Wednesday, May 4, 2016

Hillsborough Stadium Cheerleaders Trying to Hide All the Other Great Things Bed Taxes Could Pay For

Hillsborough County's politicians are lying in an effort to get a baseball stadium built...and it could cost Tampa a chance to build some really great community assets.

The Times' Steve Contorno has an exclusive story today (now that the Tampa Tribune doesn't exist anymore) indicating Hillsborough Co. is surging toward the $30M/yr mark in bed tax collections, which would allow it to add the magical sixth cent of taxes on any tourist stay in the county.

That could means another $6M/yr in bondable cash (about $75M total) toward construction of a new stadium.  While $75M may be a drop in the $500M bucket, it's a start for cash-starved Hillsborough.

However, that money could go toward a number of other projects, and politicians with baseball on the mind (looking at you, Ken Hagan) don't want you to know it.  They're spreading mistruths, suggesting those bed tax revenues can only be spent on tourism promotion (like ad campaigns) or pro sports facilities. This is a lie.
There's a destructive attitude in Hillsborough (and other places) that if bed tax money can't be used on anything important, you may as well give it to pro sports teams. But productive conversations about the county's future require transparency.

Here's just a few of the things Hillsborough's bed taxes have paid for in the past:
  • The Tampa Riverwalk
  • The Florida Aquarium
  • MOSI
  • Lowry Park Zoo
  • The Straz Center
  • Tampa Bay Black History Fest
  • Local chambers of commerce
And here's a few more things the bed taxes could pay for if they didn't go to pro teams:
  • Arts, as St. Pete has done at the Dali Museum
  • Redeveloping Channelside Bay Plaza
  • Improving Ben T. Davis - or any other Hillsborough beach - into something tourists might want to visit
  • Building a new multi-modal transit center (may require some financial creativity)
  • Any major event that draw out-of-towners
  • Any other project that increases the number of tourists visiting the county
So bookmark this link, and prepare to educate your elected officials on the topic. Because they're going to be fed a lot of mistruths about the bed tax in the next few months.

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Saturday, April 30, 2016

Rick Kriseman: the Mayor of St. Pete (Not Tampa Bay)

Rick Kriseman marched into the mayor’s office in 2014 by defeating what many saw as St. Pete's obstructionist-in-chief, Bill Foster. But Kriseman is feeling a little bit of the inside heat himself these days for not being more inclusive and liberal with the city’s rights to negotiate with the Rays.

Curtailing once to the pressure of newspaper editorial boards on the issue of the city's previously-ironclad contract, Kriseman cut a less-than-ideal deal with the Rays to look at possible stadium sites outside city limits. Still, Kriseman is learning: 1) you can’t please everyone…and 2) it’s not easy to preserve the city’s interests and financial equity in MLB (as predicted on this blog two and a half years ago).

Just this past week, Kriseman was hit with a Times article on the slow pace of “Baseball Forever” stadium discussions in St. Pete, a letter from a powerful Pinellas senator who wants to be involved in stadium discussions, then a Times editorial suggesting his administration is bumbling the process in more ways than one.

Look, the Times may be right about Kriseman putting St. Pete’s interests above the region’s, but as Bill Foster always said, the mayor was elected by the people of St. Petersburg to look out for St. Pete tax dollars and interests first. In hindsight, Foster may have actually done a pretty good job preserving the city’s leverage and keeping the Rays in-place for four years.

The Rays and the region have asked St. Pete to make a financial sacrifice to keep the team in the region long-term. Kriseman granted that wish. But he’s going to find it harder and harder as the demands for St. Pete’s sacrifices continue to grow.

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Monday, April 18, 2016

Rays Give Small Suburb the Time of Day; Media Celebrate with New Round of Speculation

Are the Rays really considering a possible stadium in Oldsmar?

Probably not, and it would seem to be a silly idea...but for argument's sake:

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Wednesday, April 13, 2016

Yankees Pinch Pennies, Produce Laughable Economic Impact Report Without Having to Hire Economist

So I finally got a hold of the Yankees' 2015 spring training economic impact "report" {see links at bottom of page}...and WOOOOOOOO, did I get a lesson in economics! As we'd expect from the Yankees: it's a lesson in bad economics.

The entire "report" consists of four pages, and similar to the Rays' laughable spring training economic impact report of 2014, the analysis isn't worth the cracker jack box it came out of.

First of all, the Yankees appear to have done the report themselves, rather than hire an economist or firm to analyze data for them.  Second of all, the team claims $162 million in economic impact last year...from 17 spring training games.

That breaks down to $9.5M in economic impact for each game...or $950 per person per game!?!?!?

