Thursday, May 29, 2014

What We Can Learn About Sports Law From Donald Sterling Episode

It appears Donald Sterling will get his walking papers from fellow NBA owners next Wednesday, and the potential court battles have sports law junkies drooling with anticipation.

That's because the NBA likes to act not as 30 individual businesses, but as a single business. 

Neil deMause explains in further detail:
Let's start with that word "franchise." As we're reminded every time a team owner tries to do something that the league doesn't agree with -- move to a new city without permission, for example, something that Sterling himself once got into hot water with the league for -- owning a sports team is less like running an independent corporation than like running a Dunkin' Donuts: You have the right to operate your local outlet, but it's the umbrella corporation that makes the rules. In this case, the NBA has a constitutional provision that requires team owners to fulfill certain contractual obligations to remain part of the league, which includes not just paying your bills on time (the technicality that MLB got Frank McCourt on) but also maintaining ethical conduct (the clause that MLB used to push Marge Schott out after her "Hitler was good at the beginning, but he just went too far" remarks).
But on the other hand, if you paid attention to the landmark Supreme Court case of American Needle v. NFL, you'd know there's case law to support sports franchises (except in baseball, with its antitrust exemption) actually operating as individual businesses.

It makes great fodder for legal watercoolers and sports talk shows...but I don't think it'll ever materialize that way.

That's because Sterling's wife holds all the cards.

She says she wants to stay married and sell the team.  If Sterling fights the sale, all Mrs. Sterling has to do is demand a divorce and 50% of Sterling's net worth.  Assuming he doesn't have a billion in the bank or in assets he's willing to give up, he'll have no choice but to sell the team and split the proceeds McCourt-style.

Malcolm Glazer Dies at 85

Yesterday's passing of Buccaneers & Manchester United owner Malcolm Glazer gives everyone a chance to talk about his business successes (probably waiting a few days to he & his family have had plenty of struggles too}.

John Romano calls him "the best thing to happen to sports in Tampa Bay," and reminds readers "Glazer was a businessman, not a public servant" {link to Times' site}.

His death comes as little surprise after eight years of illnesses, so it should also be no surprise his family appears financially prepared for it.  The Times also reports the Glazer family plans to keep the team, likely after a series of legal maneuvers transferred the majority of team ownership to Malcolm's children {link to Times' site}.
The Buccaneers pledged that careful succession planning ensures ownership of the team will remain within the Glazer family "for generations to come," though it was unclear who among Malcolm and Linda Glazer's six children — five sons and one daughter — would be controlling what. Three of Glazer's children — Joel, Ed and Bryan — are currently Bucs' co-chairmen.

Typically, the surviving spouse inherits the bulk if not all of an estate to avoid federal taxes imposed when assets are passed on to the next generation. Often, it's not until the death of the remaining spouse that any estate issues surface, said Linda Hanna, a Tampa lawyer and longtime estate tax adviser.

But Hanna adds the caveat: "There is no 'typical' when you get to the range of wealth the Glazers are in. It's all very customized."

With a net worth over $4 billion, the Glazer family ranks among the wealthiest in Florida.
NOTE: $4.2 billion, for those of you counting at home.
Fueled by soaring media broadcast deals, the value of pro sports teams has risen dramatically over the past couple of decades. That has prompted some team owners to craft complex succession plans, allowing them to shield their heirs from hefty estate tax bills that could force them to sell.

"Typically there are trust agreements drafted and tweaked over time that will dictate how this gets passed on," Putrino said. "The key is the work done prior to his death."

Wednesday, May 28, 2014

Don't Believe Every Team Follows the Same Stadium Blueprint? (Pt. 2)

Following up on yesterday's post on how just about every team - even the Red Sox at "beloved" Fenway Park - uses the same blueprint to campaign for stadium subsidies, I wanted to pass along another gem from 1995.

This story, from former USA TODAY columnist Mark Woods, appeared three years before the Rays played their very first game at Tropicana Field:
Vince Naimoli is new to this business of being an owner, but apparently he is a quick learner.

Twenty-five days. 

That's how long it took for the proud buyer of an expansion baseball team in Tampa Bay to turn around and do what owners do best: 
- Ask the taxpayers for more money. 
- Say the stadium isn't good enough. 
- Threaten to move. 

 "I've already been contacted by other parties outside Pinellas County," Naimoli said, adding that "as long as other people fill their obligations, I'll be here." 
Baseball fever ... catch it! 

Actually, this isn't just a baseball thing. It's an owner thing. 

In the last few months, it has been easy to forget about the gall of the bosses. That's because their employees were busy stealing the greed limelight - from NBA rookies asking for $100 million deals to baseball players saying things like "some of us don't even make $1 million a year." 

But this summer we can expect to watch the modern-day version of a broad daylight holdups. (No masks required. Just guys in suits saying, "Hand over all your money or we're moving to Virginia!") 

- Al Davis (OK, it's football, but the principle is the same) is threatening to leave Los Angeles. 
- George Steinbrenner is throwing out the J-word (Jersey), hoping to get money to refurbish Yankee Stadium. 
- Bud Selig is saying that his Milwaukee Brewers must have a $200 million park with a convertible roof and, of course, lots of luxury boxes. 

