CXLVII - Is this the 'Final Countdown' in Arizona?

[TheGreenTBer]

Tune in next week for another episode of Grandma needs Dick.

I can't last a week without that program

 

[MeHateHe]

Rough calcs the city is spending $356 million on the arena. At 6% over 30 years that's $25 million per year. For context the total budget of the city is $4.9 billion. So that's .53% of the city's budget that's going for basically an amenity that people enjoy having. It averages out to about $20 per person. So what's really bothering you bro?

What's really bothering me, bro, is that y'all keep vacillating between 'it's a good investment' and 'it's not that much money' as if it doesn't matter. I'd invite you to spend some time going over the budgets of any medium sized government. Mine spends roughly $70 billion a year on schools, roads, hospitals and the the people that run them. Sure, $50 million in the context of a $70 billion budget doesn't sound like much, but there are 22 ministries in the government. And each of those ministries has individual programs that chip away at those ministry budgets. Some of those smaller ministries, $50 million is half their annual budget. So it may not sound like a lot in the context of things, but it actually takes money away from real programs that could help real things.

There's also the f***ing principle of the thing. We're talking about giving away millions of dollars to outrageously wealthy men at a time when real public services could use that money. And finally, there's the fact that no one has actually demonstrated that the teams need public money for these teams. Most of the teams are making profits, and even the ones that are not are growing in valuation, meaning the owners are getting richer using money that could have gone to help actual human beings.

Finally, I never should have even taken the bait about Amazon, because it's a red herring. I don't support subsidizing sports teams in large part because I don't support subsidizing any private business.

Tune in next week for another episode of Grandma needs Dick.

I mean....

 

[TheLegend]

Sure. If it was a good investment. It's not and there has never been any good research to show it is a good investment.

Most if not all of the “reasearch” is based on a narrowly focused cookie cutter theory that municipalities pay all the freight.

As in building that cookie factory and tossing the keys over to an operator duty free forever.

Now I tend to agree that concept is wrong, extremely risky and that a municipality can and should provide the basic infrastructure needed.

But if say that duty free cookie factory was still profitable for the municipality you’d still have guys like DeMause sitting on top of his toadstool screaming at the world how evil and wrong it is because it didn’t fit their “research”.

 

[aqib]

What's really bothering me, bro, is that y'all keep vacillating between 'it's a good investment' and 'it's not that much money' as if it doesn't matter. I'd invite you to spend some time going over the budgets of any medium sized government. Mine spends roughly $70 billion a year on schools, roads, hospitals and the the people that run them. Sure, $50 million in the context of a $70 billion budget doesn't sound like much, but there are 22 ministries in the government. And each of those ministries has individual programs that chip away at those ministry budgets. Some of those smaller ministries, $50 million is half their annual budget. So it may not sound like a lot in the context of things, but it actually takes money away from real programs that could help real things.

There's also the f***ing principle of the thing. We're talking about giving away millions of dollars to outrageously wealthy men at a time when real public services could use that money. And finally, there's the fact that no one has actually demonstrated that the teams need public money for these teams. Most of the teams are making profits, and even the ones that are not are growing in valuation, meaning the owners are getting richer using money that could have gone to help actual human beings.

Finally, I never should have even taken the bait about Amazon, because it's a red herring. I don't support subsidizing sports teams in large part because I don't support subsidizing any private business.


I mean....

I didn't say it was an investment that would show you a positive ROI on a spreadsheet. I said that 1) the analysis deMausse does is incomplete and that it should be looked at like an amenity. 2) I said that the amount spent is essentially a rounding error that gets a disproportionate amount of attention 3) I do analyze government budgets. For a living.

 

[Ciao]

I didn't say it was an investment that would show you a positive ROI on a spreadsheet. I said that 1) the analysis deMausse does is incomplete and that it should be looked at like an amenity. 2) I said that the amount spent is essentially a rounding error that gets a disproportionate amount of attention 3) I do analyze government budgets. For a living.

The rounding-error argument is a fallacy.

Governments have very little discretionary spending power. One program comes at the expense of another.

Most households are the same. Once you pay your fixed expenses and other necessities, there might not be a lot of change left over. $500 might not be much relative to your total income, but in relation to your discretionary spending it could be a big piece of cheese.

 

[KevFu]

I might be able to save you guys some time with the argument...

You're again claiming that public subsidies of sports teams is making a city boom. It's an illusion

You're not wrong at all, it's just that no one CARES about "being right" on the sports stadium subsidy issue. Most people would rather be wrong with their favorite sports teams in town than right with their favorite sports team having packed up and moved.

There's no evidence that building a new stadium with public money leads to economic growth, but there's no evidence anything else will either, because you're hard-pressed to find something as uniquely popular as a major sports team.

