Friday, February 3

Stadia Mania


"So this is a basketball? Fascinating! "

As this site has gone on, one area in which I am proud is our reluctance to write articles concerning the Sonics’ financial picture. I don’t know about Paul or Chunky, but I root for the Sonics’ basketball team, not for Howard Schultz, Barry Ackerley, or anyone else in the front office. I would imagine most of the people who visit this site are in the same situation. The kind of statistics we enjoy are points per game, not economic indicators.

Yet this latest hubbub concerning the Sonics and their arena woes has struck me as something worth discussing. Obviously, both sides of this argument – as in any debate – are staking out their respective territories, filling the newspaper and airwaves with ridiculous rhetoric that has as much basis in fact as W’s State of the Union.

Somewhere between Nick Licata’s nonsense about sports having “no cultural or economic value whatsoever” and Howard Schultz’s diatribe about “we are ultimately not the ones responsible for selling or moving this team” lies the truth, at least what I consider to be the truth.

The truth is the Sonics are vastly overstating their economic impact upon their hometown, a trait they learned, no doubt, from all of the other professional sports teams in North America.

Take a guess – what’s the economic impact of the Sonics on Seattle? In other words, if the Sonics left, by what percentage what this region’s economy decline? By 20? 10? 5?

Try 1/10th of one percent. Or, perhaps I should put it another way, as this author did: “In every case, independent work on the economic impact of stadiums and arenas has uniformly found that there is no statistically significant positive correlation between sports facility construction and economic development. … This stands in stark contrast to the claims of sports teams and leagues who assert that the large economic benefits of professional franchises merit considerable public expenditures on stadiums and arenas.” Or, perhaps you’d like to read this article, whose authors “haven’t uncovered a single instance in which the presence of a professional sports team has been linked to a boost in the local economy.”

And for this, Howard Schultz wants the taxpayers of King County to cough up $200 million, all the while his front office is signing people like Calvin Booth to five-year, multimillion contracts, Mikki Moore to a deal that pay him $300,000 a point, Ibo Kutluay to a two-year deal that contributed all of zero points to the Sonics, and so on. All while his front office sales staff has posted the lowest luxury suite occupancy rate in the entire NBA.

Face it, Howard, you have made your mess and now you must lie in it. I for one am not interested in subsidizing his team’s idiocy. Yes, I love the Sonics, and, yes, if they win an NBA championship it will warm my heart like few other things in my life. But how does that compare to people stuck in 2-hour traffic delays, every day, every week, every month of the year because of a lack of public transit? Will the goodwill generated by Schultz’ new building make homeless people warmer at night?

No, it won’t. I have come to a shared conclusion with two very smart people who know more about this subject than me, you, or Howard. Noll and Zimbalist’s fine book from 1997 “Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums,” explains in excrutiating detail just what its title declares. Their conclusion? “Stadium subsidies facilitate building expensive monuments to sports that benefit no one and transfer income from ordinary people to highly paid players, owners, and executives.”

Sorry, folks, but if you’re asking me to cough up $200 million so that I can continue to enjoy writing for a sports blog, Ray Allen can add another bedroom to his guest house, and Howard Schultz can add another Starbucks in Tarzana, well, you’re asking the wrong guy.

17 comments:

Lance Uppercut said...

This article has sent chills through the spines of many a Blazer fan, leading to much pontification that Paul "Diddy" Allen might consider looking for a team closer to his yacht. For my sake, I'm hoping Paul stays in Portland, but you never know.

Paul Merrill said...

Wow, I as just about to write an article about this, but luckilly for everyone Pete wrote a much better one first.

As much as I love the Sonics, I have to laugh at some of the stupid shit coming from Ho-Shu's mouth lately. Did anyone hear him whine last week about how everyone loves the Seahawks and nobody loves the Sonics? Hmmmm. That's a tough one, Howard. The Seahawks have a smart GM who picks good players and now they're in the Superbowl. The Sonics have Wally Walker (we all know Sund is a patsy) , the team stinks and is lottery bound. Wow, why in the world would the average sports fan go for the Hawks over the Sonics right now?

And the stadium thing is just a joke. The Key is a great place to see a basketball game. A new stadium would not benefit the real fan at all - it would squeeze us out to make room for rich people who couldn't give a crap about basketball.

Argh!

doubledribble! said...