The list goes on and on. But we expected as much from them. They're veteran owners. 

Naimoli is a rookie. One would have thought it would take a while for him to get up the nerve to swing for new fences. Maybe 1998, after his team actually played a game. 

Twenty-five days. 

In the same week that Naimoli announced that his team officially would be called the "Tampa Bay Devil Rays," he also basically threatened a change in the first name. 

How about them Orlando Devil Rays? 

OK, so Naimoli didn't actually mention Orlando or Virginia or any of the other areas standing there with cash hanging out of their pockets saying, "Please rob us." He didn't have to. Not in this game. Something as vague as "other parties from outside" will do the trick. 

He is upset that elected officials haven't worked out a deal to come up with $20 million in improvements for the five-year-old ThunderDome. A commitment for financing those improvements must be submitted with a final lease to Major League Baseball officials by April 30. 

And guess who he wants to foot the bill. 

Never mind that many of these improvements - restaurants, concession stands, souvenir shops - will put money back in Naimoli's pocket. He figures the people who spent $138 million for the stadium should throw in another $20 million. 

You're thinking, "These guys (Steinbrenner, Selig, Naimoli) are the millionaires, right? Why should fans fork over money to help them make even more? Shouldn't they be the ones paying for these improvements and new stadiums?" 

Silly you. 

The taxpayers are always asked to pay.  

And they always do. 

I's the lure of having a pro sports franchise, of being considered "a good sports town," as if that's the ultimate civic goal. 

Funny thing, though. When Naimoli was trying to convince baseball to come to St. Petersburg, everyone else was making fun of the white dome with the slanted roof. But he kept insisting that it was a first-class facility, that it would make a fine home for major-league baseball.

Now he says that $20 million will "make it sufficient" and will be "enough of an improvement in order to get by." 

Twenty-five days. 

That's all it took.
UPDATE: The good folks behind the Tampa Bay Baseball Market blog add this nugget:

Tuesday, May 27, 2014

Don't Believe Every Team Follows the Same Stadium Blueprint? (Pt. 1)

It's hard for many younger baseball fans to understand, but the previous owners of the Red Sox once treated Fenway Park like the Rays treat the Trop: as an outdated facility in urgent need of replacement.

I've previously written how Red Sox ownership changed the reputation of Fenway through a little TLC and a lot of marketing prowess.

But to see how similar the Red Sox' previous stadium campaign mimicked almost every other MLB stadium campaign of the last 25 years, I dug up an old research paper on Fenway Park I wrote for my freshman year English class (in 1995!).


My intel at the time was pretty much limited to what I read in the Boston Globe and Sports Illustrated, but it also goes to show how MLB teams successfully utilize the media to disseminate their message.
 Sound familiar, Rays fans?

Monday, May 26, 2014

More Thoughts on Silliness of Rays' Spring Training Economic Impact

More research on Charlotte County's economic impact report claiming $21 million of benefit from Rays' spring training games: I have since spoken to the author of the report, as well as USF economist Philip Porter.

I had to first apologize to author Walter Klages out of Tampa for using a few false assumptions in my initial reaction post.  Fortunately, he was about as friendly and as polite as can be.

But I had to ask him about my big problem with the study - that it failed to take into account baseball fans who would have likely visited the Gulf Coast anyway - even if there was no baseball in Port Charlotte.

Klages' response: His study sure didn't take those things into account; it was never designed to do that.

He added that the majority of overnight visitors who went to Rays games while in Charlotte County likely came to the area for the beaches and weather.  And while he suspected baseball was a factor, he saw it "more like dessert on the platter, rather than the (main course)."

Basically, spring training is a nice bonus for visitors who come to Florida each spring, but there's no economist in his/her right mind that would suggest the Rays added $21 million to the Charlotte County economy last year.  Making the assertion even more ludicrous was the failure to take into account how much of the baseball-related spending was cannibalized from other local tourist attractions and businesses.

Meanwhile, Porter will never earn a living writing lucrative economic impact studies; he's actually made a reputable career debunking them.  So when I asked him to review some of the Charlotte County findings, he concluded that the Rays' economic impact was zero (or potentially negative).

Porter suspects the county's economy in recent years grew at the exact same rate as the state's, suggesting spring training had no overall positive impact there.

He also believes baseball had a negative impact since locals and tourists alike are choosing to send their disposable income to an out-of-town business (the Rays), rather than spending it within the county, where it can get spent several more times over.  Porter says this one of the great mistakes in any sports economic impact study.

Finally, since counties use tax dollars to pay for stadiums (tax dollars that could otherwise be used for schools, police, roads, etc), the only fair economic metric to use in comparisons would be tax receipts, not tourist spending.  That's because you cannot pay debt service with ticket sales, memorabilia sales, and restaurant receipts.

So while the estimated $13.8 million in direct spending is all well and good, if Charlotte Co. and the state collect 7% tax on all of that (they likely didn't), that's only $963,000 the Rays are actually generating for the state and county in tax revenue.

