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Sonics are gonna be in all kinds of trouble with NBA Owners...

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  • #16
    Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

    I could see the argument for all those jobs if it was a team moving to a city with no existing stadium, but if they are just replacing an aging structure that is already in place, aren't the jobs already there? The only jobs I see are the construction ones that are temporary.

    How does the big tax expenditure help stimulate the economy then? Other than more seats/suites to sell, I don't see it.

    Throw in that they will probably raise ticket prices because of the "new and better environment" to watch basketball and other events, and the economy might actually suffer....

    I've never gotten the argument for using that much tax money to help a private enterprise make money. Just give them the money and make them play in the old arena! As a taxpayer, I don't like subsidizing a professional sports team and then being asked to be a fan and pay waaaay too much for tickets so that they can pay the athletes too much money.

    Don't get me wrong, I love professional sports, and I will continue to attend. The big difference for me is that I rarely attend when I actually have to PURCHASE tickets. I am a guest of a corporate sponsor/benevolent benefactor at least 90% of the time.



    RESIDENT COUNTING THREAD PHILOSOPHIZER

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    • #17
      Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

      The Sonics current arena, KeyArena, is 12 years old? The average age of a professional sports venue being replaced is 31 years old. It seems to me that 12 years old isn't all that long.

      The "Kingdome" - where the Sonics played before KeyArena...yeah. Those debts are STILL being paid off until the year 2016. That's the stadium BEFORE KeyArena. Add to the fact that over $50 million in debt is still owed on KeyArena itself.

      Safeco Field - built in 1999 for the Seattle Mariners. Cost $534 million, and the public had to contribute 69% of the funds for that project. This...all despite the fact that in Sept.1995, Seattle taxpayers voted against publicly funding a new stadium for the Mariners. They'll be paying that one off until the year 2020 or later.

      Then 2 years later, the Seahawks get a new stadium. $400 million in cost. Public responsible for 75% of those funds (despite the many critics who objected).

      Mayor Greg Nickels: "If they stay in Seattle, great. If they don’t, we’ll have to make do with the Mariners, the Seahawks, Intiman Theatre, Seattle Opera, the Rep [Seattle Repertory Theatre]…I think we’ll make do."

      The Sonics have lost $60 million since 2001 - a big part of the problem is their inability to sell luxury suites - they actually had to remove 1,112 club seats in favour of transforming them into lower-priced, more traditional seating. The only time they've been able to sell all of their club seats was in KeyArena's inaugural year (I believe the Sonics went to the finals that year as well). They just barely did it then - but have been nowhere close since that time.

      The employment opportunities that come along with the construction of a new venue are largely part-time, low-skill jobs. If job creation is what's important for the taxpayers (who are the ones paying for this), then why not put that money towards unemployment issue plans? Sport is just a small piece of the puzzle when it comes to a community's economy - it can't be the engine that sparks new jobs and growth.

      Mark Rosentraub has done some extensive research and shown that players garner about 55% of the gains from public subsidies, while owners receive the other 45%. Ticket prices also tend to escalate with the onslaught of a new arena. So where again, is the taxpayers' ROI? Isn't it ironic that these people, who will be paying for the new arena, are going to likely be left unable to afford the price of admission?

      And what Bball and Mal were kind of alluding to what economists often refer to as the "substitution effect" - where people will spend their discretionary income on leisure activities regardless of whether or not the professional sports team is there.

      I've done a fair bit of research on the effects of public funding on professional sports venues - particularly this Seattle situation and honestly, I'm 100% with the taxpayers of Seattle on this one. It just doesn't make sense for them.
      Last edited by sweabs; 01-19-2008, 01:19 AM.

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      • #18
        Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

        IMHO: Its true that entertainment dollars would be spent on other things but those dollars may be spent on a vacation out of town. Restaurants receive benefits, you also have the possibility of luring 1st or 2nd rnd NCAA tournament games. This would bring fans from out of town who need downtown hotels. I'm sure a new arena would bring benefits unknown.
        "He wanted to get to that money time. Time when the hardware was on the table. That's when Roger was going to show up. So all we needed to do was stay close"
        Darnell Hillman (Speaking of former teammate Roger Brown)

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        • #19
          Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

          Originally posted by SycamoreKen View Post
          here they said the AT&T Center would revitalize the area it was built in and nothing happened so far, so it would seem to matter where said stadium was built. I'm not sure why anyone thought it would happen here though. They built it in an industrial area.
          Not shocking.

          I suspect Lucas Oil Stadium (or whatever the behemoth is called in downtown Indy) will have very little impact as well. It sits on the edge of downtown and I seriously doubt that much business will pop up next to it. Certainly, it's not going to extend downtown to the south because everything else is on the north side of it.

