A Tale of Three Cities



By Evan Weiner

March 28, 2011

http://www.examiner.com/business-of-sports-in-national/a-tale-of-three-cities



(Dover, DE) -- This is the story of three cities and their approach to sports spending. In a town that was once known as the punch line for a Jack Benny radio skit and then the home of Disneyland, Anaheim has decided that it is a worthwhile expenditure to get $75 million in bonds to seduce the Maloof brothers and entice them to move their National Basketball Association franchise to the burg. The Maloofs would eventually be required to pay back the money which presumably is a loan.



Anaheim city officials plan to discuss the proposal on Tuesday. While Anaheim is apparently showing the money to the Maloofs. The expenditure will go to making improvements at the city owned arena and more than likely NBA relocation fees or perhaps going to pay off the money owed to Sacramento when the city loaned other Kings owners some dough. The Maloofs inherited that deal.



Anaheim is a much richer market than Sacramento and more importantly for the Maloofs, the market has a major opening for a winter sports team on one of Rupert Murdoch's LA regional sports cable TV networks. Murdoch is losing Jerry Buss's Los Angeles Lakers in 2012 as Buss will team with Time Warner and form two Lakers networks, one in English and one in Spanish. Murdoch has been known to overpay for sports properties and the Maloofs might be in for a financial windfall thanks to Buss's decision to start two channels and leaving Murdoch.



Meanwhile Sacramento has no money to build a new arena and at this point when Sacramento officials are talking about cutting school programs including basketball out of the budget, having an NBA team in the city in a state of the art building can be considered gauche.



While Anaheim decides and Sacramento dithers, a few hundred miles east of Anaheim, Glendale, Arizona officials have decided that they want their National Hockey League franchise to remain in the municipally funded city-owned arena. In a complex deal, Glendale plans to sell municipal bonds to help make sure the franchise stays. But a self appointed civic group named the Goldwater Institute wants to be the de facto government of the city and has threatened to sue Glendale if they sell bonds to make sure the team stays. Goldwater's threat of a lawsuit against Glendale has stalled sale of municipal bonds that will raise a $100 million that will go to Matthew Hulsizer so he can buy the financially troubled franchise. The money will be used to purchase the team from the NHL.



The NHL wants to go ahead with the sale but Goldwater, the self appointed watchdog, has mucked up the process and the group's interference has played havoc with the bond market. If Glendale does succeed in selling the bonds and there is a court case, the Goldwater Institute, the so-called fiscally responsible group watching the people's interest will cost a lot of people a lot of money in higher interest and court cases.



The Goldwater Institute has a slight problem. One of their board members, Randy Kendrick, is the wife of Major League Baseball's Arizona Diamondbacks owner Ken Kendrick. The Phoenix-based baseball team has been heavily subsidized by taxpayers as the team plays in a municipally funded major league stadium (complete with a swimming pool) and a new spring training facility.



The Goldwater Institute has been fine with the hundreds of millions of dollars spent for the baseball team and other Major League Baseball teams for the construction of spring training bases in the Valley of the Sun metropolitan area. What is ironic about the Goldwater Institute is this. It is one of those self important think tanks that would like to set policy and shrink government spending yet organizations like the Goldwater Institute and people like Grover Norquist (the president of Americans for Tax Reform) is that they live off the government as gadflies. Reduce government and people like Norquist lose their livelihoods and cable TV news networks and news-talk radio shows will lose guests.



Norquist and his ilk have not tried to stop Anaheim. Meanwhile how did Sacramento and Glendale get in these positions?



Sacramento owners have had a long history of flirtation with Anaheim.

For years various Kings ownership groups have sought public funding to replace the privately funded Arco Arena, which opened in 1988, and build a new arena for the city's NBA franchise. Mayor Kevin Johnson, city elected officials and business leaders have about three weeks to accomplish the nearly impossible. Get funding for a new arena and do it in an economically stressed climate in California. It probably won’t happen.

