Protecting local government interests: Jurisdictions at risk from slimy sports teams owners and the Miami Marlins as an example
Professional sports leagues control who owns teams. And the leagues and local team owners "gang up" against local jurisdictions in aiming to maximize the amount of government-provided monies for new stadiums and arenas.
If the team ownership group is flawed -- for example, yesterday's Washington Post has a nice column, "Boswell: Whatever Bryce Harper decides, the Washington Nationals played this right," about the difference in quality management and being principle-driven comparing the Washington Redskins football team and the Washington Nationals baseball team.
Granted neither team aims to leave any financial crumb on the table when it comes to their negotiating position with local and state governments, that being said, it's better to have "a public-private partnership" with a principled team and one that is managed well than an ownership group without principles and poorly managed team.
Just recognize that the government needs to protect its interests rather than expecting the team to do it for them.
The Miami Marlins are a good example of this. The team was owned by a guy with a bad reputation, first with the Montreal Expos, which he ended up selling to Major League Baseball--the team became the Washington Nationals, and in return was allowed to acquire the team in Miami.
Miami-Dade County, in return for money--about $500 million of a total cost of $600 million--for a new stadium, negotiated a 5% payment of "future profits" were the team to be sold before Spring 2018.
It was expected that the new stadium and retractable roof would lead to success on the field ("By Raising Roof, Marlins Hope Interest Will Follow," New York Times).
Instead, the team has had losing seasons every year since the new stadium opened. It's fair to say this is a better example of the fact that the quality of management is more important than a new stadium in determining success.
Loria sold the team last fall.
Now he is trying to get out of paying Miami-Dade County any money. He bought the team for about $158 million and sold it for $1.2 billion.
It's now tied up in Court ("Jeffrey Loria to county: trust my numbers on the Marlins sale. Judge: no way.," Miami Herald).
Note that this does reflect my recommendation that localities negotiate a kind of virtual interest in a team to reflect the value of monies provided for stadiums/arenas ("Stadiums and arenas as the enabling infrastructure for "money-making" platforms," 2014; "New Year's Post #3: More thinking on "return on investment" from different types of sports facilities and DC, and an Olympics in DC," 2015).
Although I think this percentage should be significantly more than 5% since without the stadium-arena as platform, there is no team.
Given the Loria machinations, I'd recommend that this ownership interest be reflected in a lien on the sale of a team, or at least that a performance bond be required, to make it more likely that the team will not renege.
In any case, governments are at the mercy of the professional leagues in terms of who owns the team and how they'll operate it.
This is significantly asymmetric in terms of what is expected by the Leagues vis a vis local governments and financing.
Labels: mega-events, public finance and spending, public private partnerships (3P), special events and programming, sports and economic development, stadiums/arenas, urban revitalization
posted by Richard Layman @ 6:56 PM&Permanent Link
11 Comments:
You often rail against "neoliberalism" which I often push back again.
(in my view, it is dead term, Thatcher doesn't matter much anymore, and it inflames more that it informs)
What we can see here is that the problem is our public institutions are failing.
Trump is just an example of that. He is the Growth Machine, and has a highly transaction view of government. Not good, not bad, just transactional.
Likewise sport owners.
The answer is how we can bulk out our institutions ; say force sports owners to turn over a "Golden Share" on owners change change or something similar.
To be accurate, when I write about "neoliberalism" it's not about Thatcher etc. although yes she touched it off, it's about the idea that the market economy is always superior to government, that markets are the process solution for every matter, that government can never ever be effective.
Those general attitudes are now the consensus view for most people.
Privatization, "choice," public-private partnerships, even "social impact bonds" all come out of this thread.
The reality is that (1) ultimately, government is us, the people and (2) if you underfund government we can guarantee that it won't work.
The transactional approach is contra to point (1) and of course, Trump is the perfect example of its highest realization and zero sum/winner take all thinking.
He is a bottom feeder that got big, but still resents having to pull permits, etc.
Sports facilities is just one element.
I am amazed every time I start to delve into something and find all kinds of great planning products produced in various places. But that's jurisdiction by jurisdiction. Rarely are they captured and brought into a considered and excellent whole.
Everyone is so busy doing their own thing it becomes very difficult to build a better whole, a better framework, a better process for practice.
In the past I've argued that the reason the community benefits process is underdefined by the Office of Planning and the Zoning Commission is to reduce the cost of outlays for developers. If there was an open, transparent, structured process, there would be more spending on "preferred outcomes." (Of course, that means we need to start from a basis of a shared consensus on a neighborhood's needs.)