          The bigger impact to Indy will be due to the eventual much larger convention center...something that brings people downtown to businesses and hotels on a daily basis throughout the entire year. That's the kind of project that should get public funding.

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          • #20
            Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

            Everyone seem to be forgetting that a pro team is instant marketing for your city/state. People go around wearing the merchandise not only where the team is located, but outside too. Generating a "buzz" in this regard is key to a marketing plan that COULD lead to future economic development. A key restaurant may come to Indy or seek them out because they are targeting city's with major league franchises.

            While the numbers may never add up for bringing in a sports team, it's a big draw and I believe Seattle may not miss the Sonics now, maybe not in 5 years, but big picture.......20 years from now...what impact did that decision have on them?

            Tough statement for them to make, but there would be no proof to refute the statement, nor to back it up, other than using historical data to guess future event.s

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            • #21
              Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

              Originally posted by BlueNGold View Post
              Not shocking.

              I suspect Lucas Oil Stadium (or whatever the behemoth is called in downtown Indy) will have very little impact as well. It sits on the edge of downtown and I seriously doubt that much business will pop up next to it. Certainly, it's not going to extend downtown to the south because everything else is on the north side of it.

              The bigger impact to Indy will be due to the eventual much larger convention center...something that brings people downtown to businesses and hotels on a daily basis throughout the entire year. That's the kind of project that should get public funding.
              Actually, there are a few huge developments planned around Lucas Oil Stadium.
              http://theurbanophile.blogspot.com/2...-unveiled.html
              http://www.indyrealestatetalk.com/a-...-indianapolis/

              It seems stadiums are hit and miss. In San Diego, the Padres' stadium is now surrounded by new hotels and condos. However, I think that football stadiums are the hardest stadiums to develop by. The great thing about baseball and even basketball is you have a great number of home games. Although football home games are almost rituals where you eventually spend the entire day at the stadium/area surrounding it (tailgate in the morning, maybe eat somewhere, go to the game, go somewhere to eat/drink after words), you only have a limited number a year. The good thing about LOS is that there will be other events that it can be used for and Indianapolis' set-up with the convention center is absolutely outstanding.

              I was originally very-pro stadium, and I still am. I think that the food and beverage tax was a fair way to pay for the stadium, but I increasingly believe that the Colts' should have paid more for the stadium. This is especially true considering how much money they bring in from sponsorship deals.

              The best argument for privately financed stadiums is SBC Park in San Francisco. It is one of the best sports venues in the country.

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              • #22
                Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

                Originally posted by Mal View Post
                Bball: Yeah, but I don't think that argument would ever fly for any city with similar entertainment options as Seattle or even more than Seattle.

                And you could argue that even in Indianapolis people would spend that money someplace else in entertainment. For me, I might have used my season tickets money this season towards my first HDTV, as an example. I almost certainly would have, as a matter of fact.
                But technically that's crossing boundaries, you are shifting entertainment dollars into consumer goods/electronics, which has it's own budget. Just like saying "I would have bought more food".

                It's not the same as saying if they left I would go to the movies, theater, other sporting events, etc more often. That might be true too, but I doubt it would be to the same extent. Especially in Indy. Colts games are already sold out, so that's off the table. F1 is gone. How many locals have seen more than 2 shows at the Murat this year or gone to more than 2 games at Victory? How many have been saying "if only it wasn't for those darn Pacers I could see Mamma Mia one more time"?

                Heck, I'd suggest that some of that money would actually go up the road to Chicago entertainment even.


                Frankly Seattle does have an immensely greater number of entertainment options, there are lots of other things to do. And even still I think they might have a tough time proving this case. It's also hard to prove it the other way, but an economic study of the area around the arena, local merchandisers, commercial tie-ins and so on go with it.

                I happen to have a slight family connection to someone that brings in athletes for promotions with a major company. They've been very happy with their interactions with Durant (not so much with Oden up to this point, though that's probably on handlers rather than him).

                Celebrity spokesmen can come from other fields, or just other teams (S'hawks, Mariners), but that doesn't mean that Durant isn't the best at drawing attention and creating sales. Maybe he relates better to the local youth market and thus improves product sales in that demo. Move the team and you lose some of that connection.

                The list is just about endless, a team becomes extremely intertwined with a city. And I'll bet you that the Sonics are making the EXACT OPPOSITE case in OK City right now.

                Wouldn't it be hilarious if someone from that end pulled out an email or some document with stuff like "huge benefit to the city" promised by the Sonics? I'll tell you what, the ownership might want to strongly consider where they are placing their own future economic needs with this case. Gonna be pretty tough to get public assistance in OKC at this point.
                Last edited by Naptown_Seth; 01-19-2008, 11:37 AM.

