Thursday, June 27, 2019

A look back at Stu Sternberg’s 2005 promise when buying the Rays

Stu Sternberg has stated it simply: without a new stadium, the Rays won’t be playing any baseball in Tampa Bay much longer.
 
It really isn’t any change from what’s the franchise owner been saying for the last decade, as he’s threatened in no fewer than a half-dozen different ways relocation if the region doesn’t help (read: $$$) build the Rays a new ballpark.

But today’s stance is in stark difference to what Sternberg told the editorial board for the then-St. Petersburg Times back in 2005, when he purchased majority ownership of the team:

You will never — and I will say it now and hopefully I can say it and you’ll follow up — you will not hear the words, ‘We need to have a new stadium,'” Sternberg was quoted as saying by the Times. “We might like to have a new stadium. We can work with the authorities to have a new stadium and work with businesses to have a new stadium, but it won’t be from a sense of ‘need.’”
 
Well, Sternberg wanted someone to follow up...

So more than nine years after Sternberg started saying the Rays “need” a new stadium, it’s clear he made a miscalculation with his original promise.

Sternberg may have also made a slight business miscalculation, and every pro sports owner has the right to run his or her team as a business. But many fans would contend profits aren’t their responsibility.

Furthermore, from what we know about Major League Baseball’s business model — wildly-robust with lucrative broadcast and digital revenues — it would seem that Sternberg and other MLB owners are all making profits. We just don’t know that for a fact because none will agree to open their books to the public.

We also know the profits are flowing, because the value of Sternberg’s investment has skyrocketed.

He reportedly bought control of the team at a franchise valuation of $176 million, a bargain-basement price that was largely a result of poor attendance and the team’s contract handcuffing it to Tropicana Field.

According to Forbes, the Rays are now worth more than $1 billion, appreciation of 380 percent at a time the Dow Jones average grew just 250 percent.

So, while Sternberg may have miscalculated his words in promising he wouldn’t demand a new stadium, it doesn’t seem he miscalculated his investment. And a guy who is that savvy with investments likely isn’t miscalculating much about his next business move, either.





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Tuesday, June 25, 2019

Did Stu Sternberg Admit to Violating His Contract w/St. Pete?...and Other

Stu Sternberg rolled out his "sister-city" idea Tuesday afternoon, pitching the Rays split their 81-game schedule between new, open-aired stadiums in Tampa Bay and Montreal, possibly as soon as 2024. 

"We are asking for people to keep an open mind and join us on this exploration," Sternberg said from the atrium of St. Pete's Dali Museum, with the glistening waters of Tampa Bay behind him. "We certainly don't have all the answers...(but) today begins a conversation, an exploration, and a collaboration."

Here are five takeaways from what Sternberg detailed in the Rays' 45-minute press conference:

DID STERNBERG JUST ADMIT TO VIOLATING HIS CONTRACT WITH ST. PETE?
Several Canadian journalists made the trip down to Tampa Bay, curious about the role MLB-to-Montreal booster Stephen Bronfman would play in the Rays' proposed new venture.

"Stephen had asked us about relocation (years ago) and I immediately shot that down," Sternberg said. "He talked about if the team would potentially be for sale; (that) didn't go any further than about 12 seconds past that as well."

But Sternberg said the two men "maintained a dialogue" because Bronfman was talking to other MLB owners about expansion.

"At some point, this idea of sharing (the Rays) came up," Sternberg continued, saying he didn't remember exactly when they first discussed the idea, but it was "a couple years ago."

If Sternberg has already discussed playing home games in Montreal prior to 2027, it would be a violation of his contract with St. Petersburg, which requires the Rays to obtain specific permission from the city to have any sort of discussion about playing home games outside of Tropicana Field.

Mayor Kriseman's office apparently agreed, dispatching its city attorney to review the video of the press conference, specifically looking to see if Sternberg violated his contract with the city or if any Montreal parties committed tortious interference by trying to lure the team out of its contractual obligations. 

According to mayoral spokesperson Ben Kirby, "The City Attorney’s office has been in contact with the general counsel for the Tampa Bay Rays and received assurances that the Rays will not commence exploration of the shared city concept, or conduct any other activities related to a pre-2028 future stadium site, without an agreement with the City of St. Petersburg. The Rays' general counsel also confirmed that all conversations related to Montreal were limited to the time period after expiration of the use agreement."
MAYBE STU IS SERIES ABOUT COULD WORK...AT AL LANGSternberg took an early shot at his critics, saying "this is not a page out of a playbook to gain leverage," and suggesting the unprecedented sister-city arrangement was credible. "We all can - and - do find problems in new things, especially when listening to the blaring voice of social media these days."