A little background is necessary.

In 1996, the Kings owner at the time, Jim Thomas, proposed building both a Major League Baseball stadium and an NBA arena in the city, but by January 1997, the idea fell apart and Thomas began threatening to sell the team because the franchise was losing money. Sacramento city leaders, fearing that Thomas might move the team to Anaheim or some other city, loaned him $82 million to help ease his financial burden.

Thomas sold the franchise to the Maloof brothers in 1998.

In 2001, Sacramento's mayor, Heather Fargo, put together a task force to study whether Sacramento should green light an arena and entertainment center in the city's downtown area and, by November 2002, there was some sort of commitment to the plan. But the Maloof brothers pulled out of the proposed venture within a year, partly because they didn't want to get stuck with a debt service bill. When the issue was revisited in 2004, the Maloofs were unhappy that a city councilman offered a resolution that would cap spending at $175 million for the city and $175 million for the Maloofs.

Apparently a salary cap on NBA players' payroll is fine for the brothers, but a municipal spending cap for an arena is unacceptable.

In 2006, there was another arena proposal on the table and Sacramento officials appeared to have deliberately used language that made it unclear what voters are being asked to approve. The two-part referendum called for a quarter of a cent general tax hike for 15 years and then asked whether voters would like to see the estimated $1.2 billion in proceeds go to building an arena and other community projects.

Why didn't Sacramento politicians mention that the tax increase in question is in fact a sales tax hike?

The answer seemed to be that the arena referendum had to be worded in such a way because it was never going to get the two-thirds approval needed under California law to pass a sales tax increase. Officials need just a simple majority, a 50.1% plurality, to win a general tax hike.

The politics of sports is at its best extremely messy, and politicians generally go to great lengths to keep stadium and arena building proposals off the ballot. In 2006, Sacramento city officials seemed to have reached a new high — or low, depending on one's viewpoint — in making sure they do right by the Maloof brothers and the NBA. They were determined to build an arena despite the language in Proposition 218, which calls for a two-thirds majority on specific tax increases like arena and stadium projects.

If you looked at the details of the proposed lease between Sacramento and the Maloof brothers, it was clear that the Maloofs would be walking away with a windfall, but that's how the government–sports franchise partnership works and you can't fault the Maloofs in this deal. Sacramento was so desperate to hold on to its only major league team that it was willing to give away the store if voters say yes.

The city, through the general tax, would have put up at least $470 million for the arena and parking. Sacramento officials thought it would have cost as much as $542 million for both, and there also would have been a cost of between $35 and $51 million to pay off the debt service on the loans that will be taken out for the construction. The city would own the building, but all of the revenue generated for all events held inside the building would go to the Maloof brothers. Not only that: The siblings would keep all the money earned from selling the naming rights to the city owned arena.

The Maloofs would pay off Thomas' old loan, which they inherited after they purchased the team. Additionally, they would pay $4 million in annual rent, an amount that could easily come in 2006 from naming rights. The brothers would also have had to kick in $20 million for arena repairs. It was a sweet deal for the Maloofs and a rotten one for Sacramento.

The Maloof-Sacramento "agreement" fell apart because the Maloofs did not want an "arena-village" sprouting up around the arena and wanted lots and lots of parking.

The Maloofs and the city began fighting over development surrounding the arena, the city wanted commercial and residential building to ring the new facility to spur downtown development but the Maloofs, who would get just about every nickel of revenue inside the building, wanted the land for an 8,000 space parking lot. The Maloofs wanted the big parking lot because they would keep all of the money generated from the lot. The Maloofs wanted the same parking deal they have now at the old arena.

That might not seem like a deal breaker until you do the math. Assuming the Maloofs fill the lot and charge $10 a car, that would mean $80,000 a night multiplied by 41 and you get more than $3 million annually from parking alone just from Kings events. The Maloofs would also get parking money from non-Kings events at the building, so the parking lot issue has become significant and a deal breaker.

