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Bears hedge on Illinois vs. Indiana decision as public cost of Hammond stadium remains moving target

access_time personNeil deMause

When the Illinois legislature canceled Thursday morning’s planned hearing on a property tax break bill for a Chicago Bears stadium in Arlington Heights, it turns out, it wasn’t just a bureaucratic scheduling glitch. Rather, the legislature did so at the request of Bears president Kevin Warren so that the bill could be revised — or, as Illinois Gov. JB Pritzker intimated, maybe just because “Indiana had asked them to say that they’re going to move forward with the negotiations in Indiana.” (Indiana officials had demanded some kind of commitment from the Bears before moving ahead with their own stadium financing package.) Either way, the Illinois bill is supposed to be resubmitted at a new hearing later this week.

Sports Mockery claims (citing no sources whatsoever) that Bears owner George McCaskey was “livid” with Warren for committing so heavily to Indiana, leading to the Bears president issuing a statement Saturday that “we continue to work with Illinois’ leadership and appreciate the progress being made.” All of which has led to even more speculation that McCaskey and Warren are mostly trying to play the two states off against each other to drive up the level of public subsidy, which of course they are, Chicago sports owners practically invented that game.

Indiana’s state Legislative Services Agency, meanwhile, issued a fiscal impact statement on Friday that starts to spell out how much each of the tax streams for a Bears stadium in Hammond, Indiana would cost state and local taxpayers:

  • The state would create a stadium tax district in Hammond that would divert all new property tax, income tax, and sales tax within the district above what’s currently collected there to paying off the stadium, for up to the next 35 years. Since no one knows how big the district would be or what would be built within it, there’s no way to know how much this redirected tax revenue would amount to; the fiscal note observes that other similar districts in the state divert as much as $10 million a year, but then immediately adds that “the amount of revenue deposited in the fund is
    indeterminable and will depend on the plan for the designated district,” which is legislativese for ¯\_(ツ)_/¯.
  • A 1% food and beverage tax surcharge in Lake and Porter counties, on top of the state’s 7% level, would generate an estimated $12-18 million a year, or possibly more if a stadium district leads to more local food and beverage sales.
  • Doubling the Lake County hotel tax from 5% to 10% would generate “at least $5.4M annually,” again possibly more if hotel stays go up thanks to a stadium.
  • A 12% ticket tax would generate about $12 million a year.

(In addition, that previously reported bit that “the stadium board will retain all revenues from operation of the capital mprovement” appears to actually mean all net tax revenues from the stadium (“all excise taxes and net income from operation of the capital improvements”), which is far less exciting than it sounded when it appeared Indiana might actually get a cut of stadium revenues.)

How much would all those redirected tax revenue streams add up to? Given all the unknowns it’s impossible to say, plus the fiscal note doesn’t indicate if and how these annual tax expenditures are expected to rise over time. Discounting the ticket tax because that mostly ends up being paid by teams, we have a baseline of around $27 million a year, which would come to around $440 million in present value; but, of course, those unknown subsidies from a stadium tax district could easily add hundreds of millions if not billions more if Indiana diverts taxes from a big enough area, as Kansas is planning on doing with its infamous 293-square-mile district for the Kansas City Chiefs.

All of this ¯\_(ツ)_/¯ is expected to be signed off on by the Indiana legislature this week, while Illinois considers if and how to respond. Getting some more certainty about, at the very least, how big Indiana’s stadium tax district would be before holding a vote seems like the absolute bare minimum of due diligence, but it’s unclear if anyone will attempt that in the five days left before the legislative session ends; blank checks are seldom a good way for public officials to go into a stadium negotiation, but it sure looks like where things are headed.

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Friday roundup: Breaking down taxpayer costs of the proposed Indiana Bears deal, plus other stadium news

access_time personNeil deMause

The Indiana legislature’s amended bill for a Chicago Bears stadium project is finally up, and we can start to get a slightly better sense of what it would entail in terms of public costs. Tax expenditures would include: a city of Hammond admissions tax, Lake County and Porter County food and beverage tax surcharges, a Hammond food and beverage tax surcharge, a Lake County hotel tax surcharge, what looks like local income and sales taxes from a stadium district, and state sales taxes from a stadium district. The stadium authority would also own the stadium and lease it to the Bears (terms very much TBD), so it would presumably be exempt from property taxes.

That is a ton of moving parts, needless to say. There being no fiscal analysis attached to the bill to project how much each of these taxes will raise, it’s impossible to determine what the total public price tag would be, though something upwards of $1 billion seems likely given all the revenue streams involved. (WGN calls it $1 billion exactly, not sure where that number comes from, though Indiana house speaker Todd Huston did throw that number around as an estimate yesterday.)

