Category: Arizona Coyotes

Friday roundup: A’s exec says Fisher really does have Vegas stadium money (no, you can’t see it)

access_time personNeil deMause

Before we get to the bullet points, and I know how much you all love the bullet points, there is pressing news we have to discuss first, which is that Athletics owner John Fisher has the billion-dollars-plus he needs to build a stadium in Las Vegas. Sort of. Maybe. According to a guy:

Athletics owner John Fisher and his family will invest $1 billion into the construction of a stadium in Las Vegas and U.S. Bank and Goldman Sachs will offer a $300 million loan, club executive Sandy Dean said Thursday.

Dean made his remarks to a special meeting of the Las Vegas Stadium Authority board.

Dean said four letters will be presented at the Dec. 5 authority meeting asserting construction details and financing will be in place. Final approvals are expected to be made at that meeting to allow construction of the $1.5 billion, 30,000-seat domed ballpark with a capacity for up to 33,000 fans.

So it’s official: Fisher has financing in place for his Vegas stadium … well, no, he will have financing in place by December … or he’ll have a letter (or four) stating that financing is in place?

[One] letter, Dean said, asserts the Fisher and his family have the ability to meet their financial commitment. Dean said [another] letter from U.S. Bank will show that through a review of the owner’s finances that it “concludes the Fisher family has more than sufficient resources to fund the equity investment that’s required to build the stadium.”

Except! Here’s video of Dean saying that one of the letters will be “from John Fisher indicating that his family will invest a billion dollars in support of the project here in Las Vegas.” So which is it: Is the Fisher family committing to spend $1 billion on a Vegas stadium, or just avowing that it  is worth $1 billion? We already knew the latter — Vegas convention center authority chief and unregistered A’s lobbyist Steve Hill keeps saying it, among other things — but that’s not the same as actually figuring out what the family would liquidate to pay for the stadium: the San Jose Earthquakes? The Gap?.

(Dean also said Fisher is still looking to sell minority shares of the team at inflated prices because “it would be good coming to Las Vegas to have outside partners from Las Vegas,” but not because he needs the money, oh no: “The ability to finance the stadium is independent of that.”)

The question all this keeps coming back to isn’t “Where can a billionaire find a billion dollars?” but rather “Is the Fisher family ready to throw a billion dollars of its own money down a stadium hole?” The number of stadiums that can cover their own construction costs is slim; the number that have done so that are in their leagues’ smallest market and include a pricey dome is zero. Which is why people are eager to see Fisher put actual money on the table; promises of a letter next month that will maybe describe actual money on the table is not quite the same thing.

Sorry if all that was anticlimactic. And now, this week’s bullet points:

  • Ohio Attorney General Dave Yost wants to intervene in the Cleveland Browns‘ lawsuit against the city of Cleveland seeking to block the use of the Art Modell Law to block the team from moving to a new stadium in Brook Park. Yost says the team’s claim that the law, which requires that teams be offered up for sale to local owners before being relocated from their current home city, is “unconstitutionally vague” is “wrong,” and since Browns owners Jimmy and Dee Haslam only sued the city, he needed to file a motion to intervene on behalf of the state. Feel the excitement!
  • Philadelphia councilmember Mark Squilla may have come down in favor of letting the 76ers owners build an arena next door to Chinatown, but he has an idea for ensuring that the neighborhood isn’t disrupted: a zoning overlay to “require affordable housing, restrictions on types of businesses, and limits on the size of new storefronts to discourage chain restaurants from crowding out traditional Chinatown retail,” in the words of the Philadelphia Inquirer. Adds the Inquirer: “The precise language mandating how any of this would work has yet to be added to the bill.” This is on top of proposing a tax increment financing district to kick taxes collected in Chinatown back to local businesses to offset any rise in rents as the result of increased property values — pretty sure that would only risk encouraging landlords to increase rents more knowing businesses would be getting subsidies to help pay them, need to go back and check my Intro to Economics textbook chapter on microeconomics.
  • The World Series is over and I didn’t get around to discussing the New York City Economic Development Corporation’s claim that each Yankees and Mets home playoff game generated $20-25 million in economic activity, but suffice to say I talked to an EDC spokesperson who told me (on background, so I’m not supposed to quote them directly so I’m not) that the analysis was based off a previous model from 2022 that puts together assumptions from the city tourism board plus assumptions from the Yankees and then applies a multiplier. Also, they look at “anonymized cell phone data”? No, you and I are not allowed to see the actual model, so no further details about WTF this means will be available.
  • Spotlight on America has a piece on how Tempe, Arizona said no to funding an Arizona Coyotes arena and how other cities could follow its lead, which is all well and good until it concludes by lauding late Seattle Seahawks owner Paul Allen for his commitment to Seattle, when Allen actually paid the city to hold a referendum so he could get $300 million in public money for a football stadium, then refused to open his books like he promised in exchange for the money, seriously, what?
  • Perhaps you would prefer a deep dive into the toilets at the Los Angeles Clippers‘ new arena? Perhaps you would prefer I hadn’t phrased it that way? Sorry, you’re getting both!

 

Share this post:

Friday roundup: Browns owners sue to block Modell Law, still no Vegas stadium finance plan from Fisher

access_time personNeil deMause

We have a lot to cover today, but first I would like to encourage you to donate to Matthew Sweet’s GoFundMe for stroke recovery if you’re a fan of his music and haven’t yet — he sounds like he’s in a bad way, he couldn’t afford health insurance on a musician’s income (especially being off the road for much of the last four years thanks to the pandemic), and needing to have health insurance is still a thing in the U.S. for some reason. Here’s hoping that the money raised will help allow him to make a significant recovery, and that someday even people without hit songs will be able to afford medical care and the Pentagon will need to hold a bake sale.

