Fiesta Bowl scandal could put BCS game in play
THURSDAY, 14 APRIL 2011 11:26
http://www.newjerseynewsroom.com/professional/fiesta-bowl-scandal-could-put-bcs-game-in-play
New Jersey would be viable location for one of college football’s biggest games
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
College football media partners, marketing partners, boosters, and politicians should be circling the date of April 28 for a meeting near the site of the Sugar Bowl in New Orleans. That's the day when a subcommittee of the National Collegiate Athletic Association reviews the license that the group has given to Fiesta Bowl operators to run the annual game in Glendale, Arizona.
The Fiesta Bowl is part of the Bowl Championship Series with Glendale hosting a national championship game every four years. The Fiesta Bowl, South Florida's Orange Bowl, Pasadena, California's Rose Bowl and New Orleans' Sugar Bowl are college football's big events and are worth a lot of money. Each bowl is a fiefdom and one of the reasons that there isn't a college football championship is that none of the powers to be behind those particularly bowls wants to cede one iota of importance that those bowls have.
Until the NCAA gets all of the fiefdoms to agree that a college football championship game that makes (financial) sense, the system will not change. That is unless Congress decides to remove the NCAA’s tax exemption status and the part of the Sports Broadcast Act of 1961 that applies to the group.
Neither action seems to be very likely.
The sacking of Fiesta Bowl chief executive John Junker along with two other top officials could open a Pandora’s Box of problems for Glendale, the Fiesta Bowl and the (college football's) Bowl Championship Series for Arizona politicians who allegedly accepted gifts from Junker.
Arizona elected officials have to abide by state laws, which included an “entertainment ban” that prohibits, state employees and elected officials from accepting tickets or "admission to any sporting or cultural event" for free.
The Fiesta Bowl organizers have been summoned to New Orleans to meet with NCAA members and will be given a day in the NCAA courtroom to explain away a 276 page report by a Fiesta Bowl Special Committee that provided unique details of "excessive" spending on employees and the relationship between Arizona politicians and bowl officials. Apparently Arizona elected officials had no problems accepting gifts from Fiesta Bowl organizers which is a violation of Arizona laws if the gifts bestowed on the elected officials were more than $500.
The Fiesta Bowl organizers seem to have thought the best way to keep their fiefdom going was to have Arizona’s elected officials at their side.
Some Arizona lawmakers are "amending" their campaign financing reports to reflect that they suddenly remembered they took money from Fiesta Bowl officials or got tickets for the game or went on Fiesta Bowl related trips or received campaign contributions from Fiesta Bowl employees.
The Fiesta Bowl officials apparently knew which palms to grease. Among the politicians that got some benefits from the Bowl hierarchy include Arizona Governor Jan Brewer, Senators John McCain and John Kyl, Congressmen J. D. Hayworth and Shadegg. McCain's Political Action Committee — Straight Talk Express — also got some money from bowl officials. Additionally, there were Fiesta Bowl employees who gave $46,000 to 23 political candidates who were reimbursed for their campaign contributions by the Fiesta Bowl.
Interestingly enough, The Goldwater Institute is not involved in any complaining against the Fiesta Bowl which seems to be a contradictory stance for the conservative fiscal watchdog group. The Goldwater Institute doesn't want Glendale to sell bonds to help complete the sale of the NHL's Phoenix Coyotes to a Chicago businessman, Matthew Hulsizer, nor do they seem to care that things didn't work out attendance wise for the Los Angeles Dodgers and the Chicago White Sox during the 2011 Cactus League Spring Training part of the baseball season at the new Glendale baseball park.
Glendale had an open checkbook for the NFL's Arizona Cardinals owner Bill Bidwill (a new stadium), former Phoenix Coyotes owner Richard Burke (a new arena), Jerry Reinsdorf's White Sox, the McCourt family's Dodgers (a new spring training facility) and the city is attempting to work with Jerry Colangelo to build the headquarters for USA Basketball in Glendale.