The bill also says that “the stadium board is responsible for the operation and maintenance of the capital improvement upon completion of construction,” which sounds bad, and then two paragraphs later that “the authority has no responsibility to fund the ongoing maintenance and operations of the capital improvement,” which sounds good but also contradictory. (It’s possible this is just dividing up responsibilities between two state agencies, I need to keep going through the bill language to be sure; if so, it’s bad for taxpayers because it could end up a grift that keeps on giving.) Also “the stadium board will retain all revenues from operation of the capital mprovement,” which sounds very good for Indiana but also not likely something the Bears ownership would agree to if it really meant what it sounds like it does. So lots of questions still up in the air, we get another public hearing on this before the full Indiana house and senate votes next week, right? Right? Anyone?

Meanwhile, in other news this week:

  • The proposed Tampa Bay Rays stadium development at Hillsborough College’s Dale Mabry Campus would include relocating a middle school and some county offices to … somewhere, while the college’s buildings would be rebuilt in a compressed corner of the campus … somehow. The new Tampa Bay Times reporters on this story, one of whom was just promoted from intern and the other just graduated from college last summer, don’t appear to have actually asked anyone with the Rays or with Gov. Ron DeSantis’s office about how this is all expected to work, sure do miss Colleen Wright’s reporting on the Rays stadium saga.
  • The Cleveland Guardians and Cavaliers would like some of that sweet state unclaimed funds money that the Browns are using for their new stadium, please, to use for upgrades to their current homes. The state can get right on that just as soon as that little matter of the restraining order against the state using the funds at all is cleared up.
  • The estimated $750 million cost of renovations to the Arizona Diamondbacks stadium — which only cost $354 million to build in the first place in 1998, about $700 million in today’s dollars — is now expected to be “much higher,” according to team CEO Derrick Hall. Hall didn’t say exactly how much higher, or whether it will all fall on the state to increase its planned $500 million cut of the costs, or when the D-backs will get around to actually signing a new lease in exchange for the renovations.
  • Athletics team execs say $300 million has now been spent on construction of John Fisher’s Las Vegas stadium and $989 million contracted for, out of a total price tag of still figuring that out. This is either the biggest bluff in sports history or the biggest dog-catching-the-car-and-having-to-figure-out-what-to-do-with-it, honestly looking forward to the inevitable cataclysmic denouement either way.
  • The waiting to see if the state of Connecticut will provide $127 million to build and MLS Next Pro soccer stadium in Bridgeport is over, and the answer is: Nope, go kick rocks. State Economic Development Commissioner Daniel O’Keefe cited the need to reduce state spending and what the Connecticut Post termed the “mercurial nature of the sports industry,” noting that the Connecticut Sun may be about to move to Houston and the Bridgeport Islanders may be about to move to Hamilton, fool me three times, shame on me. Developers plan to instead use the planned stadium site for a project involving youth sports indoor and outdoor fields, which apparently don’t require hundreds of millions of dollars of state subsidies like pro sports do.
  • The video of my interview yesterday on whether Los Angeles should try to renegotiate its 2028 Olympics hosting deal is now up at Alissa Walker’s Torched site, go check it out if you like. Chris Tyler of Strategic Actions for a Just Economy, which commissioned me to do my Olympics report, joined as well, and the three of us spent a solid hour discussing what went wrong and options for trying to fix it — suffice to say that if former L.A. mayor Eric Garcetti’s ears are burning today, this is why.
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Indiana offers multiple piles of tax money for Bears stadium in Hammond, total price tag TBD

access_time personNeil deMause

The Indiana state house ways and means committee approved a bill for a Chicago Bears stadium this morning after what was surely minutes of discussion, and while it still needs approval from the full house — and the latest changes from the full senate — it reportedly now has somewhat more detail than the “form a sports authority and figure it out later” bill previously passed by the senate:

  • The site of a new stadium would be in Hammond, not Gary or Portage. Sorry, guy who thought he could build an entire $5 billion stadium with “non-football revenue”!
  • According to NWI.com, “Senate Bill 27 also now details on how a Hammond stadium would be financed, including tax revenues from a special stadium district in Hammond, a 12% ticket tax on all stadium events, potential countywide 1% food and beverage taxes in Lake and Porter counties, doubling Lake County’s innkeeper’s tax, and a variety of other funding mechanisms.” That’s different from the SB27 approved by the senate last month, which only said that a sports authority could use “proceeds of local excise taxes” and “applicable proceeds of food and beverage tax and innkeepers tax.”
  • There’s no total price tag provided for all those taxes, though Indiana speaker of the house Todd Huston reportedly says it would be “similar to Lucas Oil Stadium,” which received $620 million in public money toward its $720 million construction cost.

