OT: The Economics of Sports Stadiums and bye-bye to the Oakland A’s

[XXtwindad]

Originally Posted by IJWS

https://www.propublica.org/article/t...lions-in-taxes

No sports team needs any kind of public money.

Good read. Thanks for posting.

[Elefantino]

A bit of gallows humor: Mark Davis, the idiot son of Al Davis and current majority partner of the Raiders, is pissed that the A's are moving to Las Vegas because he says the Fisher ownership group made it impossible for him to get a new stadium in Oakland, causing his move to Las Vegas.

You have to know this sack of poo to realize that he has no idea how stupid he sounds (or looks, for that matter; he has the same hairstyle he wore at Piedmont High in the '70s).

[72gmc]

I don’t really have anything against the majority of Vegas residents but I’d be fine with that area becoming a theme park of teams with crappy owners. The Sin City Knicks.

[echappist]

Originally Posted by XXtwindad

There’s a civic pride in having a major sports club. Some clubs and cities just do it better than others (such as the SF Giants) It’s the same with Futbol clubs no? You would be better informed than I.

Taking pride in an organization with which one has an at best tenuous connection is nothing short of misguided and misplaced sentiments. The team owners or the cartel (in the case of MLS) are very happy to offer ephemeral pride in exchange for cold hard cash. At best, such pride is icing on top; at worst, it’s a misdirection that leads the gaze away from important issues. Functional government, good schools, responsible policing, abundance of well-maintained parks, efficient public transit, well-maintained infrastructure. Those are the actual bread and butter things in which one takes pride.

After a long wait, the Eagles finally won a NFL championship in 2018, but that “pride” is nothing but an ephemeral high. The next year, one of the long-established hospital that served the indigent population closed, all due to some corporate shenanigans (new owner of the hospital was interested in the underlying real estate only). Someone who actually cares about the well-being of one’s city would gladly trade a sport title for a well-functioning hospital, but I guess too many are gaslit by the ephemeral high…

Also, there is no comparison between European football vs American sports. The very point that served as genesis of this thread is almost completely absent. Take the case of Kroenke, who tried to gain whatever subsidies he could find with his NFL franchise (during the team's stay in St. Louis), but footed his own bills when it came to building a new stadium for Arsenal. That there is a contrast shows just how much of a cynical ploy asking for public financing is. And that’s before we get to the cases in Germany, where most teams are ran on the 50+1 model (as in, majority decision making voting shares are in hands of members of the respective clubs). Of the famous teams that aren’t, three had their starts as factory work teams, one is the personal project of an owner who made billions elsewhere and ploughed money into his hometown team, and one is a Redbull team. Unlike the U.S. teams, almost none of the established teams in Europe would dare to blackmail their local cities for handouts at the threat of moving away.

There’s no “major” American city without a sports club. Except one (shortly): Oakland.

Oakland is the third most important city in the Bay Area. Far from "major", if it finishes on the third step of a three-stepped podium of local cities.

In terms of population, ahead of Oakland are Long Beach (CA), Colorado Springs, Omaha, Mesa (AZ), Tucson, Fresno, Albuquerque, Louisville, El Paso, and Fort Worth, none of which with any team in the big five sport leagues (NFL, NBA, MLB, NHL, and MLS). Austin has only a MLS franchise.

But then again, your posts in this entire thread are argued from an emotional standpoint. Doubtful that any factual evidence will convince you otherwise.

[Mr. Pink]

I'm no fan of a lot of public support of pro stadiums, but, I do know of at least two projects that have benefitted the host cities a lot. The stadium in Denver where the Rockies play (does it have a name? They all have a corporate sponsor these days, which is a whole other thing. Do the citizens who paid for the park get a piece of that branding contract?), and Camden Yards in Baltimore, which I frequent a lot. Both, to me, were worth the investment, transforming areas of both downtown's into very vibrant economic places. It helps that the Ravens play next to Camden. Cant beat that one two punch.