The Goldwater Institute is nowhere to be found on this issue. Meanwhile, another watchdog group — the not for profit Citizens for Responsibility and Ethics of Washington, D. C. — has filed a complaint with the Federal Election Commission and asking the agency to investigate whether any laws were broken in the Fiesta Bowl's campaign contribution acts.
It will be interesting to see how the NCAA will put together the investigation. Will the NCAA consult cable TV partner, the Walt Disney Company, on this matter? Does the NCAA really want to go after the Fiesta Bowl and pull the license or will they slap someone on the wrist and say don't do that again knowing that every bowl committee does what is best for them not the "game" of college football?
A question that should be directed to NCAA delegates deciding the weighty matter of bowl licensing is this. Do they want a championship game in Glendale or can they line the coffers with another organizer in a bigger market?
Will the NCAA revoke the license and then put the fourth game of the Bowl Championship Series up for bid? If the Super Bowl can be played in East Rutherford in February in 2014, why not a Bowl Championship Series game at the Meadowlands in January? Think of the money that could pour into the BCS if New Jersey, Jerry Jones and his Cowboys Stadium in Arlington, Texas or Dan Snyder's and Washington Redskins stadium in Maryland outside of the District were involved in a bidding war for that spot in the Bowl Championship Series?
The NCAA more than likely should not be trusted with a real investigation of a bowl and corruption. After all this is a body that created the term "student-athlete" to get out of paying disability benefits in the 1950s after a Colorado football player could not work because of an injury suffered on the football field. This is an organization that pockets billions in television money yet limits players' off field, off court, off ice, off diamond earnings to be $2,000. This is an organization that receives a tax exemption from Congress and colleges whose football teams appear at say the Fiesta Bowl don't have to pay taxes on their take from the game.
School presidents and chancellors shop around looking for conferences that will further exposure (big money TV contacts).
This is an organization that has somehow convinced people and politicians that "student-athletes" should be lucky to get a scholarship and feel fortunate that they can play for good old whatever university and entertain stadium or arena audiences, boosters, advertisers, politicians and have their talents used by coaches who earn millions annually from schools, marketing partners and TV partners.
In New Jersey, the state's highest paid employees are the Rutgers football coach and the men's and women's basketball coaches. Go around the country and you will find that college football or basketball coaches are the highest paid employee in a good number of states.
College sports is nothing more than a business.
Congress holds hearings on college sports every so often and generally these hearings go something like this. Congressmen genuflect in front of NCAA honchos then complain about the unfairness of the Bowl Championship Series in that only BCS members have a real shot at a title and that outsiders are just that outsiders with a limited chance of ever winning a NCAA football championship.
Never once do these hearings ever produce anything worthwhile for the "student-athlete" who has to prove to a coach annually that he (or she) is worth the scholarship and if a marginal player gets hurt and is unable to return to sports, that athlete loses their scholarship. The myth of the student-athlete is just that.
A myth.
In Arizona, politicians are scrambling for cover. In New Orleans, Fiesta Bowl officials might be scrambling for the cover of Bourbon Street if indeed the NCAA pulls the bowl game license. The NCAA doesn't seem to be too concerned ever with "moral" problems. The group has pulled two bowl licenses, the Seattle Bowl and the Silicon Valley Football Classic, because the games were poorly attended.
The NCAA is acting because people were caught with their hands in the cookie jar and dispensing money to court politicians. The whole college sports industry needs a review but as long as there is money to be made and college presidents and chancellors looking for the yellow brick road for that pot of sports gold, nothing will change. The Marx Brothers lampooned college football in 1932 in “Horse Feathers,” a remarkable movie that hit on corruption in college football and nothing has changed in 79 years since that Bert Kalmar, Harry Ruby, S. J. Perelman, and Will B. Johnstone came up with a screenplay that had Professor Quincy Adams Wagstaff (Groucho Marx) recruiting players for Huxley for their big game against Darwin. The plot and the jokes of "amateurism" in 1931-32 could easily be used today.
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 bickley.com, Barnes and Noble or amazonkindle.