Bears management has responded with a statement that this represents “the most meaningful step forward in our stadium planning efforts to date” and they “look forward to continuing to build our working relationship” with Indiana. We’ll see if that’s enough of a commitment for house members approve the bill at a final vote a week from tomorrow, as they’ve previously demanded “sign off” from the Bears before okaying the money, so as not to be used as mere leverage against Illinois.

As all the articles say, this is a developing story, so I’ll be updating later today if anything else happens, including over at the Illinois legislature where a hearing is being held today on allowing property tax breaks for a potential Bears stadium in Arlington Heights. Much still to be determined, but if Bears CEO Kevin Warren wants at least the appearance of a bidding war, he seems to have got one.

UPDATE 10:50 am ET: The Illinois committee hearing scheduled for this morning was canceled before the Indiana house committee even met (thanks, commenter Sam Smith!), so one half of the erstwhile bidding war will have to wait a bit, at least.

UPDATE 2:20 pm ET: A Bears spokesperson has released a statement: “Hammond is the site we are focused on. Work to be done.” That is somewhat short of a commitment, but maybe it’ll be enough for Indiana legislators to start making out a wedding registry.

UPDATE 6:02 pm ET: “Indiana House Speaker Todd Huston said the state’s proposed package involves about $1 billion in public funding” — nope, no source on that or methodology about what that includes, the Indiana Capital Chronicle didn’t even have time to put a period at the end of the sentence, this is that fast-breaking a story!

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Royals owner admits “urgency” in stadium deal is fear of missing out on taxpayer money

access_time personNeil deMause

Speaking of deadlines, Kansas City Royals owner John Sherman hasn’t set any for his long-running campaign for a new baseball stadium somewhere in or around the K.C. area, but he still surely knows that without creating some sense of urgency, everyone is likely to wander off and start focusing on other things to do with billions of dollars in tax money. And so on Monday, Sherman did his best to say that the clock is ticking, without ever quite explaining what will happen if time runs out:

“I’ve got a great sense of urgency on this. Time is not our friend. When the Chiefs made their announcement [to move to Kansas] in December, there was a whole new wave of enthusiasm on the Missouri side. And don’t mean they weren’t working hard [before], but from the governor on down, there’s a lot of effort being put forth.”

If that was a little on the vague side, what Sherman said next was far more saying the quiet part loud:

“When I’m talking about urgency, that’s to me a business tenant that I think you should always employ in any organization. When you have a window of opportunity, you better run through it because those windows close. I feel the same way about the stadium.”

Leaving out the odd image of running through a window of opportunity, Sherman appears to be admitting here that the urgency is all on his end: He knows that whatever stadium offers are on the table — more on that in a second — may not be there forever, and that he’d better grab one while he can. After all, eventually someone in Missouri government may notice that he already has a perfectly well-liked stadium that was renovated in 2009, while the threat of the state of Kansas spending billions of dollars on the Royals after just doing so for the Chiefs both is unlikely and wouldn’t really hurt Missouri. And once that realization strikes, Sherman runs the risk of any plans for public funding evaporating entirely.

At this point, with Clay County and Kansas both showing little interest, Sherman really only has one offer, from Kansas City, Missouri, and we’re not sure exactly what it is. KCMO mayor Quinton Lucas said last week that “we will get a deal done in 2026 that’s fair and transparent for our taxpayers, our future and our team,” without actually specifying what that would look like. (He’s denied claims by a state legislature that it would involve funneling half a billion dollars through K.C.’s Port Authority.) One would hope that, now that Sherman has acknowledged that his window is closing, Lucas can use that as leverage to strike a stadium deal that’s actually fair to taxpayers — though he still has a ways to go in the “transparent” department.

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Bears face Thursday deadline to commit to Indiana move, somehow this is pressure on Illinois to pass stadium subsidies?

access_time personNeil deMause

Deadlines are a funny thing. When you’re trying to demand something, whether it’s stadium subsidies or more literal ransom money, telling your mark that the clock is ticking is a great way to impose a sense of urgency, hoping to get them to panic and do something foolish out of fear of what could happen otherwise. But at the same time, you need to have an actual threat to go with it — saying you’re going to shoot the dog only works if you’re willing to go through with it, or at least you can make people believe you’re going to go through with it. If you’re only bluffing, a deadline can work against you as well.