The two questions on the November 2006 ballot were sounded defeated but there is never surrender in the "arena-game." Stern took over the negotiations in 2007 and nothing happened. The NBA recently walked away from the bargaining table leaving the Maloofs to look elsewhere.

The entire sports industry in the Phoenix area should be studied by urban planners and historians because no city or region has been dumber than Phoenix area politicians in the past quarter century.



Had the Phoenix city council been smart, which they were not, they would have approved a multi-purpose arena back in the late 1980s that would have accommodated the NBA's Phoenix Suns and an NHL team. Instead lawmakers approved a $90 million expenditure that was designed to appease Suns owner Jerry Colangelo. The arena was built in such a way that the building was only good for basketball and not hockey or Arena Football or indoor soccer and that severely limited the potential revenues that could be generated in the place. Making sure they further satisfied Colangelo, the terms of the lease between the city and the NBA team required that the franchise pay the bulk of lease payments in years 36-40 of the 40-year lease agreement. The real rent is supposed to kick in around 2028 but given the lifespan of facilities (the Miami Arena was viable for about 11 years, the Charlotte Coliseum for about 13), it is doubtful that the team will even be playing in the arena in 2028 or 2029.

The arena opened in 1992.

In 2003, the city kicked in another $17 million to modernize the place when a second Valley of the Sun indoor athletic facility opened in Glendale, which is west of downtown Phoenix.

After taking care of Colangelo, Phoenix planners decided that a new downtown could be built with the arena and a baseball park as anchors so Phoenix politicians went about the task of getting a referendum in front of the public asking for support to build a ballpark for a Major League baseball team.

Over in Tempe, Phoenix/Arizona Cardinals owner Bill Bidwill, who came to the Valley of the Sun with his St. Louis Cardinals football team in 1988, wasn't too happy with his stadium in Tempe. Bidwill started to shop around looking for an Arizona community that wanted his team and was willing to build a stadium that the public would fund and put most of the stadium revenues in Bidwill's pocket. It took 12 years for Bidwill to find the right partner — Glendale — as votes in 2000 said yes to putting up $300 million of the estimated $465 million dollars needed to build a stadium. The money would come from a rise in the hotel/motel tax and car rentals (that is a mechanism designed to placate the locals, out of towners will pay, you won't, however most of the money on the car rental side comes from locals who rent cars more than visitors), Bidwill would recoup the $165 million through stadium naming rights and through a loophole in the 1986 Federal Tax Act which limits the money a municipality can take from stadium generator revenues to eight cents on a dollar.

Mesa said no to Bidwill in 1999.

Colangelo spearheaded the baseball stadium drive. He wanted a Major League Baseball team and went back to Phoenix-area politicians to make his pitch. They listened again.

In 1994, the Maricopa County Board of Supervisors (despite huge budget deficits and cutbacks in the funding of services) said yes to Colangelo and gave the go ahead for a quarter-cent increase in the county sales tax to pay for a part of the stadium's cost. There was a string attached, the approval had to come by March 31, 1995 which meant Major League Baseball had to either relocate a team to Phoenix (unlikely as there was nowhere to play in Phoenix) or expand. MLB awarded Phoenix and St. Petersburg teams beginning in 1998 when the Phoenix stadium would be completed.

The Maricopa sales tax hike was a problem.

Maricopa County residents were not allowed to vote on the issue of funding a baseball stadium with general sales tax revenue. In August 1997, Maricopa County Supervisor Mary Rose Wilcox was shot by Larry Naman after leaving a county board meeting. The shooter testified in court that Wilcox's support for the tax justified the attack. In May 1998, Naman was found guilty of attempted first-degree murder.

Colangelo had his stadium whether Maricopa County residents liked it or not. Colangelo's stadium was supposed to have cost $279 million but the ballpark actually price tag was over $350 million and Colangelo's group had to make up the difference. Colangelo's group paid $130 million for the expansion team, there was the cost overruns and a high payroll and throw in the fact that Major League Baseball didn't give Arizona and Tampa Bay full revenue sharing between 1998 and 2002, and that nearly caused the team to declare bankruptcy by 2004.