But enough about the unfairness of the modern American economic system, on to … well, you know:

  • With the city of Cleveland considering whether to file suit under the Art Modell Law to force Cleveland Browns owners Jimmy and Dee Haslam to offer the team for sale to local buyers before decamping to suburban Brook Park, the Haslams have taken the preemptive step of suing to block the Modell law on the grounds it violates the U.S. Constitution’s Commerce Clause and is too vague and probably a bunch of other things, the typography on the PDF is really hard to read. “Today’s action for declaratory judgment was filed to take this matter out of the political domain and ensure we can move this transformative project forward to make a new domed Huntington Bank Field in Brook Park a reality,” said Browns COO Dave Jenkins, which is a nice way of saying, “These damn ‘laws’ and ‘democratic procedures’ were getting in the way of our stadium plans, that could not be allowed.”
  • Speaking of things getting in the way of the Browns’ Brook Park dome plans, Cuyahoga County executive Chris Ronayne has reiterated that he doesn’t want Ohio taxpayers footing $1.2 billion of the stadium bill, saying, “We have looked at the facts, and the facts are that, and I said it before, that the Brook Park play just doesn’t work. It doesn’t work from a financial standpoint, and it’s frankly very detrimental to our future.” Added Cleveland city law director Mark Griffin: “I want to say this to our state legislature … and to this court system: If you make moves to try to gut this city of one of our key corporate partners and money maker, all of us will remember. You will be up for reelection. You would have to deal with the city of Cleveland in some way, shape, form, or fashion, and none of us will ever forget it.”
  • John Fisher will not be presenting any financial details of his Las Vegas Athletics stadium plan at the Las Vegas Stadium Authority’s October 31 meeting, I’m sure you’re all shocked to hear. The authority will discuss his proposed lease agreement for the stadium, but the actual language doesn’t appear to have been posted yet on the authority’s website, guess it’ll be a surprise! Marc Normandin has more on the Vegas clown show at Baseball Prospectus.
  • The Green Bay Packers have agreed to future rent increases at Lambeau Field after previously demanding a rent freeze so it could instead put the rent savings into paying for stadium upgrades. The Green Bay council unanimously rejected that proposal, and Packers execs agreed to annual 2.75% rent increases worth about $30 million in total present value — turns out sometimes pro sports franchise owners do take “no” for an answer, though obviously the Packers are a bit of a special case in terms of franchise ownership.
  • WTOP-TV quotes University of Maryland business professor Michael Faulkender as saying a renovated Washington Capitals and Wizards arena could benefit the surrounding Chinatown because “Generally when people come down for an event, they’re not just going to go straight to the event. They’re also going to, perhaps, come in early, go to restaurants, maybe stay afterward, go to bars,” which 1) they really don’t that much, 2) those that do are already there, since the arena is already in place. Faulkender added, “It may, on the margin, attract people to live closer to it, if they’re regular fans of one of those teams,” and attracting new residents to displace existing ones is exactly why people say the arena has been bad for D.C.’s Chinatown, Faulkender can just stop now, I think.
  • If you were wondering what former Arizona Coyotes owner Alex Meruelo was up to and had your money on asking for tax kickbacks for a proposed $1 billion minor-league and college hockey arena in Reno, Nevada, you’re a winner!
  • New York Gov. Kathy Hochul says her $1 billion Buffalo Bills stadium subsidy was necessary because five other cities were trying to steal the Bills otherwise. She didn’t name any of the cities, of course, but we know what one of them must have been.
  • I wrote a long explainer for Defector this week on where the proposed Philadelphia 76ers arena deal falls on the bad-to-awful spectrum, if you’ve been wanting a long explainer on that. And I did an interview with ABC Tampa about where the Tampa Bay Rays might play next year with their stadium roof in tatters, if you want to hear me expound on that, or just missed seeing what I have on my living room walls.
Share this post:

Friday roundup: Missouri gov vows bidding war for Chiefs and Royals, Coyotes (?) owner (??) throws in towel

access_time personNeil deMause

Has there ever been a week before this where two cities dropped a combined $1.425 billion on sports stadium subsidies? Actually, yeah, there was that week in April 2022 when Maryland approved $1.8 billion in stadium subsidies one day after New York approved $1 billion in stadium subsidies, which is honestly going to be tough to beat. Part of this is just how state legislative calendars work, with elected officials typically racing to get potentially unpopular bills passed super-quick at the end of sessions before anyone notices, but it can still feel alarming in the same way a couple of sports subsidy plans getting defeated in quick succession can feel encouraging. “Don’t get distracted by small sample sizes” is probably the best guidance, though “Whoever has the gold makes the rules” isn’t bad either.

Anyway, it’s Friday, so you know what that means! Let’s see what else has been happening:

Share this post:

Arizona cancels land auction for neo-Coyotes arena since owner lacks permits to build one

access_time personNeil deMause

When last we left off with the Arizona Coyotes, the old Arizona Coyotes had moved to Salt Lake City, while old Arizona Coyotes owner Alex Meruelo was still set on winning a June 27 auction for public land in Phoenix so he could get an NHL expansion team and build an arena there with the help of a tax surcharge from a “theme park district” that the Phoenix mayor opposes. And if all that sounds awfully nebulous, things got much, much worse for Meruelo on Friday, when the state of Arizona abruptly canceled the auction on the grounds that Meruelo needs a zoning variance before he can do anything with the land:

“After much consideration, the Arizona State Land Department (ASLD) has determined that it is in the best interest of the Trust to cancel the auction and reorder the steps,” the ASLD said in a release. “ASLD recently confirmed that the proposed arena use will require a Special Use Permit, and as a result we are requesting that the applicant file for and receive a Special Use Permit prior to the auction. This affords the applicant and ASLD certainty that the applicant can build what it intends to build for its anchor tenant. It is not uncommon for ASLD to require applicants to secure zoning/use permits prior to auction.