Whatever you put on that lot instead of a pro sports venue can exist anywhere: Entertainment district? Retail? The COUNTRY is an entertainment district and retail space. What makes your development special?

There's nothing else to spend money on that's going to guarantee 20k to 80k visiting one spot in the city that many times a year because major pro sports are closed-market thing. There's only 120-128 major pro sports teams (or 150-160 if you count MLS) instead of an infinite number of parks, retail, bars, restaurants, theaters, etc.

And of course, you're probably not getting re-elected if you lose the team.

 

[MeHateHe]

You're not wrong at all, it's just that no one CARES about "being right" on the sports stadium subsidy issue. Most people would rather be wrong with their favorite sports teams in town than right with their favorite sports team having packed up and moved.

I dunno. This being the business forum, I figure we should at least pretend to adhere to economic fundamentals. I have been saying that people can argue that governments can ignore the fact that they’re pissing away the taxpayers’ money but stop telling me that up is down. The main board is a great place to pretend objective reality doesn’t exist. It’d be nice to talk about this stuff from an intelligent starting place.

 

[Stumbledore]

Most people would rather be wrong with their favorite sports teams in town than right with their favorite sports team having packed up and moved.

Smartest thing I've read in this forum all month.

 

[KevFu]

I dunno. This being the business forum, I figure we should at least pretend to adhere to economic fundamentals. I have been saying that people can argue that governments can ignore the fact that they’re pissing away the taxpayers’ money but stop telling me that up is down. The main board is a great place to pretend objective reality doesn’t exist. It’d be nice to talk about this stuff from an intelligent starting place.

Can't speak for everyone, but I think you're 100% absolutely right that cities giving billionaires the free arena/stadium and all the revenues from it, tax-free, rent-free, forever -- and then build a new one 30-40 years later.

It's a lot like free agency: Is ______ "Worth it?" Of course not! You know a FA is going to be drastically overpaid (especially late in the contract)... but that's the cost of doing business. The FA has the hammer, so he can swing it. You can pay it.... or not get them.

You want a deal that's the "least bad" for the community/city.


Now if you want to discuss how most stadium deals "Aren't as bad as people think" because a lot of expense is really "opportunity cost" then I'm happy to engage.

 

[Melrose Munch]

Can't speak for everyone, but I think you're 100% absolutely right that cities giving billionaires the free arena/stadium and all the revenues from it, tax-free, rent-free, forever -- and then build a new one 30-40 years later.

It's a lot like free agency: Is ______ "Worth it?" Of course not! You know a FA is going to be drastically overpaid (especially late in the contract)... but that's the cost of doing business. The FA has the hammer, so he can swing it. You can pay it.... or not get them.

You want a deal that's the "least bad" for the community/city.


Now if you want to discuss how most stadium deals "Aren't as bad as people think" because a lot of expense is really "opportunity cost" then I'm happy to engage.

Do you really think having a sports team is that important? Most US Cities don't actually have one and outside the US they don't help that much with tourism. St. Louis did not fall off the earth when they lost the Rams.

 

[KevFu]

Do you really think having a sports team is that important? Most US Cities don't actually have one and outside the US they don't help that much with tourism. St. Louis did not fall off the earth when they lost the Rams.

I mean, I think it is, but I'm also a guy who posts about THE BUSINESS OF HOCKEY AND OTHER SPORTS all day at work; so I'm probably not the best person to ask if you want an objective opinion.


I will say this, though... the dollar amounts reported and the way it SOUNDS is a lot worse than the actual expense to the taxpayer.

I use the Mets baseball stadium because I know the terms the best. The $614m in "taxpayer money" includes over $300m that's "opportunity cost" and not REAL DOLLARS.

The actual cost to NYC taxpayers for the Mets stadium was $216m.

And of course, you can frame that another way: $1.25 per year over the course of the lease, and if it lasts as long as Shea, it's only 83 cents per year per taxpayer.

 

[JimAnchower]

Bill Daly doesn't have much to say about Coyotes arena search.

Let’s move on to Arizona. I know a topic that seems to be neverending. They came out recently and announced that they have purchased land or are working to purchase land in Mesa that would not require a public referendum and all that, but sometimes with Arizona, you just never know exactly what the future holds and what to believe and things like that.

Sometimes?

Sometimes, exactly. So what is the latest, because Gary Bettman has said publicly that pretty much by mid-season, you really need to have a decision on where they’re going to play their games or you might have to explore other options.

I don’t think the timeline has changed. We get regularly updated by (president and CEO) Xavier Gutierrez with respect to the status of their discussions on various things, and (owner) Alex Meruelo. They’re committed to finding a place in Arizona and making it work there. They continue to be optimistic about their ability to do so. I think what you saw last week or the week before, whenever, it was part of that overall plan. And I think there’ll be other things that come down the road that will tell you whether they’re making real progress or whether they’re not. But I expect that to continue to be an evolving situation. All I can say is they remain optimistic and confident, and so we get our information from the Coyotes.

