Tuesday, May 24, 2016

The 2019, 2020, and 2021 Super Bowls Go To...

UPDATE: Super Bowl LIII (2019) goes to Atlanta, with Super Bowl LIV (2020) going to Miami, and Super Bowl V (2021) going to Los Angeles. Tampa appears next in-line for the 2022 game, but that depends on a 2018 or 2019 owners vote...and how many other teams may build new digs by then.

Three years ago, this blog pointed out that Florida cities were denied all bids for Super Bowls because not enough tax dollars went to stadium projects here to "earn" the "honor."

Since then, Shadow of the Stadium has tracked all the tax dollars that (needlessly) have continued to flow to the NFL, and the ensuing likelihood of the 2019 and 2020 Super Bowls going to Atlanta and Miami, respectively (even though the Dolphins suggested they wouldn't be able to land Super Bowls without the state money they never got). And, with the addition of a new billion-dollar LA stadium, Tampa's "turn" could get delayed another year.

But given the mixed economic analyses surrounding Super Bowls, losing out on the game may not be such a big "loss" for Tampa Bay.

FLASHBACK: I agree with some of the claims from the good folks behind Tampa's bid, since Super Bowls do net "heads in beds" and lure tourists to town for a week in February. But it's also not all that hard to lure people to Tampa in February; so does the game really bring hundreds of millions of dollars to town? Of course not.

Never trust an economic impact report that makes a hundred-million dollar claim from a week-long event. And never trust elected officials who make crazy claims about those studies, either.

FLASHBACK: ALSO READ: New York Hosts a Much Better Super Bowl Than Tampa*

Super Bowls are publicly-supported events where the amount of tax dollars paying for them are anything but public. We learned in 2014 that the NFL's secret demands range from significant to outrageous, and cities like Tampa, who are perceived to be underdogs in the 2019/2020 bidding, are more likely to make even more ludicrous concessions in their attempts to land a game.

I'll update this post later on today when we find out which cities "win" the bids.

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Thursday, May 19, 2016

That's a Lot of Stadium Campaigning

How long have I been covering new stadium campaigns?

This long.

Update: the Red Sox didn't leave Boston, as they threatened.  And an aging Fenway didn't devastate the franchise, also as former owners threatened.

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A Few Tweets of Caution About Counting on EB-5 Financing

And finally, a good one from last year:

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Tuesday, May 17, 2016

Bigger Drain on Tax Dollars: Pro Sports or Walmart?

The Tampa Bay Times editorial board penned a piece this weekend condemning a corporation that was relying heavily on public resources and dollars to preserve robust private profits.

Of course, it wasn't an editorial about the Tampa Bay Rays or the four big pro sports leagues, which rely on more than a billion tax dollars each year in the U.S.; instead, it was an editorial about Walmart's reliance on police resources that could be used better elsewhere.

Strange, though, how many similarities we could draw between the retail giant's reliance on public resources...and those relied on by pro sports:

Walmart: A retail business that makes questionable claims about jobs & economic impact
MLB: A retail business that makes questionable claims about jobs & economic impact

Walmart: Most of the jobs created are part-time jobs for low wages
MLB: Most of the jobs created are part-time jobs for low wages

Walmart: Drains public resources that could arguably be spent better elsewhere
MLB: Drains public funds that could arguably be spent better elsewhere

The Times wrote "the evidence is overwhelming that Walmart is exploiting the use of the public's human and financial capital to hold down its costs" and that local governments should stand up to the 800-lb. guerilla.

"Local governments...have to keep the public safe...but they also have a responsibility to prudently spend public money and appropriately manage limited resources," the Times wrote.

Why don't we seen many editorials calling on local politicians to do the same on possible stadium spending?

Walmart: Uses tax loopholes to reduce its "fair share" of contributions to public coffers
MLB: Uses tax loopholes to reduce its "fair share" of contributions to public coffers

Walmart: Share profits w/the public that helps subsidize them? Ha!
MLB: Share profits w/the public that helps subsidize them? Ha!

The Times editorial board pretty regularly criticizes corporate welfare.  And while there are certainly some cases to be made for smart subsidies...it really is a head-scratcher why tougher questions aren't more frequently asked about the hundreds of millions of Tampa Bay tax dollars expected to go toward a new retail complex for the Rays to play.

ALSO READ: How the Rays are like Bass Pro Shops
ALSO READ: How the Rays are like BP
ALSO READ: How the Rays are like our national debt

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Saturday, May 14, 2016

Eleven Years Ago, Stu Sternberg Made a Promise

A couple weeks ago, Rays owner Stu Sternberg issued a "non-threat threat" that basically said the Rays may be outta here if local corporations don't start buying up tickets.  He suggested that only when corporations meet the challenge, can the Rays move forward with finding a new stadium solution. This makes total sense from a business standpoint.

