The Sports Economist

Olympic Stadium in Montreal was not paid off until two years after the Expos left for Washington, D.C. Three Rivers Stadium in Pittsburgh still was carrying $45 million in debt at the time of its demolition in 2001.

Seattle's Kingdome was razed in 2000, and King County is scheduled to finish paying off its debt in five years.
22 years of payments

Public money will be required to cover Astrodome debt payments for 22 more years, according to county financial projections.

The Astrodome's debt stems from the $60 million cost in the late 1980s of adding 10,000 seats, removing the scoreboard and installing 72 luxury boxes. County commissioners approved the project in an effort to persuade Oilers' owner Bud Adams to keep the team in Houston. The team left town after the 1996 season.

When asked if the expansion looked like a bad investment in retrospect, Precinct 4 Commissioner Jerry Eversole replied, “Hell, yeah!” But Eversole, who was not yet on the Court when the spending was approved, also said it has to be looked at in the context of the times, when two teams were threatening to leave town.

“We couldn't not try to keep the Oilers and we couldn't not try to keep the Astros,” Eversole said.

Labels: stadium renovations, stadium subsidies, The Stadium Game

In another 2009 study published in the prestigious American Economic Review, Stanford University professor John Taylor reviewed the evidence over the past decade on fiscal stimulus and concluded “there is little reliable empirical evidence that government spending is a way to end a recession or accelerate a recovery.”

A 2008 study, “What are the Effects of Fiscal Policy Shocks?” by University of London professor Andrew Mountford and University of Chicago professor Harald Uhlig, assessed and compared the economic impact of various cases of deficit-financed spending, deficit-financed tax cuts and tax-financed spending from 1955 to 2000. They found that spending related measures are the weakest ways to stimulate the economy and that both deficit-financed and tax-financed spending have the effect of discouraging private investment.

The International Monetary Fund (IMF), which Prime Minister Harper has cited as an authority, recently surveyed fiscal stimulus initiatives in advanced and emerging economies and concluded that the average effect of discretionary fiscal policy “does not provide strong evidence of countercyclical effects.” Simply put, the IMF concluded that fiscal stimulus is generally not an effective way to combat recessions.

Labels: economic impact, stadium subsidies

Labels: stadium subsidies

Second-division Beira Mar can’t afford the upkeep of a 30,000-seat, $94 million municipal stadium in Aveiro, while first-tier Uniao de Leiria doesn’t have enough revenue to maintain the city’s $120 million arena. On the south coast, lower-league teams Farense and Louletano rely on taxpayers’ money to bankroll the $61 million stadium they share.

Municipalities are finding other uses for stadia. The Leiria stadium, whose annual electricity bill this year will be about 111,000 euros according to published accounts, hosts corporate events. Rooms at the Faro-Loule stadium are being used for temporary classes as a local school is renovated. In Coimbra, the municipal stadium will stage a concert by rock band U2 in October.

Still, the situation is unsustainable, according to Pereira, the Aveiro deputy. He said the town should consider demolishing its stadium.

“It was a mistake building it in the first place,” Pereira said. “Now we have to do something about it.”

Labels: European football, soccer, stadium subsidies

"The corporate orders are way down. Definitely the corporations are under scrutiny because of what’s going on in the world," said Michael Lipman, president and CEO of Miami-based Tickets of America, which sells Super Bowl tickets. "This is a total fan-driven Super Bowl. What teams are in is going to dictate the market and prices."

That doesn’t necessarily mean it will be an easy ticket, though.

"This year because of it being in Miami, it’s extremely popular," said Robert Tuchman, executive vice president of Premier Global Sports, which arranges corporate and group travel to sporting events. "Also, because the economy has bounced back a little bit, there’s more interest than last year in Tampa."

Tuchman’s company, which runs sportstravel.com, has already sold out of packages at the Fontainebleau Hotel in Miami Beach and Epic Hotel in Miami.

