Tuesday, May 07, 2013

Stadium Fallout

Mr. Ross asked for money his stadium.  The legislature declined to vote on the measure, which naturally was their decision.  Its legislation, after all, and that business "is what it is" and they can play games, not vote, decide to vote, or amend it however they see fit.

And Mr. Ross is within his rights, of course, to decry the fact that there was no vote. It affects his business in some way.

But he's done a lot of posturing on the topic, because he's not happy.   He said that this just won't do, and while he won't move the team, the next owner might not have a choice, and an archaic stadium such as this could force the issue.

And the media has speculated on this further, and drawn parallels to other franchises that have asked for improvements to their stadia, didn't get it, and ultimately moved.  I'd like to add a team to that list: The Miami Dolphins.  Think about: Joe Robbie asked for the Orange Bowl to be improved, the city balked, and he moved the team to a stadium that he built with essentially his own money.

And that's where the stories diverge.  You see, in every case - other than Miami - when a team moved, they were renting a publicly owned facility.  They didn't get the improvements they wanted, and either broke their lease or waited for it to end and then moved into another publicly owned facility in another city.  And since then, they've managed to get money to improve said stadia in those cities - or have threatened to move if they don't get it.

There's also another factor.  After several moves, the NFL enacted a new rule that the owners have to vote on any move, to ensure that the Colts situation doesn't happen (think moving trucks in the middle of the night), and to ensure that NFL cities generally make sense - and that you don't leave one profitable city without a team.

Yes, the LA Dolphins certainly sounds like a possibility....but it seems unrealistic, and here's why: Miami is still a profitable franchise, and there is a following.  It seems unlikely the owners would agree to move the franchise and leave Miami open.  But there's a larger problem in that the stadium is not publicly owned...it is quite private.

Steve Ross (and his partner in this H Wayne, who still has a stake in it) owns the stadium in its entirety.  And he has an "outstanding debt" of the low- and no-interest loans that financed construction and improvements....that's money that has to be paid back by the owner "someday."  If he sold the team and stadium, and the new owner wanted to move it, well, that person would still would own a stadium that essentially would sit vacant, and owe money on it.  He would still have to pay some amount of taxes on it, and would be on the hook for the loan regardless.

Who in their right mind would do that?

So Ross' insistence that the new owner might move the team are hyperbole.  No way would an owner take a huge loss on a "white elephant" of a stadium.  And I think that's what's pissing him off.  Ross has no leverage left.  He got himself into what amounts to a bad deal on emotion - he wanted to own an NFL team and he paid too much for it, and is "stuck" with an aging stadium.

Now back to another question: why not finance improvements himself?  As I've mentioned before, he never planned to pay for it himself: he was going to use the NFL stadium funds as "his" dollars, but those dollars are only available if  there's a public-private partnership, and since there wasn't, "his" portion is off the table.

Realistically, there is only a small number of choices left for him.  He could accelerate the sale of the team, he could get some investors together to get money, or he could pay for it himself.  Or perhaps there's a combination of things that could happen.

I believe that he will wind up making a scaled back version of the improvements himself.  It would include some infrastructure pieces, and changes to provide seating closer to the field - anything else could wait.

And that's my take.


2 comments:

  1. If the team winns games, there will be always a crowd that is willing to pay for tickets.
    Also there will be more Super Bowls in Miami.
    Thise Public-Priviate-Partnerships are Slaves-Paying-for-the-Show ! ALL slaves, even if they don't want it !
    Because we are all in it together !
    We are the new American Collective !
    We are happy slaves :-)
    We want MORE football !!!!!

    ReplyDelete