Saturday, January 31, 2015

Super Bowl Economy Gone Wrong

To balance all the headlines you'll see this weekend about the great economic impact the Super Bowl is bringing to Glendale, Arizona, make sure to read Neil deMause's latest for, "The Super Bowl Windfall Myth."  Full disclosure - I was interviewed for the article.  But that has nothing to do with the fact that I think he does a great job!
Never mind that numerous economists have looked in vain for any evidence that Super Bowl host cities strike it rich. In one study, Holy Cross economist Victor Matheson (12/09) calculated that through 2001, the average increase in economic activity during each Super Bowl was about $30 million...And that’s economic activity, the total amount of money changing hands within city limits — not the amount that comes back to city coffers. When University of Maryland economist Dennis Coates (International Journal of Sport Finance, 2006) studied the 2004 Super Bowl, he found that added sales tax revenues in host Houston totaled about $5 million — well under the $30 million to $70 million that cities spend on increased police presence and other services for the game (USA Today, 1/25/15).
In addition, deMause explains the "Substitution Effect" means much of the economic activity is merely cannibalized from other economic sectors.

I was merely one of many journalists quoted in the article, but I suspect we all kind of said kind of the same thing - decimated newsrooms and the proliferation of new media have saturated the interwebs.  For every one good sports economy story out there, you will see 10 stories echoing whatever a team/league puts out in press release form.
On the occasions where journalists have taken the time to dig deeper, some excellent reporting has resulted. The dubious benefits of hosting the Olympics have gotten widespread coverage (, 7/30/12; New York Times, 8/5/14). NPR’s All Things Considered (2/3/14) investigated a British government report that projected billions of dollars in profits from the 2012 London Summer Games and found that the only economist who reviewed the study before publication — University of Michigan professor Stefan Szymanski — termed it “tantamount to a whitewash.”
Of course, hitting the Web to present a he-said-she-said report still is no substitute for real investigative journalism that attempts to determine whose claims are correct. “Our role as journalists is not to present both sides of the story, necessarily; it’s to present truth,” says Pransky. “And all too often, tight deadlines and the need for more content clouds that goal.”
And when you're done with that article, you can further your knowledge ahead of Sunday's game by reading about how the city of Glendale has struggled mightily to pay for its sports "investments".  An excerpt:
The city has found stronger financial footing since then and its bond rating has improved markedly, but not without having to raise taxes, trim 25 percent of the municipal workforce, cut back on paving projects, and reduce hours at municipal swimming pools and libraries. The 9.2 percent sales tax that shoppers and diners pay in Glendale is among the highest in the state.

To fiscal conservatives, Glendale serves as a cautionary tale for suburban cities across the United States that want to throw public money at professional sports projects.
As he navigates the financial situation, Glendale Mayor Jerry Weiers returns to a maxim he has repeated many times in his life: “I’m not living in the past. I’m just paying for it.”

In the case of the Super Bowl, he believes the city is paying dearly. He said Glendale will actually lose a “couple million dollars” by hosting the event. It’s spending huge amounts of money on overtime and police and public safety costs for the Super Bowl but not getting much back.

Friday, January 30, 2015

Florida Lawmakers Going to Do What Governor Scott Won't

I've spent the last week identifying hypocrisy and waste in the state's "new" stadium subsidy process, but it seems Florida's legislative leaders may actually do something about it.  Well, maybe...

According to the News Service of Florida, House Speaker Steve Crisafulli, R-Merritt Island, and Senate President Andy Gardiner, R-Orlando, "want a top state economist to rank four professional sports facilities that are seeking sales-tax dollars to help pay for construction projects."

In a written statement, Crisafulli expressed frustration that the state's Department of Economic Opportunity (DEO), under Governor Scott, didn't rank the projects this year, as expected. 

So while the governor - through lack of action - has indicated determining the projects' return on investment is not a priority, it's a good thing for taxpayers the legislature seems interested in the exercise.

Previous coverage:1/29/15 - Gov. Scott stumbles through stadium questions again
1/28/15 - Stadium bill also makes it easier for spring training teams to leave
1/28/15 - Campaign contributions fuel pro teams' incentives
1/27/15 - Group want to end tax help for pro stadiums
1/26/15 - Fla's "new" stadium subsidy process is no improvement so far
1/25/15 - Teams renovate stadiums even after getting rejected for tax $$
1/22/15 - Gov. Scott's non-answer answers on stadium subsidies

Manfred Says Rays-to-Montreal Rumors Blown Out of Proportion

According to Tampa Tribune sportswriter Roger Mooney, MLB Commissioner Rob Manfred pointed out today exactly what I said yesterday: the Trib's Thursday fearmongering headline was entirely out of context:
“Let me be clear about my comments about Montreal,” Manfred said, “I was asked about what I thought about the exhibition games that were played in Montreal. I did not raise Montreal at all and I certainly did not raise it in the context of talking about any franchise that was trying to get a stadium deal done. I want to be clear about that. What I said about Montreal, I said as a general comment that I think it is good for the game when you have cities that don’t have baseball that demonstrate their interest in the game by doing things like selling 90,000 tickets to two exhibition games. It is an indication of the overall health of the sport. That’s all I said. Nothing more, nothing less.”
Manfred's comments - which included “I think with the right facility Tampa Bay can be a vibrant major league market,” were repeated to the Tampa Bay Times as well.  He added that he was "encouraged" by Rays owner Stu Sternberg's optimism about Tampa Bay.

ALSO SEE: Trib Says, "Economists Be Damned!"

The Trib recap adds this Manfred quote:
“I would say a couple of things: First of all I think it is really important that Tampa Bay get a new facility. When you look around the major leagues with all the world class facilities that have been built in recent years, I think it’s really important for the Rays to get that type of facility, point one. Point two, stadium development efforts are primarily driven by the desires of local ownership, in this case, Mr. Sternberg. My conversations with Stu have left me with a firm understanding that he wants to get something done in Tampa. Tampa is where he wants to be. I’m supportive, really supportive of his efforts and will do whatever I can assist him going forward.”
Same song, different verse.


