Friday, October 30, 2009

Goodman to the NBA: Viva Las Vegas!

Goodman to the NBA: Viva Las Vegas!

By Evan Weiner

October 30, 2009

1:30 PM EDT

(New York, N. Y.) – Oscar Goodman is talking about bringing a major league professional sports franchise to Las Vegas again; this time he wants the National Basketball Association to set up shop in the city. Las Vegas residents should not count on Mayor Oscar Goodman to bring them a major league team. He has missed every three pointer he has thrown up.

Goodman’s sports record is about the same as those looking to strike it rich in the city’s various casinos. The mayor went after a number of Major League Baseball teams beginning in 1999 and tried to convince baseball operators, including the Los Angeles Dodgers ownership, that they could let it roll in Las Vegas and get major rewards. He failed.

Goodman and his team were correct in their assessment that Florida-based Spring Training Major League Baseball clubs like the Dodgers, the Chicago White Sox and others were looking to move to more lucrative areas for baseball’s pre-season but Arizona ended up with the teams because the Arizona Sports and Tourism Authority (which was fired up on April 24, 2000) gave $32 million to Sunrise (they ended up with Kansas City and Texas – two Florida teams), $4.3 million to keep the Oakland A’s in Phoenix, $12 million to keep the Anaheim (now Los Angeles Angels of Anaheim) in Tempe, $20 million to keep the San Francisco Giants in Scottsdale, an estimated $55 million to Goodyear (Cleveland and Cincinnati left Florida for the new Goodyear ballpark), and estimated $60 million to Glendale for a stadium that lured two more Florida teams, the Dodgers and White Sox.

Goodman has gotten a handful of exhibition games in Las Vegas but a game here or there is a weak consolation prize.

In 2005, Goodman predicted that Las Vegas would have a Major League Baseball team by 2011. During 2003 and 2004 Las Vegas officials met with Major League Baseball about moving the then-MLB owned Montreal Expos to the desert gambling oasis. MLB cut a deal with Washington, DC politicians and move the team there in 2005. Goodman’s staff also tried to lure Florida Marlins owners Jeffrey Loria to the desert and failed.

Loria ended up with financing for a new Marlins ballpark at the site of the old Orange Bowl in Miami last spring some four years after Goodman started to chase him. Las Vegas was never a major contender for Loria’s team nor was San Antonio, which also put out a feeler.

There will not be a Major League Baseball team in Las Vegas in 2011 as Goodman’s plan for a 40,000 stadium never materialized. When Goodman made his prediction, ownerships in Minnesota, Florida and Oakland were looking for new venues. Only Lewis Wolff in Oakland is looking for a new stadium at the moment although the Tampa Rays ownership wants a new stadium in the Tampa Bay area. The Rays have a long lease in St. Petersburg while Wolff continues to seek a San Francisco Bay Area locale.

It is unlikely that Las Vegas will have a Major League Baseball in the near or long term future.

Goodman is now seeking an NBA team. The truth is that Las Vegas had a National Hockey League team and lost it because Phil Anschutz's AEG and Harrah’s were unable to get financing to build an arena near the Strip. The NHL apparently had an owner also in Jerry Bruckenheimer, the Hollywood producer, who was ready to get behind a Las Vegas team in 2007.

When the economy tanked, so did the chances of a getting NHL team in Las Vegas even though two arenas were on the drawing board. Sports people talk about how Las Vegas might be a potentially great market and Goodman will roll out a whole bunch of talking points about how Las Vegas would be a great home for a major league team, but there is one major obstacle to putting a team in the city.

It is not gambling either; leagues can work around legalized sports betting.

It is the economy, more specifically foreclosures. In the third quarter of 2009, one in every 23 homes in the state was foreclosed. That does not help Goodman’s cause. Nevada is among the worst states in the nation in terms of the numbers of foreclosures.

Goodman has a deal with the Baltimore-based Cordish Companies to do a study on an 18-acre parcel of land near City Hall where an arena along with a new City Hall could be built. Cordish is taking a look after REI Neon could not build an arena. REI Neon talked to Las Vegas officials between August 2007 and October 2008. The plug was pulled because of the worsening economic conditions.