At the end of the day, even if business is booming around the Charlotte Sports Park each spring, the Rays are doing much more for the county's reputation and morale than they are for its bottom line.

Friday, May 23, 2014

Vinik Building Hotel - Not Stadium - in Downtown Tampa

My WTSP colleague Dion Lim took a look at Lightning owner Jeff Vinik's latest project: a luxury hotel, next to the Forum, now awaiting city approval. 

Some people will hear that news and think, "he's going to build a stadium next!"  But I don't think so.

I think Vinik has an interest in something greater and more comprehensive.  I think Vinik sees how Downtown Tampa is thriving right now and knows how valuable his developments in the urban core will be.

That's not to say the city couldn't one day build a baseball stadium where the ConAgra plant currently sits downtown; I'm just not convinced the Lightning's owner, who also happens to have a minority interest in the Red Sox, wants anything to do with a competing franchise downtown.

Additionally, if I said, "let's spend hundreds of millions of dollars to build a retail complex downtown that will sit empty nearly 300 nights a year," you'd laugh.  Vinik would too.  Plus, Tampa already has one of those.

Thursday, May 22, 2014

NFL Shenanigans: Super Bowls, Greedy Dolphins, and Cheerleaders

Busy busy week for the NFL; in short:
  1. Minneapolis was awarded the 2018 Super Bowl because...that helps Viking fans feel better about the gaping hole in their stadium financing plans.  Before anyone has a chance to say otherwise: no, Super Bowls are not worth $1 billion.  However, as I've said before, you're not getting another Super Bowl, Florida, until you make more subsidy payments to the NFL.  Its also worth re-reading my short, tongue-in-cheek post about why cold-weather cities host such damn good Super Bowls.
  2. Speaking of handouts to Florida's NFL owners, Miami's Stephen Ross wants to be paid for events hosted at the Dolphins' stadium, which is owned by taxpayers!  That way, he can continue to give hundreds of millions of dollars to the University of Michigan.  So basically, he wants Florida taxpayers to pay for kids to go to school in Michigan. UPDATE: Reader Scott Myers points out while Ross is looking for more tax dollars, Sun Life Stadium is owned by the team.
  3. The U.S. Senate finally found something they can agree on - asking the Washington Redskins to change their name - now if they could just pass a budget...UPDATE: Turns out, it was only Democrats signing the letter.
  4. And, in case you missed it, the Buccaneers are now the latest team to face a federal lawsuit over not paying their cheerleaders enough.

Wednesday, May 21, 2014

Columnist: This Single-A Stadium Deal Just as Bad as All the Others

Columnist Beth Kassab from the Orlando Sentinel writes that $15 million in local, state, and federal tax dollars to move a Florida State League (Single A) team from Brevard Co. to Winter Park is a crappy deal.  An excerpt:
When a wealthy professional sports team owner and a well-heeled private college want to build a baseball stadium, they naturally turned to the best investors they can find — taxpayers.

Who else would be so generous (or is it gullible?) to sink money in a deal for a $33 million stadium without asking for much in return?
"They wanted a lot more," said Winter Park City Manager Randy Knight. "This is where we landed in the long run."

It's hard to imagine what more they could have wanted when you consider that Rollins will own the stadium and share revenues from tickets, concessions and advertising with the Manatees.

Winter Park won't see a penny of that money.

The only thing the city would get out of the deal is ownership of a 480-space parking garage that it can collect revenue from, but only on days when there aren't baseball games.

On days when Rollins or the Manatees play — you guessed it — Rollins and the Manatees get whatever money is collected in parking fees.
Remember the promises about how the Amway Center would revive Church Street and the surrounding area? Four years later and merchants are still waiting. Or already closed their doors.

Sunday, May 18, 2014

Rays Stadium Saga Update: Lots of Talk, Little Movement

Just another week in the Stadium Saga.

First, Peter Gammons asks, "Can baseball succeed in Florida?"
And if (the Rays) are still averaging 19,107 in September, then it may be time to look at Montreal or New Haven, San Antonio or Indianapolis. Or merge with the Marlins and play in Yeehaw Junction, because for the first time in years, the farm system is running dry; they had three first rounders in 2010 and ten of the first 60 picks in 2011 and, to be honest, have very little to show for them.
Of course, Gammons has never been a fan of Tampa Bay and always thought it finished serving its purpose in the 1990s.

Then, a column on Jim Cramer's The Street site identifies the "5 Biggest TV Markets Without Major League Baseball Teams."  And while the piece is designed to sensationalize the prospects of relocation, the first paragraph actually encapsulates the situation well:
Major League Baseball took in $8 billion in revenue last season, but there's always more blood to squeeze from the stone. Look in Tampa Bay, for instance. Major League Baseball teams used Tampa/St. Petersburg, Fla., as a threat after the cities built a domed ballpark there in 1996. The Chicago White Sox, San Francisco Giants and Seattle Mariners all used the facility as leverage for their own new stadiums until 1995, when league owners finally added an expansion franchise in Tampa and cashed out.
Columnist Jason Notte also seems sympathetic to the plight of the medium market, going on to identify how Indianapolis, Portland, and Orlando would likely be no better hosts to an MLB team as Tampa Bay. 