For the Chicago Bears owners, the threat on the table is to move to Indiana, and there are two deadlines coming up there: The February 27 adjournment of the Indiana state legislature, and before that a decision this Thursday by the state house ways and means committee on whether to advance a bill to create a sports authority to build a new stadium somewhere in the northwest corner of the state. You would think this would be putting pressure on team execs to decide on whether to commit to a move — especially with Indiana legislative leaders saying they won’t approve a bill unless the Bears owners promise to actually go through with crossing state lines. And yet, this is still being presented in some quarters as pressure on Illinois to take action on its own possibly $1 billion subsidy package for a stadium in Arlington Heights:

  • The Chicago sports news site Sports Mockery says Illinois faces “a decisive moment by the end of February,” as Indiana “has been rolling out the red carpet” to lure the Bears.
  • Arlington Heights Mayor Jim Tinaglia said he’s confident Illinois officials are “wide awake right now” about the need to respond to the Indiana threat.
  • National sports news site Clutch Points reports that a hearing in the Illinois legislature this Thursday on a bill to let Arlington Heights give property tax breaks to a Bears stadium “represents a major juncture” what with “Indiana reportedly exploring relocation possibilities.” (Clutch Points also refers to the hearing as a “court date,” so maybe “news site” is overstating things a bit.)
  • Fox59 reports that the city of Portage has “upped the ante” with a proposal for a $5 billion stadium complex to be entirely funded by “non-football event revenue,” LOL.

If anything, it seems like Bears officials are the ones who should be sweating: If Indiana decides not to take up the sports authority bill in the next 48 hours, their best chance at leverage to scare Illinois leaders into coughing up tax money disappears. At this point, team owners look like they’ll need to decide on whether to pull the trigger on an Indiana move before they know what subsidies Illinois is or isn’t offering — and before knowing what Indiana is even offering, beyond a sports authority that would have the power to spend tax money, if somebody found some to give to it. That’s a pretty fine tightrope to walk, and it’s going to be fascinating to see how Bears execs approach it. Maybe they should hop on a flight to Iowa tomorrow, just in case.

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Friday roundup: Friends don’t let friends read stadium news coverage, Bears’ list of places not to move to keeps growing

access_time personNeil deMause

One of the things you learn if you read enough articles with the word “stadium” in them, as I am condemned by an ancient mummy’s curse to do, is how very many news reports are just about nothing. For every article that tells us some actual information, there are easily five to 10 that are just meant to fill pixels with something easily reportable, regardless of whether it qualifies as “news,” let alone “reporting.”

Just this week, we’ve had: MLB commissioner Rob Manfred is in favor of the Tampa stadium plan that his co-bosses the Rays owner wants and he’s “optimistic” about getting it done; a Baltimore soccer stadium is “gaining momentum,” according to a headline describing a press conference by Baltimore’s mayor, who didn’t actually even say that; Denver Broncos president says team leaders are “laser-focused” on building the tax-subsidy-funded stadium in a rail yard they already said they want; the Broncos president says actually the rail yard is only the “preferred” site and team execs are still considering other options; Minnesota Timberwolves co-owner A-Rod says a new arena is a “necessity” for the 6th-in-the-Western-Conference, $3.6-billion-valued franchise “to compete”; Kansas City Mayor Quinton Lucas says he’s determined to build a new Royals stadium that will create “economic development” in a way that’s “fair and transparent for our taxpayers,” no details provided.

That’s a whole lot of Important People giving press conferences in order to get their message out in the news media, which the news media is happy to oblige for them. For normal people, meanwhile, the only option is to try to get space on an op-ed page, if you can convince the op-ed editors that you should be allowed to have an opinion that diverges from that of Important People. It’s also an awful lot of reporters’ time spent on this when they could be trying to investigate all the open questions about what these stadium deals would actually entail for taxpayers and why elected officials are pushing them — but asking questions takes up valuable time that could be spent transcribing press statements. As the old journalism adage goes, “if your grandmother says she loves you, take her at her word and put it on the front page, so long as she owns a local sports team.”

Enough whining about the news media, time to attempt to do some actual reporting by, uh, seeing what’s in the news media:

  • The Chicago Bears have almost as many places now in neighboring states wanting to be their new home (without offering any money toward it) as they do in the Illinois suburbs: In addition to Gary, Indiana, there’s now Portage, Indiana, plus the entire state of Iowa. While the Bears moving to Iowa sounds like a joke and probably is, at least there’s a bill there to provide actual state tax credits toward a stadium; in Indiana, meanwhile, even the bill to create a stadium authority with no funding attached now isn’t going to move forward, Indiana legislators say, until the Bears owners first commit to moving there if it does. Illinois Gov. JB Pritzker and state legislative leaders might want to just bide their time and see if all the new Bears move threats evaporate just like the last round did, though it sure sounds like they’re more interested in throwing state money at the problem while the move-threat iron is hot.
  • Tampa Bay Buccaneers owner Joel Glazer still wants the major stadium renovation he asked for last April before he’ll sign a five-year lease extension, and Hillsborough County Commissioner Ken Hagan has assured Glazer that the county’s plan to divert more than a billion dollars in tax money to a Rays stadium won’t get in the way of diverting money for the Bucs. In exchange for only a five-year extension, by the way, it would only take about $220 million in subsidies to break the record for priciest per-year lease extension in U.S. sports history, you can pretty much take it to the bank that that’ll be the plan.
  • On the subject of that Baltimore soccer stadium, D.C. United owners said on Thursday that they’re planning to build a 12,000-seat venue on the site of Carroll Park Golf Course, to host a minor-league MLS Next Pro franchise and a pro women’s team owned by former NBA star Carmelo Anthony. And by “planning to build” I of course mean “hoping to receive $216 million in state money to build.” One of the state lawmakers sponsoring bills to provide the cash says “the stars have aligned” now that Carmelo Anthony is on board, maybe somebody should call a local economist to see if studies have found that involving Carmelo Anthony increases economic impact? If nothing else, it would be interesting to see what they’d say if they could ever stop laughing.
  • Foxborough, Massachusetts officials say they may not issue a permit for men’s World Cup games to be played at the New England Patriots stadium in June unless someone helps cover $8 million in security costs that the town is currently faced with paying, Asked why Patriots owner Robert Kraft, whose team is worth an estimated $9 billion, couldn’t just cut a check, FIFA World Cup Boston 26 organizers said the Krafts are offering up the use of their football stadium for two months in “peak period” of the NFL offseason, what do you want from them, blood?
  • The Center Square is a libertarian-leaning news site that has generally been pretty skeptical of stadium subsidies, so for it to run the headline “Seahawks’ Super Bowl win temporarily jolts local Seattle economy” is pretty notable — or would be if the gist of the actual article weren’t “U.S. Chamber of Commerce claims Seattle will benefit from the Seahawks winning the Super Bowl, economist Victor Matheson says one study found a short-term bump in per-capita income from Super Bowl-winning cities but it may have just been a spurious finding because ‘when you test 100 different things, even if all those things are random, one of them is going to end up being the best.'” At least the Center Square called an actual economist, unlike those corporate stooges at Al Jazeera in their article on how the Super Bowl will be a windfall for the San Francisco Bay Area despite the 49ers not being in the game and also economists consistently saying no it won’t be.
  • If Cleveland Browns owner Jimmy Haslam can’t get money to build roads and pedestrian bridges around his new Brook Park stadium from the state of Ohio, he’ll ask for $25 million from the federal government instead, there’s got to be someone to stick with the bill that isn’t named Jimmy.
  • Also in K.C. Mayor Quinton Lucas news, marginally more newsworthy edition: The mayor wants to cut spending on everything except a Royals stadium and more cops.
  • Plans for an Indianapolis MLS stadium have gone from on hold to pretty much dead, according to Indiana legislative leaders, though in stadium deals just like in comic books, only Uncle Ben ever stays dead for good.
  • The Oakland/Sacramento/Las Vegas Athletics just applied for another billion dollars in building permits for their planned Vegas stadium, everyone gets that applying for a permit doesn’t mean you’re actually committing to spend the money on the project, right? Maybe requiring personal seat licenses to buy some A’s tickets in Vegas will help raise the needed funds to employ the permits, anything is possible.
  • Nope, nobody got back to me from Wyandotte County about how their Kansas City Chiefs stadium subsidy numbers were arrived at, I’ll just assume it was the traditional “dart board and add lots of zeroes” algorithm.
  • If you have time to kill next Thursday at 3 pm Eastern/noon Pacific, tune in to Alissa Walker’s Torched Talk with me and Chris Tyler from Strategic Actions for a Just Economy on whether it’s worth it to Los Angeles to host the 2028 Olympics, and what the city could do to try to extricate itself if it’s not. Zoom link is here, calendar it now, see you then!
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Wyandotte County claims it will totally make money on $180m+ subsidy of Chiefs stadium

access_time personNeil deMause

We finally have a number for how much tax money Wyandotte County could hand over to Kansas City Chiefs owner Clark Hunt following last Thursday’s vote to funnel virtually all sales and hotel taxes from a 200-acre stadium district in Kansas City, Kansas to help pay off $2.775 billion in state STAR bonds for stadium and related construction. Or rather, a couple of numbers:

The local tax breaks could total $350 million to $450 million. The Unified Government expects the project to generate $488 million in revenue, netting the county at least $38 million over 30 years.

I have questions! So many questions:

  • How did the county estimate $350-450 million in tax expenditure (over 30 years, it sounds like, which would be more like $190-230 million or so in present value) when it’s unknown exactly what the Chiefs plan to build on the 200 acres?
  • How did the county come up with that $488 million estimate for new tax revenue, and did it account for money cannibalized from other spending that would have taken place in the county even without a stadium?
  • Since the state is planning on going ahead with the stadium regardless of whether Wyandotte County chips in, wouldn’t it get any new tax revenue either way, making the tax breaks a net loss?