“We understand the delay in an auction is a disappointment for our applicant and members of the public, but the change in timing is the prudent decision for the Trust. ASLD remains open to working with our applicant to bring the land forward to auction in the future if a special use permit is received.”

That’s all perfectly reasonable, though it does raise the question of why the state land department waited until six days before the auction to go “You know what, maybe let’s not.” Sure, back in March when the land was posted, Meruelo still had an actual NHL team instead of just some logos and the promise of one, but the Coyotes have been Utah-bound for a couple of months now, did it take this long for anyone to realize the state could just call the whole thing off?

Anyway, Meruelo is predictably steamed, releasing a team statement that “this unprecedented action by the State of Arizona seriously jeopardizes the future of NHL hockey returning to the desert” and “by cancelling the land auction, the state is forgoing millions, and potentially billions, of dollars that would have gone directly to K-12 education” [citation extremely needed].

Meruelo still has until 2029 to come up with an arena site, money to build an arena, and $1 billion to buy a expansion franchise so he can cash in the NHL-ownership IOU that he got from the league as part of the deal to move the Coyotes to Phoenix. All signs are that he is extremely unlikely to accomplish all of those things, but no harm for him in trying, right? If nothing else, it gives the few Coyotes employees Meruelo didn’t lay off something to tweet about for the first time in a month.

Share this post:

Friday roundup: Throw another $75m on the Rays subsidy fire, Phoenix mayor opposes neo-Coyotes arena tax

access_time personNeil deMause

It’s Friday again! I tried asking Google AI some stadium questions to see if it would return entertainingly daft answers, but I didn’t get much, so just eat your rocks and let’s get on with the week’s news remainders:

  • If an estimated $1.5 billion in cash, tax kickbacks, and land breaks for the Tampa Bay Rays didn’t sound like a lot already, turns out the $155 million that Rays owner Stu Sternberg wants to pay for 65 acres of land isn’t really $155 million, because he’d be making the payments in installments over 30 years. (St. Pete Assistant City Administrator Tom Greene estimates that this would knock about one-third off the value of the payments, making them worth $103 million; I get more like $80 million, but it depends on the exact payment schedule.) “I think that if you are not accounting for inflation in the agreement, we’re not getting the value that it says there,” said city councilmember Lisset Hanewicz, and, nope, inflation is not quite the same as devaluation for present value, but good enough for government work.
  • Phoenix Mayor Kate Gallego says she “does not support using taxpayer funds, including property tax abatement, for sports arenas,” which is a blow to once-and-wannabe-future Arizona Coyotes owner Alex Meruelo’s plan to build a new arena in Phoenix using a “theme park” sales tax surcharge. “Tax abatement is essentially what establishing a theme park district does — so per the statement, she is opposed,” a Gallego spokesperson clarified — I’m still not 100% convinced that’s what it does, but either way, it’s going to make it tough for Meruelo to pursue his arena plans, at least unless the state legislature passes its bill to block city officials from having any say in such matters.
  • The city of Santa Clara and the San Francisco 49ers owners have resolved their lease dispute after, as the San Francisco Chronicle put it, “the five-member City Council majority, which was elected with the help of millions in campaign contributions from 49ers CEO Jed York, approved the deal 5-2 in a closed session Monday night.” The details are too detailed to figure out exactly who came out how far ahead in the agreement, but given the above you can probably make an educated guess.
  • Voters in Eugene, Oregon have overwhelmingly rejected spending $15 million toward a new stadium for the minor-league baseball Emeralds, who have to move from their current stadium, which is only 14 years old, because MLB is making them as part of its “force all minor-league cities to build new stadiums” plan. Team officials had previously said they would move the team if the stadium measure didn’t pass; General Manager Allan Benavides said following the vote results that he didn’t know what the team owners’ next steps would be: “We’ll have to get really creative if we want to stay here, or find a new home.” Or maybe MLB could give them a waiver to keep playing in their current stadium, though that would only help the Emeralds and their fans, not MLB, so don’t hold your breath there.
  • John Mozena of the Center for Economic Accountability (the makers of these stickers) wrote an op-ed for the Tampa Bay Times yesterday on why stadium subsidies in St. Petersburg or anywhere are a bad idea, which provides a good overview of the economic arguments and more than a few bon mots — I’m partial to “stadiums don’t create more economic activity in a city any more than cutting a pizza into more slices creates more dinner for everyone,” but feel free to choose your own favorite.
  • The St. Louis Cardinals suck, which means it’s time for a news report about how hot dog trucks outside the stadium aren’t seeing as much business. Are hot dog trucks on the other side of town doing better business as a result? That’s too hard to report, you’ll have to do your own research, apparently.
Share this post:

Friday roundup: More Bears $2.6B stadium subsidy fallout, plus Indianapolis switches soccer horses

access_time personNeil deMause

Before we get to the news: I hope that those of you who enjoy using dark mode are enjoying the new dark mode plugin I installed this week (DarkMySite, if anyone cares), which seems, unlike the old one, to actually mostly work. If you haven’t tried it out and want to, click the little moon symbol at bottom right and take a load off your eyes!

Also, a special shoutout to a couple of FoS readers (unnamed, but you know who you are) who either sent in a large lump sum of cash or upped their monthly Patreon pledge for no reason at all in the last week. As I forget if I explicitly mentioned, I quit my previous day job last month, which should give me more time to devote to this site; and while I do have a new regular gig that seems promising, every step towards making this site self-sustaining is hugely helpful, so a huge thanks to all you supporters, at any level. (And for those who haven’t yet taken the plunge: There are still about a dozen more Vaportecture art prints, get ’em before they’re gone!)