As Super Bowl XLIV approaches, the National Football League has delivered a not-so-sporting message to hosting South Floridians: Bend over.

NFL Commissioner Roger Goodell warned local officials that this might be the last Super Bowl game held at Dolphin Stadium unless the facility is refurbished at a cost of $250 million, give or take.

Although the league is wallowing in profits, it has no intention of bankrolling the renovations. The Dolphins haven't said how much, if any, the team would contribute.

Most likely, the money would have to come from public funds, possibly hotel bed taxes collected in Miami-Dade, Broward and Palm Beach counties.

It's old-fashioned extortion, but the NFL has no shame. You'd have better luck negotiating with the Gambino family.

Forget the recession. Forget the fact that our boneheaded politicians just committed $490 million to a new baseball park that is doomed to be a budgetary suckhole for decades.

And forget the fact that the football stadium was renovated just a few years ago for $200 million-plus, and that the Dolphins admit they don't need any upgrades for regular-season games.

Mr. Goodell is a fussy fellow. He would like swankier skyboxes and new hi-def lighting, please. He would also like an expanded roof on the stadium to prevent raindrops from dampening the festivities.

Labels: stadium renovations, stadium subsidies, The Stadium Game

Years after a wave of construction brought publicly financed stadiums costing billions of dollars to cities across the country, taxpayers are once again being asked to reach into their pockets.

From New Jersey to Ohio to Arizona, the stadiums were sold as a key to redevelopment and as the only way to retain sports franchises. But the deals that were used to persuade taxpayers to finance their construction have in many cases backfired, the result of overly optimistic revenue assumptions and the recession.

Labels: stadium subsidies

Rep. Tom Hackbarth, R-Cedar, also was well-received. He wants a constitutional amendment that would allow revenue from slot machines at the state's two horse racing tracks to be used for a Vikings stadium.

"We're in debt a billion dollars," said Hackbarth in addressing the shivering crowd. "We don't have any money at the state level to put toward a stadium ... this is the only way."

Labels: stadium subsidies

LaForge says Humphreys and economists like him have it all wrong, that their fixation on certain economic measures misses the bigger picture of what makes a city thrive.

"To a large degree, it's people with Humphrey's view that prevents us from building the next Eiffel Tower, the next Peace Arch, the next CN Tower, because people who think like him can't find the economic rationalization to do it.

"I think that sports and entertainment is a unique industry and it adds value to a city. ... You can't replace it with a refinery or a pulp mill. They might have similar economic impact, but it's not a substitute for entertainment for the masses.

"It's people like him (Humphreys) that are going to prevent the world from being a place of entertainment, arts and culture. And I said that to him. It's not that people have to buy into my thinking 100 per cent, either, but he represents a view that I just 100 per cent disagree with."

Labels: economic impact, nhl, stadium subsidies

Labels: stadium subsidies, stadiums

Labels: public funding, stadium renovations, stadium subsidies

In late August, when the Mobile City Council and Mayor Sam Jones first toured the $2.5-million addition to Ladd-Peebles Stadium, including 11 new skyboxes, District 6 Councilwoman Connie Hudson said she was surprised to hear the city council would have a suite separate from the mayor’s, which is located just between the 40- and 50-yard lines.

“It was announced to me on the day we toured,” Hudson said. “We’ve always shared, like we do with the Baybears.”

The 11 new skyboxes bring the total at city-owned Ladd-Peebles Stadium up to 14, as three were built in 1997 in part of the press box addition. In addition to the two skyboxes available to the city, the Mobile County Commission also has a suite, which brings the total of skyboxes for local government use to three, or 21 percent of the skyboxes in the 61-year-old stadium.

Speaking generally, and taking into consideration the differences between facilities in other cities, Bud Ratliff of the Mobile Bay Sports Authority says most stadiums have only two skyboxes reserved for city and county use, but doesn’t see a problem with the current arrangement at Ladd-Peebles.