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                • #23
                  Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

                  Originally posted by Los Angeles View Post
                  I was really referring to construction. In my community, despite all the nay-sayers saying that it would be a waste of money, Staples Center has become the epicenter for an entire new neighborhood. There's a explosion of economic growth in downtown LA, and staples was the spark that started the inferno.
                  And sometimes people forget that the RCA Dome came BEFORE the downtown mall, the canal, Victory Field, Conseco, repaving/bricking on the circle, massive condo/housing development...pretty much everything. Heck, IIRC the AUL and Bank One buildings went up after the Dome too.

                  It wasn't just because of the Dome, but putting it there, getting a team in there, and bringing the suburbs downtown from time to time sure didn't hurt. The fact that it was so well integrated with the convention center made it even more beneficial.


                  ps - props to MSA for getting the first wave of development going in the 70's

                  I've done a fair bit of research on the effects of public funding on professional sports venues - particularly this Seattle situation and honestly, I'm 100% with the taxpayers of Seattle on this one. It just doesn't make sense for them.
                  Yes, but the point here is that the SONICS are suddenly agreeing with it so they can be allowed to move. I highly doubt they made the same case when asking for a new arena.

                  The reason they don't get one is because A) the public just paid for 2 other stadiums and B) Key is not old nor in a bad area.

                  Now if the owners say "we think the city will miss us, but right now we don't seem to financially fit here" then okay. But suddenly buying into the Mayor's own response to their stadium requests? That's as disingenuous as it gets and certain to tick off the other owners.
                  Last edited by Naptown_Seth; 01-19-2008, 11:34 AM.

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                  • #24
                    Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

                    Originally posted by Wu-Gambino View Post
                    Actually, there are a few huge developments planned around Lucas Oil Stadium.
                    http://theurbanophile.blogspot.com/2...-unveiled.html
                    http://www.indyrealestatetalk.com/a-...-indianapolis/

                    It seems stadiums are hit and miss. In San Diego, the Padres' stadium is now surrounded by new hotels and condos. However, I think that football stadiums are the hardest stadiums to develop by. The great thing about baseball and even basketball is you have a great number of home games. Although football home games are almost rituals where you eventually spend the entire day at the stadium/area surrounding it (tailgate in the morning, maybe eat somewhere, go to the game, go somewhere to eat/drink after words), you only have a limited number a year. The good thing about LOS is that there will be other events that it can be used for and Indianapolis' set-up with the convention center is absolutely outstanding.

                    I was originally very-pro stadium, and I still am. I think that the food and beverage tax was a fair way to pay for the stadium, but I increasingly believe that the Colts' should have paid more for the stadium. This is especially true considering how much money they bring in from sponsorship deals.

                    The best argument for privately financed stadiums is SBC Park in San Francisco. It is one of the best sports venues in the country.
                    Nice find. I guess my point is, the much larger convention center is the driver here from a business standpoint. People from conventions absolutely flood downtown frequently to eat lunch and fill the hotels. The proximity of this new development will draw huge numbers of convention traffic and is likely to be a success.

                    However, this reminds me of the time when Union Station died. Circle Center got all the business traffic. This city may not be able to adequately support this. Considering we already have a stadium and have Conseco fieldhouse, I seriously doubt the stadium will bring many more people downtown from what the current events already draw. Certainly the low paying jobs being generated by these developments are not going to fill the stadium either.

                    When Payton Manning leaves, the hangover should set in. ...and you thought Conseco Fieldhouse was quiet...

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                    • #25
                      Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

                      Originally posted by Naptown_Seth View Post
                      Yes, but the point here is that the SONICS are suddenly agreeing with it so they can be allowed to move. I highly doubt they made the same case when asking for a new arena.

                      The reason they don't get one is because A) the public just paid for 2 other stadiums and B) Key is not old nor in a bad area.

                      Now if the owners say "we think the city will miss us, but right now we don't seem to financially fit here" then okay. But suddenly buying into the Mayor's own response to their stadium requests? That's as disingenuous as it gets and certain to tick off the other owners.
                      The reason the Sonics asked for the new stadium in the first place was probably related to the fact that the owners knew it was a way to get out of Seattle. Because it makes that little of sense. I don't know what you mean by saying you doubt they made the same case when asking for a new arena. Sure, the Soncis didn't come out and say it would make no sense - but they realize that it wouldn't for all of the reasons I listed earlier and it would be a "justified" reason for leaving the city.

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                      • #26
                        Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

                        Originally posted by aceace View Post
                        IMHO: Its true that entertainment dollars would be spent on other things but those dollars may be spent on a vacation out of town. Restaurants receive benefits, you also have the possibility of luring 1st or 2nd rnd NCAA tournament games. This would bring fans from out of town who need downtown hotels. I'm sure a new arena would bring benefits unknown.
                        The wholoe tourism argument is also overblown. Even the Superbowl of all things, has little affect on hotel occupancy rates, retail sales, or airport traffic within the city (according to Porter & Fletcher's 2002 research).