Oh, but the bogus assumptions continue:
  1. Nearly 40,000 Yankees fans came to Florida last year for the primary purpose of watching baseball, staying for an average of 7.5 nights each, but going to just one Yankees game each.  Of course that's ridiculous, but acknowledging fans go to multiple games over the course of a spring diminishes all those economic impact claims!
  2. About 43,000 fans came to Florida for reasons other than baseball last year, but took in a Yankees game while they were here. Yet the team still counted their entire $90 million supposedly spent in Florida as spring training-related economic impact.  That represents 56% of the Yankees' claimed total impact.
  3. Not one single Yankees fan from outside the state attended more than one spring training game last year.  Ha.
Oh, the team didn't even survey fans themselves; they simply took out-of-state/in-state percentages from a 2009 statewide spring training study.  Which explains other discrepencies in the "report," such as how the team suggests on Pg. 4 that an analysis of spending receipts showed 27% of spring training fans (46,417) were from Hillsborough County...yet on Pg. 2, they estimated all but 39,747 fans came from outside the county.  Psshhhhttt....minor details!

The Yankees should be embarrassed to put out these numbers and the Tampa Tribune should be embarrassed to have relied on them in an editorial.

Meanwhile, the numbers may or may not have helped convince Hillsborough County leaders to give the league's most valuable franchise another $30 million or so in tax money.

All told, $30 million for a more than 20-year spring training contract extension isn't a bad deal these days.

But yes, the $13 million or so in Hillsborough County bed tax money could have absolutely gone toward a Rays Tampa's nearly-impossible task of financing a stadium just got a little bit harder.

Click on the four-page "report" to read the Yankees' economic claims:

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Sunday, April 10, 2016

Why MLB Loves Montreal (Hint: It's Not Why Expos Fans Think)

We see a lot of Montreal fans talking about recruiting the Rays from Tampa Bay...or convincing MLB to expand to 32 teams.  But those Montreal fans fail to see the league's rich history of deception...and how much more valuable they are to MLB owners without a team.

As Peter Gammons has explained, MLB's business model depends on having a city like Montreal to "blackmail" all other MLB cities with...and Denis Coderre couldn't play more perfectly into the league's hand:
MLB's leveraging is well-documented, including in a 2015 book by Frank Morsani, "Betrayed by Baseball."  Morsani writes how the league repeatedly mislead/lied to him in efforts to advance its own interests and get new stadiums built in existing markets.  Obviously, it worked.

But for a deeper dive into MLB strategy, I turn to a 2010 article in the Harvard Journal of Sports & Entertainment Law, which also documents how MLB leveraged its anti-trust exemption into billions of dollars worth of publicly-funded stadiums.

The whole thing is worth a read, but one citation worth highlighting includes a passage from Mark Rosentraub's "Major League Losers: The Real Cost of Sports and Who's Paying for It":
Like any business, professional sports teams can increase their profits if they reduce or eliminate competition. Most businesses must accomplish this objective by producing the best possible product at the lowest price. The professional sports leagues, however, have been able to establish a protected environment and eliminate competition while maintaining the illusion of a free market. All the professional sports leagues are, in reality, cartels or private business associations insulated from the competitive pressures of a free market. These cartels control the number of teams that exist, allowing association members to extract subsidies and welfare from state and local governments that want one of the controlled franchises located within their borders.
In short, even if Stu Sternberg wanted to move to Montreal or sell to investors there, the league must sign off on it too.  And even if Montreal wants to fund a new franchise, it doesn't mean squat unless MLB wants to risk feeding more hungry mouths through revenue sharing.

Then there's this excerpt from noted economist Andrew Zimbalist, written in 2003 for the Brookings Institution:

Baseball’s monopoly allows it to restrict artificially the number of franchises and to dally with cities that have no team—to hold out to them the elusive promise of a franchise, pressuring existing host cities to build new stadiums or otherwise do MLB's bidding. As a consequence, cities and states compete against each other, leading to exorbitant stadium-financing packages and sweetheart leases. Cities have attempted on their own to include lease provisions that deter team relocation and provide a more equitable sharing of the facility returns. But usually only the largest cities have sufficient bargaining leverage to accomplish even part of these aims.
Don't you see it, Montreal fans?  MLB loves you for the time and money you're willing to getting new publicly-funded stadiums built here in the U.S.

