TGIF-Friday's Final Thoughts
E-Mail of the Week: This one from Mike caused me to really look closely at the numbers, and wonder if MLB here is a good thing. I didn't change my mind, but read this, it is very, very good:
I heard your interview with the government official. I thought it was great you asked about the Math and he admited they only had $112 million.
Being the excel geek I am, I had a spreadsheet from 2001 when the MLB released there financials to Congress. Based on those number (granted inflation over 4 years) I did the following quick math on how much Revenue and Debt would be with a $150 million dollar stadium.
The result: With the Marlins payroll at a estimated $50 million and the MLB average being $71 million, the tax at 9% would generate $5.5 Million and the debt service on a $150 million lona at 6% is $10.8 million per year. A loss of $5.3 million. (see attachment)
Again this is just quick math, but it doesn add up. After the PGE Stadium Budget mess that cost the city $40 million the risk is too great.
From his first e-mail to us:
My friend and I have had this debate for weeks. He is a huge baseball fan and I am the "conservative idiot" as he calls me.
The points you made during the 3PM hour on 1/10/05 are all his (Steve Kanter) points. They are good points, but I have some issues with it.
1) Education vs. Baseball. You asked does every current MLB city hate education. I think you have to look at this in a different way. Other MLB cities already have the teams. Portland is looking to attract a team and needs to build a stadium. Recently, Washington DC would be the model for this. The city has made the commitment to pay half the costs for a stadium that has ballooned up to $700 million dollars. That's $350 million needed from government to build the stadium. In a city with educational issues, PERS pension issues, and the worst road conditions (I swear I hit 10 potholes each morning on my way to work) why do we need to raise another $350 million for a baseball stadium?
2) Tax players salaries. The comment has been made that we can tax Players Salaries in order to pay for $150 million of the Stadium. Sounds like a good idea, but when I look at it the math doesn't add up. Another talk show host (Lars Larson, sorry but he askes a good question) did the math. If you taxed the NY Yankees Salary, the highest in baseball for a season, it would not cover the debt service of a $150 million dollar loan for 30 years. I'm not sure of the specifics of the tax rate he used, but it was not even close. How do you answer this? Id love to see how the Math works, but I think these are tough questions that need to be answered ahead of time. Then on top of that, where does the city come up with the other $200 million to raise its half of a reasonable stadium cost.
3) Baseball Stadium increases taxes, tourism, and city development. Your example of Denver's Coors Field in the LODO district was great. I 100% agree. It helped Denver and was a win/win. However, in Portland I don't see it being the same. Granted it will help, but will it be worth the $350 million dollar investment for the stadium? People come to Portland for the environment. Mt. Hood, hiking, boating, etc... How many ADDITIONAL people will come to Portland for baseball? I just don't see it. Plus Portland has already developed the Pearl District and the area below OHSU Hospital and those are hot areas WITHOUT baseball. My point is we have hot districts without baseball. Is a $350 million dollar investment going to increase that much revenue? In addition, the city already has given so many property tax breaks for those districts, can it afford to give more $$$ for a stadium.
4) Private Investment. I do want baseball in Portland and would love it. But my feelings are that if we are going to get it we need private money to invest. If the numbers are good, and its a good investment for the city, then it should be a good investment for a private group too. Sure, we are not going to get a Paul Allen to pay for all of it like the Rose Garden. But my point is if this was as good a deal as some make it sound why doesn't Phil Knight or other large investors ante up and push for the deal. I have not heard of any private investors willing to back this. That tells me the risk is to high. I will admit that Spirit Mt. wanted to build a stadium, (which I thought was a great idea) but I have a friend who works with the tribe and they knew the offer would be rejected. The motive behind the offer was to have the State government veto tribes going outside there land to build casinos. As another Indian tribe is trying to build a casino along the Colombia Gorge.
I know this is a long email and some maybe rambling, but my point is this. The risk as it looks now is just too high. I hear a lot of "what if's" and "could be's", but not alot of solid numbers and financial data. I'm assuming if there was a solid business plan behind this more private investors would appear. Looking at what Washington DC is going thru, I am thankful we didn't get the Expo's/Nationals. I think city government has much more necessary issues then building a stadium. In the coming years other MLB teams will look to move and I think we should be active and wait. MLB is not as hot as it was and I think we need to wait till the cards are in our favor.
Just the thoughts from a "Conservative idiot".
Mike in Milwaukie
Mike, you are not an idiot, just someone who took the time to break down the numbers. The way the bill in the state is written, there is no financial risk to the state, and from what Steve Kanter has told me on and off the air, the local financing packages will have no risk associated with them either. I am not a spreadsheet geek so I freely admit not totally understanding all of this, but from what the Portland Baseball Group people say, there really is no risk involved for government officials. I think you could actually look at it from the standpoint of there are more risks involved when states make financial concessions for large companies-what if those companies have a down year and end up laying off employees? That costs everyone money-risky.
Some other random notes from the week:
What is the real gig they are looking at for Big Stan? Porn Star or Basketball Analyst? Former Heat coach Stan Van Gundy said he was contacted by two talent agents but has no interest in broadcasting.
This will make Big Suke happy…from the Detroit News: ESPN2 is moving "Quite Frankly with Stephen A. Smith " to an 11 p.m. time slot starting Jan. 30. Smith's show is hard to watch, thanks to his shouting-speaking style and the program's stilted pacing. The ratings haven't been good, hovering around a .2 rating and 192,000 households in the 6:30-7:30 p.m. slot.
Vegas is Hurting: Las Vegas sports books lost money on NFL games this season, The Denver Post reported, because betting favorites covered the line more than half the time — 63 percent, to be exact — for only the third time since 1989.
"It wasn't one of our better seasons," Jay Kornegay, executive director of the Las Vegas Hilton sports book, told the newspaper. "I guess we'll have to raise the price of our grilled-cheese sandwiches and turn down the lights a little bit."