Showing posts with label Fiesta Bowl. Show all posts
Showing posts with label Fiesta Bowl. Show all posts
Thursday, April 14, 2011
Sunday, April 3, 2011
Fiesta Bowl allegations just another Arizona public policy failure
By Evan Weiner
April 3, 2011
http://www.examiner.com/business-of-sports-in-national/fiesta-bowl-allegations-just-another-arizona-public-policy-failure
(New York, N. Y.) -- If you want to see where everything that could possibly go wrong in government spending for sports facilities, you need to look no further that the Phoenix, Arizona area. In a bid to make the Valley of the Sun one of the most prominent sports areas in the country, local politicians have spent more than a billion dollars of public funding to build two arenas, one Major League Baseball park, numerous baseball spring training facilities and a football stadium.
The Valley of the Sun was a sleepy sports setting until the late 1980s. As people moved to the Phoenix area, someone got the idea that Phoenix should have more "big time" sporting options than the National Basketball Association Suns. No, the area needed to become "major league" and getting a National Football League franchise, a Major League Baseball team and a National Hockey League squad would do the trick. The Suns, major college baseball and the mid-level Fiesta Bowl were not enough.
It hasn't financially worked out all that well for Phoenix, Scottsdale, Mesa, Tempe and Glendale. The sacking of Fiesta Bowl chief executive John Junker along with two other top officials could open a Pandora’s box of problems for Glendale, the Fiesta Bowl and the (college football's) Bowl Championship Series for Arizona politicians who allegedly accepted gifts from Junker.
Arizona elected officials have to abide by state laws, which included an “entertainment ban” that prohibits, state employees and elected officials from accepting tickets or "admission to any sporting or cultural event" for free.
The Junker situation could ensnare Arizona elected officials for ethics violations and could be an opening for Congress to investigate the Bowl Championship Series (and maybe tax exemptions that members of the National Collegiate Athletic Association enjoy).
Oddly enough the gadflies at The Goldwater Institute have sat on their hands and have been mum about the Fiesta Bowl revelations, which is so unlike them. The Goldwater Institute doesn't want Glendale to sell bonds to help complete the sale of the NHL's Phoenix Coyotes to a Chicago businessman nor do they seem to care that things didn't work out attendance wise for the Los Angeles Dodgers and the Chicago White Sox during the 2011 Cactus League Spring Training part of the baseball season at the new Glendale baseball park.
Overall, spring training baseball attendance was off in the Valley of the Sun.
How did Arizona politicians get into the sports business and when did they go wrong? It started about a quarter of a century ago when Phoenix started to experience a population growth. Urban planners and historians should study the entire history of the “big time sports industry” of the Phoenix area because no city or region has been dumber than Phoenix area politicians.
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 (The Islanders real estate deal is still festering with present owner Charles Wang apparently shelving an arena-village concept and Hempstead Supervisor Kate Murray not approving the project for reasons only known to Supervisor Murray).
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. Eventually Ellman's partner Jerry Moyes took control of the team and hemorrhaged money and the NHL now owns the team. Moyes and the league battled after Moyes got Canadian investor Jim Balsillie to buy the team. The NHL stopped the sale and the confrontation ended up in court when a Phoenix judge said the NHL had the right to control individual franchises in terms of sale and market. The franchise remained in Glendale and Balsillie's plan to move the franchise to Hamilton, Ontario fell through.
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.
Last fall, Colangelo was back in business in the Valley of the Sun in Glendale. Colangelo wanted to build the USA Basketball headquarters in Glendale and why not? Glendale had an open checkbook for Bidwill, Burke, Reinsdorf's White Sox, the McCourt's Dodgers. But Colangelo is miffed that financing for his headquarters has not come about. But Colangelo left the door open for Glendale (in government sports financing you never close a door) to get someone with money to build a headquarters.
Funny, the Goldwater Institute is not commenting on Colangelo. It must be that Goldwater's trustees don't like the Canadian sport of hockey while American sports like baseball, football and basketball (even if it was invented by a Canadian, Dr. James Naismith) are fleecing Glendale.
Meanwhile Glendale had another problem in 2010. 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 that 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 Sports business is pretty simple have the politicians get involved and make financial guarantees. It has been a good formula for sports owners and players but not so good for taxpayers who have a financial stake in the sports industry whether they watch games or not.