Bill Daly Q&A: Latest on the Coyotes arena saga, Bally Sports and more from the NHL deputy commissioner

Daly sat down with The Athletic recently in a one-on-one in Stockholm at the European NHL Player Media Tour.

theathletic.com

 

[Melrose Munch]

I mean, I think it is, but I'm also a guy who posts about THE BUSINESS OF HOCKEY AND OTHER SPORTS all day at work; so I'm probably not the best person to ask if you want an objective opinion.


I will say this, though... the dollar amounts reported and the way it SOUNDS is a lot worse than the actual expense to the taxpayer.

I use the Mets baseball stadium because I know the terms the best. The $614m in "taxpayer money" includes over $300m that's "opportunity cost" and not REAL DOLLARS.

The actual cost to NYC taxpayers for the Mets stadium was $216m.

And of course, you can frame that another way: $1.25 per year over the course of the lease, and if it lasts as long as Shea, it's only 83 cents per year per taxpayer.

I'm not sure I agree. Sports is a nice to have, Not a necessity for a city. I think sports can paper over the very real issues cities face. And that's a big reason why they chase them.

Bill Daly doesn't have much to say about Coyotes arena search.

Bill Daly Q&A: Latest on the Coyotes arena saga, Bally Sports and more from the NHL deputy commissioner

Daly sat down with The Athletic recently in a one-on-one in Stockholm at the European NHL Player Media Tour.

theathletic.com

Would rather hear an update on the Hockey Canada stuff, that's more important right now.

 

[aqib]

I dunno. This being the business forum, I figure we should at least pretend to adhere to economic fundamentals. I have been saying that people can argue that governments can ignore the fact that they’re pissing away the taxpayers’ money but stop telling me that up is down. The main board is a great place to pretend objective reality doesn’t exist. It’d be nice to talk about this stuff from an intelligent starting place.

The funny thing is that you seem to be arguing against something that no one here is saying. Literally none of us has say that if a city spends $X on a sports team we can show you a spreadsheet that it will generate $X + $Y in economic output. The arguments that we're making is that:

1) Governments do spend money on things that enhance quality of life in a city that wouldn't meet the definition of "necessities." What about the arts? Are those necessary? No they are a luxury. I don't hear nearly as much angst about that. What about bike lanes? People make it out as if they save on fossil fuel emissions but don't account for drivers burning extra fuel in stop and go traffic when the extra space could allow traffic to move faster, or having to slam their brakes because of some idiot on a bike. People act as if bike lanes help people who can't afford cars but its really Brett going to CrossFit.
2) The amount of angst for sports subsidies relative to the amount its grossly disproportionate to the actual amount. Western New York wouldn't suddenly become paradise if the Bills left town. Oakland is suddenly thriving after losing 2 teams and it won't take off if the wind up losing the A's.

 

[TheLegend]

Bill Daly doesn't have much to say about Coyotes arena search.

Bill Daly Q&A: Latest on the Coyotes arena saga, Bally Sports and more from the NHL deputy commissioner

Daly sat down with The Athletic recently in a one-on-one in Stockholm at the European NHL Player Media Tour.

theathletic.com

You wouldn’t hear much until the Coyotes make an announcement.

 

[aqib]

Do you really think having a sports team is that important? Most US Cities don't actually have one and outside the US they don't help that much with tourism. St. Louis did not fall off the earth when they lost the Rams.

Yes for a lot of cities it is. Not for places like LA but for a lot of others yes.

As far as most cities not having them, all of the top 40 metro areas have at least one major league sports team or a major college program other than Virginia Beach and they have had assorted proposals over the years to figure out how to get one. Here is an article about impact in Nashville of getting sports teams: Adams helped Nashville become an 'It' city

Ask Oklahoma City what the impact of the Thunder showing up is.

As far as St Louis goes, first they have 2 other major league teams and turned around and built an MLS stadium. Secondly, football wasn't number one in St Louis it was always baseball. Go there during baseball season and hang out downtown on a game night. You can see what having the Cardinals does for the city.

 

[TheLegend]

Yes for a lot of cities it is. Not for places like LA but for a lot of others yes.

As far as most cities not having them, all of the top 40 metro areas have at least one major league sports team or a major college program other than Virginia Beach and they have had assorted proposals over the years to figure out how to get one. Here is an article about impact in Nashville of getting sports teams: Adams helped Nashville become an 'It' city

Ask Oklahoma City what the impact of the Thunder showing up is.