While Colangelo was looking for a baseball team, he also wanted a National Hockey League team to take up dates in the city's new arena. In 1994, Colangelo told this reporter that Phoenix was a perfect spot for the NHL. The NHL needed to fill the Mountain Time zone for TV purposes and Phoenix and Denver were in the mix for NHL franchises.



Colangelo, who was not a hockey guy, was spot on. Denver investors bought the Quebec Nordiques in 1995 and moved the team to the Colorado city and Richard Burke put together a group that included Steven Gluckstern and bought the Winnipeg Jets. Burke and Gluckstern moved the team to Colangelo's building in 1996 and that is when trouble started.



The building approved by Phoenix politicians in 1988 had more than 3,000 view-obstructed seats or about 25 percent of the house. No NHL team can survive in a flawed arena even if the building was just four years old. Burke bought out Gluckstern in 1998 after Gluckstern teamed up with Howard Milstein to buy the New York islanders (in a real estate deal).



In 1999, Burke was hoping to move the team to Scottsdale. Bidwill had struck out in his bid to win voter approval for a $1.8 billion football stadium-village on May 18 of that year but Burke had won a preliminary vote on that date for a new arena with the help of Steve Ellman.



Burke got his arena project approved by Scottsdale voters in November 1999 but the arena was never built. Ellman bought the Coyotes in 2001 after the Scottsdale deal fell through. Ellman worked out an arena-land developing deal with Glendale officials in 2001 and moved his Coyotes to a new arena in 2003. Glendale paid $180 million for the building, Ellman did some developing but the real estate deal turned bad and the NHL now owns the team. Glendale could be kicking in as much as $25 million to keep the team going in 2010-11



Glendale worked with a group called Ice Edge Holdings to keep the team in the arena and create a tax district around the building to help stabilize the Coyotes bleak financial picture. That fell through but another suitor came to the rescue, Chicago businessman Matthew Hulsizer.





Meanwhile Glendale has another problem. The Arizona Stadium and Tourism Authority (AZSTA) is broke. That is the group that has raised funds for the Cardinals Glendale stadium and various Major League Spring Training ballparks that ring the Valley of the Sun. Hotel/motel and car rental taxes (which is 3.25 percent) from tourists that fund the authority are flat.



Arizona public officials decided in the 1990s to become a sports destination. Spring Training would be a big money maker for Arizona as baseball fans would flock to see their favorite teams in March of every year. The authority took in $34 million last year and has $37 million in expenses, $16 million of which goes to the Cardinals football stadium. Surprise (Kansas City and Texas), Scottsdale (San Francisco) and Tempe (Los Angeles Angels of Anaheim) will be getting less money to pay the bills at three spring training facilities. Youth sports will take a million dollar or so hit.



All of this is a product of Proposition 302 that was approved by Maricopa County residents 10 years ago.



The Maricopa County Stadium District and the Arizona Stadium and Tourism Authority are responsible for stadiums around Phoenix. The stadium district was formed in 1991 to make sure Phoenix area-based spring training teams were not lured by Las Vegas.



How expensive is spring training?



The Los Angeles Dodgers now share a new $110 million stadium in Glendale with the Chicago White Sox, who moved from Tucson. Glendale is providing $54 million in financing for the stadium.



Scottsdale and the stadium authorities put together a $23 million package to refurbish Scottsdale Stadium to make the San Francisco Giants ownership happy. About $13.3 million is from the AZSTA funds, $6.67 million from the Maricopa Stadium District, and $3.1 million from the city.



Arizona officials contend that the 2010 spring training slate had an economic impact of $348 million yet there is a deficit.