But he's also bullish on Charlotte, calling it a potential "baseball powerhouse."  That was enough to get a few readers worked up on Twitter.  Notte responded:
Charlotte is certainly not without its own issues, not to mention its already got a bunch of teams and the Rays are stuck in a seemingly-ironclad contract.

But the nice end to this chapter of the Stadium Saga ends with Notte delivering the understatement of the week!

Saturday, May 17, 2014

Sometimes I Deserve to be Spanked

After posting, "Rays Spring Training Economic Impact Study is Embarrassing," I received a response from the Charlotte Harbor Visitor & Convention Bureau (VCB), rebutting and (fairly) spanking me on several points.  The chief among them was that I used incorrect tax data to show March revenues hadn't spiked in the county.  I was wrong.

Turns out, I was citing tax dollars reported by Charlotte Co. in March, not collected.  Because there's a lag, my data didn't reflect the typical spring break boom, so I apologize.  In actuality, Charlotte County enjoys a big boost in tourism every March (even though it's truly impossible to know how much of it is baseball-related).

The VCB also countered other points.  Including one that claims teams that train close to their regular-season homes (i.e. Rays) don't draw as many out-of-towners as teams like the Red Sox or Twins.

Their response:
Fans of both the home team and the visiting teams attend spring training games and were captured in the study’s findings. For example, on the day the Rays played the Toronto Blue Jays, the study captured a number of Blue Jays fans, including some who had traveled from Canada.
True, but if fans were really making a trip to see their favorite team play one game as the visitors in  Port Charlotte, its unlikely they'd stay the five nights the VCB suggested in its press release.

On my claim that Rays fans from "Hillsborough, Pinellas, Manatee, Sarasota, and Lee counties...were unlikely to spend an overnight," the VCB wrote:
Some 22.7% of the Rays Spring Training game attendees interviewed told us that they were spending the night in Charlotte County. The remainder were day-trippers to the destination and only their spending in Charlotte County for the day was included in the study.
On my conclusion that their economic impact numbers seemed inflated:
Mr. Pransky is characterizing total economic impact, which includes visitors’ direct, indirect, and induced impacts as direct visitor spending. Game attendees who stayed in Lee County or Sarasota County were treated as day-trippers and only their spending in Charlotte was included in the estimation of economic impact. Day-trippers reported average spending in Charlotte of $60 per person. This includes attendees’ spending at the game, as well as their related spending in area restaurants and retail facilities. Overnight Charlotte visitors average spending was reported to be $672 per person. This is the equivalent of $112 per person, per day of spending for the game, food, lodging, other entertainment, retail purchases, etc. The combined direct spending of day-trippers and overnight visitors for the 14 games is estimated to be $13,756,400, or an average of $982,600 per game.
That means Charlotte Co.'s economic impact of $21 million is based on $13.8M of direct spending and $7.2M in "trickle-down" spending based on 1,275 overnight fans per game.

It's not clear how much the study accounts for dollars that immediately leave the county, whether its to out-of-town hotel owners, the out-of-town Rays' owners, or national food chains.

But the even bigger question I have is why does it not (apparently) take into account the fact that some of the overnighters who attended Rays games may have visited Charlotte Co. anyway, even if the Rays weren't there?

The study also appears to neglect the fact that many of the folks who traditionally vacation in Charlotte Co. may now choose to go to a Rays game on a weekday afternoon instead of the mall, the movies, or the golf course.

So while Rays contribute to the hyper-local economy around the ballpark, much of the spending is not new spending, but instead cannibalized spending from elsewhere in the county.  I have reached out to the author of the study regarding these questions on Friday and will post an update as soon as I have one.
UPDATE: I've now since posted more thoughts on the study here after speaking with its author.

The VCB, of course, called out my mistake of using the wrong tax data.  They go on to provide some of their own data from 2013:
Charlotte County’s local option sales tax collection rate is 1%. The {2013} data documents a $790,233 increase in local option sales taxes paid in March 2013 as compared to February 2013. This increase represents $79,023,300 additional taxable transactions in the Charlotte economy in March than February.
If the study is accurate, the Rays are responsible for approx. 1/4 of the county's total tourism success in March.  However, March has always been the best month of the year for Gulf Coast counties like Charlotte Co., even when they don't have spring training.  Looking back at historical numbers, Charlotte Co. enjoyed a March boost in the years prior to the Rays' arrival in 2009 too.

I will quickly admit, I make mistakes.  And I'll own up to them when I do.  My tax stat gaffe was foolish, and the VCB makes some good points in defense of its study. 

There's little question the Rays contribute to Charlotte County's bottom line each spring.  And, because the state paid the majority of the stadium's 2009 renovations, the county got a pretty good deal on landing the Rays.

But at the end of the day, this new information does little to sway my skepticism of economic impact studies paid by agencies or teams.  When they're motivated to show big tourism impact, it's not very difficult to find stats to back it up.