Labels: economic impact, public funding, stadium subsidies

Add $5 million to the money Pennsylvania is giving toward Pittsburgh's pricey Uptown hockey arena.

This time, it isn't site acquisition or construction cost overruns, but a shortfall that occurred when interest on variable rate bonds soared last fall after credit agencies downgraded the bond's insurer, Financial Security Assurance Inc.

That left the city-county Sports & Exhibition Authority, which is building Consol Energy Center, with an extra $5.08 million bill and no money to pay it.

The state, which agreed to give about $40 million in Redevelopment Assistance Capital Budget grants to cover site acquisition and extra construction costs for the $325 million arena, will tap a different account for this bailout. Gov. Ed Rendell's proposed budget would appropriate $5.08 million from the Pennsylvania Gaming Economic Development and Tourism Fund for the bond bailout.

The bailout has generated little public discussion. It was buried in Rendell's proposed 2009-10 budget, with little to indicate the money would pay for arena bond shortfalls.

As speculation over a possible Jacksonville Jaguars exit builds, the city has identified about $5 million a year that can be used to pay for needed maintenance at the Sports Complex — primarily Jacksonville Municipal Stadium.

City Council President Richard Clark said Tuesday evening he’s planning on introducing a bill that will redirect bed tax money now going to the Prime Osborn Convention Center to the city’s three major sports and entertainment venues.

With the convention center debt scheduled to be paid off in October, Clark will propose that the money going to the Prime Osborn instead go to the Baseball Grounds of Jacksonville, Veterans Memorial Arena and the stadium, home of the Jacksonville Jaguars.

“The Jaguars are an enormous economic driver in this city, and we owe it to them as much as we owe it to the taxpayers who own the stadium,” Clark said.

Every Jacksonville hotel bill generates six cents on the dollar for three funds: two cents go to the Sports Complex; two cents go to the Tourist Development Council; and the rest goes to the convention center.

Labels: stadium subsidies

Under the development agreement, MadKatStep was required to repay the bonds and interest at a rate of about $3.9 million a year over a period of 26 years. Ryan, which built the arena and holds a majority stake in MadKatStep, guaranteed the first four years and has made all of the necessary payments...

Hoffman Estates officials said the sides remain far apart. MadKatStep wants the city to take on about $7 million in loan obligations and operating debt, in addition to the roughly $89 million in bond payments remaining over the next 22 years, they said...

Since opening in October 2006, Sears Centre has fallen short of financial projections and failed to turn a profit. It had an operating loss of $512,635 in 2008.

The arena hosted 84 events last year, including eight concerts. A 2005 feasibility study projected the facility would host 140 events a year, about 20 of which would be concerts.

The venue has two small anchor tenants: the Continental Indoor Football League’s Chicago Slaughter and the Lingerie Football League’s Chicago Bliss. It used to be home to minor league hockey, indoor lacrosse and indoor soccer, but those teams have since folded.

[A]n official from the firm brought in to operate the arena on an interim basis after MadKatStep leaves says the Ryan Companies inflated the 11,000-seat venue's moneymaking potential when it convinced the village to give it a $55 million construction loan.

"I think they were caught up in the (potential) success of the arena," said Joseph Briglia, vice president for International Facilities Group.

But Smith noted the projections from 2005 were based on two reports, one commissioned by Ryan and the other by the village.

He acknowledged those studies "were wrong."

A feasibility called for the Sears Centre to book 140 dates per year. But it's averaged less than 100 annually.

Labels: finance, stadium subsidies, stadiums

McHenry County received the bonding authority under the $789 billion American Reinvestment and Recovery Act. The bonds are supposed to encourage lending by giving investors a 45 percent refund of the federal taxes payable on them. Because the bonds are federally backed, the county is not liable if the borrower defaults.

