More on the economics of professional sports teams..

As kind of a follow up on the Sonics to San Jose thread….

First, a nice piece summarizing the current state of disorder up in Seattle, courtesy of the Seattle Metroblog. What it doesn’t get into is the economics of the PREVIOUS refurbishment of Key Arena, and how much of that isn’t yet paid off.

(I”m curious, though… there are San Francisco, Seattle, Portland and Vancouver metroblogs, but nothing for San Jose? shame. What, we’re too suburban for you? grin)

Our background in all of this. Laurie and I have been interested in sports business and finance for years; Laurie’s MBA thesis was a financial analysis of San Jose Muni and whether it made sense to upgrade it LAST time the city had to deal with that question (in 1993, back when Hammer was mayor); it helped the Giants convince the city to spend money on the stadium and keep the baby giants in town (and away from Chico). We were season ticket holders with the Baby Giants for years, until 70 summer nights a year became incompatible with the rest of our life (like work; the last season, I was the guy in the box seat with the laptop trying not to get beaned while finishing up reports). We’ve been season ticket holders with the Sharks since day 1, including lots of long, boring drives to the Cow Palace to watch bad hockey because, well, it was better than no hockey.

Later on, we lived the dream for a year, signing up as the web geeks for the San Francisco Spiders of the IHL the year they came, they played, and they went out in a blaze of, well, ennui. But we actually did get to be part of a pro (well, in theory) sports franchise for a bit and see life from the inside, and it was just as strange and funky as we expected — while we got to spend a year driving up to the Cow Palace to watch IHL hockey, but we also got to sit down with the management team and talk the business side of sports as well, especially NBA and arenas, since the president of the Spiders that year came from the Warriors…. (in the meantime, the Cow Palace went from “gee, it’s great we have hockey, no?” to “boy, is this a pit. but it’s OUR pit, dammit!” — can we just tear the poor thing down and put it out of our misery?)

My personal stance on public funding of sports buildings is guaranteed to piss off both sides of the fight: I believe there IS a legitimate purpose to public funding of public buildings, which tends to piss off folks like Andrew Zimbalist who like to create funding models that “prove” that public funding is a bad idea. At the same time, I also believe the public funding should be limited to the same kind of investment they would make in any business enterprise in the city: it has to foot out, and it has to pay itself back, and no, you can’t assign arbitrary values to intrinsics like “civic pride” and “public image”.

For instance, I think that San Francisco absolutely screwed the Giants — and I wish the Giants had walked down to San Jose instead of finding a way to make it work; on the other hand, Pac Bell Park is an absolute gem, but the financial deal stapled to it sucks, especially compared to the $100 million dollar bonds worth of extortion the 49ers pulled out of San Francisco, but fortunately, that deal is dead and those bonds will never happen. I think the deal between San Jose and the Sharks is generally fair to both sides and been beneficial to everyone. it’s a great example of something that works for everyone, but doesn’t make anyone completely happy (which is a feature, IMHO). I’ve talked to Greg Jamison about it a couple of times, and he clearly feels the city ought to be investing some more money into capital improvements in the building, and I’ve talked to people on the city side who think the Sharks (okay, okay, Silicon Valley Sports and Entertainment; the sharks are a separate company, but down that road lies madness) ought to be returning more to the general fund. I think the balance of power here is fairly even, so I like it.

I’ve been watching Lew Wolff handle the A’s situation since he took over the team with great interest. His proposed deal with fremont is a great example of innovative financing that should work for all parties (the only downside: it’s not closely tied to BART, but that can be solved with a bus bridge at reasonable cost). Compare that to the fiasco that is the Raiders, and what Oakland did to the A’s in their lust to bring the Raiders back.

I’ve long in favor of using PSLs for financing, as long as you don’t get greedy and screw them up like the Raiders and Oakland did, because in reality, they’re use taxes on the people most likely to actually use the building; at the same time, these buildings get used for a lot more than just the team’s games, and to that degree, these things are civic resources. Asking the season ticket holders to fund the use of the building by the circus or the monster trucks is just as unfair as asking the city to pay the tab for the season ticket holders…. Where the rational compromise in the middle is, that’s the rub, and these situations have been so politicized that there are rarely any openings for rational compromise any more (another reason to cheer on Wolff in Fremont; he’s finding a way) — and this polarization is directly the result of overly demanding and greedy owners who’ve demanded not fair deals, but patronage deals — and two of the worst of this are the people up in Seattle, and our friends over in Oakland. Although, in reality, the city is as much to blame as Davis is, beacuse they basically opened up the kimono and started throwing goodies at Davis, but someone needed to see how irrational and guaranteed to fail the deal being set up was; nobody did, they’re going to be paying for that for years, or decades. AND lose the A’s as a side effect.

I”m basically that strange geek who, instead of wanting to grow up to be Harmon Killebrew, I grew up wanting to be Buzzie Bavasi. That, of course, never happened (but I did get to meet Bob Bavasi a few times when he was running the Everett Aquasox and we were roadtripping up there in the summers….). I keep hoping that when laurie and I move north in a few years I’ll be able to get a job as an usher for the ‘Sox, just because I think that’d be fun…

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