Okay, enough of that, time’s a-wasting and there’s a whole week of news remainders to dig through:

  • The fallout continues from the Chicago Bears owners’ $2.6 billion stadium subsidy demand (see the updates for the math behind the updated figure), with so much more today that we’re going to have to break out the second level of bullet points:
    • Chicago Mayor Brandon Johnson says it’s no contradiction that he said during his mayoral race that the city shouldn’t spend billions of dollars on a Bears stadium when there were “dozens of other urgent needs” and now thinks this is a great idea, on the grounds that he, a “middle child” from a “working-class family,” got to talk to billionaires and make sure they put some “skin in the game” and also the stadium will be “transformational” and “the Bears are staying in Chicago” and “the type of economic development this project brings” and “14 more acres of space for our children in the city of Chicago to benefit from.” Is all that the best use of $2.6 billion? I’m sorry, we’re out of time for questions, thank you for coming.
    • The Chicago Sun-Times editorial board did get a chance to ask Bears CEO Kevin Warren what would happen if the team got its $1.225 billion in taxpayer money for the stadium and nobody came up with another $1.175 billion to build new underground garages and park space, and Warren replied: “I’m not going to think negatively about that now. … If that’s the conclusion that … you want to reach now, then you can say that. I’m being positive about it … and being very transparent as far as what we need from the different three phases with this stadium project.” So, optional when projecting the city’s costs, not optional in the sense that you don’t want to go there in terms of what happens if the city doesn’t come up with another billion-plus dollars, got it.
    • Illinois Gov. J.B. Pritzker reiterated yesterday that he’s agin’ the whole kit and kaboodle, saying: “I’m skeptical of the proposal that was put forward and I’m even more skeptical of the ability to get enough votes for it in the General Assembly.”
    • Chicago Sun-Times columnist David Roeder suggests that if the Bears (and White Sox) want public money, they should give the public a cut of ownership of the team, though some stick-in-the-mud (okay, it’s me) points out that sports leagues love nothing more than to head off the possibility of public ownership, even blocking one-time San Diego Padres owner Joan Kroc from gifting her team to the city of San Diego on the grounds that that just isn’t done.
  • Way back in 2019, the Indiana state legislature approved giving $112 million toward a new soccer stadium for the Indy Eleven soccer team, provided owner Ersal Ozdemir got his team promoted from the USL to MLS. At the time, this seemed like an easy enough lift, since all the other kids were doing it, but it hasn’t happened yet, and now apparently Indianapolis mayor Joe Hogsett has gotten tired of waiting, announcing that he’s putting in a bid with another ownership group to get an MLS expansion team, using the same tax kickbacks that Ozdemir was looking to get. Ozdemir, who already broke ground on his stadium site last year, though it’s unclear if he’s actually started construction, is naturally enough extremely unhappy with this latest news, accusing Hogsett of “preparing to walk away” from “years of good-faith negotiations” and instead give the public money to some other soccer guy instead of him. Will there be lawsuits? Stay tuned!
  • A “hotel entrepreneur and former longtime Kansas City resident” got space on the Kansas City Star op-ed page to argue that Kansas Citians who voted against a tax subsidy for Royals and Chiefs stadiums missed an opportunity to become like Denver, where “the Coors Field development inspired a stunning downtown renaissance” where “dozens of restaurants, bars and clubs opened to serve crowds before and after the 81 hometown games each year.” I once again wish that I still had a copy of the chart someone once showed me that indicated that most of the development starts in Denver’s LoDo district actually preceded the construction of the Rockies stadium; if I can dig it up, I’ll post it here as an update.
  • The Arizona state senate is considering a bill to allow the state to approve “theme park districts” like the one Alex Meruelo wants for a Coyotes 2.0 arena, without city governments weighing in. (It did so by virtue of hollowing out an already-state-house-approved bill to give first responders access to treatment for PTSD and inserting theme park district language instead, which Arizona calls a “strike everything amendment” but “zombie bill” is a much better name.) This could make it easier for Meruelo to have the state levy a sales tax surcharge in his arena district that would be kicked back to him for construction costs; we’ll have to wait and see what the state senate thinks of it.
  • Buffalo Bills owners Terry and Kim Pegula may sell up to a quarter of their team to help raise money for their share of a new stadium, after construction costs have soared by a reported $600 million. In case you needed more evidence that many if not most stadiums are money losers that are only built so that team owners can cash subsidy checks, here’s your Exhibit A.
  • Arlington, Texas is spending $4.2 million to upgrade the Texas Rangers‘ old stadium, which the team moved out of after 2019 into a new publicly funded one, because, according to Arlington Mayor Jim Ross, “it’s a regional injection of all economic development.” The stadium is currently home to the XFL Arlington Renegades and occasional concerts.
  • What more could happen to Montreal’s Olympic Stadium after costing $1 billion to build and hundreds of millions more to fix the roof on and now $870 million to fix the roof on again? How about catching fire and needing $40 million to fix the damage? You gotta wonder if the Big Owe is just trying to put itself out of its misery at this point, but Montreal officials aren’t getting the message.
Share this post:

Coyotes arena could cost Salt Lake City $670m or more, plus Meruelo keeps on Merueloing in Arizona

access_time personNeil deMause

This may just be the inevitable fallout of a franchise relocation that came pretty much out of nowhere two weeks ago, but there was a lot going on this weekend with the Arizona Coyotes‘ transformation into the Utah Something-Somethings. Let’s take the news items one at a time:

New team owner Ryan Smith doesn’t want a new arena, he wants to renovate his current one. This makes sense, if only because Smith is already plunking down $1.2-1.3 billion on the franchise, so he’ll want to keep construction costs down so that he doesn’t have to cover too much of them. It could be a tricky rebuild, though, as, like the arenas in Phoenix and Brooklyn, the Delta Center was built with the NBA in mind, so it’s going to require significant reworking to accompany a hockey rink, which is a good bit longer than the Jazz basketball court.