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                        • #27
                          Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

                          Originally posted by rcarey View Post
                          The reason the Sonics asked for the new stadium in the first place was probably related to the fact that the owners knew it was a way to get out of Seattle. Because it makes that little of sense. I don't know what you mean by saying you doubt they made the same case when asking for a new arena. Sure, the Soncis didn't come out and say it would make no sense - but they realize that it wouldn't for all of the reasons I listed earlier and it would be a "justified" reason for leaving the city.
                          What exactly are the problems with Key Arena? I know there are some actual tangible revenue-generating impediments that have been noted, but does anyone know what they actually are? No luxury boxes? Poor design? Not enough seats? No bathrooms? I really wonder how a semi-modern facility built in the mid-90s could be so bad. I've only seen it from the outside during Bumbershoot, but it's definitely in a high-traffic area and genuinely looks cool from the outside. (Although I've heard it criticized by people in business, media and sports...just can't recall why.)

                          Originally posted by rcarey View Post
                          The wholoe tourism argument is also overblown. Even the Superbowl of all things, has little affect on hotel occupancy rates, retail sales, or airport traffic within the city (according to Porter & Fletcher's 2002 research).
                          I find that hard to believe. You have a link?

                          Assuming half of the 70,000 people actually going to the game are in town for an average of 3 nights, that would represent a huge spike in room occupancy I would think. And that's not even considering the thousands that are there just because of all the associated events happening...corporate events, parties, celebrity nonsense, etc.

                          I suppose a city like San Diego or New Orleans (at least pre-Katrina and starting to pick up again now) that already has a booming conference industry keeps most of their hotels close to capacity throughout the year. Miami with its tourist industry too. But in places like Phoenix, Detroit, Houston and Jacksonville, I have to imagine an influx of some 50,000 makes a huge difference.

                          And frankly, based on my smallish organization's difficulty finding cities that can even meet our hotel room needs just for a yearly conference of around 10,000 attendees, I'm pretty surprised a city like Detroit or Jacksonville even has anywhere close to the number of rooms necessary. And if I recall, lots of people ended up staying in Windsor during the Detroit one and people were spread out like 100 miles trying to find places to stay for Jacksonville.

                          Even so, I find it hard to believe that selling out every hotel room in the greater San Diego area for an entire weekend when the Super Bowl comes to town isn't at least a minimal economic boom time.
                          Last edited by JayRedd; 01-19-2008, 03:41 PM.
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                          • #28
                            Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

                            Another problem in all of this is the "economic balance" method used here. Say the city has an event and gross revenues equals $1,000,000,000. That's One Billion Dollars - with a B. Let's say that the amount of money that changed hands - all of which comes as a negative on one accounting column or another - is $990 Million. Well guess what? some idiot out there is going to use the lame *** argument "The city spent $990 Million dollars just to make 10 million in profit!!! I'm outraged!!!"

                            Labor is considered an expense and counts as a negative. But labor cost is exactly why you do something like this. You're giving money to the people in exchange for work.

                            In the end, $1,000,000,000 changed hands and every time it changes hands the government gets a slice, and all the supporting businesses use the money to make it another year. This isn't about profit, it's about keeping the engine running.

                            Major building projects that create revenue generating properties are "more likely than not" to succeed.
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                            • #29
                              Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

                              Originally posted by Los Angeles View Post
                              Another problem in all of this is the "economic balance" method used here. Say the city has an event and gross revenues equals $1,000,000,000. That's One Billion Dollars - with a B. Let's say that the amount of money that changed hands - all of which comes as a negative on one accounting column or another - is $990 Million. Well guess what? some idiot out there is going to use the lame *** argument "The city spent $990 Million dollars just to make 10 million in profit!!! I'm outraged!!!"

                              Labor is considered an expense and counts as a negative. But labor cost is exactly why you do something like this. You're giving money to the people in exchange for work.

                              In the end, $1,000,000,000 changed hands and every time it changes hands the government gets a slice, and all the supporting businesses use the money to make it another year. This isn't about profit, it's about keeping the engine running.

                              Major building projects that create revenue generating properties are "more likely than not" to succeed.

                              ...Million here... million there... Pretty soon we're talking real money...



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                              • #30
                                Re: Sonics are gonna be in all kinds of trouble with NBA Owners...

                                Originally posted by JayRedd View Post
                                I find that hard to believe. You have a link?
                                http://www.umbc.edu/economics/wpapers/wp_03_103.pdf

                                Page 8, at the end of the 3rd paragraph.

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