeping some new members from getting the emails. This should now be fixed, but if you think you should be receiving emails but still aren’t, please contact me; if you think you shouldn’t be receiving emails but are, then really contact me. (And if you’re not receiving emails because you haven’t become a monthly patron but would like to, just sign up!)

And with that business out of the way, let’s move on to the real excitement: the week’s leftover stadium and arena news!

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Jazz, Mammoth win $1-a-year arena rent until 2125, how much will that cost Salt Lake City?

access_time personNeil deMause

One of the most common questions I get from journalists new to the world of sports subsidies is “Where can I find a list of how much public money went to each stadium and arena?” and my answer is always Ha ha ha ha ha ha ha no. There have been attempts, like Judith Grant Long’s 2013 magnum opus Public-Private Partnerships for Major League Sports Facilities, which took her ten years to research and was almost instantly out of date — one reason being that it turns out publicly announced figures for stadium spending are only the tip of the iceberg, with other things like tax breaks and discounted hidden below the waterline. And how much a team owner will benefit from costs they won’t be paying in the future turns out to be really tricky to project, which is how you end up with Washington, D.C. officials saying a Commanders stadium would cost $850 million and a land-use economist saying the actual number is somewhere between $7 billion and $26 billion, depending on the future value of land that D.C. is forgoing collecting property taxes and rent on.

All of which brings us to the latest news from Salt Lake City, where Utah Jazz and Mammoth* owner Ryan Smith just landed an eye-opening lease extension on the land under his arena:

The deal includes provisions that can extend the agreement for as long as 100 years for as low as $1 per year. … The lease was set to expire in 2060. Under the new agreement, Jazz Arena Investors can rent the land for as little as $1 per year, as long as it keeps up with certain provisions over the next 30 years…

After 2055, the arena owner can extend the lease every 10 years for up to seven times, accounting for the remainder of the 100-year deal. After 30 years, the Reinvestment Agency could assess “market rent” rates if conditions aren’t met.

*(Yes, the former Arizona Coyotes have been renamed the Utah Mammoth, in case you missed it. And yes, the plural of “mammoth” is “mammoths,” but these are the Mammoth because oneness or something, or maybe just because whoever filed the trademark request forgot the “s,” who can say?)

Okay, so Smith gets to have his NBA and NHL teams play at the Delta Center for $1 a year — or “less than the cost of a candy bar,” as the Salt Lake Tribune helpfully explains for anyone who doesn’t know how much a dollar is worth — through the year 2125 if he wants, though Salt Lake can start charging real rent starting 60 years from now if Smith moves both teams out by then. All of this is for an arena and surrounding district that Smith just got $900 million in state and city tax money to upgrade, even though neither the state nor the city owns it nor will be getting any revenue from it.

That’s a pretty sweet deal, but how sweet? To figure that out, we would need to know what the going rate is for rent on a large piece of Salt Lake City real estate with a sports arena sitting on top of it, which, needless to say, it’s hard to find comparables for. In fact, we actually need to know not just the going market-rate rent now, but what it is likely to be until shortly before the founding of Starfleet Headquarters. We could guesstimate a current value of Salt Lake City commercial land at about $2 million an acre, but we would still have to know how many acres of land Smith is getting control of (the entire arena district site is 100 acres, but this would only be for part of it, if I’m reading the news reports correctly), plus then subtract out the value of the $1-a-year rent Smith is already set to get through 2055. I’ve asked Geoff Propheter, who did the D.C. subsidy estimate, to run similar numbers here, and he says he’ll get back to me once he can get more details.**

Plus, there’s also the value of the leverage Smith is buying: Because it’s not an actual 100-year lease but just a series of lease options, Salt Lake City can’t demand more rent from him, but he (and his children and grandchildren and AI descendants) absolutely will be able to threaten not to renew his lease if he thinks it will enable him to demand more public money in the future. It’s a perfect “grift that keeps on giving” scenario, in other words, which is maybe not the sort of thing that your city council should be approving unanimously with little debate.

Anyway, if anyone asks you how much public money Ryan Smith is getting for his privately owned arena, feel safe in saying “around a billion dollars” and leave it at that. It may not make for a nice data point on a bar chart, but it has the benefit of being undeniably true.

**UPDATE: Propheter has done a quick estimate of the value of the additional 70 years of lease extensions plus the additional 26 acres of land Smith will be getting on top of the 10 acres he already has, and come up with: $2 billion in present value, give or take. So maybe “around $3 billion” is a better answer for how much public money Smith is set to get overall, depending on how he plays his cards with threatening to opt out of his lease.

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