Thursday, January 29, 2015

Trib Says, "Economists Be Damned! Don't Tax Sports Because People Like Them!"

Not to be lost in their crazy headline this morning, the Tampa Tribune also added an editorial that misses the mark on the very incentives I've been reporting on for the last week.

The editorial board's basic logic: Florida should throw more millions at professional teams because lots of fans attend games and Super Bowls are nice.

So far this week, I've reported how Florida's new stadium subsidy "competition" was no competition; much of the "new" tax revenue three stadium renovation projects will "create" are simply from higher ticket prices and inflation; and the politicians behind the controversial law got big-time campaign checks from the organizations that benefited.

Clearly the Trib editorial board wasn't paying attention, because it uses flawed logic to support subsidies that state economists just panned.  In fact, the editorial suggests lawmakers should ignore state economists because “millions of people across the country were introduced to the Sunshine State through the annual baseball ritual in cities from Miami to Tampa, and from St. Petersburg to Vero Beach."

First of all, the editorial board is confusing spring training stadium subsidies with those for year-round facilities like the Dolphins’ Sun Life Stadium and the Jaguars’ EverBank Field.   Those stadiums don't draw many out-of-state visitors and they're already collecting $2 million a year each from the state.  They're now asking for more ($90 million and $30 million, respectively, over the next 30 years).

Furthermore, the state economists that the Trib questions actually supported spring training subsidies, indicating they were the only sports incentives that had a positive return on investment for Florida taxpayers.

Second of all, the editorial board probably didn't even read the sports subsidy bill its endorsing for a second time.  If it had, the board would have found the same thing Senate staffers warned last year: a clause in the bill could cost Floridians some of the benefit from the very same spring training economic boom the Trib heralded.

Third of all, the editorial opines, "the state settled on an equitable process for awarding money to professional sports franchises."  How did the paper miss the fact that the "equitable process" was a joke this year??

Fourth of all, the editorial fails to make a convincing case why the state should go ahead and give the sought-after sales tax rebates to the four organizations that have already started their construction projects anyway.  We all know sports teams/leagues get wealthier with every new TV deal and "because they draw tourists" is not enough reason to dole out state tax dollars.  In fact, if they were, we'd be paying a helluva lot more to the good folks at Disney and Busch Gardens.

Finally, the Trib's last argument for awarding pro teams tax dollars is "intangibles," like " Canadian audiences" during Lightning games and other "major media markets" during Rays games.

For what it's worth, the nation's top tourist destination is Orlando - home to just one pro team, and lots of other tourist attractions that routinely expand and renovate without handouts from the state.

Tampa Tribune Takes Embarrassing Turn on Fearmonger Train

The editors* of the Tampa Tribune should be ashamed of themselves.
*If there is even more than one editor left there.

The paper took a perfectly reasonable Chris O'Donnell article that adds a little context to MLB's Montreal fears...and turned it into a "click-bait"-type of headline that unnecessarily adds to the fearmongering:
This isn't a service to readers; it's an intentional distortion of facts to sell well as push the paper's editorial agenda of pressuring the City of St. Pete to back off its contract with the Rays*.
*It's not the first time

As I pointed out earlier in the week, all new MLB Commissioner Rob Manfred did was respond to a question about Montreal's viability with an open-ended, "sure it could work again."  That means the new guy was merely to keep the league's leverage in-tact as MLB supports the Rays' campaign for a new Tampa Bay stadium.  Most of the insiders interviewed in the Trib's story even acknowledge this!

In fact, the only person quoted in the O'Donnell's Trib article who thought the Montreal threats were viable was Hillsborough Co. Commissioner Ken Hagan, who also once claimed a single college football game could create 1,700 jobs in Tampa Bay.

Compare the article's print headline to its online counterpart:
The caption even notes the commissioner only said a few "nice things" about Montreal*.
*The editors/editor at also missed a glaring typo

I get that those of us who live in glass houses shouldn't throw stones.  I get that we should we be just as disappointed in MLB for pitting one city against another, and for penalizing Tampa Bay for its bad business decisions of the past.

But Trib & Trib readers: don't believe the hype - I've written countless times about Montreal's longshot bid - Tampa Bay is still a lot closer to building a new Rays stadium than anyone else.

ALSO SEE: Three things the Stadium Saga needs in 2015

Gov. Scott Stumbles Through More Stadium Questions

Governor Rick Scott said Wednesday he would leave the stadium subsidy debate up to the legislature following the executive branch's decision not to rank the four applications, as expected.  {Here's the video}
A 2014 law (SB 1216) created a process designed to reduce lobbying and legislative influence on stadium subsidies, but the governor's Department of Economic Opportunity (DEO) merely deemed all recently-submitted applications as "complete," and forwarded the four requests along to the Joint Legislative Budget Commission to make allocation decisions.
"The Department of Economic Opportunity put out there announcements yesterday," Scott said. "They put out what they were required to do. I think you probably saw the announcements they put out about what they should be doing; that's what they did."

10 News has investigated questionable claims about return on investment from the four organizations seeking incentives from state taxpayers. In the last two decades, the state has paid $300 million to help fund eight stadiums. The majority of teams that play in those stadiums are owned by billionaires.

Scott, who was once an investor in the Texas Rangers, has been supportive of pro teams and stadium-building. He was reported to have gotten very involved in the legislative debate in 2013, supporting the Miami Dolphins' bid for state tax dollars.

But just as he did earlier this month, Scott offered very little public insight as to where he stands on the issue, or what he is doing to ensure return on investment for Floridians.  Scott said Wednesday he'd "continue to wait for the legislature" to make the tough decisions on sports incentives.

10 Investigates' reported Monday how tax dollars to pro teams are likely to grow significantly this year. And on Tuesday, 10 Investigates detailed the significant campaign contributions the governor and other influential politicians received from the teams that benefited from last year's stadium incentive bill.