It was a similar tone Sternberg struck back in 2005, when he purchased majority ownership of the franchise and put unknown "Harvard Business School graduate Brian Auld" in charge of duct-taping together the Trop:
"If we can't make it work at Tropicana Field, I don't believe - and I could be proven wrong - but I don't believe it automatically works because of some panacea of some other ballpark."
But the preceding paragraph in that same 2005 article seems at-odds with everything Sternberg has done in the 11 years since.  He makes this promise to Devil Rays fans:
"You will never - and I will say it now and hopefully I can say it and you'll follow up - you will not hear the words, "We need to have a new stadium,' " Sternberg told a group of Times editors. "We might like to have a new stadium. We can work with the authorities to have a new stadium and work with businesses to have a new stadium, but it won't be from a sense of "need.'
Stu, I'm following up, as you requested.  I should have done this in 2010, when you told the region you "need to be in a location that's convenient (and) attractive" and "the discussion needs to begin soon" if the team is going to stay in Tampa Bay long-term.

To your credit, you didn't stand behind that 5.5-year-old non-threat threat any more than you stood behind your 2014 non-threat threats that the franchise was "doomed to leave" without a new ballpark soon, or that you'd walk away from the negotiation table after St. Pete's council voted down one of your proposals.

Yet, your flip-flop is pretty evident, even if the "need" for a new stadium isn't the team's only "need."  READ HERE - 2011 post - "Is new Rays stadium a 'need' or 'want?'"

So what prompted the broken promise?  It would seem, Stu miscalculated his investment.

"We have learned (attendance) is not just about winning," Sternberg admitted in 2010, five years after assuming control of the Rays.

But the miscalculation should not be Tampa Bay's cross to bear.
If SeaWorld built a new orca tank the week before Blackfish came out...then claimed a business miscalculation in smaller-than-expected profits...how do you think taxpayers would feel about requests to build them a new state-of-the-art orca tank?

Or if Pitbull had a reputation-damaging scandal that threatened his "Mr. 305" brand...how would taxpayers feel about a request to subsidize his next tour so that he could continue to rain economic impact on Florida?

Similarly, the Rays/MLB miscalculations - and changing business models - aren't the fans' fault.

Furthermore, isn't the "we aren't making enough profit" line a tough sell around here, in a time where Pinellas County is struggling to get its schools in-order and Hillsborough County can't properly fund transportation?  All the while, as MLB closes in on $10 billion a year in revenue?

Sternberg did say when he bought the team the ballpark may need replacing before 2027...but he was not officially asking for public help; just a "partnership" with local governmental and business interests:
"I would expect it to be cooperative, and I think cooperative always works best. Now is it 90-10, or 10-90, or 50-50? You have to look at it and get a sense of where the benefit is coming and where it's going," he said. "We are not going to build a stadium at whatever point in time that comes to line our pockets. If it's necessary to do, and it will be necessary to do at some period of time, it will be done because it works for the community, it works for the area, it makes a lot of business sense and it makes a lot of sense for something that will create a lasting showpiece. "Even if we pay for the whole thing, it will be cooperative. But I don't anticipate us having the ability to ever pay for an entire stadium."
But just as Sternberg didn't forecast attendance struggles like the Rays have experienced, he probably also didn't forecast the MLB revenue boom, largely on the back of its digital properties.  So yes, MLB & the Rays do have the ability to pay for their own stadium.  They just won't.

And they won't officially ask for public money, either.  Because asking for public cash is so 1990s. Nowadays, it's much more en vogue to rely on the non-threat threat of possible relocation!

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Sunday, May 8, 2016

Shadow of the Stadium's 7th Anniversary

May 8 is that special day each year I sit down to eat cake (by myself) because Shadow of the Stadium has survived another 12 months!
It's been another consequential year...unless it hasn't. We're still pretty much at eight years without real developments in the Rays' Stadium Saga...but boy has it been fun chronicling it!

As always, I remind you that the blog's goal is to provide some big-picture perspective on where, when, how, and if a new Rays stadium should be built in Tampa Bay (along with other local sports business news).

Just in recent months alone, this blog has consolidated countless articles about possible Montreal relocation, debunked a ridiculous economic impact claim from the Yankees, and documented Ken Hagan's double-talk on taxes.  But we shall not forget the following stories, among the blog's most-read through 1,300+ posts since May 8, 2009:

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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.

UPDATE: Here's audio of Commissioner Hagan glossing right over the fact that tourist taxes can go toward any capital project that draws tourists. Then throws out total B.S. number on Steinbrenner Field economic impact.

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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 stadium...so 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 invest...in 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"; GoBankingRates.com 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, Vocative.com 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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