Todd LaSala, a private attorney who serves as an economic development consultant for the Unified Government, attempted to answer the last question, at least, speculating that Hunt could build his stadium in a different part of the state if the county didn’t agree to the funding: “If you voted no, it sends an interesting, if not a dismissive message to the Kansas City Chiefs, who want to choose Wyandotte County as their home.” LaSala didn’t indicate why the Chiefs owner would balk at a Wyandotte stadium site when he’d be getting the same amount of STAR bonds for it regardless, but it is important to remember that if you want to remain attractive to the local billionaire, you must never speak your mind and learn how to light his cigar right.

As for the other questions, I’ve gone through all the documents presented for last week’s county commission vote, and I can’t find anything giving details about how those tax break and tax revenue projections were calculated. Given that when the state of Kansas tried a similar exercise with its own $3 billion-plus in Chiefs tax breaks, economists deemed the resulting figures to be “incredibly optimistic,” “insane,” and “just not credible,” it’s probably a good idea to take these latest numbers with a grain of salt — even before considering that these tax subsidies look to be money that Wyandotte County is voluntarily giving up to land a stadium it would get regardless. I’ve reached out to both the county and LaSala with the above questions, and will post an update here if I hear back from them.

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Oregon bill offers Blazers owner all income taxes from in and around arena in exchange for not threatening to move yet

access_time personNeil deMause

The Portland Trail Blazers are in the middle of being sold to Carolina Hurricanes owner/subprime auto loan baron/“glass chewer” Tom Dundon, and apparently the threat of the team’s expiring lease in 2030 and Dundon’s reputation for playing hardball has Oregon elected officials moving toward spending a ton of money on upgrading Portland’s arena to avoid the team from moving to (Oregonian staffers throw darts at giant wall map of the U.S.) Nashville or Kansas City. What would Oregon taxpayers give up, and what would they get in return? As usual, it’s complicated:

  • According to a bill introduced on Monday by state Senate President Rob Wagner, the state would take all income taxes collected in and around the Blazers arena for the next 30 years and make them available for Dundon to use on arena upgrades. That would include not just taxes on Blazers players and staff, as team execs were previously reported to be seeking, but income taxes paid by any entertainers who perform at the arena, and even by the construction workers performing the upgrades.
  • This income tax money would be used to pay off $360 million in state bonds, as part of an overall $600 million public funding package. The rest would come via $75 million from a city climate fund meant to be used on projects that reduce carbon emissions and help residents at risk of climate change impact, $75 million from county car rental taxes, and $50 million from city business taxes and $40 million from county business taxes on the sale of the team to Dundon. All of these look to be present value, meaning the nominal amount of taxes redirected over time would be considerably more, if you prefer to count that way (I do not); the bill itself helpfully informs us that it “may have fiscal impact, but no statement yet issued” and “may have revenue impact, but no statement yet issued.”
  • In exchange, Dundon would agree to keep the Blazers in town for “a specified term” of time, which isn’t vague at all. If the Blazers’ eventual lease extension ends up concluding anytime before 2044, it could break the Charlotte Panthers record for the most expensive per-year lease extension in sports history.

That’s significant chunk of change for an arena that Portland taxpayers already helped then-Blazers owner Paul Allen build in 1995 and then took off the hands of Allen’s heirs in 2024, saving them about $1.2 million a year in property taxes. Oregon Gov. Tina Kotek is on board, though, calling the arena subsidy “an opportunity for the city and the state and the county to put their best foot forward and say, ‘Look, we want to be a partner with the new owner to keep the team'” and meeting with NBA commissioner Adam Silver last month to argue for the deal. Then there’s Oregon U.S. Sen. Ron Wyden, who took in a Blazers game on Saturday and wandered the arena telling anyone who would listen that he wants to “help anybody who wants to keep us in town” and calling the privately owned NBA team valued at $4.25 billion “infrastructure” and “a huge economic development opportunity” and “a big economic force in the state” when he wasn’t too busy exchanging hugs with former Blazers player Buck Williams.

The biggest stumbling block right now appears to be Multnomah County, where county leaders have expressed a desire to use their $40 million business-tax check from the Blazers sale to spend on actual resident services, or at the very least to backfill the car rental tax money the county would be giving up. That’s relatively small potatoes, though — the biggest piece, the $360 million in income tax money, is expected to be voted on by the Oregon legislature by the time it wraps up its session on March 8.