Labels: sports pork, stadium subsidies, taxes

Labels: gambling, stadium subsidies, The Stadium Game

Less than an hour before the National Hockey League commissioner planned to broker a deal to sell the Phoenix Coyotes and strip team owner Jerry Moyes of his duties Tuesday, Moyes filed for bankruptcy to sell to his own buyer.

Moyes, as part of a Chapter 11 reorganization filing, agreed to sell the team for $212.5 million to a BlackBerry wireless magnate who plans to move the team to a yet-to-be determined location in southern Ontario, Canada.

The move is not a certainty. Already, the NHL and Glendale, which leases Jobing.com Arena to the Coyotes, have objected to Moyes' tactics. And other investors could outbid BlackBerry executive Jim Balsillie's PSE Sports & Entertainment LP.

But the Coyotes, who have played in metro Phoenix since 1996, habitually have lost money in the desert, first when they shared an arena with the Phoenix Suns in downtown Phoenix and most recently in Glendale.

Moyes, who since 2001 has invested more than $310 million in the team, declined to be interviewed. Earl Scudder, his financial and legal adviser, said Moyes had no option but to file for bankruptcy because that was the only way to void the team's lease with Glendale.

"He didn't have a lot of choices," Scudder said. "He had gone through extensive marketing efforts and was unable to get offers for the team that would take care of the creditors." The move shocked Glendale, which contributed $180 million for the $220 million arena that opened in 2003. For the city's hefty investment, the team signed a 30-year agreement with an early-termination penalty of more than $700 million.

I agree with this assessment from Meyer:

Several years ago, Phoenix suburb Glendale paid about $180 million to build a hockey stadium for the Coyotes. The Coyotes had already been in the Valley for several years, losing money all the while, and had shed one ownership team for another fronted by Wayne Gretzky. It was shear madness to build them a stadium, as their chances of financial success were almost non-existant. It was already clear at this point that hockey was not going to be a big draw in Arizona. For this reason, Scottsdale and Phoenix both ended up passing on subsidizing the team before Glendale, out to prove it was a “real” city, stepped up to the plate with a wad of taxpayer money.

Labels: bankruptcy, nhl, public funding, stadium subsidies

Labels: mixed-use development, stadium subsidies, The Stadium Game

Labels: Major League Baseball, new stadium, stadium subsidies

None of the amounts appropriated or otherwise made available by this Act may be used for any casino or other gambling establishment, aquarium, zoo, golf course, swimming pool, stadium, community park, museum, theater, art center, and highway beautification project.

None of the funds appropriated or otherwise made available in this Act may be used by any State or local government, or any private entity, for any casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool.

Labels: scandals, stadium subsidies

The Minnesota Vikings' already wobbly prospects of getting public financing for a new stadium this year got no firmer Monday at the State Capitol, where legislators said the state's dire financial picture made the project nearly unthinkable.

In doing so, a House panel brushed aside a new study by the Metropolitan Sports Facilities Commission, owners of the Metrodome, that said a new stadium on that site in downtown Minneapolis would generate $734 million in construction spending, create 13,400 jobs during construction and generate $32.2 million in taxes during the first year after a new stadium opened.

"To come in with a two-thirds publicly funded proposal for a brand new stadium here this session would appear to be a nonstarter," said Rep. Frank Hornstein, DFL-Minneapolis.

Labels: economic development, stadium subsidies

If there ever was a time to crow about the wonders of rebuilding a city around a professional sports team, this would be it. Three of the four teams remaining in the play-offs hail from cities -- Baltimore, Philadelphia and Pittsburgh -- that in recent years spent billions rebuilding their downtowns around pro sports facilities and other community "anchors."

Except that there's a problem. The teams might be competitive, but the cities definitely are not. All three continue to shrink in population, and have stagnant job markets and crumbling public schools.