The DEO validated the four applications from the Jacksonville Jaguars, Miami Dolphins, Orlando City Soccer, and Daytona International Speedway. This year, the legislature can allocate up to $7 million per year in each of the next 30 years to the applicants; in 2016, another $6 million per year (for 30 years) will be available.

One of the co-chairs of the Joint Legislative Budget Commission, Rep. Richard Corcoran, R-Lutz, said Wednesday he is personally "dead-set against" providing tax dollars to professional teams and leagues. But Corcoran, expected to be House Speaker in 2017-2018, said the issue would be hotly-debated since stadium spending has been "near and dear" to the heart of Senate President Andy Gardiner, R-Orlando.
Previous coverage:
1/28/15 - Stadium bill also makes it easier for spring training teams to leave
1/28/15 - Campaign contributions fuel pro teams' incentives
1/27/15 - Group want to end tax help for pro stadiums
1/26/15 - Fla's "new" stadium subsidy process is same as old, except more tax dollars awarded
1/25/15 - Teams renovate stadiums anyway, even when they don't get state tax dollars
1/22/15 - Gov. Scott's non-answer answers on stadium subsidies

Wednesday, January 28, 2015

Florida Lawmakers Increased Stadium Handouts Even as State Economists, Budget Experts Caution Against It

My latest for WTSP-TV goes a little more in-depth into what I first reported last April: Florida lawmakers made it easier for Grapefruit League teams to break their agreements with local cities and counties.

Governor Scott - and most House and Senate members - signed off on last year's stadium bill (SB 1216) despite the Senate's own Commerce & Tourism staff warning it would have an "indeterminate negative fiscal impact" on spring training economics.  Spring training support just happens to be the only sports incentive that state economists concluded had a positive return on investment.

In 2014, the Senate committee's fiscal analysis warned changing the rules on spring training subsidies would make it easier for professional teams to collect tax dollars, as well as allow them to more-frequently come back to the table to ask for more money.

The analysis also points out SB 1216 makes it easier for Grapefruit League teams to break their leases by limiting the damages they'd have to pay to leave.

Nevertheless, the bill was signed into law last summer.
Senator Jack Latvala, the sponsor of SB 1216, told me he stands by the need to incentivize pro stadium projects, but ended the interview abruptly after four questions.
Previous coverage:
1/28/15 - Campaign contributions fuel pro teams' incentives
1/27/15 - Group want to end tax help for pro stadiums
1/26/15 - Fla's "new" stadium subsidy process is same as old, except more tax dollars awarded
1/25/15 - Teams renovate stadiums anyway, even when they don't get state tax dollars
1/22/15 - Gov. Scott's non-answer answers on stadium subsidies

The Money That Flows From Pro Teams to Lawmakers is Typically Returned Through Tax Handouts

My latest for WTSP looks at the lawmakers expected to issue new tax incentives to pro sports teams, despite criticism of the incentives from the state's official economists.  I've spent the last week reporting on the questionable stadium spending and dubious claims by those looking for it.

Tuesday - Group want to end tax help for pro stadiums
Monday - Florida's "new" stadium subsidy process is just like the old one...with more dough
Sunday - Teams renovate stadiums anyway, even when they fail to get state tax dollars
Last Week - Gov. Scott dodges questions about stadium subsidies

Today, I look at the campaign spending from the sports organizations that benefited from last year's stadium bill (SB 1216), and the hundreds of thousands of dollars in influential contributions they've made recently to the state's most powerful politicians.

One of the biggest recipients of sports contributions is State Sen. Jack Latvala, who wrote last year's stadium bill that increases the amount of money available to professional stadium projects. 10 Investigates reported in May how Tampa Bay Rowdies owner Bill Edwards gave $100,000 to Latvala's political action committee, the Florida Leadership Fund, following passage of SB 1216. The law made the Rowdies -- along with MLS soccer teams and NASCAR facilities -- eligible for state stadium subsidies for the first time.

But after he got his bill passed, Latvala also collected contributions from the Jacksonville Jaguars, Miami Dolphins, and Daytona-based International Speedway Corporation (ISC). All three organizations stood to benefit from the law's passage, as 2015 subsidy applicants are now close to collecting a total of $210 million in tax commitments over the next 30 years. The new MLS team in Orlando is also campaigning for a share of the money.

In addition to Edwards' money, Latvala's PAC also received $20,000 from the Dolphins, $5,000 from the Jaguars, and $5,000 from ISC. The Tampa Bay Rays haven't yet applied for new state funds, but they contributed to $15,000 to the PAC.

In the last three years, the Jaguars also gave more than $20,000 to the Republican Party of Florida (RPOF), which can then spend the money on any candidates it chooses with very limited disclosures.

The Dolphins gave more than $328,000 to state-level candidates and committees in the last three years, including $50,000 each to the Florida Democratic Party (FDP).

Most of the International Speedway Corporation's $224,112 in contributions since 2012 went to the RPOF. There were also numerous contributions from the company's subsidiaries and executives, including CEO Lesa France Kennedy, who gave $47,500 to the RPOF and $25,000 to Rick Scott's "Let's Get to Work" committee over the past three years.

The Orlando City Lions -- and co-owner Phil Rawlins -- have also contributed to Republican leaders. And the Rowdies' Edwards contributed more than $300,000 to Scott and the RPOF in addition to his contributions to Latvala's committee.

DONATION LOOKUP: Political donations from local teams, athletes, owners

Lobbying expenditures have also mounted for the teams seeking state subsidies, led by the International Speedway Corporation, which has spent approximately $487,000 lobbying the legislature the last three years. According to state filings, which give ranges on executive lobbying, ISC spent between $327,000 and $476,000 more lobbying the executive branch since 2012.

Other lobbying expenditures since 2012 include: the Jaguars (between $100,000 and $200,000); Orlando City Soccer (between $235,000 and $345,000); and the Miami Dolphins (between $170,000 and $240,000). All figures are according to estimates found in state filings.

Rays Rumors Quietly Percolate...