Is Vegas paying for this stadium? Why do they need it? Like there isn't enough of entertainment venues in that town. It's just one big nasty party anyway. Horrible place, if you ask me. I couldn't wait to get out. It's like everything wrong with humanity, besides war, in one hot, miserable town in the middle of the desert.

[Mark McM]

Originally Posted by echappist

Taking pride in an organization with which one has an at best tenuous connection is nothing short of misguided and misplaced sentiments. The team owners or the cartel (in the case of MLS) are very happy to offer ephemeral pride in exchange for cold hard cash. At best, such pride is icing on top; at worst, it’s a misdirection that leads the gaze away from important issues. Functional government, good schools, responsible policing, abundance of well-maintained parks, efficient public transit, well-maintained infrastructure. Those are the actual bread and butter things in which one takes pride.

There is one, and only one, major league sports team that is actually owned by the community it plays in: The Green Bay Packers. They are celebrating their 100 anniversary this year. Although many other teams have moved around from city to city at the whim of owners and business deals, the Packers have never moved, and are unlikely to move.

It should come as no surprise that the private owners of the rest of the other NFL teams came together and have banned further public ownership of team franchises (the Green Bay Packers were grandfathered).

[avalonracing]

I think the billionaire owners should pay the cities to play there. Not the other way around.

[Matt92037]

Worst owner in the NFL IMHO. Spanos could have done something great in San Diego if he was willing to partner with San Diego State.

No Spanos is a renter…..

Originally Posted by deluz

Spanos family

[Mark McM]

Originally Posted by avalonracing

I think the billionaire owners should pay the cities to play there. Not the other way around.

Actually, that happened in Boston. Boston is known as a "sports town", having teams from 3 of the 4 major sports right in the city (Boston Red Sox, Boston Celtics, Boston Bruins), and the stadium for the team of the 4th major sport (New England Patriots) not far from the city. When it came time to replace the old Boston Garden (where both the Celtics and Bruins play), the city not only did not give them money (it ended up being funded with loans from 3 banks), but in exchange for the permit to build the new building, the owners had to agree to put on a minimum number of charitable events in the building each year, and to pay for these events themselves.

Despite its reputation as "sports town", Boston has a pretty good history of not using public funding to build sports complexes. When the New England Patriots wanted a new stadium, they threatened Boston that if they didn't help pay for it, they'd move to some other New England City. Boston told them to take a hike, so the Patriots asked both Providence and Hartford if they help pay for a new stadium. Both cities also said no, so the Patriots ended up paying for their new stadium themselves.

The Boston Red Sox wanted to build a new stadium, referred to as "New Fenway Park", right next door to the old Fenway Park. Although the Red Sox would pay for the new stadium itself, they asked Boston to provide infrastructure and transportation upgrades (at the city's expense). The city was initially hesitant to do it, but then it came out the reason that owners wanted to do the project is because they wanted to sell the team, and the new stadium and other upgrades would jack up the value and selling price. So the city nixed it, and the Red Sox ended up upgraded the old stadium at their own expense.

A few years ago, a group was created to put together a bid for the 2024 Summer Olympics. Although the group tried to hide who was behind the "Boston 2024" organization, it turns out that it "Boston 2024" was primarily setup by a group of local builders, who would be the ones bidding on the all the infrastructure projects that would have been required to be built to host the games. They never got the public to get behind the bid to hold the Olympics (in fact, public sentiment was generally against it, after seeing other cities left holding the bag for the costs), and the a formal bid for the games never materialized.

More recently, the Indy Racing League wanted to put on a race in downtown Boston. There was so much local opposition, they never did get permits. But that didn't stop them from selling hundreds of thousands of dollars of tickets. Just after they passed the deadline by which they would have had to get the permits, the organizing group declared bankruptcy, and ticket holders were not able to get refunds.

[Elefantino]

Originally Posted by Mark McM

it turns out that it "Boston 2024" was primarily setup by a group of local builders, who would be the ones bidding on the all the infrastructure projects that would have been required to be built to host the games.