When the Steelers were in the Super Bowl in 2006 I was the host of a radio show in Pittsburgh. I argued that the franchise was an exercise in leadership excellence in a city whose politicians were anything but. Numerous callers hammered me. They said there are a lot of "Steelers" bars across the country, and that proved the city still had some national respect. Indeed, there are hundreds of watering holes dispersed across America loaded with fanatical devotes of the Pittsburgh Steelers. "Where are the Seahawks bars?" the callers asked.

In Seattle, of course. That city has gained population while Pittsburgh lost it. Steelers bars are the visible cultural artifact of a kind of economic diaspora. People in those bars are the refugees who looked at high taxes, union dominance and lousy schools and voted with their feet. They can still root for their favorite team -- from Raleigh, North Carolina. You go South or West to get your bread. The circuses can be watched on cable.

Labels: economic development, stadium subsidies

Something strange happened on our radio show this week. We had Miami Dolphins tickets to today’s game against the San Diego Chargers to give away.

No one wanted them! Free tickets to an NFL game and they had less value than a station T-shirt. 2007 Dolphins tickets, I could totally understand, but these guys just drilled the Patriots.

Now, this moment could have been a fluke, but I don’t think so. I think the sports landscape is changing.

Labels: mls, NFL, sports economics, stadium subsidies

• 1986: Congress passes a law (the Tax Reform Act) that says sports facility construction projects can only be financed with tax exempt bonds if the principal and interest are paid using tax revenues.
• 2006: The IRS issues Private Letter Rulings that allow New York City and the Yankees (and later the Mets) to finance the construction of two new baseball stadiums using tax exempt bonds and pay off the principal and interest on these bonds using payment in lieu of taxes (PILOTs), and not tax revenues collected by New York City or the State of New York. This ruling effectively guts the 1986 Tax Reform Act. The rationale for this decision was that these stadiums would generate significant positive economic impact in the community, and thus serve the public interest.
  

Labels: economic development, economic impact, scandals, stadium subsidies

For the 455th consecutive time last Wednesday afternoon, 96-year-old Fenway Park in Boston sold every seat for a Red Sox game, tying baseball's record.
At the same time that Boston's Daisuke Matsuzaka was throwing his first pitch before 37,373 paid customers, Florida Marlins pitcher Chris Volstad was throwing one at 21-year-old Dolphin Stadium before 584 fans — counted by the players themselves.
That's all you need to know to understand why government's frenzy to waste half a billion dollars to build a Marlins stadium is off base.
As auto dealer Norman Braman plays his hand in court as the only public figure willing to buck the giveaway, the Marlins play to the smallest attendance in baseball, by thousands, day after day.
Even the Marlins' pitiful average of 16,576 paid through last Wednesday's game is suspect, because while players were counting 584, the Marlins were reporting an "official" 11,211 — though that's still far less than a third of capacity. Whether almost nobody bothered to use their tickets to see a team fighting for a title or the Marlins were fudging numbers, who knows?
What is perfectly clear is that few show up. No new stadium would change that.

Labels: Major League Baseball, stadium subsidies

The Cubs' sale price is likely to exceed Dan Snyder's 1999 purchase of the Washington Redskins of the National Football League for $800 million, the most paid for an American sports team. John Henry's $700 million purchase in 2002 of the Boston Red Sox, Fenway Park and the majority of a regional-sports network is the most spent for a baseball team.

England's Manchester United soccer club was sold to Malcolm Glazer in 2005 for $1.45 billion and is the most ever paid for a sports team.

Cuban Among Bidders

Billionaire Mark Cuban, owner of the Dallas Mavericks who made his fortune by selling his Broadcast.com to Yahoo! Inc., will continue in the bidding process, though the identities of the four other groups weren't known, the Sun-Times reported. John Canning, chairman of Madison Dearborn Partners LLC, considered a favorite because of his friendship with baseball Commissioner Bud Selig, was not among the groups advancing to the next round because his offer fell short of the $1 billion mark, according to the newspaper.