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Wednesday, April 6, 2016

4 Quick Rays Links Worth Your Clicks

Hopefully you're caught up on the must-read links you needed before Opening Day, because here are the four must-read links you need after Opening Day:
  1. Rob Manfred said all the typical things you'd expect a commissioner to say at a Tropicana Field opener, plus one thing you'd never catch his predecessor saying: "Deadlines aren't helpful on issues regarding new stadium negotiations."  The video is worth a watch, check it out here:
  2. Another quick watch worthy of your time is Stu Sternberg's annual opening day comments:
  3. The Trop somehow placed just 15th on a (probably poorly-sourced) list of "most affordable stadiums in MLB"; cited "higher than average" ticket prices in placing them smack in the middle of the list of affordability.
  4. And finally, if you needed any more reminder to be skeptical of all those spring training economic impact reports and stories, has a really harsh takedown that's worth reading.  It makes you wonder why Florida constantly trips over itself to hand MLB more money...and why the economic impact reports are never worth the cost of the paper they're printed on.
Go Rays!

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Saturday, April 2, 2016

All the Rays News You Need to Read Before Opening Day

Apologies to my Canadian friends (you guys still have the world's best anthem), but this blog aims to provide perspective on all things sports business, so that includes the dreams of Montreal baseball expansion. It's not an impossible dream...but it's certainly not imminent.

To expand, MLB would need two markets that wouldn't drain revenue-sharing, and even if you think a national Canadian TV deal is a given and Montreal would pull it's own weight...we're a long way from having a second market like that.  And of course, the Rays are contractually bound to Tampa Bay for the next 12 years. So MLB-in-Montreal is quite unlikely in the next decade.

Nevertheless, we're seeing lots of news this week for those who just can't get enough of the speculation:
  1. Jon Paul Morosi penned a predictable - but fair - column about Montreal's baseball future, but he says all the important questions the city must address are pressing issues because in the next two years, "the Rays should know whether they're staying or leaving Tampa Bay."  I'm not sure I agree, for as I wrote last year (in much more depth), "because of the legal issues, there's no chance the Rays leave Florida in the next five, six, seven, or eight years.  Maybe longer."
  2. Great "5 questions regarding MLB's return to Montreal" piece in the Toronto Star, including "MLB is using Montreal’s interest to try and leverage concessions for the Tampa Bay Rays out of three levels of local government in Florida. And only when the Rays stadium issue is resolved will there be any talk of expansion."
  3. The Tampa Bay Times' annual Opening Day editorial focused on ways Commissioner Rob Manfred could/should keep MLB in Tampa Bay, including: acknowledging the region's commitment to working together (even though they aren't right now on the Stadium Saga); acknowledging the high TV ratings & interest; and by paying for much of it himself.  The paper also echoed this blog's call for more revenue sharing since the league could not be more flush with cash.
  4. The Tampa Bay Baseball Market blog has a great interview with new Rays Chief Business Officer, Jeff Cogen, who shares inside info on how the team is addressing some of the "attendance struggles", including ideas on converting TV-watchers to ticket-buyers.
  5. Gary Shelton points out Miami fans continue to get hosed by a crappy Marlins team.  Oh, and the team's been unable to sell naming rights to their new cathedral for $5M/year.
  6. And finally, let's look back at this 2004 Washington Post story from Steve Fainaru, which offers evidence of why "private investors" aren't going to fund a half-billion dollar stadium in Montreal.  Bud Selig, on whether a stadium's revenues can outpace revenues: "Can a ballclub build a stadium and survive? No."

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Thursday, March 31, 2016

A Pre-emptive Splash of Cold Water for Montreal Rays Fans

With the Jays and Red Sox kicking off a 2-game exhibition in Montreal, you can expect another round of defeaning "we have 106,000 fans here, so move the Rays to Canada!" rhetoric, just like last year.

No doubt, Tampa Bay's radio waves will be filled with fearmongering (whatever drives listeners).  And Montreal will ride the momentum into a newly-released plan to land an MLB team.

But will that plan include how the city plans to pay for a brand-new stadium?  Or how the city intends to make the logistical and legal hassle of a franchise relocation worth MLB's trouble?

Simply wanting a team isn't good enough.

I thank loyal Shadow of the Stadium reader Patrice Derome for keeping me in the loop on the French-Canadian media's reporting, which have been enough to keep Expos faithful and conspiracy theorists alike plenty busy:
But at the end of the day, my post from last year remains relevant - Tampa Bay has the Rays, and a contract binding them here until 2027.

Don't let that get in the way of your dreams this weekend though!

At least the Diamondbacks may give Montreal fans hope that the Rays aren't their only options...

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Tuesday, March 29, 2016

Tell Us How You Really Feel About Diamondbacks' Posturing for Stadium Renos/Replacement

In case you missed it, the Diamondbacks, who entered the league the same year as the Rays, also think it's time to start talking about replacing their stadium.