That leaves less than four weeks for public discussion, which would be plenty of time to go over the dubious theory that businesses should keep the income taxes paid by their employees because if they skipped town all that tax money would go away, which 1) it almost certainly wouldn’t and 2) pretty much defeats the whole economic purpose of luring and retaining businesses regardless. Tune in Monday at 8 am PT to watch the state senate rules committee discuss the income tax diversion bill, sorry, looks like no public testimony at this one as it’s a committee “work session,” but surely there’ll be time for the public to be heard, at least minutes before the legislature takes its ultimate vote.

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Pritzker’s office met with Bears, Goodell to talk stadium spending, everybody speculate wildly!

access_time personNeil deMause

Illinois Gov. JB Pritzker continues to drop hints about possible state involvement in funding a new Chicago Bears stadium in Arlington Heights, and the assembled media continues to Kremlinologize about it:

  • The Chicago Tribune, citing “sources familiar with the discussions between the Bears and state of Illinois officials,” reported that both sides have been meeting regularly since early December and discussing both state infrastructure funding and approval of local property tax cuts for a Bears project, as well as possible guarantees by the team to make games more affordable.
  • Pritzker spoke twice with NFL commissioner Roger Goodell last month, though the governor’s office declined to comment on what was discussed.
  • At an event to announce Illinois’ launch of STAR bonds — state bonds repaid by siphoning off future sales tax revenue from a development district, most recently seen funding $2.775 billion toward a Kansas City Chiefs stadium project —  Pritzker noted that while STAR bonds can’t currently be used for sports venues, the legislature could always change that: “We’re not specifically looking at it that way — perhaps the Bears are.”
  • At the same event, Pritzker said of the STAR bonds, “We’re not going to do anything that’s bad for the taxpayers here. I mean, I am not… we’re not throwing money at building a stadium. For anybody.” He then added on the potential of the Bears moving to Indiana, “I’m always concerned about making sure that we’re attracting businesses or keeping businesses in the state of Illinois”; asked if he would consider offering enticements for, say, the St. Louis Cardinals to move to Illinois, Pritzker replied, “I am trying to attract businesses, yeah. You said ‘any world?’ Yeah, like every world in which we are trying to attract businesses—and that includes teams—but businesses to the state of Illinois.” (Cardinals president Bill DeWitt III, asked for comment on this, said his team remains focused on renovating its current stadium and “Illinois is not on our radar,” though you have to imagine putting Illinois on Missouri’s radar when it comes time to ask for renovation money is very much on DeWitt’s radar.)
  • “People familiar with the discussions” tell CBS News that “representatives from Gov. JB Pritzker’s office, at least two Illinois state lawmakers, village leaders, and the Bears have met multiple times a week since December to discuss legislation to help the Bears with their proposed stadium in Arlington Heights” and they’re getting close to an agreement. Pritzker confirmed that there’s “progress that’s been made,” including on infrastructure spending “and other things that are sort of available to any business that is growing or building something new in the state of Illinois that’s putting people to work.”

New highway ramps and moving a commuter rail station aren’t typically things available to any business, so we’ll have to wait and see if Pritzker is talking about a smaller state infrastructure spend than the Bears owners’ $855 million ask, or if he’s trying to have his “not throwing taxpayer money at a stadium” and eat it too. All the good tea never gets spilled, this world needs some better people familiar with discussions, stat.

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MLB has lockout and more revenue sharing on deck; what will it mean for the stadium game?

access_time personNeil deMause

For the purposes of this site, I’ve been mostly ignoring the coming end to MLB’s union contract (and expected lockout) following the 2026 season, in part because it’s a bit tangential to Field of Schemes’ coverage area and in part because it’s just too damn depressing to think about how I’m going to spend my time next spring. (Watch the MLS transition season? Shoot me now.) Money stuff is money stuff, though, and as Marc Normandin pointed out in his newsletter yesterday, team owners’ stadium revenue strategies are affecting how they’re thinking about revenue sharing with players:

I believe there are owners who genuinely want a [salary] cap. I also believe there are owners who have not fully considered what having a cap would mean for them, in terms of having to argue with the MLBPA again and again about what actually constitutes baseball revenue. To go back to the WNBA again for a second, there has been a salary cap in place there for ages, and now that the players are in a position where they have more bargaining power, the two sides are arguing about what should count as revenue toward revenue sharing. There is much more money involved in MLB’s side, and just as significant of a grift — hello, baseball stadiums that are also real estate bonanzas of “non-baseball” revenue.

That’s a bit in the weeds if you don’t regularly follow sports CBA negotiations, but rather than me try to explain it, let me get Normandin to do so, since he’s the expert. Hey, Marc, get over here a minute!

Can you explain, briefly if that’s possible, what the pros and cons of a salary cap are for baseball owners?