All of the maneuvering has left an impression. The baseball landscape has changed with all 15 Major League Baseball teams that train in Arizona located around Phoenix. Tucson has lost three teams (the White Sox, Colorado Rockies and the Diamondbacks). The arena in Phoenix has to fight Glendale for non basketball events. Glendale, not Phoenix or Tempe has the Super Bowl and while Phoenix gets a piece of the event buck, it is Glendale that gets sports spending money from those crown jewel events. The downtown envisioned with the arena and stadium as the pillars of a new downtown Phoenix has not materialized.



The question of whether it was worth spending billions in a state that is broke is never addressed by politicians. Arizona is selling off state buildings to plug a financial gap which in part was caused by poor sports decisions on every level.



They could have said no to Colangelo. They could have said no to Bidwill. They could have said no to the NHL. They could have said no to Major League Baseball. Don't blame the owners for asking for money, they could have asked for whatever they wanted.



There was an awful lot of economic miscalculation when it came to sports planning in Arizona and the battle is far from over. Mesa would like to hold onto the Chicago Cubs, the franchise that allegedly is the economic engine of the Cactus League, and the Milwaukee Brewers ownership could be looking to exit Maryvale. The Goldwater Institute seems to not have any problem with the All-American game of baseball despite all of the money being spent on the sport in Arizona. This is the tale of three cities and all should be figured out in a couple of weeks. The Maloofs will either stay in Sacrament o or leave for Anaheim and the city of Glendale will either sell the bonds or lose the main tenant in the city build arena. Sports business is pretty simple until politicians gets involved and make financial guarantees.

Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at www.bickley.com, Barnes and Noble 's xplana.com, kobo's literati or amazonkindle. He can be reached at evanjweiner@yahoo.com

Forget Lebron — bigger NBA stories are on tap for the summer

Forget Lebron — bigger NBA stories are on tap for the summer
By Evan Weiner - TheDC 2:07 AM 07/22/2010