...The Cubs may not be worth as much money if the team doesn't come with the ballpark, said Andrew Zimbalist, an economics professor at Smith College in Northampton, Massachusetts. The club owner may not be able to make improvements to Wrigley that will boost revenue, or the owner might have to share that money with the landlord.

Labels: franchise values, stadium subsidies

In defending the city's decision, Councilman Brown points out that on the same day the City Council approved funding for the stadium, it also earmarked $1 billion to upgrade D.C. schools, including $58 million for a new high school for construction trades and architectural design. And under terms of the deal, the city expects to see about $40 million a year in revenue. The smallest portion will come from the team, which is supposed to pay $5.5 million a year in rent. But just this week the Nationals began withholding payments, saying the city had failed to "complete" the stadium.

The vast majority of income is expected to come from the same people who financed the stadium: the taxpayers. An estimated $14 million a year is projected from taxes on tickets, concessions and merchandise. Another $24 million will come from a new stadium tax on D.C. businesses with gross revenues of $3 million or more. Indeed, with the exception of some housing and small businesses that have moved into the neighborhood, the vast majority of the "development" in Southeast is nothing more than taxpayer-funded public works projects.

So in the end, what did the taxpayers get other than a bill for $611 million? The Washington National's Web site advertises jobs for elevator operators, fan ambassadors and security guards. The pay is $7.50-$8.50 an hour.

Labels: stadium subsidies

Labels: mls, new stadium, stadium subsidies

Super Bowl wasn't a windfall
Glendale spent more on game than it made

Carrie Watters
The Arizona Republic
May. 12, 2008 12:00 AM
Glendale did not recoup what it spent to host Super Bowl XLII, according to a new study that showed out-of-towners here for the game added an estimated $1.2 million to the city's tax coffers.

The city laid out $3.4 million preparing for and hosting the Feb. 3 game.

Bottom line: The city spent $2.2 million more than its estimated take in connection with the game.

That deficit could be lessened by NFL spending or local visitors' spending, which were not part of the study by Scottsdale-based Elliott D. Pollack & Company.

City leaders have long said they did not anticipate that the city would immediately recoup its expenditures.

"You can look at it from getting the actual dollar back," Councilman David Goulet said. "But I think there is a bigger picture to look at than just the pure law of numbers."

He foresees a return on the investment over time as the game bolstered the city's image as a destination.

In two weeks leading up to the game, the city was mentioned in more than 5,000 broadcast stories, a publicity value that Cision, a media-monitoring company, pegs at nearly $27 million.

Labels: economic impact, stadium subsidies

Five CFL teams – the Montreal Alouettes, Winnipeg Blue Bombers, Hamilton Tiger-Cats, Saskatchewan Roughriders and the ownership of a conditional Ottawa franchise – are aggressively pushing plans to build new stadiums or drastically alter and refurbish old ones.

Factor in the anticipated makeover of Vancouver's B.C. Place Stadium, which could add a retractable roof to the facility, and a potential redesign of Toronto's BMO Field to accommodate the Argonauts, and the CFL could be looking at well over a half-billion dollars invested in stadium infrastructure during the next five years.

Many would suggest it's long overdue.

Labels: cfl, nhl, stadium subsidies

There are lots of ways to pay for an arena, but Mayor Mick Cornett said city leaders thought the choice was obvious in Oklahoma City.

The Ford Center was built with money from the original MAPS sales tax.

It just made sense to continue the temporary 1-cent sales tax, which was already extended to pay for MAPS for Kids, Cornett said.

If voters approve the Ford Center tax, it will go into effect Jan. 1, 2009, the day the MAPS for Kids tax is set to expire.

"Our citizens seem to prefer a sales tax initiative to other concepts,” Cornett said. "This is following the model that was created by MAPS. MAPS is a proven entity to our voters.”

No other NBA arena was funded exclusively by sales tax money, according to the National Sports Law Institute of Marquette University Law School.