MN: The pros are pretty simple. Owners will say that a cap would level the playing field, even though the parity of MLB is no worse and in some cases better than that of capped leagues, but the actual reason for one is to slow or outright inhibit spending. And with it, the expectation of spending to compete. It maybe wasn’t noticed enough in the negotiating for the existing CBA, but the owners offered a salary floor of $100M and a cap of $180M attached to it before dropping the subject.

My guess as to the low floor and ceiling there is less “this is the cap the owners expect to institute” and more checking the temperature on the Players Association in general. It’s either that or the owners don’t understand how a salary cap is actually calculated, based on revenue, which is where the con lies. The books are never opened for a reason, and MLB teams insisting that real estate revenue made at a baseball stadium isn’t baseball revenue is another reason to keep them closed. Having to open the books and argue about what is or isn’t revenue would take longer than the rest of bargaining combined, and it’s not even clear if the owners would agree with each other, never mind the players, about what constitutes baseball revenue.

So do you have a sense whether team owners have been hot for “non-baseball” revenue from mixed-use districts like the Atlanta Braves‘ Battery because that revenue is easier to hide from players (and other owners)? Or do they just want them because they’re free money, but then it becomes a reason to keep the books closed? (Also, wondering if you know how this works for, say, the NFL, which both has a salary cap based on total team revenue and is equally gung-ho about turning stadiums into real estate deals.)

MN: Being able to hide it is a plus, but that there’s simply more of it is a win, too. Get a city/county/state to pay for the land and the stadium, build a mall there financed with the kind of low-interest loans a billionaire can take out, profit. It’s a great deal for everyone involved besides the taxpayers, as you know!

The NFL breaks things into three sections (league media, postseason/NFL ventures, local) with the percentages going into sharing varying for each. Concerts held at NFL stadiums don’t count towards local revenue, though, so I imagine the league has successfully argued itself out of counting real estate around stadiums as football revenue.

Of course, the NFLPA hasn’t exactly covered itself in glory over the years, so “well the NFL does it this way” might not be a convincing argument in the MLBPA’s eyes.

Do any of these revenue-sharing machinations have anything to do with teams like the Pirates and A’s signing actual players to actual contracts all of a sudden? I know they have a reason to try to avoid grievances for cashing their revenue-sharing checks and never spending them, but this seems like more than the token efforts of the past where they’d sign a guy or two with plans to trade them come July.

MN: My read on this uptick in activity — from two organizations that literally could not be threatened into spending by the PA for years — is that they know it’s likely revenue-sharing is going to see an increase in the near future, via the next CBA. Which is not a move that requires a cap, either, as the existence of revenue-sharing in the present reminds.

But like in the late-90s and early aughts, the newer (or just more successful) streams of revenue some teams have access to and others do not in the same quantities means a rebalancing is in order. Bud Selig had to convince George Steinbrenner to agree to a system The Boss felt was socialist, but he got there. Rob Manfred probably has it a lot easier since the system is already in place and just needs redefining by nationalizing, as it were, local revenue streams to the same degree that the NFL has to eliminate some portion of the advantage that the Dodgers et al have. While (at least in theory) inspiring teams like the Pirates and A’s to spend their newfound funds, too. The Dodgers and Yankees and so on aren’t agreeing to a new system where they cut checks to teams that won’t use them, so this is teams showing they can be trusted with very large bags of money they otherwise won’t have access to.

So this gets us back to the central contradiction of revenue sharing of any kind: It makes it easier for small market teams to compete with big market teams if they want — but any leveling of the playing field also means that teams can be a lot more footloose, because it doesn’t matter if they play in Green Bay if they still get a cut of those national checks. Obviously we don’t know how revenue sharing will look exactly under a new CBA, but do you see a real possibility of a kind of NFLization of MLB, where market size doesn’t matter as much either for competitiveness or for relocations?

Or to put it way more simply: Does any of this make it more likely that the A’s will move to Las Vegas?

MN: Someone would still have to foot the Vegas stadium bill, and it sure doesn’t seem like it will be John Fisher. But hey, MLB already waived the relocation fee for the A’s, maybe they will let him off the hook with the stadium costs, too.

You bring up a good point related to that, which is that this opens up the possibility for some new markets that previously had limitations, which in turn would mean expansion is finally on the table again and the expansion fees that come with it, never mind the larger shared revenue pools that can come with additional broadcasting deals, gates, merch sales, etc. Revenue-sharing getting a huge revision would impact so much on its own, which is another reason the cap talk just doesn’t seem realistic to me. Not when there is a solution that wouldn’t endanger 2027, or the broadcasting negotiations of 2028, and requires full player buy-in, too.

Thanks! Still more reasons to dread next spring, just what I needed!

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