The Sonics are not a financial anomaly. In fact, I can't think of one company who doesn't share this same philosophy...
transfer income from ordinary people to highly paid WORKERS, owners and executives.

However, you don't see other failing companies asking the public to pay back their debts, especially 200 F#&@N' million $!

Paul Merrill said...

Actually, DD, companies rarely transfer wealth to their workers. Executives and managers? You bet. The people that do actually work? Never. The workers are the first people to get laid off during downsizing and the last to get pay raises.

In fact, Chunk and I once worked for a company that recently fired ALL it's workers, then hired a handful of them back on a contract basis (less pay + no benefits!) so they could have 10 people do the work of 50. Hooray for American economics!

This doesn't really apply to the NBA, of course, because pretty much everyone is a millionare, but the owners still make much more than their "workers".

Rob Salkowitz said...

Someone in the Sonics PR and marketing departments needs to get fired. I mean, here we are in the middle of a Sonics season where they couldn't even get half a house to show up for Nate McMillan's return, where interest in the team and its players is at an all-time low, when everyone is bummed out because we haven't seen the sun in 8 weeks and... oh yeah, another local team is GOING TO THE FRIGGIN' SUPER-BOWL! And that's when the Sonics, in their wisdom, decide to go public with their whining. But wait, it gets better. Who do they put on alongside Howard Schultz? Wally Walker - the guy that any Sonics fans still paying attention realize is the biggest reason why the franchise is stuck in neutral, who garners (and deserves) zero respect among informed Sonic-aware Seattleites.

Do they want to leave? Are they actively inviting the anger and contempt of the public? Do they think people are going to rally in the streets to save the Sonics because Howard Schultz found the one activity where he can't make money, or because we find Wally Walker so sympathetic and persuasive? Jeebus. Don't let the door hit you on the way out.

Adrian said...

Great article. I agree wholeheartedly. It saddens me to see people like Schultz asking for $200 million for an unneeded arena when the state of our public school system is in the shitter. AND he has the audacity to do it all in the most dissapointing Sonics season in recent memory. Disgusting.

doubledribble! said...

true, workers are the least respected finacially, good point.

Nuss said...

One point I failed to make was that I don't think anyone can know with absolute certainty what economic impact a sports team has on a city. I didn't want to come across as someone with all of the answers, which, unfortunately, I probably came across as.

Rather, I wish the media would study this argument thoroughly and offer some criticism of what Schultz and his ilk trumpet as fact. Yes, Howard, you say the Sonics provide x amount of value to the city every year, but where are your figures coming from, if you have any figures at all? Isn't it at all possible that this entire sporting-teams-benefit-the-city argument is all a recasting of the emperor's new clothes fable?

Anonymous said...

I have no problem becoming a Blazers fan. If Walker et al wanna take the ball & leave, let 'em. $200 mill my ass.

AK1984 said...

From Howard Schultz, to Wally Walker, to Rick Sund, it seems as if the Seattle Supersonics front office is run by a group of immature, doltish idiots who are trying to rape us, the fans, of anything and everything—including our dignity!

b_con said...

This is why Nate left. He didn't want to deal with those fools in the front office anymore. Make's sense... The Sonics won't leave Seattle though, it's far too good of a market. (although Oklahoma might be f'ing us over a bit. Stop being so excited Oklahoma! You're making us look bad! Can you imagine there disapointment, going from the promising and excitin core of Chris Paul, David West, and JR Smith to Ray Allen, Vlade, and Swifty?)

In basketball news EARL WATSON has pretty much requested that Denver pull the trigger on him and Bryon "MJ's Bitch" Russell for Vitaly "the pick before Kobe" Potapenko, Flip "Sux [Donkey]" Murray, and Reggie. It's gonna happen! It's gonna happen! YES! YES! YES! I Heart Earl Watson for being a whiny little punk!

Anonymous said...

wanna thank all you contributors on this ownership situation. i am in so cal -- all the talk down here is about how the city of Anaheim is due almost 400 MILLION because the Angels changed their name (sort of). Your arguments have me seeing the city's case in a new light.

I agree that the focus should be on the team and not on ownership/city/finances. I have had a problem with HoSho (like that!) since he came into the picture. And the roster moves leave me scratching my head... I try to sell myself on "at least they resigned rayray.."