Labels: NBA, stadium subsidies, tax revenues

This week in Sports Economics I talked about the effect sports teams and sports stadiums have on their local economies (not much). That doesn't keep owners from trying to get public subsidies. The Star Tribune notes that Vikings owner Zigi Wilf seems to be publicly turning up the heat to get public funding for a new Vikes stadium.

"The Vikings and the NFL understand and respect the priorities and pressing issues facing the state, but at the same time, the stadium issue needs to be resolved in the near future," Wilf said. "Construction costs are rising significantly each year that we delay and there is an urgency to reach a solution."

Given the subprime mortgage crisis, might this not lower the rate of inflation of construction costs? But I digress.

The state's answer puts the project — a retractable roof stadium along with housing and business development on the Metrodome site — up against a tight deadline.

Sports economists agree: sports stadiums are not the boon of economic development that they are often portrayed to be and, thankfully, public money has not been as easy to come by in many instances. That's why some recent public financing packages include plans to have ballpark villages developed as a part of an agreement for public financing. Otherwise the secondary development is not likely to happen.

The development is unlikely to occur because the returns for the development do not justify private investment. Otherwise we'd see a lot more "spontaneous" economic development surrounding stadiums. In other words, the people who frequent stadiums don't really care all that much about shopping/bars/restaurants/condos etc. around ballparks. They want to go to the event, do what they do there (get their private benefits), get in their cars, and go home. So politicians are seemingly more resistant, thankfully, to giving subsidies just for stadiums by themselves. But package in some secondary development (which, if it draws any extra economic activity to the site, will probably draw it from elsewhere in the region) with the subsidy request and see if you can get the necessary votes.

But if private financing isn't forthcoming for the housing and business development, is it really that good of an investment for the government? In other words, what are the public goods associated with the ballpark villages?

Labels: economic development, NFL, stadium subsidies

Harrah's Entertainment, Inc. and AEG today unveiled plans for of an approximately 20,000-seat, privately financed, state-of-the-art arena. This arena is envisioned to be Las Vegas' new home for the most popular and important sports and entertainment events. The site of the venue will be one block east of the world famous Las Vegas Strip on approximately 10 acres of land that is part of the current Harrah's land holdings.

As managing partner, AEG will be responsible for developing, operating and programming a full range of live sports and entertainment events including concerts, boxing matches, special events and awards presentations, as well as sporting events, tournaments and exhibitions. The arena will be constructed and configured in a manner that will make it capable of housing an NBA or NHL franchise.

Labels: Las Vegas, stadium subsidies

Across the nation, virtually every ballpark in the game has been replaced or scheduled for demolition over the last 15 years; those few that haven't, like Fenway Park and Wrigley Field, have been carefully renovated. The purpose of this new construction has always been the same: To build smaller, more intimate parks specializing in providing more high-end service to businessmen. Money isn't made these days from the family out to take the annual trip to the local park; it's made from clients who spend hundreds of thousands of dollars on luxury suites in which they entertain clients.

This is a broad conceptual shift, and I don't think it was inevitable. There is a great tension in marketing a mass entertainment as a boutique product, and a different commissioner would have made different choices, handling that tension differently. Selig has come down on one side, firmly and consistently.

You can see the ultimate example of this in California, where the Athletics are moving from a football field in relatively low-rent Oakland to a 35,000-seat park in Fremont, which isn't, by baseball's historical standards, even a definable place. It's the most extreme manifestation of the shift the sport has made toward valuing quality over quantity — to cater to the relatively few at the expense of the many. It was inevitable that baseball would move in this direction, but under Selig the sport has become totally committed to it. Even in New York, a city with enough passionate fans to support five successful teams, the new stadiums are limiting supply to increase demand and better serve the wealthiest patrons — the Mets' new field, for instance, will have 10,000 fewer seats than Shea Stadium does, and that's not because they have a problem moving tickets.