Also, Smith claims that if he had his druthers, he’d be building a new arena south of downtown, but elected officials instructed him otherwise:

“Our elected officials,” Smith said, turning to address those in attendance Friday. “I know you guys get dragged every way possible, you guys literally stopped us in the middle of the process and said ‘These both have to be downtown, so go figure out what you have to do.’” The Delta Center remodel plans were the result.

There’s still no reported price tag for a renovated Jazz arena to accommodate hockey, but the Salt Lake Tribune does have a new estimated total for the 0.5% Salt Lake City sales tax hike that would help fund it, reporting that it “would, in the estimation of the Legislature, raise $54 million per year that would go towards repaying bond on the project; over 20 years, it’s a total that sums to over $1 billion.” The better total would be to use the present value of those dollars over time — in other words, figure out how much in 2024 spending it could pay off, like calculating how much house you could buy with a certain amount of future mortgage payments — and that comes to $673 million, which is a lot more than the $500 million that was reported last month when the legislation was passed by the state legislature. Plus, that doesn’t include the kickback of all sales taxes from a possible sales tax increment financing district around the arena, so the public price tag could still go higher.

The sales tax hike still needs to get passed by the city council, but Bettman says if it fails, there’s a Plan B for raising the funds:

If that tax hike doesn’t pass, Bettman told ESPN700 on Friday that he’s seen a second set of arena plans. “There are a couple of sets of plans which I’ve seen. One is obviously a renovation and a resizing and configuring of this building. And the other is … a new building,” he said.

Uh, that’s not actually a Plan B for raising money, it’s a Plan B for spending it. Either Bettman, or ESPN700, or the Tribune (which reported the above) got confused somewhere along the way, your guess is as good as mine as to which.

Salt Lake City downtown businesses are in for an unpleasant surprise. “Utah NHL rising tide expected to lift all downtown businesses” read the headline on last night’s KUTV story, which quickly makes it clear that the ones doing the expecting are those self-same downtown business owners:

[STK Steakhouse manager Markus] Ericksen knows the introduction of a hockey league could be great for a growing downtown.

“We are excited; we saw a lot of great walk-in business because of the games with the Jazz,” said Ericksen.

Unfortunately, the economic literature doesn’t support the idea that more arena business drives a significant amount of new spending at local dining establishments — here’s one paper from last year that concludes that “basketball & hockey arenas do not appear to generate significant spillovers for the surrounding businesses” — and neither do anecdotal reports from local restaurateurs, who say it’s hard to seat enough fans in the brief time before and after games to get much benefit.

Ericksen has the opportunity to get his steakhouse’s name in the news, so it makes sense for him to use it to promote his business to future hockey fans. Why KUTV chose to investigate the economic impact on local businesses solely by talking to one local business owner and the head of the downtown chamber of commerce — I mean, it’s an easier lift than spending the 60 seconds it took me to find that economic paper, I guess, and then going through having to contact the authors and wait for them to get back to you and set up a Zoom, but it’d be nice to see TV journalists doing at least minimal journalism.

Outgoing Coyotes owner Alex Meruelo can’t make up his mind about pretty much anything. Meruelo had quite the week, saying all kinds of things that he then had to immediately walk back:

  • On Thursday, Meruelo said he’d retained ownership of the minor-league Tuscon Roadrunners, and announced that “we’re gonna move them up to Mullett Arena” in Tempe, where the Coyotes have played the past two seasons. Later that same day, Meruelo said “we haven’t made a decision yet,” and the next day he said, “We’ve talked about maybe playing half the season in Tucson and half the season at Mullett.” He also, according to Tucson TV station KVOA, revealed that “the hasn’t discussed the matter with the Roadrunners, the City of Tucson, or Arizona State University, which owns Mullett Arena in Tempe,” all of which would be slightly important before moving the team.
  • In Friday’s press conference, Meruelo declared that he hadn’t done many press interviews of late because he “didn’t like the media” — leading NHL commissioner Gary Bettman, who was sitting next to him, to interrupt: “Let me translate that a little bit. I don’t think anybody should take that personally. I think he doesn’t like being a public person.”
  • After calling his planned Phoenix arena “the first ever privately funded sports arena and entertainment district in the history of Arizona,” Meruelo declared that he actually plans to ask the city to create a “theme park district” that could levy a 9% sales tax surcharge within the district, which would be kicked back to pay for arena construction. (How much of this would come out of taxpayers’ pockets, and how much would act like a ticket tax where he would have to lower prices on things like concessions and souvenirs to avoid driving away customers, remains the subject of debate among economists, depending on a bunch of factors.) A theme park district would also be exempt from property taxes and “monies derived by the district” exempt from income taxes, which could be a much more significant chunk of change.

Like I said, it’s a lot. It’s entirely possible, though, that the move of the Coyotes from Arizona to Utah could end up triggering a billion dollars or more in public costs across two states, so that two NHL team owners can get new arenas without dipping too far into their own pockets. Or Salt Lake and Phoenix elected officials could vote down all the tax kickbacks, sure, that’s a thing that could happen. But accepting defeat and paying for things yourself doesn’t seem to be in Bettman’s, or Meruelo’s, vocabulary.

Share this post:

Friday roundup: Nevada legislator says she voted for A’s stadium because she didn’t understand it, and other great moments in U.S. politics

access_time personNeil deMause

Before we get to the week’s news roundup, a couple of programming notes. First off, my apologies for the ads that have kept appearing in the middle of posts on this site — I keep telling Google Ads not to put them there, and it keeps ignoring me. I think I may have finally succeeded in turning those off, but do let me know if they reappear for you. I may end up dropping Google as this site’s ad provider if it keeps this up — that is, if I don’t drop Google anyway for firing workers upset that it successfully created Project Nimbus from the famous science fiction novel Don’t Create Project Nimbus.