The same is true of the sports facilities process. I don't think Nat. League of Cities or ICMA or Lincoln Land Institute has a grouping aimed at producing a master contract along the lines of the International Model Building Code.
And without Congress stepping in with laws that would prevent sports leagues from pitting cities and states against one another, at the end of the day a community that really wants a team will fold.
LA is the exception that proves the rule. Even so, the teams won't be in the City of LA proper, but a suburb, because the city wouldn't come forth with what the teams wanted.
Last week I think there was an article in the Guardian about how British people "don't want socialism."
Maybe they don't. But they do want working railroads, properly funded local government, a functioning health service, etc.
It's about the language we use to describe "community."
I guess another element of neoliberalism is the disconnection between government and community and substituting government involvement in community with the civil society, excepting it's always made out to be superior and for many it is an excuse to empower religious institutions vis a vis civil society and government.
2. wrt developers cf.
https://www.printfriendly.com/print?source=homepage&url_s=uGGCFkllJJJmGurtyBornAqznvympBzlArJFlGBEBAGBluBJ-n-ArJ-oErrq-Bs-tBBq-tHL-Erny-rFGnGr-qrIryBCrE-vF-znxvAt-n-CBFvGvIr-vzCnpGlnEGvpyrdhghdfhhl
another point re sports owners... the NFL hates that the Green Bay Packers are community owned. It does show that there is another way. However, in a league of big market teams and teams that don't have to live within their financial means, it's tough for the GBP to compete. They've managed, but it requires quite a skill set.
2. another thing about the basics of the neoliberalism approach. It isn't exactly no taxes, but definitely the idea that people and firms can spend money more wisely.
It doesn't really accept the idea of public goods, that some things (like infrastructure) aren't likely to be created "by the market" except in unique circumstances.
The no tax underfund the government trope is from the anti government types (Tea Party, hard core conservatives) and I don't think neoliberalism has ever taken such a hard core position.
Well I think it is important to get the terms right, because we are all in a post-Reagan/Thatcher neoliberal world and we have to figure this out.
(And yes, they were popular because the 70s sucked hard).
And I'd question how much of the complaints/problems are a result of neoliberalism (which I'd define as the primacy of the private sphere, not the public one) versus the problem of neoliberalism not delivering the goods.
(again, Gay marriage is neoliberalism. Immigration is neoliberalism. Taco trucks on every corner is neoliberalism)
Or suggest -- where you , I, and Steve Bannon agree -- that we need to put community first.
yes being provocative, sorry.
And going back to cities, how do we do that?
As you said with CBAs, we need to be less transactional and more transformative.
as usual! you are great at the turn of phrase, getting right to the point, the epitome of succinctness...
1. Primacy of the private sphere;
2. We need to be less transactional and more transformative.
well I've been reading the Art of War in Italy this week, and thus thinking a lot of on the privatization of state functions and what that means.
The union contracts (L. Littlefield) is another way in.
re unions, interestingly, Morgan State wants some tax incentives to redo a "derelict" shopping center near the campus, that kind of links the campus to the area neighborhoods.
one of the unions testified before City Council against the deal because of open contract negotiations.
I understand the point about using whatever leverage you can have, and I'd hate to be a councilmember later seeking union support, but I wouldn't vote against this proposal were I in the same place.
more re transaction vs. transformational, in 2002 I submitted written testimony re DHCD priorities wrt their use of fed. monies. This was after the H St. CDC tore down the corridor's oldest buildings to construct a crappy one story building in their place with a fake second floor, at the corridor's most significant intersection (it is at such 100% intersecdtions where you're supposed to build bigger and grander).
I made the point that the issue wasn't that DC was doing better than Baltimore or Detroit, because it still competed with Arlington, Montgomery, Alexandria, etc. and that every dollar spent needed to accomplish multiple objectives, that we couldn't afford single outcome projects, that we needed to be very smart with the money.
... that's when the city was still kinda poor (remember a recession in 2003 led WMATA to junk the separated blue line) and coming off bankruptcy.
We still haven't moved too far when it comes to the concept of transformation.
I'm curious....
https://actionnetwork.org/events/how-to-be-a-community-advocate
More on Miami. Regrets by some Miami-Dade County Commissioners on voting for the Marlins deal, and a concern that the new ownership group is no better than the old one.
http://www.miamiherald.com/sports/spt-columns-blogs/barry-jackson/article203530764.html
Post a Comment
<< Home