http://dailycaller.com/2010/07/22/forget-lebron-bigger-nba-stories-are-on-tap-for-the-summer/print/
The National Basketball Association’s biggest public splash of the summer is the Miami franchise signings of Lebron James and Chris Bosh and getting Dwayne Wade to stay in South Florida and forming the nucleus of a “super” team.
That story is garnering a lot of attention globally, but underneath Heat owner Ted Arison’s opening the checkbook and getting three stars on his roster, there is a boat load of trouble brewing in NBA Commissioner David Stern’s world. The sale of the Golden State Warriors by Chris Cohan to a group led by Jacob Lacob for a reported $450 million is a silver lining because it means there are still people willing to put up big money for a franchise for Stern, but it is one of the few pieces of good news that the NBA bean counters will get in the next 12 months.
In Stern’s world, two immediate problems have cropped up. And in the somewhat distant future, there is a possibility that the owners will lockout the players on July 1, 2011 in an attempt to rein in salaries as part of a new collective bargaining agreement. Stern’s owners allegedly lost $400 million in their business last year.
In California, Governor Arnold Schwarzenegger has threatened to cut state employees hourly wages to the minimum wage of $7.25 because of California’s extreme budget crisis, and that is not good news for the Sacramento Kings ownership group looking for funding for a new arena in California’s state capital. A good many workers in Sacramento are state employees and might not be able to afford Kings games if they lose money or their jobs. How can the Maloof brothers, the Kings owners, ask for public funds when there is nothing but fiscal bad news coming out of the state house on a daily basis?
Schwarzenegger had a court’s backing to cut the salaries of some 200,000 state workers until a state budget is passed. Schwarzenegger’s leverage in the political process disappeared last Friday. The Sacramento area could have lost as much as $60 million a week in wages if Schwarzenegger went ahead with the plan. But Schwarzenegger’s idea has been blocked by Judge Patrick Marlette of Sacramento County Superior Court for the time being.
On Tuesday, the Sacramento City Council passed a resolution asking Schwarzenegger to reconsider his order as one in five Sacramento workers are state employees.
Schwarzenegger promised that the pay cuts will be rescinded when the state comes up with a budget. None of this can please NBA Commissioner David Stern who stepped into the Sacramento arena battle in December 2006.
On November 7, 2006, Sacramento voters flatly turned down Proposition Q 72-28 and Proposition R 80-20; both measures would have provided funding for a new arena.
Sacramento voters just did not want to fork over anything extra for a sports arena for the Maloofs, but that did not made Sacramento politicians and business leaders any less determined to build a new venue for an NBA team. Nearly four years later, there are still options on the table.
Stern hired John Moag, who helped negotiate the deal which brought Art Modell and his Cleveland Browns to Baltimore. Modell cut the deal with Maryland in the fall of 2005 and moved his NFL team to Baltimore for the 1996 season. Moag has been working at an arena proposal for years but hasn’t delivered one quite yet.
Sacramento politicians were prepared to give the Maloofs something no other California city would agree to in 2006. There was five hundred millions of dollar available for a sports facility. But the Maloof brothers didn’t really like the Sacramento deal as presented. Compared with New York, Los Angeles, and Chicago, Sacramento is a weak TV and corporate market, so the Maloofs needed every penny generated in the arena for their business and wanted no competing businesses near the building. The Maloofs wanted a parking lot, not a rebirth for a depressed economic area, by the rail yards. The parking lot would have been a revenue generator for the Maloofs, the city wanted to build on the parking lot in an effort to create businesses, jobs and a tax base.
The parking lot was a deal breaker as the Maloofs went to the sidelines during the 2006 arena campaign because business development was not good for them.
In Stern’s world — as in that of other big league sports commissioners — every team should be viewed as a three-legged stool. All three legs are needed or the stool falls over. In sports, the three all-important legs are big press and broadcast dollars, corporate support, and government. And if you can separate emotions and apply rationality to this issue, the Stern Theory makes a lot of sense.
Government: Without the support of a local mayor, city council, county officials, state government, governor, and federal government, you can’t operate a franchise. Local and state governments typically raise taxes to build arenas and stadiums or give land away for a sports owner to build on in exchange for payments (in lieu of taxes) and a promise that the arena or stadium will serve as an economic engine that will spark a local economy and create jobs.
There is a lot of local government support in Sacramento to build a new arena, an absolute necessity yet there are questions about where to put the building and how the construction will be funded.
Sports owners and sports leagues need government to give them total control of the revenues a municipally built facility generates, including on-site arena restaurants and stores and — a big revenue source — parking. Owners also need a government that will give them sweetheart leases and create special tax districts within the facility so that if a team owner contributes to the cost of the building, he/she can pocket some of the sales taxes collected and earmarked for government coffers.