Second, I know that the Dark Mode function is pretty broken again, often displaying dark gray type on a black background. I’m in discussions with the plugin provider about bug fixes, and also once again looking for alternatives that work more consistently. In the meantime, you can sometimes get it working by refreshing your browser; if that doesn’t work, just don’t use Dark Mode for now, and hopefully everything will be back in working order before your eyeballs explode from the screen glare.

And now for the news:

  • Nevada assemblymember Danielle Gallant tried, despite a very unhappy dog in the background, to explain her vote last summer for $600 million in public money for a new stadium to bring the Oakland A’s to Las Vegas, and ended up having to apologize for not understanding how the financing worked at all. “I hope future errors you make are met with more kindness than some of the responses I received,” tweeted Gallant, presumably inviting those among you who haven’t accidentally given $600 million to a billionaire sports owner to cast the first stone.
  • Chicago Mayor Brandon Johnson, who previously praised Chicago White Sox owner Jerry Reinsdorf’s proposed stadium development that would require $2 billion in public subsidies and said “everything is on the table here,” now says that some things are off the table: “I’ve always said that ownership has to put some skin in the game,” Johnson told reporters this week, adding that he opposes kickbacks of city ticket taxes to Reinsdorf to help fund the project.
  • If you’re a Buffalo Bills fan outraged that the team is charging as much as $50,000 for personal seat licenses before you can even buy tickets to their new stadium that is being built with over $1 billion in your tax money, good news: Now you can instead be upset about the fact that Gov. Kathy Hochul agreed to make the PSLs exempt from sales tax, costing you and your fellow New Yorkers around another $25 million. Or I suppose you can be upset about both, but life is short, you have to pick your priorities.
  • Tampa Bay Times opinion editor Graham Brink, who previously defended spending $1.5 billion in public money on a new Tampa Bay Rays stadium on the grounds of “collective pride,” is now back with a list of other ways it would allegedly be a good deal: extending the Rays’ lease will keep the team in town longer, their development partner is “the real deal,” they’re using stadium designers who’ve designed stadiums before, owner Stu Sternberg has an “astute front office,” and … that’s all he’s got so far, stay tuned for “Economists may say Rays stadium is a boondoggle, but aren’t puppies great?”
  • Meanwhile, if you ask St. Petersburg residents if $1.9 billion is too much to spend on a Rays stadium, they say yes, and if you ask them if a new stadium would be a good idea in the abstract without telling them how much it would cost, they also say yes! The truth must lie somewhere in the middle!
  • Where will the Kansas City Royals and Chiefs owners turn for stadium money now that voters told them where to stick their sales tax hike? “It’s not something that’s going to just kind of be thrown up into the ether out of nowhere,” says Kansas City Mayor Quinton Lucas of city funding, and a spokesperson for Gov. Mike Parson says there’s no state money in the works either. Clay County Presiding Commissioner Jerry Nolte says he hasn’t heard from Royals execs lately, and there’s no talk of fresh funding from Jackson County after the sales-tax plan failed, which leaves only … the team owners’ pockets? KMBC-TV for some reason doesn’t mention this option in their article, the internet must have run out of bits before they got to it. The Kansas City Star, meanwhile, reported on noted sports business expert George Brett’s thoughts on whether the teams will now move out of town, it’s truly not a great week for Kansas City journalism.
  • Now that the Arizona Coyotes are moving to Salt Lake City in the fall, everyone wants to know what the team will be called, and new owner Ryan Smith confirms that it will “start with Utah.” No word yet on what it will rhyme with or how many syllables, but presumably Smith will reveal that eventually — just maybe not this fall, don’t want to rush into things, “Utah Professional Hockey Club” sure has a nice temporary ring to it.
  • Tempe city councilmember Randy Keating has complained that the reason the Coyotes are leaving town is because team execs “ran a terribly inept campaign” for arena subsidies. Better luck next time finding ways to overcome massive public opposition, Randy, there’s got to be a way around this whole “democracy” thing.
  • A’s concessionaire Aramark threatened to fire stadium workers who openly criticize the team’s coming move out of Oakland, which turns out to be a violation of labor law, who could have known?
  • This Ringer article on fan opposition to the A’s departure is really long for anyone who already knows the basics, but its deep dive into the history of fan protest movements does quote Field of Schemes and also includes the priceless quote from Oakland activist Bryan Johansen that his goal is “to fucking haunt John Fisher for all of eternity,” so it’s worth it if you have the time.
Share this post:

Economists divided on whether Coyotes’ departure will hurt Arizona economy, if you only ask two economists

access_time personNeil deMause

With the Arizona Coyotes departing for Utah (for now), the Arizona Republic’s Sam Kmack set himself the task of determining what, if anything, this will mean for the local economy. Let’s see what the experts say!

[Grand Canyon Institute research director Dave] Wells believes the Coyotes’ departure will have “close to zero” economic effect, because of how consumers behave regarding entertainment spending.

“Most people have a limited leisure budget to start with. So, they’ll just reallocate it. You might see an uptick in attendance at ASU basketball games or something like that,” said Wells. He added that a “small core of people” in Arizona may now shift some of their spending to Utah to follow the Coyotes.

And:

[Arizona State University Seidman Research Center director Dennis Hoffman] pointed to three factors related to the Coyotes’ departure that could have an impact:

  • Canadian snowbirds choose to vacation in Florida or another warm state with NHL hockey, rather than coming to Arizona and spending cash here.
  • The loss of the roughly $200 million in revenue he expected the Coyotes would generate, plus the broader economic activity that initial income drives.
  • The loss of the NHL franchises employees who both spend money here and pay state income taxes.

