Saving the Chargers Stadium Campaign for the National Football League
Part 7 of 7: Media Analysis and Arizona Cardinals Model
July 8, 2002 Union Tribune Articles analyzed (5 pages regarding the 3 articles’ 14 pages): (1) "A Bolt of Skepticism," (2) "The Q Factor," and (3) "Brewers latest to demonstrate that new stadiums draw fans...as long as you field a winner." The key issues are land use and who pays. In summary, there will be a positive cash flow to the City of San Diego as well as the team and other tenants.
Articel #1: "A Bolt of Skepticism" July 8, 2002 Union Tribune: ALL need to be reminded that this is the SAN DIEGO stadium, NOT the Chargers Stadium; the Chargers are just one, albeit an important, part of the solution. The Chargers are the linchpin that makes it all happen. All proposing a stadium solution want housing included (except the one "give it back to nature"), regardless of with or without the stadium. Its the Chargers’ call: everyone will follow their lead.
Articel #2: "The Q Factor" July 8, 2002 Union Tribune: The second article calls for lead agency to head the development. This is not a good idea. A major developer reporting to an agency, perhaps, but a government group managing the development is, as always, amateur hour. Let them be government, etc., but let real developers do the actual developing Mixed-use football complex with housing would fit into Mayor’s "City of Villages" growth-management plan touted by the Mayor.
Chargers need to consider putting up the $5 million planning monies to show good face re staying and re working it out with all the other stakeholders, and to demonstrate they have a stake and will pay their fair share.
The team revenue from the DGSM solution would generate a minimum of $200 – 300 million a year, which is greater than the Forbes magazine estimated Charger’s 2001 revenues of $119 million/year, with a payroll of $71.8 million and operating profits of $8.9 million.
Chargers need a full throttle PR campaign (its lack suggests either that they haven’t made up their minds about L.A. or whether to stay or they think the city will rescue them). The reality is that L.A. won’t take them without their selling control of the team if done by AEG, and San Diego will facilitate but not put up the money they need for financing but not funding.Additional revenue should be put into operations and profits, not all into player salaries.
Chargers need to put on table, NOW, a plan to become competitive in the future, and to field great games even if they lose, working their way to their wins (great games, win or lose, fill seats, but poor team looking minor league will not).
Articel #3: "Brewers latest to demonstrate that new stadiums draw fans...as long as you field a winner" July 8, 2002 Union Tribune: This article on Miller fields shows need to truly appreciate fans (not just raise ticket prices) and plan to accommodate THEIR pocket books with stadium design and fiscal plan, not the designer’s. Teams without solid PR plans will lose the perception battle in the eye of the public. Fans want their teams; they want a show of commitment from team to commit back. Solid PR can generate fans in the seats Re: "A Bolt of Skepticism." Economic arguments seem based on previously held pro or con NFL, not economic facts, and whether or not pro or con NFL or pro or con public $$. Old paradigms prevail; 21st century is ignored.
Diverts from Other Spending Myth
- But who else will create jobs or get the revenues?
- Tourism industry is all about diverting tourist TO San Diego
- If no football, people will spend elsewhere, YES, but NOT in San Diego; Chargers help keep Sand Diego money in San Diego
- If diversion thesis is correct, how come as more and more fast food franchises opened, the old ones didn’t disappear? Ditto continued development of major malls and strip malls. They have all continued to thrive.
- The pie and the population continue to expand. Too many of the theories are way off the empirical reality
- PLUS: tourism is ALL ABOUT diverting people TO San Diego, and a Mission Valley football etc. complex is all about that diverting of others to San Diego
- Being COMPETITIVE is just as important for the City as it is for the Team
Too often "some economists" are used without mentioning names.
Theories range from great economic value to amenity/livable/quality of life value only:
- But, $295 million from last Super Bowl.
- NFL studies show teams represent $100s of millions/year for stadium city/region.
- One article not mentioned talks $1 billion in direct, $1 billion in indirect, which may well be high but certainly is significant.
- Misses economic benefit of KEEPING the money in San Diego.
- Amenity value and free advertising of games and Super Bowl only FORGETS that with tourism the 3rd largest industry, Super Bowls and NFL games help make the industry and all that feed off it.
- Notion of team in town lowers per capita income $10/year is hogwash. Show me the econometric model. This is another "theory" to create another expert to be paid to be a professional consultant call girl on call.