There have been a few Rays developments non-developments in the last few days:
  1. WTVT reports the Rays are talking with the City of St. Pete again.  We've heard this one before - don't expect any overnight solution.  The Rays are still 13 years from the end of their contract, so they may have to work a bit to get out of it.
  2. Meanwhile, Charlie Frago reports councilmember Jim Kennedy plans on asking some difficult questions of the team before he votes to let them go.
  3. The Tampa Bay Times reports Hillsborough County quietly hired a law firm tied to former MLB President Bob DuPay - the issue skirted under scrutiny on a consent agenda item in October.
  4. ESPN lays out MLB commissioner Rob Manfred's top-five priorities upon taking office...and the Rays are not among them.  But interestingly enough, unifying the league's business operations is.  Could this mean more revenue sharing, as I've previously suggested?
  5. But Marc Topkin reports Manfred said on Sirius/XM that he'd be a resource to Rays' ownership.  However, "stadium construction is fundamentally a local issue - the owner, the local government, the local communities have to be committed to the project."
  6. Yet, as just about everyone is reporting, Manfred is still keeping the door open to Montreal, saying "it's possible...with the right set of circumstances and the right facility."  So basically, Montreal is still half a billion dollars away from it.  Manfred added nothing is imminent, but of course, he's got to keep the hopes up - how else could he "help" Tampa Bay ownership if he didn't retain the right to fearmonger and threatmonger, Bud Selig-style?

Tuesday, January 27, 2015

Are Florida stadium subsidies just "forced taxpayer handouts?"

The morning after we put out our third stadium subsidy story on WTSP in a week, conservative group Americans for Prosperity is calling on the Republican-led legislature to end the "forced taxpayer handouts" to pro sports teams.

The group issued a statement that read, in part, "This whole debacle really shows that when millions of dollars are on the table, special interests will find a way to get a hold of the money. It would have been good for the DEO to at least evaluate the applicants this year, but it would be even better for the legislature to end the corporate welfare and instead allow Floridians to individually decide which sports facilities to support via their ticket purchases and investments."

Just to recap, our investigation revealed:
  • Florida's new stadium subsidy "competition" is no different than the old incentives, except way more money will be doled out;
  • The process was designed to reduce lobbying in the state capital, but will likely increase it, at least this year;
  • Much of the "new" tax revenue the renovations will create are from higher ticket prices & inflation, not new visitors to Florida;
  • The law was written in a sneaky way so that the Miami Dolphins & Daytona International Speedway aren't required to show their tax receipts will actually increase with the renovations;
  • Daytona and the Dolphins want to use state money to reduce their facilities' capacities;
  • State Sen. Latvala received more than $120k from the teams and owners that benefited from his 2014 stadium bill.
ALSO SEE: Teams' claims about tax dollars unfounded
ALSO SEE: Gov. Scott dodges questions about stadium subsidies

The Associated Press reports: "(Latvala said) legislators assumed the $7 million they set aside would cover everybody that wanted help."

So it sounds like the first year was supposed to be $7 million in assumed handouts - not the search for projects with positive "return on investment" as we were told.  Maybe we'll get a "competition" next year when there's $6 million more in annuities available.

Americans for Prosperity railed against film subsidies too {INFOGRAPHIC}, and their statement is amazing.  Read it all here, but here's a small snippet:

"Because some lawmakers were misled by Hollywood lobbyists promising massive economic growth, illustrious films and shows like Spring Breakers, Magic Mike, What would Ryan Lochte Do?, and even a Victoria’s Secret commercial were approved to receive millions in corporate welfare...It’s time to end Hollywood’s B-rated cronyism drama in Tallahassee. No more handouts for special interests.”

Monday, January 26, 2015

Florida's "New" Stadium Process is Same Process with Just More Tax Dollars

A new law, designed to improve Floridians' return-on-investment when it comes to subsidizing pro sports facilities with tax dollars, may actually help funnel more state money to teams, many of which don't seem to need them.

When State Sen. Jack Latvala, R-Clearwater, was fighting for SB 1216 last year, he said his goal was to create a competitive process that would force pro teams to prove job creation and positive economic impact before they got state tax dollars for facility construction.

But all the process has shown so far is that the pro teams and leagues that call Florida home are very good at filling out paperwork, and the governor's Department of Economic Opportunity (DEO) is not very good at settling debates.

The Jacksonville Jaguars, Miami Dolphins, Daytona International Speedway, and Orlando City Soccer club are all seeking tens of millions of dollars in state tax dollars for stadium renovation/construction projects.

And even though the projects are already funded and underway – and the suggested benefits to Floridians are expected to be delivered – all four applicants claimed getting reimbursed with state tax dollars would help them create jobs and spur economic growth that wouldn't take place otherwise.

ALSO SEE: Teams renovate stadiums anyway, even when they don't get state tax dollars

Despite the dubious claims, the DEO "approved" all four projects as "eligible" for state funding. The agency did not rank the projects, leaving the job to the Legislature. In a lengthy memo, the DEO indicated it wasn't responsible for ranking applicants until next year's pool.

"It would have been nice to have more guidance from the DEO," said Sen. Bill Galvano, R-Bradenton, who sits on the Joint Legislative Budget Commission (LBC), which will now decide the applicants' fate.

Galvano added that he expected the four applicants to resume heavy lobbying ahead of the 2015 session. SB 1216 was supposed to take the lobbying out of the process and award state incentives only to the projects with the greatest return-on-investment.

Calls to other local LBC members not returned Monday.

But it appears the incentive process is not much different than it has been in previous years, where eight teams now claim $2 million each in annual stipends from the state. The only difference now is that last year's SB 1216 significantly increased the available pot of money for pro teams by $7 million this year and $13 million every year afterward.

"There are no new jobs; it's smoke and mirrors," said former state Sen. Mike Bennett, R-Bradenton, who is now Manatee County's supervisor of elections. "How can we possibly tax the working people of the State of Florida to support … a sports franchise that pays its players $8, $10, $12 million a year?"

It is believed the majority of pro sports franchises in Florida are owned by billionaire owners, yet the state has contributed $300 million since 1994 to eight pro stadiums. Those dollars are in addition to the billions in local subsidies Florida taxpayers have helped contribute to pro sports stadiums in recent decades.