Cordish is an intriguing partner for Goodman in that Cordish was supposed to develop the area around St. Louis’ new baseball park in a stadium village concept. The stadium was built but little else has been done at the site.

The economy tanked.

Cordish isn’t promising to build an arena, the company is kicking the tires so to speak to see if it is wise to put a venue up along with other buildings.

The NBA has had a presence in Las Vegas for a while. The league held the 2007 All-Star Game and other festivities in the city which was supposed to be a showcase. It turned out to be a public relations nightmare because of the Adam (Pacman) Jones incident and other problems. The NBA also has an annual summer league in the city and in 1983-84, the Utah Jazz played 15 games there. The National Hockey League’s 2009 award presentation went off without a hitch.

The NHL has played pre-season games in Las Vegas.

In 1996, the Oakland A’s first home stand was played in Las Vegas because the Oakland Coliseum remodeling was not complete.

Las Vegas is a destination site and that becomes problematic when the sports model for success is applied to the city.

Government, Cable TV and Corporate support.

Goodman is giving a potential sports owner support in offering a venue, in this case a proposed arena although there are very few specifics about the facility including what it might cost if Cordish goes ahead with construction. How would the facility be funded, will the city will give land away to “boost” the economy or would Cordish pay property taxes, or use other mechanisms like payment in lieu of taxes or tax increment financing? Another question. Will Cordish or a potential sports owner pay more than eight cents on a dollar (the federal bottom) or just eight cents on every dollar earned inside the facility to go back to the municipality? These are multi-million dollar questions.

Goodman and arena proponents may scream and yell and claim that an arena is an economic engine but time and time again that has been proven wrong as once the construction stops on the building, the majority of the people working at the arena will be per diem, minimum wage employees.

Leg two on the three-legged sports financing stool is cable TV. Las Vegas does not have a big population, sure it was growing but cable TV money from a regional sports network may not be very large. Right now, there is no regional sports network in Las Vegas and someone would have to build it from scratch or a Las Vegas team might have to deal with a regional that already is in the city from another market.

Thirdly, a team needs large corporate support. In Las Vegas, the casinos control entertainment. Do casinos operators want competition from a sports team that might keep customers out of the casinos for four hours? The Maloof Brothers own the NBA’s Sacramento Kings (they need a new arena and Sacramento Mayor Kevin Johnson, a former NBA player with Cleveland and Phoenix is seeking ideas to build a new place in his city) and one of the Maloofs, George, runs the Palms Casino Resort so that might be a major factor in whether the casinos would support a Vegas NBA (or NHL team, there have been rumors for years that the Maloofs might be interested in the NHL in Las Vegas). Without casino support, there is no chance a team can be successful in Las Vegas. Las Vegas is a service industry town and that group could make up a fan base but owners need a customer base, people willing to spent money -- fans look for bargains, customers don’t. That is a huge divide when it comes to actually supporting a franchise.

The NBA’s Women’s National Basketball Association has a franchise in the arena at the Mohegan Sun casino in Connecticut. The casino owns the team and people leaving the arena can go right into the casino. In essence, Connecticut Sun patrons can be a captive audience that is released into a casino right after a game. The NBA, based on allowing the Mohegan Sun owners to run a franchise in a casino, should have no problems with a potential Las Vegas franchise.

Las Vegas needs all three requisites to align.

Goodman has failed in getting Major League Baseball to set up a “Gambling” League (MLB has the Grapefruit League in Florida and the Cactus League in Arizona) Spring Training loop and did not land the Expos or Marlins. The NHL doesn’t have a rink in the city although the league still likes Las Vegas and the NBA has business in the city. But neither the NBA nor the NHL has a place to play.

Goodman is at it again. He won’t get a National Football League because of the gambling although NFL teams are partnering with state sponsored gambling in various cities. Goodman does have a United Football League team in the city that is getting lukewarm support. NASCAR has a Las Vegas stop, boxing is still a big deal in Nevada, there are minor league baseball and hockey teams in the city and golf and tennis tournaments are played there throughout the year. But Goodman wants more. He needs to build a taxpayers supported facility as a lure or give land away and hope for an arena-village for an NBA (or NHL) team to come to Vegas and that has not happened as of yet.

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