- Reality says the assumptions of the drop in income would not hold up. Like saying breast milk causes heroin addiction as so many heroin addicts breast fed.
- Noll writes from the perspective of an ideologue: it fits his ideology well but does NOT fit empirical reality.
- Especially his "football is an amenity only" argument.
- His stadiums block investment theory is wrapped in "may" without any citation or example.
- Ditto his theory of football stadiums have slight negative effect on the local economy: no example, no citation, despite NFL studies and San Diego’s studies to the contrary.
- His stadiums and Super Bowl are better fits for cities that don’t attract tourists, as Detroit, goes against fact that NFL rarely goes to cold cities for Super Bowl and no one else is tearing down Detroit’s doors (despite losing significant population, Detroit has just built two new stadiums, one for the MLB Tigers and the other for the NFL Lions).
Raising question of whether Chargers cause companies to move or stay is giving to the Chargers BOTH credit it deserves and doesn’t deserve; the answer is in the middle.
Notion that creative types of new economy would prefer arts and hiking trails to stadiums goes against the empirical reality that most people like to sit to be entertained; we didn’t become half obese because people are out hiking and enjoying nature. This is a real leftist bias statement with no empirical base in fact.
Notion that biotech and telecoms would come and flourish without the Chargers is a false argument, as it claims they would have moved here anyway because of the weather. IF the weather is ALL important, then why haven’t all the rest of the country’s biotech firms and telecoms moved to San Diego? Why does wretched weather cities (year round wretched) New York City and Washington DC claim many more people than San Diego?
- The notion that putting up the money for 250 university professors rather than a stadium fails to realize two things: (1) the stadium will generate its own money and not need tax payer dollars to thrive; (2) the 250 profs would require untold millions more to build classrooms and laboratories and offices, ALL of which would have to be tax payer subsidized
- Rick Florida’s notion that people would go to where they don’t go, as in Detroit (his example) ignores the fact that NO ONE wants to go to cold winter/humid summer Detroit AND they are losing population, not gaining. Florida obviously wishes he was not in Pittsburgh and was in a warm climate. So he should move if he followed his theory.
False Focus on Money for the Tteam Rather than for the Public-Private Partnership
- Myth that the City should make a profit needs to be replaced with reality that the City is a facilitator which should NOT subsidize the stadium or team
- Cities are NOT in the business of making profits.
- Cities are in the business of facilitating companies making profits so they can pay taxes.
- NONETHELESS, as the City DOES own the stadium, it SHOULD run a positive cash flow, not a negative one.
- City schools, libraries, zoos, museums, do NOT make a profit. They are all SUBSIDIZED. By this argument, so should be the stadium, which is why owners call for it. BUT times have changed; stadiums don’t need that kind of subsidy any more.
- Argument for PROFIT for city is off base: City is a facilitator to make things happen and then provide taxes to pay for the privilege
- Need plan that is profitable for ALL, not just Chargers
- A public-private PARTNERSHIP will give those in the profit sector profits and those in the non-profit sector tax revenues for other things, but no debt with stadium
- 40 revenue generating ways in 26 categories provides cash flow for everyone
False Focus on Ability of Stadium to Generate Monies for the Team
- Misinterprets 21st Century stadium realities
- Early 20th century = public financing
- Late 20th century = team financing with public money
- 20th Century: revenues all from inside the stadium
- 21st Century: revenues from inside AND outside the stadium in public-private partnership
- San Diego has to get off of old paradigm thinking: protecting its wallet against the team, and work to fill BOTH wallets, city’s and team’s
- Jerry Jones makes $200 million/year on Team, not stadium, on revenue streams both inside AND outside the stadium. DGSM model would boost TEAM revenue another $100 million ($200-300 million total to start) plus another $100-200 million and more (depending on how the retail components are structured) for the rest of the mix-use facilities
False Focus on Football as an Amenity
- Uses old data of old paradigm
- Misses new uses today as seen by Jerry Jones or other examples DGSM has given
- Misses economic asset base of team
- Treats NFL as unifying water cooler topic only
- Ranks with parks, zoos, museums, theatres
- BUT none of these achieve the emotional commitment/bonding city wide
- None of these provide the high end per use revenue
- None of these provide extra revenue activities like the Super Bowl
Super Bowl Should Not Be Discounted
- Whether $250 million or $295 million, that is still a lot of money, especially if it can be once or twice a decade, which a new stadium can deliver.