Owners also don’t necessarily want to see development (such as restaurants and bars) outside their arena, because those establishments become competition for the dollar. The idea is to keep customers in the building, where they’ll spend on products and franchise-owned enterprises that their owners can cash in on.
For the Maloofs, a parking lot is more valuable than the potential for new businesses to pop up around the arena. It’s that simple: The brothers keep parking lot revenues and don’t have to compete with other businesses that might attract their customers.
Local Broadcasting: Comcast probably overpaid to land the Sacramento Kings cable TV rights so it could in turn launch a profitable San Francisco Bay Area regional sports network. Sports owners make billions from cable television, which Congress deregulated in the 1980s. Because of deregulation, everyone who has basic expanded cable pays for sports channels even if they never watch a regional sports network or tune in to national networks like ESPN and TNT. Hapless cable subscribers may pay anywhere between $7 and $12 a month for sports channels alone, and sports are the most costly part of the monthly cable bill. Congress refuses to address a la carte pricing, which would allow cable subscribers to choose which channels they want, in part because the financial toll could wipe out many cable TV networks and have serious impact on sports finances.
Corporate Support: Part three of the Stern trilogy. Someone has to pay for high-end seating like luxury boxes and club seats, and it’s not the everyday fan. In fact, owners don’t court fans; they want customers who can afford luxury suites and seats surrounding the basketball court or rink side seats at a hockey game. Corporate types buy seats and reap the tax write-off, whether they’ve gone to the games because they’re fans or just looking to be seen.
You can’t really blame the Maloofs for playing hardball in 2006. They were just following Stern’s three-legged sports business philosophy; Sacramento got a lesson in what it means to be a small market in the major leagues.
In Indianapolis, Herb Simon got another city bailout to help the “struggling” Indiana Pacers franchise. These two storylines are far more important to the financial health of the NBA than the Miami singings although the loss of Lebron James in Cleveland will return the northeastern Ohio city back into the NBA doldrums and that could add Cleveland owner Dan Gilbert to the list of financially hawks who might want to shut down the NBA next year when the collective bargaining agreement ends on June 30, 2011.
In a fiscal-conservative state, Indianapolis officials through the city’s Capital Improvement Board and Simon have adjusted a 1999 lease agreement and the city will give Simon $33.5 million over three seasons for expenditures to operate the city’s arena.
There will be a $10 million per year bailout to operate the arena along with $3.5 million for capital improvements between 2010 and 2013. The Capital Improvement Board, which is cash strapped, hopes to use funds from a one percent hike in the Indianapolis hotel tax to pay some of the $33.5 million they have committed.
Indianapolis has spent over a billion dollars on the arena and a new football stadium. Simon’s original lease gave him the ability to control the operations of the building, pay virtually no rent and keep all of the revenues from Pacers games and other events in the building. Despite the one-sided nature of the lease where Simon got virtually all of the revenues and the city got whatever was left, Simon has claimed his losses are staggering.
Simon’s Pacers will continue to play in the building for the next three years which ends Simon’s threat of moving the franchise for the time being. In 2013, Simon can move the team if his annual losses exceed $2 million. Should Simon find a greener pasture (Kansas City, Louisville, and Newark, New Jersey—the New Jersey Nets franchise does relocate to Brooklyn— he would have to give back a portion of the $30 million and pay money for breaking the 1999 lease that he signed with Indianapolis officials. Simon is free to leave without penalty in 2019.
Indianapolis is a small market and cannot compete with major markets on the same economic playing field and has given team owners the wherewithal with taxpayers dollars to be on an even playing field monetarily with New York, Los Angeles, Chicago and together big market cities.
Jim Irsay’s Indianapolis Colts National Football League franchise keeps rights to all football-related revenue in the almost new Indianapolis taxpayers funded stadium, as well as half the annual non- football revenue, up to $3.5 million. Irsay pays no rent to use the facility and has a lease until 2034. Irsay receives all revenues from a stadium name, signs and sponsorships in the stadium. The Capital Improvement Board picks up the tab for stadium maintenance and game-day expenses.
In the United States, local and state governments have been pouring millions of dollars into building sports facilities since Milwaukee funded County Stadium in 1950. Milwaukee pioneered giving away the store philosophy when the city finally got a Major League Baseball team. Lou Perini moved his Boston Braves to Wisconsin and got a gift, a stadium to use 77 times a year in 1953 (and beyond) in exchange for $1,000 in rent. Perini had some guilt about paying $1,000 in rent and keeping all the concession money so he gave Milwaukee $25,000 for rent after nearly 1.9 million people paid to see Braves baseball in Milwaukee in 1953. There is no real reason that municipalities spend billions on sports facilities other than it gives an area a sports identity and a meeting place where people to bond watching a game. But it sure seems rather expensive to prop up the sports business.
Evan Weiner is an author, radio-TV commentator and speaking on “The Politics of Sports Business” and can be reached atevanjweiner@yahoo.com


Read more: http://dailycaller.com/2010/07/22/forget-lebron-bigger-nba-stories-are-on-tap-for-the-summer/print/#ixzz0uPcY5MXt