VIDEO: Gov. Scott dodges questions on stadium subsidies

The Jaguars and Dolphins are seeking new state subsidies this year, even though their facilities - EverBank Field and Sun Life Stadium, respectively – both already receive the $2 million annual stipend from the state. Both teams claimed renovations would help draw out-of-state visitors.

"Disney certainly creates a lot more revenue than a baseball game," Bennett added. "People do travel all across the country to go to Disney, but I don't think we need to give them a handout either."

State economists tend to agree with Bennett. In a recent report, they indicated Florida's current pro stadium subsidies have returned just 30 cents on every dollar invested, largely due to the fact that most fans of the four major sports come from in-state.

But the subsidies will only grow, as SB 1216 opens up tens of millions of dollars in new incentives over the next few years. It also expanded the teams and leagues eligible for state money to include motorsports, Major League Soccer, and the North American Soccer League, in which the Tampa Bay Rowdies play.

"I stand by the need to spend dollars," Latvala said of stadium projects. "It's no different than spending money on libraries or performing arts centers or parks … These are amenities for the people who live in our state."

Latvala and Galvano both said the City of Orlando and Orlando City Soccer, specifically, would not have moved forward with stadium construction had the prospect of state subsidies not been in place. Latvala also pointed to convincing support from both legislative chambers for the final version of his bill.

Watchdog group Florida TaxWatch gave its hesitant approval to the bill as well, opining, "If the state is going to subsidize stadiums, Florida TaxWatch commends the Legislature for creating a competitive evaluation process to do so."

It's yet to be seen if the evaluation process will be competitive, since the DEO approved all four applications and gave no indication they'd challenge any claim made within.

"The only money they can get back is the incremental increase in sales tax generated by the new projects," Latvala said, referencing a safeguard in the law that requires recipients of the incentives to show new economic activity to receive their money. Payments are in the form of sales tax rebates.

But 10 Investigates combed through the thousands of pages of applications and found much of the estimated increases in tax receipts were from higher ticket prices and inflation, not an influx of out-of-state visitors.

The Miami Dolphins' renovations actually involve removing 10,000 seats.

But because lawmakers also carved exemptions for any "first-time applicant whose project exceeds $300 million and commenced on the facility's existing site before January 1, 2014," neither the Dolphins nor Daytona are subject to the incremental/baseline tax rule, per FSS 288.11625(4)(h).

When I asked Gov. Rick Scott about the stadium spending this month, he provided little insight as to the benefit to taxpayers:

"It's a new process," Scott said. "The DEO is reviewing it; they'll be making their report to the Legislature on the completeness of those programs."

Sports teams and leagues have been among the state's most-active political donors and lobbying interests in recent years.

As 10 Investigates reported in October, the Dolphins, Jaguars, and Daytona-affiliated donors have spent hundreds of thousands of dollars on political contributions and Tallahassee lobbyists to try and sway lawmakers.

In 2014, Latvala's political action committee, the Florida Leadership Committee, reported a $20,000 contribution from the Dolphins, a $5,000 contribution from the Jaguars, and a $5,000 contribution from International Speedway Corp.  He also received $100,000 from Bill Edwards, owner of the Tampa Bay Rowdies, which were also included in SB 1216 as eligible for state stadium subsidies for the first time.  He defended the contributions to WTSP in May.

Jaguars owner Shahid Kahn gave $250,000 to Rick Scott's "Let's Get to Work" political committee in 2014.

LOOKUP: Political contributions from Florida athletes, teams

10 Investigates asked the four teams and leagues applying for funds "what happens to the construction if the team loses its bid for this year's money?"

Leonardo Santiago, vice president of communications for Orlando City Soccer, responded the team was working with the DEO on its application and, "We look forward to working through the process to a positive outcome for our club, our fans and the community, which stands to benefit greatly from an economic standpoint."

International Speedway's manager for corporate communications, Gentry Baumline-Robinson, wrote, "ISC's significant investment of $400 million for a complete transformation of the 'World Center of Racing' is on target to open just one year from now as the nation's first true motorsports stadium."

Neither the Jaguars nor Dolphins provided a response for this story.

READ: Daytona's application
READ: City of Orlando/MLS application
READ: City of Jacksonville/Jaguars' application
READ: Dolphins' application

Five Years Ago This Weekend...

Five years ago this weekend...the ABC Coalition wrapped up its comprehensive study of what Tampa Bay can/should do to keep the Rays around long-term.

Their conclusion?  Ignore territorial boundaries and work together.

In the five years since, we've seen several other "study groups" formed (they came to similar conclusions), we've heard fans worry the team would be gone if something didn't happen soon (it didn't, and the team is still here), and we've seen a reasonably successful mayor voted out because he couldn't get form consensus on the Stadium Saga (the new mayor is still trying after 13 months too).

A lot of folks will point to politics or stadium location as the biggest problems the Rays have faced in the last five years...but I think their biggest long-term headaches have been most-significantly magnified by the region's resistance to public transit improvements.

Sunday, January 25, 2015

Teams Prove the Scary Repercussion of Not Publicly-Financing They Have to Pay for it Themselves

Monday night at 11, I'll have another report on WTSP/10 News about the push for state tax dollars for the Jaguars, Dolphins, Daytona International Speedway, and Orlando City Soccer club.  This follows my questions for the governor...which basically went nowhere.

Sure, teams are quick to point out how many Floridians they employ over the course of a season. In fact, teams often claim if they don't get the tens of millions of dollars they're seeking for stadium construction or renovations, many Floridians could lose their jobs.

But a closer look at the facts shows the potentially-scary repercussions of rejecting stadium subsidies seldom come to fruition. For example:

  • Officials at Daytona International Speedway sought $60 million from the state in 2013 for its "Daytona Rising" renovation project. They reportedly said the track wouldn't remain "relevant" without the money. But when the subsidies failed to pass through the legislature, International Speedway Corp. (which owns NASCAR) moved ahead and privately-funded the entire $400 million renovation project.