READ: Official response from Charlotte Co. Visitors & Convention Bureau:
Page 1
Page 2

UPDATE: I've now since posted more thoughts on the study here after speaking with its author.

Thursday, May 15, 2014

Winter Park Considers Spending Millions to Lure Brewers Single-A Team

Will someone please tell Winter Park officials to call their friends over in Ocala?

Just saw this hair-brained scheme: $30 million in public money to move the Single-A Brevard Co. Manatees (Brewers) to Winter Park.

From Central Florida 13:
The Community Redevelopment Agency in Winter Park approved the item on Monday, which would convert Alfond Stadium at Rollins College for minor league baseball use. The team that would come to town would be the Brevard County Manatees, the Single-A affiliate of the Milwaukee Brewers.
But, the deal is more than just about the stadium. The deal would include more parking -- including a parking garage for year-round use -- along with hundreds of part-time and full-time jobs.
"There's also the question of, 'What are we giving up?' You know, if we spend this money on this project, that means we're not spending it on something else," (UCF economist Sean) Snaith said. "So basically, what's the opportunity cost of going forward?"

Winter Park would contribute $6 million and Rollins College would supply the land for the stadium, valued at $12 million and a cash amount of $4 million.
Apparently the team will put up $2 million, but that still doesn't add up to $30 million, so not sure on the specific math of it all.  But the last time a city was considering tens of millions of dollars for a Single-A stadium in Florida without getting any spring training teams with it, I basically laughed my way all the way to the empty stadium.

Wow: Pirates Pay for (Almost) All of Spring Training Upgrades Themselves

The Bradenton Herald reports the Pittsburgh Pirates will pay for the overwhelming majority of a new $6.5 million improvement to their spring training home:
While other cities tend to get demands for Major League Baseball spring training facility improvements from the teams -- sometimes accompanied by threats of leaving the city -- the Pittsburgh Pirates continue to highlight their commitment to Bradenton with plans to invest another $6.5 million in McKechnie Field and Pirate City.

The Pirates plan calls for replacing the existing clubhouse and expanding the agility field at McKechnie Field, and building a new strength facility at Pirate City.

The city would invest $275,000 into the project from the public works budget.
Callahan praised the team's commitment to the community and charitable organizations, as well as working with the city's master plan vision to transform the area around McKechnie Field into an entertainment district.

"The Pirates are continuing to invest in Bradenton because of our long-standing relationship with the community and the vital, year-round training and rehabilitation assets that have been developed by our partnership with the city," Pirates President Frank Coonelly said in a news release. "Our Major League and Minor League players deserve first-class facilities and the new home clubhouse at McKechnie Field and performance center at Pirate City will be among the best in the industry."
The article mentions that the renovations will require an expansion into the city's solid waste yard.  However, it doesn't seem likely to impact the facility, or mean a land handout to the team.

So hopefully, its a win-win for all parties...and a lesson for other cities that feel they have to dip into reserves to satisfy an MLB team's demands.

Wednesday, May 14, 2014

Rays Spring Training Economic Impact Study is Embarrassing

UPDATE: I have posted two corrections below and added an additional post on the topic.

Remember my mantra that you can make an economic impact report say anything? It appears the Charlotte Harbor Visitor & Convention Bureau has.

The agency paid Tampa-based Research Data Services, Inc. to study the economic impact of Tampa Bay Rays' spring training on Charlotte County, and it came up with $21 million this year. This was my first thought:
Now, spring training can be a big draw - just ask Lee County, which draws thousands of visitors from Boston and Minnesota each spring. 

However, there's no doubt the effect is diminished when your team, the Rays, plays its regular-season games just an hour away.  The Charlotte Co. study painted a rosy picture of how 61% came from out of the county and 14% came from out of state.
Corrrection: Charlotte Co. responded and said 19.5% of visitors came from out-of-state.

You can't really count the local residents in the revenue-generating category since they'd presumably spend their money on entertainment whether the Rays were there or not.  In fact, there's a good chance more of the money they'd instead spend at beach shops, restaurants, or a movie would stay locally than if they'd spent it at a Rays game.

So even if we pretend none of the visitors who went to Rays games may have visited Charlotte Co. anyway, that's still $21 million in economic impact from roughly 48,000 tourists.  That's $438 in economy generated for Charlotte Co., per tourist, per game attended.

Oh, and 68% of visitors to Charlotte Co. were from other Florida counties, including Hillsborough, Pinellas, Manatee, Sarasota, and Lee counties, where they were unlikely to spend an overnight.  So even if those folks bought tickets, souvenirs, lunch, dinner, and gas in Charlotte Co., you're now talking thousands of dollars in economic impact per fan who chose to stay overnight in the area because of Rays spring training.

And because the study found "the typical overnight visitor party had a median party size of 2 people and spent on average five nights in the area," it suggests couples from another part of the state or country will visit Port Charlotte for five days because of the Rays...choose not to stay in nearby Sarasota or Ft. Myers...and spend thousands of dollars in Charlotte Co. for every game they attend

I don't know if you've been to Punta Gorda or Port Charlotte lately, but hotel rooms aren't terribly expensive.  It would be mighty hard to spend several thousands of dollars on a vacation there.