Only the years will tell, but I think this could prove to be a catastrophic choice.

Labels: luxury boxes, MLB, stadium subsidies

So as you look around the NFL for the franchise that’s most unhappy with its stadium deal, the Vikings quickly jump to the top of the list. Their lease at the Metrodome runs through 2011, but as any contract lawyer will tell you, everything’s negotiable. So get used to the sound of “the Los Angeles Vikings.” It only makes sense.

Pro football is dead in L.A. because the owners have put it on the back burner for years, more interested in using the threat of it to extorttaxpayer money from cities and playing potential stadium owners and sites against each other. A rise in TV ratings this year, and the fact that NFL games get a decent share in L.A. even without a local team, have also reduced the urgency level.

Despite the fact that a team in Los Angeles would help the NFL in broadcast negotiations, the city also has some value to the league without a team. Every time a football team is unhappy in its current city, it gets to threaten to move to Los Angeles in an effort to get a better stadium deal and more tax breaks. (The fact that Mayor Hahn appears uninterested in such sweetheart deals doesn't seem to have diminished the effectiveness of a general threat to decamp to L.A.) San Diego, Indianapolis, Minnesota, and New Orleans have all pulled this stunt recently. So letting Los Angeles go without football has allowed the NFL to extort more money from taxpayers across the country.

Labels: stadium subsidies, Vikings

The Charlotte Coliseum, the site of 19 years of sporting excellence, has been imploded. This arena was opened in 1988 and was built with 100% of public funds.

In some Utopian sports society, where the separation of sports and state are clear, would the Coliseum have been torn down at 19 years of age and would it have been built so big in the first place?

This seems to be one of the things Milton Friedman had in mind when he warned us about spending other people's money on other people.

*Thanks to commenter Frank for noting that I had written the arena had too many luxury boxes when I originally wrote the post

Labels: NBA, stadium subsidies, stadiums

Labels: stadium subsidies

Labels: other sports, stadium subsidies, ticket prices

Labels: stadium subsidies

Dave Checketts, owner of Real Salt Lake, threatened to move the professional soccer franchise to St. Louis if he didn't receive public funding to build a 20,000-seat stadium in Sandy.

Real Salt Lake is playing at the University of Utah until it can get a permanent venue, a dream that was momentarily placed in doubt when Salt Lake County Mayor Peter Corroon withdrew the county's promise of $30 million to help Real relocate to Sandy. Corroon had been warned by financial advisers that it was a risky investment.

An alternative proposal from Utah County was snubbed. Anderson Development offered to buy the team and base it at the former Geneva Steel site in Vineyard. Checketts insinuated that we're second-class citizens down here and rejected the deal.

In the eleventh hour, the Utah Legislature, goosed by Gov. Jon Huntsman Jr., came through, pledging $35 million in public money. The cash is supposed to come from taxes on hotel rooms and rental cars.

House Minority Whip Brad King, D-Price, called it a chance to promote Utah to the world. "This is worth millions and millions of dollars we will never commit from state coffers to promote us," King said.

Checketts is not the first sports team owner to get help from state government. Utah Jazz owner Larry H. Miller leases the land under the former Delta Center for $1 a year until 2040. Salt Lake City is also using taxes to pay off the center's $25 million bond.

There may be times when it's proper for government to help a business get started, but we are not convinced this is it. A soccer stadium hardly qualifies as an economic kick-start.

This is a subsidy for a special interest, in our view.

We console ourselves with the fact that $35 million is a small amount compared to other stadium deals. But that doesn't change the principle.

Salt Lake County's financial advisers said that revenue projections by Checketts were "too optimistic." Likewise, economists Roger Noll of Stanford University and Andrew Zimbalist of Smith College -- co-editors of the book "Sports, Jobs and Taxes" -- say that stadiums are more of a consumption expense than an economic booster.

Labels: mls, soccer, stadium subsidies