  • The Jacksonville Jaguars failed to secure $2 million/yr from the state in 2013 for renovations to their home, EverBank Field. The team indicated "major events (would) look past everything Jacksonville has to offer" without the money. But when the bill failed to pass, the team paid for the renovations on its own. EverBank Field already receives $2 million/yr from the state.
Yet all three projects return to the legislature in 2015, seeking tens of millions from the state for the projects that are already underway and funded.

Sometimes, good ole-fashioned political lobbying even trumps scary hypotheticals.

Check out the stories tomorrow on-air or online for more.

Thursday, January 22, 2015

Gov. Scott Dodges Question on Stadium Incentives, Then Pledges Transparency

I've been digging for a couple of months into Florida's new stadium subsidy "competition," which pits pro teams and facilities against each other for hundreds of millions of dollars in sales tax rebates. It's a process created when Gov. Scott signed the SB 1216 last summer.

A month's worth of hounding of Scott's office for an opportunity to ask the governor a few questions about the controversial incentives paid off with a 60-second interview last week when Scott came through Tampa. But what I got was the same ole' song and dance:

Reporter asks legitimate question; governor gives non-answer answer; reporter asks question in different way; governor talks about jobs. Rinse and repeat.

It can be frustrating for a reporter looking for transparency, but if the below video and transcript is any indication, transparency will soon be on the governor's 2015 "To Do" list:
Reporter: On the stadium issue, there are four proposals right now running through the DEO; all four of those are already underway though. So what's the return for taxpayers giving incentives to programs that are happening anyway?

Gov. Scott: It's a new process; the DEO is reviewing it; they'll be making their report to the legislature on the completeness of those programs.

Reporter: What would you say to Floridians who say these are tax dollars going to billionaires?

Gov. Scott: I'm going…my job is to make sure we get returns for taxpayers and that's what I'm going to continue to focus on. We've had a big turnaround in this state, we've added 715,000 jobs…but, on all incentive programs, you know, you always want to make you get good return and there's transparency. I'll be making some proposals this year to increase returns and to increase transparency.

Reporter: Lastly, any concern about sports teams pitting states against each other and cities against each other to get the best deal?

Gov. Scott: Look, we're competing globally for jobs. And that's part of my job – I want to spend your tax dollars well. But I'm competing to make sure that this is the state that your family can get a great job; your children can get a great education; that's why we're going to have record funding for K-12 education per pupil; make sure we live in a safe state.

Only in Florida can a direct question to the governor about stadium subsidies elicit an answer about K-12 funding.

We'll have much more on this topic over the course of the next week, but why did Scott avoid a very simple question about return on investment? Then avoid a question about giving tens of millions of dollars to teams owned by billionaires? His non-answer answer was about transparency and return on investment.

But Scott failed to address specifics, including his very own state economists questioning the state's stadium spending in a significant study released earlier this month.

The governor also failed to answer the final question about pro teams playing hardball as they look for handouts. It's a topic I've written about extensively over the years. But Scott loves pro sports and has professed his support for increasing stadium subsidies several times, so the clearest answers we may get from him on the topic could come in the form of signed legislation and budget allocations.

Saturday, January 17, 2015

Shocking Revelation: State Stadium Subsidies Don't Pay for Themselves

Sometimes you get to break stories, sometimes you get beat.  But just as I wrap up a couple months worth of work (a few hours here, a few hours there) on Florida's stadium subsidies, the state's economists put out a paper analyzing the effects of pro stadium funding...and it's not pretty.

The Office of Economic & Demographic Research (EDR) concluded the $16 million Florida contributes a year to eight MLB, NHL, NBA, and NFL stadiums across the state (plus more for spring training facilities) do not produce positive return on investment for taxpayers, largely because only 11% of ticket-buyers came from out-of-state:
The Professional Sports Facilities Incentive Program has a projected ROI of 0.30.  For every dollar spent through the incentive, the state of Florida received 30 cents in tax revenue. In addition, the state incentive caused Florida’s Real GDP to increase by about $369.9 million and caused Real Disposable Personal Income to grow by $295.1 million during the review window.
The study even slams the popular, rosy studies teams like to commission!
Economic studies commissioned by proponents of public subsidies for professional sports facilities are likely to fail to recognize or account for the substitution effect of consumer spending, leakages in both visitor and franchise spending, and the opportunity costs of public (or taxpayer) expenditures. Academic economists have identified additional “misapplications, omissions, and gratuitous assumptions” which contribute to overly-optimistic economic impact studies and inconsistencies with peer-reviewed research by academic economists.
It actually goes on quite a bit to discredit team-sponsored studies, touching upon issues they seldom cover, such as leakage (local spending disappearing to hotels and franchises owned by out-of-towners) and opportunity costs.

The state's report is certainly not without flaws.  For instance, it doesn't include the "intangibles," such as marketing exposure and civic pride.  But it should at least table any claims of robust economic impact of stadium handouts.

Interestingly enough, the report cast a very favorable view of subsidies to the Florida Sports Foundation, which promotes amateur events and Spring Training.  The study reported FSF subsidies return $5.61 for every $1 taxpayers spend to support them.  Why?  They draw out-of-state visitors and put "heads in beds" that few pro teams ever will.

It's a fascinating read - check it out.

Weekend Reading: Regulating Pro Sports, David Beckham, and Baseball in Tampa Bay

Lots of fun links for your reading pleasure:
  1. NewBallpark: San Jose loses anti-trust case against MLB
  2. Sports Law Blog: Pro sports leagues should be regulated
  3. Miami Herald: A year later, David Beckham's dream of soccer in Miami still not a reality.
  4. "Wait, You’re Spending HOW Much On The Football Program?!"
  5. Twitter: Jeff Vinik says he wants baseball in Tampa Bay.
  6. SaintPetersblog: St. Pete council prepares for another workshop on Rays
  7. SFGate: Losing Rams would be blow to St. Louis' pride, not economy

Thursday, January 8, 2015

Why Kriseman Has Hope on Rays' Stadium Saga

Speaking extensively on the Rays' Stadium Saga for the first time since city council rejected his proposed deal in December, Mayor Rick Kriseman said he has "no timetable" for renewing negotiations with the team but expects to find middle ground and advance the dialogue soon.

