Floyd Kephart spent much of the week trying to rescue the badly damaged image of Coliseum City by giving interviews on three radio shows, while also assailing Matthew Artz, the BANG reporter who got access to part of the proposal given to Oakland/Alameda County. It was all flailing and little substance for Kephart, who until the PR disaster had mostly kept his message under control.
Among the notes I gathered from Kephart’s interviews:
- None of the money from the public land sale will pay off the existing Coliseum debt. If that’s the case, what is paying off the debt?
- Some of the stadium debt would be repaid from project taxes. We know that different kinds of taxes would be used for infrastructure, though that was for a much larger project. Somehow the infrastructure would be downsized, yet the project would still have 4,000 housing units, a hotel, and large commercial square footage. How does that work?
- Kephart believes that the proposal excerpt was leaked to kill the deal. Probably true, especially if others would rather start moving forward with an A’s deal. Though in all honesty isn’t the leak simply accelerating the process?
- When pressed, Kephart refused to talk about buying a 20% stake in the Raiders, citing the confidentiality agreement. Smart on his part, since he’ll have to continue to work with the private equity groups he needs to provide that confidentiality. Everyone else, from municipalities to sports interests, can be thrown under the bus.
- The point of buying the 20% stake was that private equity was not going to make money on investing directly in the stadium, so having a stake in the team was the only way to get access to the stadium’s (really the team’s) net revenue. In the same breath, Kephart said that New City doesn’t have a “burning desire” to buy into the Raiders.
- According to Kephart and a number of Raider fans, 81 baseball games can’t possibly compare to 10 football games.
The pretzel logic used to argue that the NFL would be preferred is mindbogglingly awful. Sure, the NFL is the highest profile sport with the greatest cachet – at least in the US. It has bigger ratings and bigger national media coverage. Those factors, however, have absolutely nothing to do with bottom line arguments. The City and County are looking for the option(s) that provide the greatest economic impact. There is no way that hosting the NFL can provide this, with the possible exception of hosting the Super Bowl every year. We know that’s not going to happen, since the Raiders stadium will be too small, Levi’s Stadium already exists as host stadium in the Bay Area, and LA will have its own West Coast option soon.
Not including playoff games, the Raiders will bring in 550,000 per season (55k x 10 games). In a new ballpark, the A’s are projected to get around 2.2 million in attendance per season, 4x the football total. The important thing to remember is that the revenue streams (tickets, concessions, parking) will by-and-large remain with the team. The City and County are set up to recognize very little of gameday revenue. What, then, are football stadium backers relying upon to boost revenue? Out-of-towners. Fans of the Raiders and visiting teams will fly into Oakland, rent cars at OAK, stay at Oakland hotels, eat at Oakland restaurants. Sounds like a reasonable claim. What economic impact does that make?
The NBTA did a 2009 study on the top 50 cities in the US and tax impacts from visitors. It was focused on business travelers, but the basic tenets are the same. The study calculated hotel and car rental taxes, along with sales taxes from meals in each target city. Care was taken to separate downtown (center city) locations from airport locations, since they can have different dynamics.
Each city is ranked based on combined taxes, which mostly range from $25-35 per day. Bay Area cities are in the middle of the pack statistically. Oakland comes out at $32.45 per visitor, per day. Now let’s take those 550,000 football fans, and let’s estimate that 10% of them are from out of town and fly in, stay for a night, and eat locally.
55,000 fans x $35 per day (adjusting for inflation) = $19,250,000 per year
55,000 fans x $35 per day (adjusting for inflation) = $1,925,000 per year
$20 $2 million in economic impact? That’s good, but remember that the ongoing debt and operating subsidy for the Coliseum and Raiders is $22 million per year. How is less than $2 million per year supposed to work, especially if the debt isn’t being addressed?
(Ed. – Commenter Victor pointed out my bad math. Corrected it’s even an even worse deal.)
Kephart wondered aloud why so many people had problems with the deal as proposed, claiming that it worked for everyone. If the Raiders are paying the full freight on the stadium and the City/County aren’t getting the old debt addressed, it’s not working for anyone except New City. Frankly, he shouldn’t be surprised at the cold reception.
P.S. – Now let’s apply the same economic impact to baseball. Far fewer tourists visit ballparks except during the summer, so it stands to reason that a smaller percentage of attendance could be attributed to baseball fans from out of town. If only 2.5% of fans, or 600-700 per game, fit that tourist description, that’s still 56,250 total visitors, more than the football tally. And while that football total is maxed out, the ballpark still has headroom of 500,000 or more fans per year, which means more tourists. Plus there are 2 million locals and casual fans to boost economic activity per baseball season, compared to 500k football fans.