Hoffman said “we could be losing significant money” because of the cash Canadian retirees have invested in Arizona’s economy. Hoffman said that money could “migrate” out of the state, if snowbirds chose Arizona because of the Coyotes.

“How many Canadian winter visitors have historically chosen to locate in Arizona as opposed to Florida because they can go to NHL games?” Hoffman asked. “It’s unknowable. But I think it does a disservice if we just say we’ll ignore it because it’s unknowable.”

And:

Nope, sorry, two economists is all we have time for today! All the better for framing this with a heading reading “Experts are divided” and a framing about how this has “reignited an old disagreement between two experts” over the Coyotes’ proposed Tempe arena deal, albeit a disagreement where one side (Hoffman) was being paid by the Coyotes for his time.

While this may be news to the Republic, there are other economists out there, many of whom have looked at things like what happens when a team leaves a city! As a public service to Kmack, I spent 30, maybe 40 seconds crafting an email to several of them yesterday, and here’s what I got back:

J.C. Bradbury, Kennesaw State University: If Dennis Hoffman honestly thinks that the Coyotes generate a significant economic impact on Phoenix, then he needs to write that up and submit it to peer review where it will be vetted by other economists. That’s the normal process for academic researchers. You don’t get to dismiss the academic consensus by flippantly stating the opposite to the media, especially after producing the estimates for a fee. That’s completely inappropriate, and it does a disservice to the community, which is largely ignorant of rigorous economics research standards. I’m at a total loss to understand why a PhD economist with an academic appointment thinks a pro sports team has such a large economic impact on the community. I mean, maybe I’m wrong; but the burden of proof is on him to demonstrate it to his economist colleagues who have found the exact opposite.

Victor Matheson, College of the Holy Cross: Anytime an economist says there are “untold benefits” from hosting a franchise, either the economist is too lazy to estimate them or is afraid of calculating them for what they might show.

As for actual losses, the state income tax losses from a group of highly paid athletes leaving the state is real, in my opinion, so that is a few million a year. There is an actual “feel-good” loss for the actual fans. (Of course, the fact that the Coyotes are moving suggests there aren’t many of those fans.) Other than that, pretty much no losses.

And the idea that Canadians might not relocate to AZ is absurd. Small numbers in the first place and no consideration that people bring costs not just benefits when they live in a community.

Geoffrey Propheter, University of Colorado: I agree with Victor’s take. It’s silly on its face that people from anywhere outside the state, let alone the country, travel to Arizona strictly because of the Coyotes and for no other reason in such large and frequent numbers to justify the cost of a consultant’s economic impact study, let alone the subsidies for the Coyotes themselves.

I’ll add that the income tax loss is a loss to state public goods. Players pay about $1.8m in state income tax this season, and based on anecdotes about salaries for non-players from NBA teams, I’d put the total (non-players + players) at $2.5-$3.5m. Which on a per capita basis means the hit to state public goods is less than 50 cents per person. The state’s general fund budget is $17.8 billion, or $2,405 spent on state public goods per person. So the income tax loss of the Coyotes leaving the state is at most 0.021% of the state’s total per capita spending on state public goods. Yes, there is a state income tax hit, and yes that translates in theory (ignoring fiscal illusion/obfuscation issues) into lower quantity and quality state public goods, but the magnitude of lost state public goods is so tiny I frankly have a hard time trying to figure out a practical comparison to make it meaningful.

But a little algebra tells me 235 people working 20 hours a week for 52 weeks at the state minimum wage will generate $3.5m in state income tax too. So if folks really care about that couple million dollars of state income tax, there’s other ways to get it.

Matheson: Yeah, I agree with Geoffrey about all of this. I like to put it this way regarding the potential $3.5 million in player taxes. At current interest rates, that amount is sufficient to finance roughly $50 million in stadium construction. So, if you propose a $1 billion stadium deal where the team pays $950 million in construction costs and the state offers up $50 million in subsidies, I probably wouldn’t argue too much.

Brad Humphreys, West Virginia University: New sports facilities do not drive migration between US cities

And there you have it: Economists are actually very much in agreement on whether the Coyotes leaving will have a significant impact on the Arizona economy (LOL, no), except for the one guy who used to work for the Coyotes. The answer must lie somewhere in the middle!

It’s still weird, though, that nobody at the Republic thought to call any other prominent economists to ask — wait, what’s this, also dated yesterday?

What does losing a pro sports team like the Coyotes mean for the metro Phoenix economy?

By Corina Vanek
Arizona Republic

[Phoenix’s] status as a sports hotspot translates little into economic activity, two sports economists said…

[Kennesaw State University professor J.C.] Bradbury said there is “no evidence whatsoever that communities are harmed when teams leave,” when looking at economic activity…

[University of Michigan professor emeritus Rodney] Fort said there are other, measurable benefits that come with sports teams, however. Those are outside ripple effects, Fort said, such as increased sales for businesses near stadiums, making a market more attractive for people to move to and creating a sense of value for fans. The benefits can be small, like if someone goes to a bar to watch the game and buys a drink, but they could add up to notable economic activity…

But, Fort said, it is important to note that those effects are “a drop in the bucket” to a place like Phoenix, which has an annual budget of $6 billion. The economic impact of a sports team annually is about the same as the impact of a large anchor department store, he said.

So one economist says there’s no evidence that economies are significantly harmed when a team leaves, however, another economist says that communities may be harmed, but not significantly. The answer must lie somewhere in the middle!

Anyway, Arizona Republic left hand, meet Arizona Republic right hand. You two clearly have lots to talk about.