Kriseman was fielding both hardball and softball questions from participants in the Suncoast Tiger Bay Club, a local group that meets approximately once a month to put prominent figures in front of other local influential people to face difficult, but generally good-spirited questions.

Among the Tiger Bay members firing questions at the mayor was St. Pete councilmember Wengay "Newt" Newton, who asked Kriseman if he "really believed council would approve" the Memorandum of Understanding (MOU) that would have given the Rays the ability to explore possible new stadium sites in Hillsborough County without penalty.

Ultimately, council rejected the deal, 5-3, over concerns of future redevelopment potential.

"I view city council as a partner and city government as a team," Kriseman said, acknowledging the two sides won't always see eye-to-eye. ""What I appreciate is and I continue to meet & talk...for the good of the city."

Kriseman added criticisms of the city council, saying it was too quick to "workshop" every issue and councilmembers don't trust each other, so they attend every workshop. He said when he was on city council, from 2002-2006, councilmembers trusted each other more and worked better together.

Tuesday, January 6, 2015

Another Epic Stadium Saga Quote

We know all teams in all sports follow the same blueprint to get taxpayers to help pay for their stadiums:

In 1995, Jerry Reinsdorf said, "a savvy negotiator creates leverage."

In 2010, Peter Gammons said, MLB teams "need to be able to blackmail" cities.

In 2014, Milwaukee Bucks owner Herb Kohl said, the Sacramento Kings were helped to a new arena "by the drama with it all.”

And now, I've discovered this gem from Penguins legend/owner Mario Lemieux in 2008:
"We had to do a few things to put pressure on the city and the state, but our goal was to remain here in Pittsburgh all the way. Those trips to Kansas City and Vegas and other cities was just to go, and have a nice dinner and come back."
 "(Pressure) was felt, and that was the important thing. A lot of things happened throughout the negotiations. Ups and downs. That was just a way for us to put more pressure, and we knew it would work at the end of the day," Lemieux said.
Fans should take note of the 100:1 ratio of owner threats to owner relocations.

Lightning's Jeff Vinik Does NOT Join Twitter

WTSP's Grayson Kamm points out the much-hyped account has a photoshopped "verified" sign.

Monday, January 5, 2015

Pinellas, Hillsborough Talk Multi-County Tax...for a Movie

One of my "3 things the Stadium Saga needs in 2015" was more collaboration between Pinellas & Hillsborough counties.  If we are to learn anything from successful stadium projects elsewhere, it's that they're a lot easier to fund by spreading the tax subsidies across multiple counties.

But while local officials have balked at the slightest notion of paying for a stadium located in a different county, Mike Salerno reports this weekend that the two counties are talking about pledging $100,000 each to try and convince Tim Burton to shoot his new movie, "Miss Peregrine's Home for Peculiar Children" in Tampa Bay.  The money would only be awarded if the production documents the money it spends here on things like hotel rooms.

Aside from the fact that $200,000 is a lot of money and warm-weather states like Florida would be far-better off if nobody offered handouts to's encouraging that multiple agencies would reach across the Bay for the betterment of the region.

But some important questions to ask:
  1. Can/will the subsidies guarantee the majority of the movie is shot in Tampa Bay - and will the location be abundantly clear to moviegoers?
  2. Could a movie about "peculiar children" drive tourism the way Winter the Dolphin does? Or will it simply have the (lack of) effect that Spring Breakers did?
  3. Will the subsidy offer truly benefit the region or just prompt Sarasota & Charlotte counties, where the book is based, to spend more in subsidies themselves?  A bidding war is not in the region's best-interests.
  4. Is it $200k well-spent? Rebates for hotel rooms could indicate the jobs aren't going to local workers. Will the subsidies require 90% local workers? Will there be any guarantee of high-wage jobs?
No matter what, all of the players in the Pinellas/Hillsborough economic community should also read the Baton Rogue Advocate's monster investigation, "Giving Away Louisiana," which details how tax incentives have turned Louisiana into a mega film capital...but the program is a "money-loser" that's "financially unhealthy."

UPDATE: Hillsborough commissioners passed their half of the subsidy, according to Mitch Perry, who writes the funding is contingent upon Pinellas approving $100k as well.  However, he also reports the money is contingent upon Burton basing his office headquarters in Hillsborough County, proving an earlier point of mine that Tampa Bay isn't one single community, but lots of cities that still compete with each other.

PEDs and Baseball's Hall of Fame - My Annual Defense of Bonds & Clemens

Barry Bonds should have been - without a doubt - a first-ballot Hall-of-Famer.  Roger Clemens too.  But to save effort why it shouldn't even be a question, here's an excerpt from my 2012 column on PEDs & the HOF:
Sure, McGwire (and Bonds and Clemens and etc) used PED's.  But so did a huge chunk of the guys they was competing against (just like Willie Mays, Mike Schmidt, and Whitey Ford before them).

We don't compare pitchers' ERAs in 2012 with those of the dead-ball era because stats fluctuate between eras.  But dominance among peers remains the best indicator of Hall-of-Fame worthiness and during the "steroid era," when PEDs were largely legal.  The playing fields were level.
Guys like Mike Piazza, Mike Mussina, Jeff Bagwell, and John Smoltz all have better shots this year than Bonds or Clemens because they're not considered "users."  But we have no idea who used PEDs - it was far more rampant than we'll ever be able to quantify.  So why pretend we have any idea?

In fact, that's what I wrote about last year when Glavine and Maddux were elected:
Held to today's standards, Willie Mays, Mickey Mantle, Mike Schmidt, Hank Aaron, and Whitey Ford may all have been kept out of the Hall.  And if you don't think there is a long list of current and recently-retired stars who have breathed huge sighs of relief for not being outed as a "user," you're foolish.
Maddux and Glavine didn't exactly come across as anti-PED crusaders back in 1996.  In fact, I doubt there was a single player in the league during the 1990s who didn't know PED's were running rampant.  They all profited from the post-strike home run obsession.

