Posts Tagged sports
Overlooking the Obvious with Brent Larkin
Posted by Roldo Bartimole in Economic Development, Media on February 21st, 2010
February 21, 2010… How pathetic can you get? Brent Larkin, Sunday, uses quotes from four City Council members to tell us that Cleveland is in serious, serious trouble.
And as a center piece of the argument he uses the city’s $350 million mistake on the lake – Browns Stadium – to highlight somehow Cleveland’s problems.
As Mike Polensek points out it has no roof. Does he think with a roof it would be filled with activity? The city now has the right to use the stadium it pays for NINE times a year. Do you see it being used? No way.
Cleveland – with Brent Larkin, who actually wanted to be PD sports editor – and The Plain Dealer, paid close attention to sports in the last two decades. To the neglect of so much. Even now the sports pages are the largest section of the paper. And typically with fewer ads than other sections.
Dumbing down the dumb is tradition at the newspaper. It excels at it.
Anything the sports moguls wanted they got and get. Didn’t mean anything that some of what they got came from the Cleveland schools. Didn’t mean anything that other needs were pushed aside.
What was important to our leaders for decades was that the entertainment via sports, rock and roll and other venues got what they wanted. They got the money. We paid the price.
We still pay.
Brent has been the go-to guy in politics and civic life at the PD. He favored every one of these moves. Without reservation. With no discrimination as to value. Expressing no reservations with how it was done. No restraint on cost. Just do it!
Now he shouldn’t complain about results, or get others to do it for him.
Cleveland is what it is not because of the form of government – a city mayor and city legislative body.
These people don’t make the big decisions. They simply ratify what the business, corporate and foundation communities want.
Rarely does the public get involved. Usually the people are simply frozen out. But sometimes a tax is just too much for them. As with County Commissioner Vince Campanella’s desire to build a domed stadium with a property tax. That was the 1980s agenda. It got clobbered near two to one by voters. That ruined Campanella, a Republican, and his desire to be governor. But the game wasn’t over for the corporate leadership. Oh, no.
The usual suckers – voters – weren’t buying a property tax. That didn’t stop the Cleveland business establishment. Find another tax they’ll swallow. It took years – with Cleveland Tomorrow shifting its sights from the Cleveland economy to building sports facilities – to bring forth Gateway. Whoop-de-do.
A sales tax on booze and cigarettes. Hell, the little people pay that. Better than a property tax in the end.
We saved our sports teams. We lost our city.
Was that a great deal or what? Suburbanites get to drive into Cleveland, park at a tax subsidized garage, walk into a tax subsidized sports stadium or arena. But don’t get to drink the water.
Changing the form of government is meaningless unless you change the character of our civic and corporate culture.
And no one is even talking about doing that.
Gateway’s $3.2 Million Budget Bargain for Teams in 2010
Posted by Roldo Bartimole in Economic Development on February 8th, 2010
February 6, 2010… The Gateway Economic Development Corp., the non-profit entity that operates Progressive Field and Quicken Arena, has set a budget of $3,275,873 for 2010.
As a result of Gateway’s near bankruptcy a few years ago the two team owners decided to “save” Gateway from bankruptcy by agreeing to pay operating costs. They now are multi-millionaires Larry Dolan of the Indians and Dan Gilbert of the Cavaliers.
In exchange, the team owners got the entitlement to income from naming rights. It now looks as if the team owners again got the best of the bargain. By far.
Naming rights revenues now easily exceed the operating costs, as we shall see.
Just how good a deal this was can be seen by the naming rights cost at the former Jacobs Field, now Progressive Field. The naming rights bring Larry Dolan $3.6 million a year. (As Jacobs Field in the final years the rate was some $900,000 a year.) See the $3.6 million deal here: http://cleveland.indians.mlb.com/news/article.jsp?ymd=20080111&content_id=2343558&vkey=news_cle&fext=.jsp&c_id=cle
Dolan’s share of the 2010 proposed budget is $1,890,548, according to Gateway. That sounds like less than $3.6 million a year the naming rights produces. Maybe half?
Quicken Loans – also owned Gilbert – uses the naming rights on the former Gund Arena, which at the end of its life was paying some $900,000 a year. Obviously, the naming rights are far more valuable now but not recorded for publication. In essence, Gilbert is paying himself, however he works it for tax purposes.
Team naming rights here originally were to last until 2013 and would total about $14 million at each facility during that period. This revenue would have gone directly to the Gateway Economic Development Corp.
The rescue deal called for each team to pay a portion of the costs of operation. The major cost is property taxes. (As anyone who reads me knows Gateway is tax exempt. But that only applies to the structures. Land continues to be taxed.)
This year the property tax is set for $1,052,271 with $761,851 for the stadium and $290,420 for the arena.
The next highest cost is security for the two sites with $413,974 for the stadium and $401,761 for the arena. Maintenance is another high cost: $326,398 for the stadium; $356,676 for the arena.
The total operating costs of $3.2 million will be shared by the two teams as follows: Cleveland Indians, $1,890,548 and Cleveland Cavaliers, $1,385,325.
So Gateway – and the taxpayers – got the short end again. Or is it still?
Gilbert, owner of Quicken Loans, enjoys a very lucrative deal for the use of the arena. Data show that Cavs fans spend a game average of $317 for tickets, food and trinkets, according to a site that deals with these sporting teams. The fan index cost is for a family of four.
That suggests that Gilbert has gross revenue of some $65 million from the Cavs’ games alone. (Attendance was some 820,000 last year.) He also enjoys the proceeds of all other events at the taxpayer built arena.
Data can be found here: http://basketball.ballparks.com/NBA/ClevelandCavaliers/index.htm
The Cleveland Indians had revenues of some $181 million last year. They spent a little more than half on players. See here:
http://www.forbes.com/lists/2009/33/baseball-values-09_Cleveland-Indians_333426.html
The cost of building the two facilities was some $154-million for the arena and $181-million for the stadium. Another some $40 million went for land and other costs. Some figure that close to 90 percent was tax subsidized.