Share this post:

Three ways to think about the Coyotes’ sort-of move to Utah

access_time personNeil deMause

The first rumors that the Arizona Coyotes would relocate to Salt Lake City for the 2024-25 season raised a lot of questions: Why now, when team owner Alex Meruelo was just two months away from bidding on land for a new arena in Phoenix? Would the NHL really be happy with trading one of the larger NHL media markets (albeit with not much historic enthusiasm for the NHL) for a much smaller city that’s also not a hockey hotbed? Why would Utah Jazz owner Ryan Smith be paying $1.2 billion (or maybe $1.3 billion; reports continue to vary) for the team, but Meruelo only receiving $1 billion, with the rest being shared among other NHL owners?

Over the weekend, more details emerged, and they only raise more questions:

  • While all of the Coyotes’ assets, including its players and right to actually play NHL games, are being sold to Smith and transferred to Utah, Meruelo will retain the Coyotes name, logo, and trademarks, as well as the minor-league Tucson Roadrunners.
  • Meruelo will have five years in which to finalize a new arena, in which case he’ll immediately be given the right to buy an expansion franchise for the same $1 billion he received for the Coyotes.
  • Accordingly, Meruelo is going ahead with his Arizona land bid, and if he wins, he’ll presumably begin to pursue funding for an arena, likely using a state “theme park district” tax surcharge that remains murky exactly whether it should really be a public subsidy. (I asked three prominent sports economists and got back one “probably,” one “I don’t think so,” and one “let’s cross that bridge when we come to it.”)

To help make sense of all this — none of which has been officially announced, mind you, with Meruelo himself issuing a “reply hazy, try again later” letter, though the Associated Press says a press conference is expected next week — let’s try conceptualizing what’s going on here in three ways:

  1. Meruelo is selling the Coyotes, and getting a replacement expansion franchise in Arizona once he gets an arena deal. This is how it’s mostly being framed in the media, and is strictly accurate. It sort of makes sense for everyone involved: Meruelo gets more time to negotiate an arena deal without racking up annual losses in Arizona; the NHL gets out of the embarrassment of a franchise playing in a college arena without having to worry about a legal battle with Meruelo, plus that $200 million it’s taking off the top of the sale price; Smith gets a team without having to go through expansion bidding wars; and commissioner Gary Bettman gets a new owner who, according to ESPN, has “spent several years building a level of trust” with him, read into that as you will. The main risk for the league seems to be that Meruelo could end up getting an expansion team at a bargain price if those bidding wars really take off, but the NHL may be fine with that if it means getting back into the Phoenix market with an acceptable arena deal.
  2. The Coyotes are going on hiatus to figure out their arena situation, while Utah gets an immediate expansion franchise to take its place. This is an equally valid way of looking at it, and makes the pros and cons even clearer: The NHL is solving its Arizona problem by putting the Coyotes on ice for a few years, while filling out the schedule by letting Smith jump to the head of the line for a new team in exchange for a 20% tip on the sale price. (Smith is also getting an established roster rather than having to pick players in an expansion draft, though given the current Coyotes roster that may not be that much of a benefit.)
  3. The Coyotes are going to be the NFL’s Cleveland Browns, where the team moves but the team’s name and identity stays. That’s Yardbarker’s take, but I’m not sure the parallel works: The NFL granted Cleveland a new Browns franchise in exchange for stadium funding, yes, but that was all sparked by lawsuits over Art Modell moving the old Browns to Baltimore. If the Coyotes re-emerge eventually, though, it’d be the same in terms of a team in one city being transferred to another one then being replaced, after a break, by a new team with the same name once a new venue has been built, so it kind of works if you squint.

There’s definitely lots of ways the Coyotes’ move to Utah can go wrong: As noted here previously, Salt Lake City would be by far the smallest market with two major-league winter pro sports teams, which will create a ton of competition for both ticket buys and TV eyeballs; and the Jazz’s Delta Center, while clearly a better NHL venue than the Coyotes’ current Mullett Arena if only because it has more than twice as many seats, is one of those NBA-optimized venues that sucks for hockey, at least until it gets the $500 million facelift that the state of Utah has promised it. But you can see where someone in the league offices could have made a good case for “So we want a team in Arizona but don’t have an arena there yet, and we have a guy in Utah who wants a team right now and has a marginally workable arena, maybe this can be the beginning of a beautiful friendship? Also, $200 million cash!” At least nobody here would be paying the purchase price by wiring a fraction of it and then claiming he’d left a bunch of zeroes off as a typo. Probably not, anyway. The NHL is always about trying new things.

As for the bigger picture: What, if anything, does the Coyotes’ sort-of move mean as far as how seriously cities should take relocation threats? The team is leaving Arizona after Tempe voted down $500 million in tax breaks for a new arena there, but that came less because either the team owner or the NHL wanted to leave so much as that Meruelo had painted himself into a corner by getting booted out of his old arena and moving to a 5,000-seat one. And Utah did apparently bump itself to the head of the new-NHL-team line by approving $500 million in arena spending, but only because the Coyotes situation called for an immediate solution and they were standing in the right place at the right time. Leagues and individual owners absolutely do shop around for stadium and arena subsidies when thinking about where to play, but that’s not all they think about — if it were, Arizona would now be getting the cold shoulder from the league, instead of an offer of an expansion slot in the next five years. The only truism here is that sports barons love leverage; how they then use it is up to them.

UPDATE: And The Athletic just dropped a tick-tock of what led to the current Coyotes resolution. Tl;dr: The NHL and NHLPA were both sick of the Mullett Arena situation, Meruelo didn’t want to sell but also couldn’t promise when he’d build a big-boy arena, and this was the compromise that was worked out. If that’s not how you think sports league franchise decisions should be made, go take it up with crony capitalism.

Share this post: