A few quick thoughts.
When I was in Chicago for my daughter’s wedding, one of my biggest fears was potential violence at Millennium Park. Roughly 50 were shot on Memorial Day weekend, and thankfully there was a gigantic police presence in the Loop that stopped any riots. The place where we stayed had armed guards in the evening and would give you an armed escort to your car if you desired one.
My wife and I took a walk, and there were fences all around Millennium Park. Much of the park itself was fenced off from other areas of the park inside. You had to walk through too long lines, a metal detector, and get your bag checked to go into the park. They were checking for things like spray paint, guns, and knives.
I lived right there for a few years when we were in Chicago and having unfettered access to Millennium Park was really a game changer in standards of living.
Chicago might consider the lack of violence on Memorial Day at the park a triumph but I don’t. The thugs won.
Speaker of the House Kevin McCarthy got a deal done with President Biden. Predictably, people on both sides of the aisle are very upset. This morning, 25 Republicans want to vote no, and far right-wing bloggers are very mad. AOC is really mad too! Problem for McCarthy is that he has a slim majority in the House. The Republicans don’t control the Senate, and the Democrat majority is slim. The White House is in Democratic hands. This is the best he can do.
Pass it, then go win some elections and change it. Thing is, when the Republicans controlled all three levers of power, they didn’t cut the deficit. They did do some small tax reforms. Trump wasn’t exactly a budget cutter. He gets a bad rap because of Covid spending, but even without Covid he increased the deficit and it wasn’t due to tax decreases but increased government spending. 70% of the budget is spent before anyone takes the oath of Congress. No one wants to take that on.
In my new home state of Nevada, the Oakland A’s have come visiting with their hands out. They want roughly $400 million, which used to be $500 million, to build a stadium on the Strip. Why not $0 million?
It was totally predictable, but many Democrats in the legislature are squawking about how if the A’s get money, their favored programs which are more important ought to get money too. That’s the wrong way to even start to frame this issue.
I am all for the A’s coming to Vegas. However, I am all for the A’s coming to Vegas and doing it privately. The business of professional athletics has become a giant subsidy. Read Economist Allan Sanderson’s research. Pro sports leagues tug on the emotional heartstrings of fans, putting pressure on legislatures to subsidize stadiums. They produce models that inflate their economic impact. Sanderson’s research has cut through that.
One example that gets tossed around all the time by the uninformed or people who can’t critically think: The NFL draft is supposed to be such a money-maker for cities. The league rotates it around it’s so great. When it was in Chicago, it was barely a blip on the economic spectrum. My guess is it was the same for Vegas since the hotels would have been full anyway. It’s all vanity and ego. Running the numbers rigorously and showing the assumptions and math is how Sanderson goes about his analysis.
Reading through testimony yesterday, you’d think they were building some sort of Cash Flow Factory on the Strip. A lot of those factories already exist called hotels and casinos, and they are privately funded. This stadium ought to be too.
Here are some data points of interest. Look at Chicago(!).
The Cubs own their ballpark. They invested private money around the ballpark and inside it. It’s considered a gem and sure, they had some good bones to start with. They monetize every inch of it, and the fan experience is great.
Look at the South Side. The Sox play in a government-run ballpark. No one waxes poetically about how great it is and the owner has zero incentive to turn out a good product.
Look at Soldier Field. We had season tickets there before and after the rebuild so I know what it’s like to go to a game there. It’s government-run and the rebuild was ill-conceived. The nation’s third-largest city got the NFL’s smallest stadium. It’s outdoors, instead of being a dome that could do other events. The Bears know it’s a dump and they are moving and building a privately funded domed stadium in the suburbs.
The Raiders negotiated a stadium deal with Nevada. They built a dome. The Raiders still suck. They have no incentive to put a decent product on the field because of the subsidies. By the way, the parking situation at that dome is abysmal. Inside, it’s okay, but I have been in better domes.
The Vegas Golden Knights worked a deal to have a privately funded stadium on the Strip. Parking there is better than Allegiant Stadium, which is a couple of miles or so down the Strip. The Knights have put a tremendous product on the ice for their entire history. Let’s hope they can win four more games this season.
With the A’s, I ignore a lot of the malarky being talked about. I don’t care that they don’t draw a lot to their current stadium which is in Oakland….and a dump. It’s been a dump since they moved there from Kansas City and Philly. I don’t care that the proposed stadium in Vegas is 30k seating. When you look at attendance around the league, that will be fine. I don’t care Oakland has lost every sports franchise.
What I look at are the pure finances and numbers. We ought to see a transparent cash flow analysis not that anyone voting on, or reporting on the deal would understand it. There ought to be an independent one produced that might use different assumptions than the internal one the A’s want everyone to believe.
Why can’t the owner of the A’s work a deal with Bally’s to privately fund the stadium? If the cash flows are so great, and the economics so great, everyone would have an incentive to do a deal, no? Couldn’t there be an equity swap of some sort? Wouldn’t it be easy to sell corporate bonds to the market?
What I know for sure is any dollar the legislature grants the A’s is coming out of the pockets of Nevada taxpayers and the only benefit they will get is the smugness of saying they have three of four major league franchises here. NBA next. No doubt, they will come with their hand out.
Hi Jeffrey - Really enjoy the stack. However, surely this is a typo for billion rather than million? "They want roughly $400 billion, which used to be $500 billion, to build a stadium on the Strip. Why not $0 billion?"
Any public subsidy to professional sports is essentially a(nother) excuse to legalize a money-laundering operation of cash from taxpayers, through wealthy oligarchs, to buy politicians, making the local oligarchs that much more wealthy and powerful. The temptation is too strong to resist. So it will probably happen because powerful people usually get their way in the end. I know it’s a cynical-sounding view, however I think it reflects reality. We can’t really solve these kinds of problems if we deny they exist.