So despite Sternberg's lack of clarity on many logistical questions, it was clear from some of his responses he has thought about exactly where the Rays could play open-aired games the first half of the MLB season: Al Lang Stadium.

As Florida Politics wrote last week, Sternberg has always loved the idea of playing baseball along St. Pete's waterfront. That's the reason Sternberg chose the Dali Museum for his Tuesday press conference.

And, unlike his proposed 2008 sail stadium idea, Sternberg wouldn't necessarily need voter approval to get major stadium construction done this time. He purchased the Tampa Bay Rowdies soccer club, who received voter approval in 2017 to assume long-term control of Al Lang Stadium.

Sternberg also had a message for critics who say the team wouldn't draw any better for 40 games than it does for 81, suggesting a reduced supply of games would help pack the stands early in the season.

HOW WOULD MONEY WORKSternberg said he had no idea how two regions would each afford a new ballpark, and he didn't offer any contributions himself.

Nor did Sternberg specify a preference between St. Petersburg and Tampa for the site of a new ballpark, but it isn't hard to figure out his preference: Pinellas County, where bed tax revenues are robust and available.

The Rays already have rights to some redevelopment revenues derived from the 85 prime downtown acres underneath Tropicana Field and its parking lots, and St. Petersburg Mayor Rick Kriseman has also suggested general revenue dollars could be on the table if the team were to stay in the city long-term (albeit, prior to the split-season pitch).

As for the bed tax, Pinellas' beaches keep the money pouring into tourist tax coffers, whereas Hillsborough County is largely tapped out, paying for three other stadiums already.

Sternberg didn't say how much a new stadium would cost him - or taxpayers - but it's safe to say a smaller, part-time, open-aired stadium would be far lower than the $900 million stadium pitched in Ybor. 

We'll find out if he played this hand well - hit Tampa Bay with sticker shock in Ybor, then settle for something a lot more practical later?

WHAT EXACTLY IS STERNBERG ASKING FOR?The Rays opened their press conference with nine minutes of accomplishments they wanted to make sure everyone in Tampa Bay was aware of: from actions in the community to progressive policies. 

It was clear Sternberg was asking the region to forget any ill-will that may have built up in the past.

Then, he asked for the region to simply have an open-mind.

"What happens next, I do not know," Sternberg said. "But even though is seems like a long-shot concept and a cockamamie idea...we really feel great about it and believe it can be done."

That was the public ask. But read between the lines, and Sternberg was also clearly asking for support for the taxpayer subsidies to make it happen...as well as an enormous request from St. Petersburg: permission to talk to Montreal about playing games there prior to 2027.

Mayor Kriseman just responded to the press conference, saying the city would not help fund a stadium for a part-time team and the Rays need to re-establish a "good working relationship" with his office, but you can bet permission to discuss relocating home games to Montreal won't be part of that anytime soon.

THE ECONOMIC IMPACT OF LOSING 41 HOME GAMES A YEARSternberg, who spent years talking about how valuable the Rays were to the region, talked repeatedly about the economic engine the sister-city arrangement would create for the region.

In short, he suggested losing 41 home games a year - while also paying for a new Rays stadium - would pay for itself, as new Canadian tourists would come down to see their "home" team early in the season.

Back-of-the-napkin math on this suggests St. Pete would need tens - or even hundreds - of thousands of new Canadian tourists to make this work, which seems somewhat ridiculous, given that no Montreal fan is going to want to watch their team in Florida's June humidity when they could wait three weeks and watch them up north in July.

You could also simply count all the empty seats at Blue Jays' spring training games in Dunedin to know hundreds of thousands of fans aren't coming down to watch their home team play baseball in Florida.

Could a sister-city arrangement create new economic opportunities for Tampa Bay? Absolutely. But enough to pay for a new stadium? Of course not.






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Monday, June 24, 2019

Stu Sternberg's Latest Pitch is Just His Latest in a Long Line of Non-Threat Threats

The latest overtures from Rays' owner Stu Sternberg - that the only way to keep MLB in Tampa Bay long-term is a longshot plan to share the team with Montreal - appear to be little more than a reminder that the region to get off its collective butt and help finance him a stadium.
 
In fact, that makes at least a half-dozen major "non-threat threats" Sternberg has delivered to Tampa Bay in the last nine years, as he tries to wiggle out of an otherwise-ironclad stadium contract he purchased back in 2005.
 