Of course, economists use multipliers when calculating these things to account for local workers re-spending their earned income, but this study is a joke. 

Want more proof?  Here are Charlotte Co.'s local option sales tax collections for Spring 2014 - just look at the March spring training jump!:
  • Jan 2014 - $1.91 million
  • Feb 2014 - $1.74 million
  • Mar 2014 - $1.87 million
Corrrection: Tax data cited was revenue reported, not revenue received. Because there's a lag in reporting, March data was not actually available yet.

Spring training is an economic driver in Florida, but we'll probably never be able to trust a study done by a local tourism board.

Friday, May 9, 2014

Tampa Bay Rowdies Eyeing New Stadium, Subsidies

The Tampa Bay Rays aren't the only local team with stadium demands.

Tampa Bay Rowdies owner Bill Edwards confirmed Friday he'd like to see a new, 18,000-20,000-seat stadium on St. Petersburg's waterfront, although his immediate priority is getting the team's current home, Al Lang Stadium, up to league standards.

As detailed last week in a Shadow of the Stadium post, Edwards started putting the wheels in motion in March for a new stadium by successfully lobbying the state legislature to include the minor-league North American Soccer League (NASL) in groups eligible for state stadium subsidies. Previously, only the NBA, NHL, NFL, and MLB were eligible for the $2 million annual stadium subsidies.

But on Friday, Edwards acknowledged the state subsidies - which will now be approved by the governor's Department of Economic Opportunity, rather than the legislature - were on the table for a potential new St. Petersburg soccer stadium.

"I'd love to see them - see us - find a way to build a stadium on the waterfront that holds 18-to-20-thousand people," Edwards said of a possible Al Lang replacement.

It wasn't clear if the slip of the tongue on "us" was a reference to St. Petersburg, although he indicated a preference for publicly-owned (and financed) venues.

Edwards says the team cannot play another season at Al Lang without leveling the pitch and re-sodding. He says he'll put up the $123,000 needed for the work if St. Petersburg will end its 67-year history of playing baseball there.

"We've got probably the worst field in the country as far as the league is concerned," he said, attributing the bumpy pitch and dead grass to baseball.

Edwards added that leaks and mold plague the clubhouse, while more than 900 seats are not usable.

If St. Petersburg doesn't fix the major problems at Al Lang, Edwards said he may take the team to Tampa as soon as this fall, although he didn't have a specific venue in-mind.

"I'm not asking to move, I'm fighting to stay," Edwards said of St. Petersburg.

The mere mention of "Tampa" is likely to trigger an emotional response from a region that's played tug-of-war for years over institutions like the Buccaneers, Rays, and international airport.

But Edwards sees St. Petersburg as his long-term home and would like to get a new stadium built on the current site of Al Lang. And he thinks he can get it done for a tenth of the cost of a new baseball stadium.

"I'm not one of those guys that thinks you have to spend $200 million on a stadium," Edwards said. "I think somewhere between $30 and $60 million would build you a tremendously beautiful stadium."

Edwards believes the team could qualify for state tax dollars after the passage of a new stadium subsidy bill, but he wouldn't speculate as to whether city or county tax dollars would come into play too. The possibility could seemingly put the Rowdies at-odds with the Tampa Bay Rays, who are also presumed to be seeking local tax revenues for a new stadium, albiet in Tampa, preferably.

Edwards also wouldn't speculate whether entering Major League Soccer (MLS), the United State's top soccer league, was in his plans, saying he liked the direction the NASL was going.

Thursday, May 8, 2014

Rays Attendance Watch: May 8

They're not the worst in the league, but the Rays' 18,790 attendance average through 16 home games is nothing to...well, write home about.  It's the third-worst mark in the majors, besting only the White Sox and Indians.

On the bright side of things, the Rays' attendance is a little higher than it was at this point last year despite a significantly smaller stadium capacity.  And, it bucks the small trend of MLB attendance sagging compared to last year.

Over on Tampa Bay Baseball Market, Mike Lortz attempts to take a sabermetrics look at the team's attendance and concludes April was a disappointing month at the box office for the Rays, but the return of Jeremy Hellickson and Alex Cobb could help turn things around both at the gate and on the field.

Happy Anniversary! Shadow of the Stadium Turns Five

Five years ago today, the price of a stamp was only 44 cents; a gallon of gas was $2.05; and the value of the Rays was only $320 million.  Those prices are now, respectively: 49 cents; $3.71; and $485 million (or $530 million, according to Bloomberg).

A lot's happened in the last five years, including the birth - and growth - of Shadow of the Stadium. And today, on its fifth birthday, I thank everyone for following along with what aims to provide some big-picture perspective on where, when, how, and if a new Rays stadium should be built in Tampa Bay.

It's hard to keep track of more than 900 posts, but below are some of this blog's most buzz-generating posts in its first five years:

Wednesday, May 7, 2014

Times Still Hates Corporate Welfare (Except When it Comes to the Rays)

Remember this post, "Times Hates Corporate Welfare; Except for Maybe Pro Sports Teams?"