- Super Bowl money needs to be factored into payment of stadium
- Top US and world execs coming to Super Bowl provide prime opportunities for selling the city to them for plant/office location and convention going
- To say those who come for Super Bowl would have come anyway needs to address the question: what else would fill 169,000 hotel room nights in a week?
Re: "The Q Factor"
- Most of the experts see it as either the call of the Chargers or the call of both the Chargers and City working together.
- Downtown business group highly opposed to quick fix or insider deal.
- They are also opposed to making it a second downtown (which only a city planner, not a businessman would dream up)
- [It should be noted that with a Mission Valley mixed-use football complex, there is plenty for everyone]
- [Also: 166 acres for housing development would have to be expensive housing; 500 acre Naval Training Center, 316 acre East Village, and 232 acre former General Dynamics complex are better suited, as are rehabbing dilapidated city areas and adding to the concentric rings around the city]
- Manhattan Battery Park draws on 8 million people, San Diego would not
- $40 square foot value of land, as city owns it, is indeed cheap (that was the high end in NYC office space in 1985, although there was also $10-20/sq foot space in other buildings
- Cheap land for affordable housing would wind up under formula: a percentage. There would have to be luxury housing to provide the revenue for all of the infrastructure needs that affordable housing on such a small piece of land could NOT generate. AND, once the first set is sold, the prices will escalate fast, given the location, and those in the "affordable" range will no longer be able to afford housing.
- All housing, etc., would generate FAR LESS/year revenue for the city than would a mixed-use football complex, that would still have housing
- The site has to be redesigned, regardless of whether Chargers stay or not
- Parking can be handled through multi-story garages as at Mall of America
- Transit stop can be used to mitigate parking as in other stadium cities (requires wider planning)
- 21st century infrastructure looking ahead 50 years can be integrated into the siteRe: "Brewers latest to demonstrate that new stadiums draw fans...as long as you field a winner"
- Shows difference in how well run NFL is than MLB
- 12 new stadia since 1992
- MLB has poorer product obtaining fewer fans
- Shows MLB has hidden behind the promise of stadia rather than the management of teams
- Poor quality teams can’t draw high quantities to the ball parks
- Shows how view of people regarding owners is very important to fan attendance
- Its not so much losing as looking like amateurs that keeps fans away
- Solving the weather problems (retractable roofs) didn’t solve the attendance problems
Arizona Cardinals as Relevant Model for the City of San Diego and the San Diego Chargers
- Arizona Cardinals offer yet another model and story that can relate to San Diego. They are planning a public partnership that could be overlayed on Mission Valley.
- Their stadium site will be selected at the end of August 2002 by their Sports Authority. Construction could then begin immediately.
- Glendale is in the lead (3 communities are vying for the right to build it).
- Glendale’s proposed stadium features a retractable roof, a retractable side and a retractable field that moves in and out of the structure so that the grass will be able to absorb more sunlight.
- The Glendale proposal also figures a park, tail gating area, etc.
- The Glendale web site states that the stadium is seen as a
- "catalyst for the continued economic development of the West Valley with new hotels, restaurants and retail shopping anticipated to be built on the land surrounding Glendale’s proposed site." This would fit well with San Diego.
- Another quote: "The proposed facility definitely has numerous regional benefits and enhances our current investment in developing the Western area. Glendale is the best home for the Cardinals."
- AND: "Creates a unique, world-class sports, entertainment, and business destination."
- "In a strong show of solidarity, all 11 mayors of West Valley cities and WESTMARC, a regional coalition representing western Maricopa County, are pledging their support for Glendale’s proposal to the Tourism and Sports Authority (TSA) to build the new Arizona Cardinals football stadium next to the planned Phoenix Coyotes hockey arena."
- Financing is to be done through issued bonds and parking and other narrow, site related revenue.
- The Glendale stadium web page, an excellent site, has more:
- Power point presentation at http://www.glendaleaz.com/Stadium/PressConferencePresentation.cfm
- Additional web site features re stadium at http://www.glendaleaz.com/Stadium/ProposalUnveiled.cfm
Page content written / posted: 06-12-02, 01-20-03