A brief history:
  • June 2010 - Sternberg says the only way "for this asset to be preserved" is a new stadium, and if not, there are "five markets" that would be better homes for the team.
  • Oct. 2011 - Sternberg says MLB will "vaporize" the Rays within 9-12 years without a new stadium (it hasn't).
  • Jan. 2013 - Sternberg suggests to Hillsborough Co. commissioners the league would move or contract the team if a new stadium wasn't built.
  • Dec. 2014 - Sternberg says team is "doomed to leave" without a new stadium, he was done re-negotiating with St. Pete (alas, he wasn't), and he'll sell the team by 2023 if he doesn't have a new stadium.
  • May 2016 - The Rays will have to leave Tampa Bay if businesses don't step up and spend money on MLB.
Each non-threat threat resulted in a predictable cycle of headlines, news reports, opinion columns, and countless hours of sports talk speculation.
 
But what none of them have produced yet is real, tangible progress on the stadium saga. 
 
You can't blame Sternberg for trying; his hands are tied, and to improve his bottom line, he has to find a way to move the needle.
 
It's straight out of the Pro Sports Ownership 101 syllabus: "a savvy negotiator creates leverage."
 
However, Sternberg does have some leverage, and he's using it: St. Petersburg, anxious to redevelop the 85 acres Tropicana Field and its parking lots sit on, also has its hands tied by the stadium stalemate.
 
The city cannot move forward with its much-anticipated (and lucrative) redevelopment without cooperation from the Rays. St. Pete's contract with the team also requires it to pay out 50% of redevelopment revenues to the team as long as its playing at the Trop.
 
So you can see why the financial situation isn't as dire as the Rays may want some to believe. You can also see why continuing the stalemate may not be in St. Pete's best financial interests, either.
 
Unfortunately, when hundreds of millions of dollars are at-stake, negotiations move along at a snail's pace.
 
Sternberg's next non-threat threat is scheduled for Tuesday afternoon, where he'll hold a press conference at St. Pete's Dali Museum. Expect a surreal scene.





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Thursday, June 20, 2019

What Exactly is Stu Sternberg Leveraging with the Tampa Bay/Montreal Split Season Idea?

Just as President Trump can dictate an entire news cycle with a single tweet, the Rays have done the same in Tampa Bay, sending the entire region (and baseball world) into a frenzy by leaking news that they want to explore splitting their 81-game home schedule between two markets, Tampa Bay and Montreal.

However, as with any sensational tweet, it's important to sometimes take a step back and ask, "is this realistic?" 

Because in the case of the Rays, a split season may be nothing more than fodder to fill a news rundown. It also appears to be a possible way for the franchise and Major League Baseball to leverage public opinion on the stadium stalemate in Tampa Bay.

By the time this story is published, every news site across West/Central Florida will have posted a report detailing the unprecedented split-season idea thrown out by the Rays and MLB, a concept team owner Stu Sternberg said (in a prepared statement) was "worthy of serious exploration."

But let's focus on how much of a longshot this idea is. Not only did St. Pete Mayor Rick Kriseman say his city already shot the idea down (the Rays cannot talk to other cities about home games outside the Trop prior to 2027), but the money also doesn't make sense.

Neither Tampa nor Montreal have been close to cobbling together the billion dollars necessary to build a new stadium for 81 home games, so it doesn't seem very likely they'd have more luck on a stadium for only 40-ish games.

And St. Pete, which has been anxious to move past this never-ending soap opera so it can redevelop its 85 acres of prime downtown land before the economy slows down - with or without the Rays - would have very little to gain by continuing to subsidize a team that's home only 40 nights a year while leaving a giant gaping hole in its redevelopment plans the other 325 nights.

Of course, as White Sox owner Jerry Reinsdorf pointed out after using Tampa Bay to get himself a new Chicago stadium, "a savvy negotiator creates leverage."

So what are the Rays and MLB trying to leverage? Three possibilities:

1. Maybe Stu Sternberg really does believe some best-of-both-worlds situation exists where he can keep the fan base he's built up in Tampa Bay while also landing a new subsidized stadium in baseball-starved Montreal. But Sternberg, an astute businessman, knows this is unlikely.

2. Maybe it's the next step in the team fleeing to Canada. Former St. Pete Mayor Bill Foster, who has always claimed Canada was Sternberg's end-game, said Thursday in quite unflattering terms, "this is the Rays' way to mitigate damages to (St. Pete) while they transition to a permanent home in Montreal...the Rays want a wife and a mistress, and believe that everyone should be fine with that. That's not how this works. It's time to show the Rays the door right now...they don't deserve St. Pete."

3. Despite all his frustrations, there are two things Stu Sternberg loves about St. Petersburg: the waterfront, where he initially pitched a new stadium in 2008, and the Trop site redevelopment revenues he stands to collect 50% of, for as long as the Rays play ball in St. Pete. So could Sternberg be envisioning a future where the Rays play 41 games a year at Al Lang Stadium (which he now controls through his ownership of the Rowdies) while also collecting revenues from the city's redevelopment rights where the Trop currently sits? As President Trump's tweets remind us, everything is negotiable.