And in case you missed it, I wasn't impressed:

I wasn't the only one, either:

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Sunday, March 27, 2016

Four Takeaways from This Weekend's Stadium Saga News

  1. It was good to see the Tampa Bay Times pen an editorial echoing my post from last week on publicly vetting the majority of Tampa stadium talks. This is an important topic that appears to need a lot more attention.
  2. St. Petersburg is keeping it's stadium campaign public, vetting 15 proposals from well-known companies to redevelop Tropicana Field - with or without a baseball stadium. One team I'm keeping an eye on - Stantec, one of Jeff Vinik's big Channelside developers, who listed the Tampa Bay Lightning's Rob Canton as a project consultant for the potential Trop job.
  3. A Trib editorial made some nice points about Spring Training's economic impact by drawing out-of-state tourists, especially compared to the much higher costs of a full MLB stadium, which tend to target locals.
  4. But it's also worth mentioning that same Trib editorial dismisses "academics" who don't believe in MLB teams' economic impact claims, calling their warnings "nonsense." Too bad they didn't read the embarrassing Rays spring training economic impact report from 2014. Or the report from Tampa's 2012 Republican National Convention.  Sadly, what's really "nonsense" is the fuzzy math the Trib editorial writers use without economic justification.  But who needs economics when you're cheerleading for new stadiums?

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Friday, March 25, 2016

How Commissioner Ken Hagan Flipped on Opposition to Rays Stadium Subsidies

Hillsborough Co. Commissioner Ken Hagan, the self-appointed lead negotiator on the Rays-to-Tampa talks, promised to be totally transparent with his peers on commission regarding any stadium negotiations...except for that pesky issue of where the Rays want to put a stadium...which means conversations about funding in specific parts of town may remain secret too.

So does that mean Hagan is expecting "no public dollars" for the project, as he pledged several times along the tea party-influenced 2010 campaign trail?

Of course not.  Which makes it all the more interesting to track his shifting stances on how many tax dollars the Rays will wind up getting.
First, Hagan's 2010 pledge: "I am certainly not talking about public financing."

But six years later, Hagan flipped his stance to "no new tax dollars," opening the county up to paying for infrastructure projects related to a new stadium, as he successfully pushed for in the controversial Bass Pro Shop deal back in 2013.

He tried to rewrite history in a recent interview with my WTSP colleague, Mark Rivera, saying he's always been open to using public dollars for the Rays:

OK, so Hagan's current stance is that he doesn't want to raise taxes. But he hasn't talked about where the existing tax money for a stadium would come from.  The county has an $9.7 billion transportation deficit right now (according to Hagan), so adding new highways around a stadium rather than fixing the county's broken roads will be a tough sell.

Furthermore, the much-repeated Hagan claim of "no new taxes" would also seem to apply to taxes on rental cars and hotel rooms, which have both been mentioned by stadium proponents as possible new revenue streams for a Rays stadium.

Then last week, Hagan introduced another new tax development to the Trib's Chris O'Donnell: he's brainstorming ways - with the Rays - to make a tax bill pill easier to swallow by incorporating year-round community and cultural assets into ballpark construction.

Do you get the feeling politicians on Florida's West Coast failed to learn the lessons from Miami's baseball boondoggle, or even the Braves' secret, not-so-great-for-taxpayers deal in Cobb Co?

Here's some more of that interview with Mark Rivera, where Hagan claims the Rays are an economic engine worth hundreds of millions of dollars, then says St. Pete has lost hundreds of millions of dollars in opportunity cost by keeping the team (WHAT!?!?!?):

Claiming St. Pete's valuable land is better off without a baseball stadium - but that Tampa's would be better with one - ignores just about every economic principal in the book.  {See this chart for more

But then again, if we didn't ignore economics, we wouldn't be talking about funding new palaces for our teams in the first place!

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Thursday, March 24, 2016

Rays Stadium Deal for Could Mirror Braves' Secret, Not-So-Great, Potentially-Illegal Deal (Pt. 2)

In case you missed the story here last year, Hillsborough Co. Commissioner Ken Hagan, the self-appointed lead negotiator for the county, is a big fan of how the Braves' deal with Cobb Co. went down - quickly, secretly, and with little public scrutiny:
“The Atlanta model was very different,” he said. “That is encouraging to me, that with all the due diligence we’re doing on the front end, once we’re given the opportunity to sit down with the team, it will not take as long as it historically has to determine a location and a fundraising package.”
Well, now that Hagan's had a chance to sit down with the Rays, he confirmed yesterday he will no longer be providing the public - or his fellow commissioners - with updates.  All the while, touting how transparent the process will be?!??
I can appreciate Hagan's desire to keep any potential land acquisitions secret for leverage purposes.  The more people know, the more expensive it could get.