As far as St Louis goes, first they have 2 other major league teams and turned around and built an MLS stadium. Secondly, football wasn't number one in St Louis it was always baseball. Go there during baseball season and hang out downtown on a game night. You can see what having the Cardinals does for the city.

Just going to remind everyone in regards to LA there were three NFL teams that spent several years fighting over two spots the league was going to allow there and it got into the tens of millions for each of them just to get in with one spending billions just on the stadium.

 

[aqib]

Just going to remind everyone in regards to LA there were three NFL teams that spent several years fighting over two spots the league was going to allow there and it got into the tens of millions for each of them just to get in with one spending billions just on the stadium.

Yeah, what I mean is that LA is one of the few that the city doesn't pay because having an NFL team isn't as important to them as it is in other cities. Between having 2 major college football programs, 2 teams in each of the other major leagues, and so much of the population being transplants from other cities. Before the Rams/Chargers moves and schedule going to 17 games, I thought they should go to 17 games and have each team play one neutral Sunday night game in LA.

 

[KevFu]

Honestly, the real economic argument to be made is that building a new stadium for an existing team is a better deal for the city than building a stadium to GET a team.

It really depends on what the land you want to build on currently is now.

All of the stadium deals where "we build the new place in the parking lot of the old place" deals are perfectly fine and cost-effective. Because the OLD STADIUM probably had the same terms.

The city is claiming the opportunity cost of not charging property tax when they haven't charged it for that land at all in the past 50 years is the ultimate example of phantom dollars. You're just continuing the same deal from the old stadium in the new stadium.

 

[KevFu]

Yeah, what I mean is that LA is one of the few that the city doesn't pay because having an NFL team isn't as important to them as it is in other cities.

There's not really a good way to quantify that, because there's no "organization" of all the people who wish they had something but don't. Before the Sonics moved, how would you gauge interest in "Oklahoma City wants an NBA team?"

The NFL could go without an LA team for so long because the NFL TV package is 100% national and adding a team there really doesn't change anything. Most people just watch the games they get regardless of who's playing. The TV money is the same per team regardless if you're in the #2 market like LA or the #50 market like Buffalo; so the league had no reason to expand to get a team in LA.

 

[aqib]

There's not really a good way to quantify that, because there's no "organization" of all the people who wish they had something but don't. Before the Sonics moved, how would you gauge interest in "Oklahoma City wants an NBA team?"

The NFL could go without an LA team for so long because the NFL TV package is 100% national and adding a team there really doesn't change anything. Most people just watch the games they get regardless of who's playing. The TV money is the same per team regardless if you're in the #2 market like LA or the #50 market like Buffalo; so the league had no reason to expand to get a team in LA.

As the old saying goes: Not everything that counts can be counted and not everything that can be counted counts.

In OKC's case we had what happened when the Hornets had to temporarily relocate there. Clay Bennet had also bid for an NHL team during the late 90s expansion process. They wanted to get a big league team because they felt that would validate them as a big league city. The effect on quality of life, we can't quantify but I am largely going based on anecdotal evidence based on what people I know from there have said.

With LA and the NFL, how much angst did you hear from LA between 1995-2015 about them not having an NFL team?

 

[KevFu]

With LA and the NFL, how much angst did you hear from LA between 1995-2015 about them not having an NFL team?

I heard "plenty" of individuals say it was ridiculous LA didn't have a team. The problem is you don't know how many individuals are saying it.

A great example is Seattle, they ran a poll on "how interested you'd be in an MLS team if Seattle got one" and the results were... not great. Like 5%. Then they got a team and sold like 40,0000 tickets left and right for a decade or so. the US National team started playing there because it was such a great soccer market; that kind of thing.

 

[Stumbledore]

You wouldn’t hear much until the Coyotes make an announcement.

Yes, but there are 'announcements' and then there are "ANNOUNCEMENTS".

 

[aqib]

I heard "plenty" of individuals say it was ridiculous LA didn't have a team. The problem is you don't know how many individuals are saying it.

A great example is Seattle, they ran a poll on "how interested you'd be in an MLS team if Seattle got one" and the results were... not great. Like 5%. Then they got a team and sold like 40,0000 tickets left and right for a decade or so. the US National team started playing there because it was such a great soccer market; that kind of thing.

Sure people thought it was ridiculous that LA didn't have a team but was anyone from LA bemoaning the absence of the NFL?

Compare that to any other market that lost a team. Seattle, Cleveland, heck I heard more people from Brooklyn complaining about the Dodgers 50 years after they left than LA football fans.

 

[TheLegend]

Yes, but there are 'announcements' and then there are "ANNOUNCEMENTS".

….. and the squires of the Business Of Hockey forum (who drop in once every 6 months with their “expertise”) would say it isn’t an announcement until THEY declare it to be.

(present company not included of course.)