You just described the SLOOC and the reason the Games had to bring in Mitt to straighten out the mess. I know. I lived next door to one of the messes.

[Hindmost]

Originally Posted by echappist

Oakland is the third most important city in the Bay Area. Far from "major", if it finishes on the third step of a three-stepped podium of local cities.

Careful now, some of us natives are sensitive about this sort of thing. But yeah, things change...money and growth to support professional sports have gone elsewhere.

[Elefantino]

Originally Posted by Hindmost

Careful now, some of us natives are sensitive about this sort of thing.

Yes, and what did we say when we were growing up?

"Why is it always smoggy in the South Bay? Because San Jose sucks."

[vespasianus]

Originally Posted by XXtwindad

Which brings me to my central question? How much should a city pony up for a sports team? I know that several teams/cities (San Francisco, Baltimore, and Pittsburgh come immediately to mind) have revitalized downtown areas and made beautiful ballparks. But should a city allow an owner to hold them hostage? Are the economic and civic benefits worth it?

The city should do an economic study to determine how much revenue they get from having said sports teams and if the investment is worth it. I assume they did and it did not make much economic sense.

Christie's whining was just an emotional rant for what is a business decision.

[saab2000]

Originally Posted by Mark McM

There is one, and only one, major league sports team that is actually owned by the community it plays in: The Green Bay Packers. They are celebrating their 100 anniversary this year. Although many other teams have moved around from city to city at the whim of owners and business deals, the Packers have never moved, and are unlikely to move.

It should come as no surprise that the private owners of the rest of the other NFL teams came together and have banned further public ownership of team franchises (the Green Bay Packers were grandfathered).

I grew up going to Packer games and my family still holds four season tickets. Try to see at least one game per year. Last year saw the hapless Packers lose to the Jets. I’ve seen Walter Payton, Tom Brady, Steve Young, Fran Tarkenton, Barry Sanders, Calvin Johnson, Eli Manning, Odell Beckham Jr. and many more as well as generations of well known Packers.

Always a great experience. Cold, crowded aluminum bench seating. Great atmosphere.

The relationship between the Packers and Green Bay and frankly all of Wisconsin and to some extent Michigan’s UP is unique in sports. They couldn’t be brought into existence today. The area is tiny and the media market very small town. Buffalo is a huge metropolis comparatively.

[thwart]

At a concession stand at Staples Center in Los Angeles, Adelaide Avila was pingponging between pouring beers, wiping down counters and taking out the trash. Her Los Angeles Lakers were playing their hometown rival, the Clippers, but Avila was working too hard to follow the March 2019 game.

When she filed taxes for her previous year’s labors at the arena and her second job driving for Uber, the 50-year-old Avila reported making $44,810. The federal government took a 14.1% cut.

On the court that night, the players were also hard at work. None more so than LeBron James. The Lakers star was suffering through a painful strained groin injury, but he still put up more points and played more minutes than any other player.

In his tax return, James reported making $124 million in 2018. He paid a federal income tax rate of 35.9%. Not surprisingly, it was more than double the rate paid by Avila.

The wealthiest person in the building that night, in all likelihood, was Steve Ballmer, owner of the Clippers. The evening was decidedly less arduous for the billionaire former CEO of Microsoft. He sat courtside, in a pink dress shirt and slacks, surrounded by friends. His legs were outstretched, his shoes almost touching the sideline.

Ballmer had reason to smile: His Clippers won. But even if they hadn’t, his ownership of the team was reaping him massive tax benefits.

For the prior year, Ballmer reported making $656 million. The dollar figure he paid in taxes was large, $78 million; but as a percentage of what he made, it was tiny. Records reviewed by ProPublica show his federal income tax rate was just 12%.

From the excellent ProPublica article above.

Corporate welfare, indeed. I seldom agree with Cliff Christie, but he’s right on here.

(FWIW, even Ballmer agrees he should be paying more taxes.)