Well, this morning, the editorial board penned another anti-subsidy piece slamming "corporate welfare" {link to Times' site}:
That is not the wisest use of millions in tax breaks, and better regional coordination in business recruitment would shift the focus toward creating new jobs instead of moving the existing ones around.
It's curious why the paper doesn't feel that way about relocating a Rays stadium from St. Petersburg to Tampa?  Or does it feel the threat of relocation is so real and imminent that spending hundreds of millions of public dollars on a retail business makes sense, contrary to so many of its other editorials?

"Florida Man Makes Numbers Up, Nobody Questions Him"

Line of the day comes from Field of Scheme's Neil deMause:
So let me get this straight: You sent your staff to calculate how much it would cost to refit the Citrus Bowl for soccer, and they just said “a lot” and you left it at that? I know what I want my next job to be: Florida government economist. I bet I wouldn’t even have to crack open my copy of Excel.
This,  on the heels of yesterday's Shadow of the Stadium post that no one - absolutely no one - should be shocked Orlando is having buyer's remorse before even opening its new MLS stadium.

Add this to the long list of accomplishments of "Florida Man."

A Pro League Deceives Municipality; Municipality Acts Shocked

From the Associated Press:
Orlando's Major League Soccer team will eventually play its games in a new downtown, soccer-specific stadium, but several Orange County commissioners said Tuesday they felt misled by the MLS after Atlanta was awarded a team that will play in a hybrid football-soccer stadium.

In October, the county commission approved $20 million in tourism taxes to help fund the new $80 million facility that met MLS requirements, which called for 18,000-25,000 seats, a grass playing surface, covered stands and an urban location.

County Commissioner Ted Edwards, who voted against the taxes, said the general understanding among the commission at that time was that Orlando's Florida Citrus Bowl, which had been Orlando City's home since 2011 in the third-tier USL Pro League, was too large and not constructed for soccer.     
"From what I'm hearing, most of the commissioners were duped. They weren't provided all of the information," he said.

Several other commissioners also said they thought playing in the Citrus Bowl, which is undergoing a $200 million renovation, was a nonstarter. 
Joke's on you, Orange County - but even more so on taxpayers who will foot the bill to hand out cash to another wealthy sports league. Approx. $20 million from the county, $20 million from the city, $2 million from neighboring Seminole County, and maybe $20-30 million more from the state,

Read more here:

Tuesday, May 6, 2014

Despite Aquarium Priorities, Pinellas Remains New Rays Stadium Frontrunner

The Tampa Tribune's Chris O'Donnell has the latest installment of the "Rays better ask Pinellas County for money soon if they want it" story. We first heard this story back in 2012, but here are excerpts of the latest chapter:
Pinellas County commissioners on Tuesday vote on amendments to their tourism development plan that would allow bed taxes to be used for construction of a new aquarium, a move that could open the way for the taxes to go toward Clearwater Marine Aquarium’s $160 million expansion plan.
Further hindering the Rays is that while they are tied up in negotiations, projects competing for a share of the taxes are moving ahead. State lawmakers awarded $2 million for the aquarium project from the state’s proposed $77 billion budget. The $1.2 million lawmakers allocated for a proposed Olympic BMX facility in Oldsmar, however, could mean the city will not apply for bed taxes if the item survives Gov. Rick Scott’s veto pen.
(Bed) taxes also are viewed as a crucial part of publicly funding a sports stadiums, not least because the tax is levied on tourists and not residents, making it an easier sell for local politicians concerned about re-election.
O'Donnell added that beach renourishment may be an increasingly-greater priority for the county as questions arise about cuts to federal funding. A Shadow of the Stadium post back in March foreshadowed the impending conflict between stadium subsidies and beach dollars.

But the silver lining for Pinellas County is it can still add another penny to its tourist tax since its a "high-impact" tourism county. Hillsborough County is not. And that penny could be bonded out to about $100 million for construction/infrastructure purposes. Which, on top of existing stadium revenue streams, is why Pinellas remains the favorite to (one day) build the Rays a replacement home.

So if the Rays ever getting around to asking Pinellas County for money, there is still hope...unless, of course, MLB fails to address recently-passed legislation that punishes it for its current Cuban policy...or Pinellas County decides to throw its available money at a new stadium for the Rowdies...

Monday, May 5, 2014

Wait, You Can Build a Stadium without Public Assistance?

From our friends at NewBallpark in the other Bay Area:
Casino giant MGM/Mirage and arena giant AEG broke ground today on a $375 million arena in Las Vegas. The new venue, which is being designed by Populous, will have a maximum capacity of 20,000 and is expected to open in spring of 2016.
There’s no shortage of large venues in Vegas, with the Grand Garden Arena at 16,800 seats. The Mandalay Bay Events Center, also an MGM property, has a capacity of 12,000. The largest venue in the area has long been UNLV’s Thomas & Mack Center, which holds 19,500 for concerts. Orleans Arena’s capacity is 9,500. Concert halls at The Palms and the Hard Rock support 4,000 or so. Vegas mayor Carolyn Goodman supports an arena in downtown Las Vegas, but with the new arena coming on line there’s more than enough capacity. Both that project and the UNLV Now! arena/stadium combo require a significant amount of public funding, and could lose support over time. Thomas & Mack is expected to undergo $60 million in renovations to support the National Finals Rodeo, a longtime tenant that signed a 10-year extension to stay in the city (not necessarily at the arena).
The post makes a phenomenal point that should not be lost at the end:
At $375 million for construction cost, this arena will come in much lower than the planned arenas in Sacramento and San Francisco. It goes to show how budget-conscious companies can be when they’re building their own venues.
Which begs the question, if the Rays had to pay for their own stadium, how much would the estimated $550 million price tag drop?