In fact, it's worth pointing out that during last year's Ybor City stadium press conference, where Sternberg was pitching a Rays move across the bay, he still seemed interested in finding a way to tap that St. Petersburg redevelopment money, even after he left the Trop.

So while neither the Rays nor MLB are hurting for money, businesses don't profit off new stadiums if they have to pay for them themselves.
READ THE REST OF THE STORY ON FLORIDAPOLITICS.COM






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FSU privatizing its athletics department is so shady, not even Seminoles fans should support it

Florida State University is embarking on perhaps the darkest chapter in its athletics department’s history, which is significant for a program that has endured a massive cheating scandal, multiple Jameis Winston controversies, and whatever the heck that was that the 'Noles put on the football field in 2018.

Is this over-the-top outrage for the school creating a private booster organization to run its athletics department? Especially when a pair of other universities in the state already have the same arrangement?

Depends on whom you ask … and how much you value transparency.

If you’re the win-at-all-costs type who roots for your team regardless of how many criminals they place on the field or how many booster bucks flow into their pockets … I guess there’s no need to read any further.

But if you’re a taxpayer who cares about how your money is spent, or you’re simply a human being who believes sunlight and transparency are the best disinfectants, then FSU’s move to convert its athletics department into a private direct service organization (DSO), thus exempting it from state public records laws, should be extremely concerning.

The Sunshine State has a rich tradition of transparency and accountability in government, and FSU’s end-around on those values couldn’t be more obvious.

Yet, somehow, it seems none of the officials tasked with looking out for Floridians seem to be concerned.

For what it’s worth, FSU President John Thrasher told The Washington Post’s Will Hobson the restructuring had nothing to do with avoiding public records and more to do with streamlining fundraising and athletics/booster relations.

Thrasher said the Seminoles would continue to provide access to public records like emails, text messages, and financials — just as the University of Florida has done through its DSO.

But these schools will only provide full access to these records until the day they decide not to.

Continue reading here on FloridaPolitics.com.






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Wednesday, June 5, 2019

New Clearwater Spring Training Report Determines Bogus Economist’s Numbers are Bogus

Hat-tip to the Tampa Bay Times' Kirby Wilson, who wrote Tuesday about how a new spring training economic impact report from the city of Clearwater contradicts a similar report from just one year earlier - a report the city used in 2018 to try and justify $80 million in taxpayer-subsidized stadium renovations.

Note: the word "report" is used throughout this story, rather than "study." 
That's because it's typically marketing professionals - not economists - who compile the rosy reports in an effort to justifying taxpayer subsidies for privately-operated stadiums.

Most real economists will tell you these studies are wildly-inflated, and Kirby had no trouble finding some a couple to offer up thoughts. Even Andrew Zimbalist, an economist who has been paid to consult on behalf of MLB, told the Times there were some pretty big flaws in both of Clearwater's reports.

Clearwater's 2018 report was based off old research by FSU marketing & hospitality professor Mark Bonn, who was exposed by WTSP in 2017 for selling decades of inflated reports to Florida municipalities that lacked basic economic principles and intentionally skewed numbers to get desired results. The estimated economic impact of the Phillies in 2018: $70 million.

Seeking better numbers in 2019 - but not trying very hard - Clearwater turned to the firm of a different FSU marketing professor (now retired), Phillip Downs.

Downs' firm acknowledged in its 2019 report that locals who spent money at Phillies games likely would have spent it elsewhere if Spring Training was not an option. It also acknowledged that a tourist who attends three Phillies games only needs one hotel room per night, not three, as Bonn's reports have previously suggested.

The Downs and St. Germain Research report suggested the Phillies were not worth $70 million per year to Clearwater, but $44 million per year - a figure experts said was still inflated.

The authors of the report defended their numbers, telling the Times they relied on fan surveys and a model called IMPLAN to figure out how much direct spending will ripple throughout a community after the event.

However, economists say IMPLAN wasn't designed for one-time or seasonal events.

For what its worth, the Phillies told the Times the $44 million figure was simply too low. One reason, Phillies players often buy homes in Tampa Bay. 

It's not clear how many millions of dollars in groceries and rounds of golf are accounted for by the 25 players on the team's roster.

For the record, if you were wondering if there was ever an economic impact report that suggested public stadium subsidies were not worth their price, the answer is yes: when Florida's top economist took an impartial look at the state's stadium spending in 2017, she concluded it provided very little return on investment.

The Phillies and Clearwater are looking for Pinellas County to pick up the majority of the $80 million renovation tab, even though Spectrum Field is already considered one of the Grapefruit League's nicest parks.





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