Which is EXACTLY why pro teams like keeping stadium negotiations secret.  The more the public knows, the more it costs them.

You just have to shake your head - if we've learned ANYTHING from the Marlins' stadium financing debacle in Miami, it's that taxpayers lose when we keep conversations about subsidies and funding a secret!

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Don't Cry for Them: Rays Owners "Only" Grew Equity $25M Last Year

Another year, another big (estimated) fortune made by the owners of the Rays, according to Forbes.

The publication estimated the franchise to be worth $650 million in this their annual value estimations, a $25 million increase (4%) increase from a year ago.

That figure ranks the Rays 30th out of 30 MLB teams, another $25 million behind the 29th-ranked Marlins ($675 million) and a bit further behind the top-ranked Yankees ($3.4 billion).

Before you shed a tear in your beer for Stu Sternberg & the minority owners of the Rays...realize they paid about $167 million for the franchise in 2005.  That's a 289% return during a period where the stock market appreciated just 70%.

Oh, and even last year's estimated slow 4% growth is twice what the average homeowner will make in an average year on the purchase of a home.  Forbes estimates the average MLB franchise appreciated by a modest 7% last year.

Just one more reason why any "problem" in Tampa Bay is not the fans' problem, but simply an issue of the league not sharing enough of its profits across its smaller-market teams.

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USF Athletics Budget Balanced on Back of Students

The University of South Florida has had a number of recent highlights on the athletic fields and courts, standing tall against some of the biggest NCAA powerhouses in the country. But it's getting harder for USF to compete, at least financially, according to the latest report on WTSP-TV.

The exhaustive analysis of last year's USF athletics budget reveals growing expenses and shrinking revenues, forcing students and the USF Foundation to balance the budget.  It's a growing problem for schools in the "Group of Five," as they try to keep up with the athletic programs in the "Power Five," but without the robust television and NCAA revenues.

"There are financial challenges at USF," said Yulander Wells, the program's chief financial officer. "(But) there are financial challenges for other schools in the 'Group of Five.'"

USF students get free tickets to all home athletic events -- and thanks to successes in sports such as women's basketball, men's golf, and men's tennis -- USF enjoyed its highest finish in the Learfield Director's Cup standings last year (73rd), which takes into account dozens of varsity sports.

But in the sports that matter most to USF's budget -- men's basketball and football -- years of struggles are taking a toll on the department's revenues.

Other findings from the analysis include:
  • Five years of football struggles decimated ticket sales and contributions revenues;
  • The split of the Big East - and fall from an NCAA power conference - dealt a big blow to USF's television and NCAA revenues;
  • The loosening of NCAA rules on paying athlete cash stipends costs USF about a million dollars a year;
  • Head Coach Willie Taggart's contract extension costs another million dollars a year;
  • A football stadium on-campus is as much of a financial risk as it would be a possible revenue-booster.
Wells is right - a lot of newer athletic programs share the same problems. But the difference between the NCAA's "haves" in the Power Five and the "have-nots" in the Group of Five is growing.

Click here to read or watch the reports on 10News WTSP.

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Monday, March 21, 2016

Sports Business Angles to Rays Cuba Trip You May Not Have Thought Of

Pretty cool opportunity this week for the Rays to show off the MLB and USA brands in Havana, Cuba.  But diplomacy isn't the only thing going on with the Rays:
  1. Team officials met again with Hillsborough and Tampa officials Friday...and apparently decided selling more tickets to corporations would be a good idea.
  2. The Braves continue to meet with officials & developers in Sarasota County regarding a new spring training home, but conveniently - they got all sides to sign confidentiality agreements to control the dissemination of information, thus we don't know how Sarasota will pay for the stadium.  The Blue Jays have a similar confidentiality agreement with the city of Dunedin; the trend isn't very good for taxpayers.
  3. The Rays' Chris Archer didn't hear back from President Obama regarding his Havana dinner offer, so he reached out to First Lady Michelle Obama.  All fun and games, right?  Except for the fact that Archer's marketing value stands to gain a few million dollars from the international exposure a photo op with the Obamas would bring.
  4. Tomorrow's Rays exhibition in Cuba will likely draw a crowd upwards of 55, just go ahead and make your Rays-to-Havana stadium jokes now.
  5. Actually, an exhibition crowd of 55,000 qualifies you for a new MLB franchise now...right Montreal fans???

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