I've been away from the northwest for a long time, but I was there during the whole Smulyan/Nintendo Mariners mess. city didn't get it then, either. Yes, there may not be much that can be directly attributed to the presence of a sports team, but what is civic pride worth? "we have two other teams, that's enough." ????? needless to say, you aren't a basketball fan, are you?

Anonymous said...

The NBA empowers this type of behaviour from its franchisees. I think the City should get out of the arena business and just give Key Arena to the Sonics. That way we're off the hook for a soon-to-be antiquated stadium and we can then pour the money into the the viaduct replacement, schools, or whatever.

Alan said...

Had the Sonics been smart back when the rennovations first took place, they would have upgraded the Key more than they did. As soon as the Sonics moved back into the Key, they started bitching about how it was outdated.

here's an idea, mr. Schultz. Put a consistant winner out on the floor and maybe we'll be more willing to go for this. Prove to us you deserve the new arena.

b_con said...

I'm pretty sure people will be more likely to shell out huge bucks for luxury boxes if the team is worth watching than if they are inconsistent at best. We could've built off last year, but Nate left cause he knew Wally and Howard are impossible to work with, unlike my main man Paul Allen.

hsshoops said...

The Sonics are pushing for this money like they run the team, badly. It is full of bad decisions, switching directions and the arrogance to say we are f*ing right and not care about what other say. In comparision to what Paul Allen did to get the new football stadium built it is a handbook on how not to do it. Ultimatims rarely work and just make people feel bad about what they are doing. Approach the City and Legislature with a good deal for all and they will take it and go back to their consituients looking like heros.

That being said, I believe it is a mischaracterization to say the Sonics are asking the taxpayers to shell out $200 million out of their own pockets. The Sonics are asking the state to issue $200 million in bonds to be paid off through a specific revenue stream that is primarily a hotel and rental car tax. The tax has been in place for several years and it doesn't seem to have hurt the tourism industry. All the Sonics are asking for is that the tax be extended past the expiration date. And the tax has the advantage of being paid by people coming to visit. Essentially, they are asking the government to be bank and pay back the loan by soaking out of towners.

The Sonics could sweeten this deal by offering to guarantee the bonds if the revenue stream falls short and guaranteeing to cover any cost overruns. (Allen did a similar deal on the football stadium) Not a big risk if your financials are accurate (a huge economic downturn might be the risk). With a scenario like this everyone comes out smelling like roses.

I don't want to see the Sonics leave, even if the economic impact is negilable, because teams do mean a lot to building a sense of the community. And I like basketball. While Schultz made his own bed, it is unrealistic to think he is going to lie in it when he has alternatives elsewhere. The only upside to the confrontation scenario is that Schultz might sell the team to someone who will fire Wally Walker. I'm not willing to bet on that.

What other suggestions do you guys have for making it work? Just saying no is not a viable option.

Nuss said...

hsshoops,

You make good points, and they were ones I considered when I wrote what I did; namely, that the tax is to be paid by visitors and will therefore not affect the local population.

Still, it begets the question: Why should the city/state be required to do anything at all? Bearing in mind that this rebuilt stadium will not positively affect the local economy, why does King County need to raise money for it?

Try to look at it from this hypothetical perspective:

Imagine the Greater Seattle Ballet Company came to the city demanding $200 million to retrofit Key Arena so that they could continue to perform the Nutcracker. I'm guessing you wouldn't be so keen to contribute $200 million of taxes you don't pay to that, would you?

Of course not. And that's what this all comes down to. We all like basketball so we don't mind spending other people's money so that we can continue liking basketball.

My contention is that maybe we all need to take a step back and realize that professional sports companies are taking us all for a ride. In all seriousness, do you think that this retrofit is going to be viable in 10 years, or is it more likely that whoever owns the Sonics in 2016 is going to come to the city demanding $385 million to add something or the other to make the Sonics competitive with the new franchises in Las Vegas, OK City, Atlantic City, Tokyo and Mexico City? Where does all of this end?

Perhaps it is time for one city to take a stand and tell a sports team to either fend for themselves or take a hike. Look, I live in Vancouver, more than 2 hours' drive from NBA basketball, and watch probably as many games now as I did when I lived on Seattle - it's just that they're on TV. My quality of life hasn't been destroyed, and neither will anyone in Seattle's if the Sonics leave.