Saturday, May 3, 2014

Legislature Approves Pro Sports Subsidies for Teams/Leagues that Clearly Don't Need Them

On the final day of Florida's legislative session, the House of Representatives gave the final seal of approval to the state's newest stadium handout law (the governor said he would sign the bill).

Aaron Deslatte from the Orlando Sentinel reports while the law will require recipients to "compete" for the subsidies, it will also make even more teams and leagues eligible (see related post on ridiculous inclusion of minor-league soccer).
It would also allow the MLS clubs and Daytona to split $7 million sooner -- in the 2014-15 budget year -- because their projects are already underway sooner. Instead of the full Legislature, only a budget panel would have to approve them.

Some House members objected to that provision Friday, arguing Senate leaders were effectively committing the $7 million this year to the soccer and speedway projects.

"It's no longer a process; it's a handout," said Rep. Carlos Trujillo, R-Miami.
These handouts to leagues and teams that clearly cannot show a legit need - and have no interest in even trying - are monies that could have, of course, gone to other state needs like...I don't know...maybe schools or universities?

Which is why the Koch Brothers-backed, conservative activist group Americans for Prosperity condemned the conservative, Republican-dominated legislature:
Abbie MacIver, AFP Florida Director of Policy, issued a statement in response to today’s passage of H.B. 7095, which will provide millions of dollars to professional sports teams for stadium construction and renovation.

“I’m hugely disappointed in today’s passage of HB 7095,” MacIver said. “Today the Florida Legislature gave away millions of taxpayer’s dollars to sports franchise owners rather than returning it to Floridians that could really use the money.

“Rest assured that AFP will educate the constituents of these elected officials about this vote.”
“Twenty-seven Representatives and four Senators stood for economic freedom and fiscal responsibility by voting against the bill,” she said. “The vote will be included on AFP-FL’s 2014 Economic Freedom Scorecard.”

Friday, May 2, 2014

Rays Get On-Board to Support "Greenlight Pinellas" Transit Referendum

Just as they did in 2010, the Tampa Bay Rays are supporting a local transit referendum.   It's not clear how much - if any - financial support the team will lend to Greenlight Pinellas, but SaintPetersblog provides initial details:
The Tampa Bay Rays, BayCare Health System, Raymond James Financial, St. Petersburg College, and the Pinellas Realtor Association all are signing on to increasingly controversial plan to increase taxes in order to pay for expanded mass transit options in Pinellas.

During a press conference at St. Anthony’s Hospital, speakers representing these five organizations spoke about their support for Greenlight Pinellas.

  Tony Marrero reports {link to Times' site} the Rays pledged $25,000 to the campaign, citing a "first step toward a regionwide transit system (that) will benefit Rays fans no matter where we are in the region in the future. More importantly, that transit system will help Tampa Bay grow, and as Tampa Bay grows, so will the Rays."

Could Cronyism Lead to the Rowdies Entering MLS?

It's do-or-die day today in the Capitol for a stadium subsidy bill that could make it easier for pro teams and leagues to land tax dollars, as well as potentially make it easier for them to break their leases.

But it won't just be baseball and football teams keeping a close eye on what happens enormous amount of soccer investors will too.  Because while the legislature was debating the controversial inclusion of Major League Soccer teams into the bill, lawmakers somehow also slipped in language to include the minor-league North American Soccer League too.

Yes, the NASL, which averages little more than 4,000 fans per game in Florida (teams in St. Pete and Ft. Lauderdale) will now be eligible to apply for state funds originally designed to support economic drivers like spring training.

No offense to great fans and a great organization, but the Tampa Bay Rowdies are not drawing fans in from out-of-state, and they're not driving the region's economy.

You may ask what businessman could be so influential to get the NASL on the same playing field as MLB, NFL, NHL, NBA, and NASCAR?  It's Rowdies' owner Bill Edwards, one of the biggest businessmen in the 'Burg and more influential figures in the state.

We know he wants state money...could it be for a new stadium and possible push into the MLS?

It would certainly helps explain this February Twitter exchange between Edwards' ally Peter Schorsch and Punditfact editor Aaron Sharockman:
While any Rowdies subsidies would still need to submit to the state's yet-to-be-seen economic impact qualifications, Edwards knows it's not hard to get an economic study to say anything you want.  There may also not be much competition for stadium subsidies from the Tampa Bay Rays if the bill passes in its current state, which would exclude MLB teams until the league changes its policy on Cuban players.