On top of it all, Glavine was in a position to fix it.   As the Braves' long-time players' union rep, he was one of the leading voices in the MLBPA - the organization that fought off drug testing for so long.
Simply put, the Hall of Fame should be for the guys who dominated their peers, regardless of era.  By those metrics, Bonds and Clemens should be on every voter's ballot.

Empty Seats the New Normal in Big-Time Sports

If yesterday's GoDaddy Bowl (Toledo vs. Ark. St. in front of 36,811 fans) or the previous day's Birmingham Bowl (Florida vs. E. Carolina in front of 30,083 fans) didn't inspire anything more from you than a tweet to's to be expected.  It's just the new normal.

The painfully-drawn out and often-obscure bowl schedule is a reflection of today's pro big-time sports culture, where TV dollars matter more than seats.

In fact, USA TODAY writes:
In 1995-96, there were 18 bowl games. Now there are 38, plus a national championship game — four more bowls than last season, including two at stadiums that seat just 25,000 and 15,000. Next year, bowl organizers are set to add another new lower-tier game that might be fortunate to draw more than 25,000 fans.

That's because even though ticket demand is relatively low for lesser bowls, millions of viewers keep watching, even if it's the Camellia Bowl in Montgomery, Ala., a game that drew just 20,256 fans last week but attracted an average television audience of 1,114,000, according to ESPN.

Last season, schools and conferences again struggled to sell their bowl ticket allotments and were required to pay for a record $23.8 million in unsold tickets, according to NCAA financial records. Many bowl games in recent years also have tried to offload tickets on discount sites such as Groupon.

But on television, bowl games are a sure thing, having drawn much larger audiences than other sports programming, not to mention other content on other channels. And that's what really matters these days.
We can draw two conclusions:
  1. TV dollars will soon be more important than attendance numbers for ALL leagues.
  2. It may not be long before we actually see a new bowl game inspired by Glenn Foley's famous comment in 1992.

Friday, January 2, 2015

Times Editorial: The Path Forward on Rays' Stadium Stalemate

Following a tumultuous 2014, I called on the local newspaper editorial boards to be less heavy-handed in the new year.  On the first day of the year, the Trib issued its first stadium-related editorial...and on Day No. 2...the Times did too:
As everyone returns to work this week, St. Petersburg Mayor Rick Kriseman should move quickly to salvage an agreement with the Tampa Bay Rays that the City Council unwisely rejected last month. His first calls should be to council members to determine whether their concerns about development rights at Tropicana Field are the real reason they refused to break the stadium stalemate, or a convenient excuse to justify hurt feelings.

The council voted 5-3 against a reasonable compromise negotiated by Kriseman and the Rays that would let the team look for stadium sites in both Pinellas and Hillsborough counties. Council members were irritated by the Rays' response to a question about whether the team would retain rights to share proceeds from development on the Trop site even after it decided to leave. Rays president Brian Auld accurately answered that the Rays' use agreement for the dome calls for those proceeds to be shared and said the issue could be resolved later. But he spoke like a hard negotiator when council members wanted a warmer, more accommodating response.

Now council members who have been so protective of the use agreement that calls for the Rays to play at Tropicana Field until 2027 want to essentially open up that agreement over development rights. The reality is more complicated than the rhetoric. The rejected compromise would allow the Rays to look for new stadium sites for up to three years. If the Rays chose to leave, they could wind up playing in the Trop for an additional three or four years while financing was secured and a new stadium built in Pinellas or Hillsborough. In that time, the city would want to explore redeveloping all or part of the Trop's 85 acres.

Some council members suggest the Rays could receive tens of millions of dollars if the city sold the entire site to a developer while the Rays were still playing there. That is implausible and not contemplated by the Rays or Kriseman, and the concern could be easily resolved in a few additional sentences in the compromise. If the council's concern is sharing with the Rays proceeds from development on part of the Tropicana Field site in the period before the Rays moved, that is more complicated and not easily addressed now. The city would be shortsighted to sell off part of the site when its best value is its size for a planned development, and a piecemeal approach would create parking issues and other problems for the Rays. It's difficult to put a value on those partial development rights now, and the Rays likely would counter by lowering their proposed payments to the city for leaving before the use agreement expires.

The development rights issue was best left to be negotiated if and when the Rays decided on a new stadium site, but Kriseman and the Rays can address the council's worst-case scenario. First, though, the mayor has to determine whether that would be enough to persuade at least two council members to change their vote and break a stalemate that does not benefit St. Petersburg taxpayers or Tampa Bay.
The piece is certainly less heavy-handed than the editorial board's criticisms from a few weeks ago, but its clear the Times' editorial staff still believes hesitant councilmembers are the villians and the Rays deserve a break.

Thursday, January 1, 2015

Trib's Hope for New Year: A New Rays Stadium

Surprisingly, it wasn't the Times mentioning the Rays in a New Year's Day editorial today, but the Trib, in its list of "Hopes for the New Year":
This year could very well determine whether the Tampa Bay Rays remain in the region. Unless St. Petersburg City Council reverses itself and allows the Rays to scout Pinellas and Hillsborough counties for a new location for a ballpark, as Mayor Rick Kriseman had negotiated with the franchise, the Rays’ days here could be numbered.

Losing the Rays would be a major economic blow not only to St. Petersburg and Pinellas, but to the region as a whole. Wiser thinking must prevail. The Rays should be allowed to look for a more centrally located site for a ballpark in both counties in exchange for fair compensation to the city. This issue needs to be resolved.
Both papers listed the Stadium Saga in last year's New Year's editorials, and it may appear in next year's too at this rate.

For what it's worth, here are the 3 things I think the Stadium Saga needs in 2015.

UPDATE: Turns out the Times had a New Year's Resolution for a stadium too, just a couple days later than normal.