Courtesy of Deadspin, this infographic shows the growth of tax subsidies for stadiums over time.
A quick repost of a blog post I wrote up for my students today on the blog project they are working on.
Yesterday was bowl selection day for the NCAA College Football teams across the United States. Teams who won half their games (or others who receive special exemptions despite losing records) are all eligible to play in bowl games. While much of America was screaming at the Orange Bowl for having Northern Illinois University (NIU) playing in a Bowl Championship Series (BCS) game, a few individuals were very unhappy that Louisiana Tech was not going to a bowl game. It was not a matter of record (the team went 9-3) or that they didn’t get an invite to a game (the Independence Bowl offered), but that the athletic department was indecisive when trying to figure out whether to accept the invite.
The bowl business is tricky stuff, and La Tech was thinking they were going to some specific bowl games coming into the weekend. Then Northern Illinois finished 16th in the BCS rankings and won an automatic bid to the Rose Bowl, kicking Oklahoma out of the BCS. This shift cause other bowls to shift who they were inviting, and soon La Tech found themselves with only an invite from the Independence Bowl. It is not that the Independence Bowl is a bad game to play in, but that the payout the athletic department would receive would be around $1,100,000. While that seems to be a good chunk of change, the bowls that La Tech thought they were in the running for had payouts around $100,000 to $200,000 higher. While this seems like a small amount in the age of athletic departments spending tens of millions of dollars on football, I think La Tech had good reason to hesitate.
The bowl game system is one which invites teams from across the country to travel long distances and stay many days (teams travel, practice, have some fun events, play the game, then go home). Most schools also bring donors, alumni, students, the marching band, athletic department staff, and university staff and administrators to the game. Think about the bill for hundreds of people having to travel, stay in hotels, food, drinks, banquets, tailgates, events, and all of the sudden you are running a pretty high bill. Couple this with the fact that some bowl games require schools to make a revenue guarantee in regards to the amount of revenue generated by fans purchasing tickets, and bowl games can quickly become a losing situation for many athletic departments. In other words, bowl games are a “winners curse” for some.
So did La Tech do the right thing? I think so. It is better, in my opinion, for an athletic department to take their time and make the right decision, than make a poor one which would put them in the red. La Tech’s most famous alumni Karl Malone, a former NBA superstar, was not happy. Mr. Malone took to twitter and lambasted the school and its athletic department for not landing in a bowl game. I can understand Malone’s anger as those who are punished by this are the student-athletes who earned the chance to a bowl game, but are now not going anywhere. Malone suggested that not going to a bowl game is “exactly what is wrong with our university”.
I disagree Mr. Malone. The athletic department was weighing their options carefully. Is it a disappointment? Yes it is, but it does not hint at a bigger systematic issue with the university and the athletic department.
I bring unfortunate news of the passing of Marvin Miller at the age of 95 from cancer. Marvin was the first director MLB Players Association, and effectively helped usher in the free agency era. Under Mr. Miller MLB players saw their salaries jump from a paltry $6,000 a year (about $38,ooo in current dollars) to $10,000 a year. Some would say that this was the beginning of the boom in salaries, but Marvin played a big role in shaping the professional sport landscape that exists today.
I began class today with a discussion of Marvin Miller and his importance to sport as we know it today. It was unfortunate that his passing was the first that many had heard of Mr. Miller, but they quick appreciated the importance he had for baseball and all professional sports.
The NHLPA has submitted a new proposal in hopes of ending the current lockout. The NHL is set to respond later today to the union’s newest offer. Details of the deal include a 50/50 split of hockey related revenue beginning in year one and asking for an additional $180 million towards the league’s “Make Whole” provision ($211 million) to cover existing contracts. The union’s proposal has been reported as a five year deal.
The New York Marathon has been cancelled. The mayor’s office said that it was because of the media saying too many negative things about the race. I’d like to think that the previous blog posting played a role in the backlash against hosting the event, but reality says that probably isn’t true.
Brooklyn is playing their first regular season NBA game in the Barclay’s Center tonight, so there are signs that New York is recovering. Best wishes to those on the East Coast affected by Hurricane Sandy.
Hurricane Sandy has had a big impact on lives all across the Eastern coast of the United States. One of the prime areas hit by the hurricane was New York City, leading to many deaths, large amounts of damage, flooding, and residents still without power in large areas. While the airports are operational again, much of New York City’s mass transportation system is still down, the subways are flooded, and the bus lines are said to be overwhelmed. With this in mind, the NBA cancelled the season opener between the Brooklyn Nets and New York Knicks, a move that seems quite smart as it seemed to be rather difficult to get people to come to, and actually care about a basketball game at this point in time.
The NBA seems to be a bit more aware of what is going on than the City of New York, who has decided to hold the New York Marathon this Sunday. There are lots of arguments for why the race should be held: it will inspire people in this time of tragedy, it will show how resilient residents and the City of New York, and that it will help businesses that were hurt by the storm and create an economic impact for the city.
Earlier this morning on my drive to work, I listened to a guest on the Colin Cowherd show discuss how the New York Marathon is the sporting event which brings the biggest economic impact to the city. The individual who was someone important in the track and field/running world said that the event will bring around $300 to $400 million economic impact to New York City. Readers of this blog will note that the skepticism of the economic impact studies that are conducted by consultants, but to claim that a race needs to go on because of its economic impact is really a step in the wrong direction. Sensitivity aside, the supposed economic impact that comes from a sporting event is from visitors to the location spending money in hotels, restaurants, shopping, and so forth. With full flight schedules just starting this morning at airports in the area, it is already hard for visitors to be able to get into town for the marathon. Additionally, fuel supplies are so low in the area we have seen several hour lines for gas, even airplanes flying into New York are taking on extra fuel because of shortages. So travel to the area is going to be difficult, and that means the number of visitors who come for the marathon will probably go down.
Then there are other factors, like many businesses that would normally profit from marathons like sporting good stores having to close down locations because of lack of power, employees unable to get to work, or stores/merchandise being damaged and destroyed. The owner of Modell sporting goods stores was on CBS this morning, and he noted that all his stores in the area are closed, and two of them are destroyed. How is his business, and others facing similar issues going to benefit from holding a marathon? Not at all. If they are closed, there will not be people spending their money there. And now local hotels are now starting to say that they will refuse to evict locals for marathon runners coming to town. If we consider all the people who live within driving distance of the race, they may have lower discretionary income because they are dealing with bills for fixing damage to homes, property, vehicles and so forth, that they may come to run the race, but they might just not spend.
So when New York mayor Michael Bloomberg says the race will go on because of the economic impact, the city doesn’t really seem to be very understanding of the reality they are in. Not to mention that at a time like this, there will be a demand on infrastructure and government manpower (emergency services, police, security, etc) to host such an event. While the organization that is in charge of the marathon says they are using more outside contractors to help with these areas than before, there will be public money and costs to the city for holding the marathon. Honestly, I think this isn’t the right time to hold the marathon, and the economic impact argument is a very weak one to back it up.
The hope I was feeling a few weeks ago regarding the NHL Lockout has been replaced by apathy. Neither side seems to be in a rush to solve anything. Both sides seem willing to let sand flow through the hourglass as they sit and wait for the other to make a “realistic” offer. The NHL cancelled game through November and news came down yesterday the league is thinking about shutting down the Winter Classic. This seems to be nothing more than an attempt to scare the Players Association by taking the Winter Classic out of the equation. Doing so will take away some of the leverage the union has since it is believed that NHL will not risk its premier event. Cancelling the Winter Classic does not seem to be in the best interest considering all the dollars associated with the event. However, I stopped thinking rational thought between the two sides was an option a long time ago.
Paul Kelly thinks he has found a way for the union and NHL to end this lockout, expand the league. According to the article written by Ken Campbell for The Hockey News, the former executive director of the player’s union thinks expanding the league to north Toronto and Quebec City is the perfect solution to this stalemate. He believes expansion will bring in ”at the very least 600 million” in fees for the owners. That money, in his view, will help the owners and players narrow the gap between the two sides. To promote stability between the two sides, he also proposes a longer agreement around nine years with an option for a tenth. Decent article, but I see little that either side would agree to.
Is expansion the best course of action? Is Canada the only logical place to expand? Would expansion prohibit growth as it would water down the talent pool? If there is one certainty with the NHL and NHLPA, when it seems they take a step forward they always find a way to turn around and run in the other direction.