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
By Evan Weiner
April 3, 2011
http://www.examiner.com/business-of-sports-in-national/fiesta-bowl-allegations-just-another-arizona-public-policy-failure
(New York, N. Y.) -- If you want to see where everything that could possibly go wrong in government spending for sports facilities, you need to look no further that the Phoenix, Arizona area. In a bid to make the Valley of the Sun one of the most prominent sports areas in the country, local politicians have spent more than a billion dollars of public funding to build two arenas, one Major League Baseball park, numerous baseball spring training facilities and a football stadium.
The Valley of the Sun was a sleepy sports setting until the late 1980s. As people moved to the Phoenix area, someone got the idea that Phoenix should have more "big time" sporting options than the National Basketball Association Suns. No, the area needed to become "major league" and getting a National Football League franchise, a Major League Baseball team and a National Hockey League squad would do the trick. The Suns, major college baseball and the mid-level Fiesta Bowl were not enough.
It hasn't financially worked out all that well for Phoenix, Scottsdale, Mesa, Tempe and Glendale. The sacking of Fiesta Bowl chief executive John Junker along with two other top officials could open a Pandora’s box of problems for Glendale, the Fiesta Bowl and the (college football's) Bowl Championship Series for Arizona politicians who allegedly accepted gifts from Junker.
Arizona elected officials have to abide by state laws, which included an “entertainment ban” that prohibits, state employees and elected officials from accepting tickets or "admission to any sporting or cultural event" for free.
The Junker situation could ensnare Arizona elected officials for ethics violations and could be an opening for Congress to investigate the Bowl Championship Series (and maybe tax exemptions that members of the National Collegiate Athletic Association enjoy).
Oddly enough the gadflies at The Goldwater Institute have sat on their hands and have been mum about the Fiesta Bowl revelations, which is so unlike them. The Goldwater Institute doesn't want Glendale to sell bonds to help complete the sale of the NHL's Phoenix Coyotes to a Chicago businessman nor do they seem to care that things didn't work out attendance wise for the Los Angeles Dodgers and the Chicago White Sox during the 2011 Cactus League Spring Training part of the baseball season at the new Glendale baseball park.
Overall, spring training baseball attendance was off in the Valley of the Sun.
How did Arizona politicians get into the sports business and when did they go wrong? It started about a quarter of a century ago when Phoenix started to experience a population growth. Urban planners and historians should study the entire history of the “big time sports industry” of the Phoenix area because no city or region has been dumber than Phoenix area politicians.
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 (The Islanders real estate deal is still festering with present owner Charles Wang apparently shelving an arena-village concept and Hempstead Supervisor Kate Murray not approving the project for reasons only known to Supervisor Murray).
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. Eventually Ellman's partner Jerry Moyes took control of the team and hemorrhaged money and the NHL now owns the team. Moyes and the league battled after Moyes got Canadian investor Jim Balsillie to buy the team. The NHL stopped the sale and the confrontation ended up in court when a Phoenix judge said the NHL had the right to control individual franchises in terms of sale and market. The franchise remained in Glendale and Balsillie's plan to move the franchise to Hamilton, Ontario fell through.
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.
Last fall, Colangelo was back in business in the Valley of the Sun in Glendale. Colangelo wanted to build the USA Basketball headquarters in Glendale and why not? Glendale had an open checkbook for Bidwill, Burke, Reinsdorf's White Sox, the McCourt's Dodgers. But Colangelo is miffed that financing for his headquarters has not come about. But Colangelo left the door open for Glendale (in government sports financing you never close a door) to get someone with money to build a headquarters.
Funny, the Goldwater Institute is not commenting on Colangelo. It must be that Goldwater's trustees don't like the Canadian sport of hockey while American sports like baseball, football and basketball (even if it was invented by a Canadian, Dr. James Naismith) are fleecing Glendale.
Meanwhile Glendale had another problem in 2010. 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 that 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 Sports business is pretty simple have the politicians get involved and make financial guarantees. It has been a good formula for sports owners and players but not so good for taxpayers who have a financial stake in the sports industry whether they watch games or not.
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
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