Friday, October 23, 2009

Stadium Subterfuge

If you wanted full-court press, you now have it. For the past several years, Vikings' ownership groups, the NFL, and those in the local media beholden to the Vikings and/or the NFL have pressed their agenda in pursuit of a publicly funded NFL stadium for the team.

The rationale, we are led to believe, is four-fold: (1) the Vikings are short on cash; (2) the Vikings are short on cash because they play in a stadium that does not offer the team revenue streams that many other NFL teams reportedly enjoy; (3) Minnesotans owe it to the team--and to themselves--to finance a new stadium for the Vikings; and (4) without a new stadium, the Vikings will move to Los Angeles.

The tactic being employed by the Vikings' front office is one of submission. Using their on-air employees to hammer home, between virtually every other word, the Vikings' "need" for a new stadium, the Vikings clearly hope to instill this premise in the minds of all who listen to their games. Even those not paid by the Vikings, but who nevertheless have substantial ties to the team and to the NFL, have lamented the team's purported woes on behalf of the team, such as when Michelle Tafoya blatantly ignored reality in claiming that "the Vikings cannot compete in the Metrodome." Factual misstatements aside, I suspect she intended to say in "Mall of America Stadium."

Not far behind Vikings' employees and the local supporting cast in calling for a publicly funded stadium for the Vikings are those working for the NFL. Not a week goes by without a NFL broadcasting crew noting how nice new stadium X is compared to the HHH Dome and how deprived the Vikings are for having to operate in the Dome. There is no question but that those points are well-orchestrated and handed down from the NFL Commissioner and the NFL's stadium-drive committee.

If one can get past the NFL's and Vikings' thinly veiled attempts at influencing public opinion, the larger question becomes whether any of these agents of the Vikings and the NFL is making any good faith attempt to influence public opinion on the basis of all of the germane facts. The answer to that question, to date, is "no."

I have written in the past of fallacious claims that the Vikings either are cash-strapped or receiving a paltry return on their investment. In short, the Vikings are flush with cash and equity and the team's returns dwarf those of most any other business on the planet.

Of course, the Vikings' owners would like to make more money and be considerably wealthier than they already are. There's no problem with that, except that the team's owners have posited their goals in the context of need rather than desire--a theme that their employees, certain local media members, and the NFL have fostered and promoted.

To the end of promoting that theme, the Vikings have long insinuated, largely through back-door channels since the Wilfs arrived in Minnesota, that the team might have to consider moving if a stadium deal cannot be resolved prior 2011, when their current stadium lease expires. The prime relocation site, the story-line goes, is the finely named City of Industry, just outside of Los Angeles.

On the surface, the NFL has been more than happy to feed the Vikings-to-Los Angeles story to help the Vikings obtain public funding for a new stadium. Behind closed doors, however, the NFL has been adamant that no current NFL team will be permitted to relocate to the Los Angeles area.

That latter position makes eminent sense for the NFL. For why would the league allow a current team to move to the most lucrative market rather than retain the rights to that market and reap the benefits of selling expansion rights in the area?

League position notwithstanding, the Vikings offer a particularly poor candidate for relocation to the proposed stadium in Industry. The developer of that site, Ed Roski, reportedly has committed to spending mostly his own money to build a new stadium. Estimates of costs are between $800 million and $1 billion, with the City of Industry floating $150 million in bonds for infrastructure surrounding the stadium.

What Roski seeks in return on his investment is not a tenant for his expensive stadium, but a team of his own. Were the Wilfs to sell to Roski, they would be selling the team to a prospective owner who owes a considerable debt on the new stadium--a factor that necessarily would reduce the sale price of the team. More disconcerting for the Wilfs, however, would be the fact that they would be selling the team at a far lesser premium than if they sold the team to a local purchaser without any stadium deal in place and at a much greater discount than if they had a stadium deal in place (even one that they financed entirely). A Vikings' move to Industrial, under the current dynamics, thus makes absolutely no financial sense for the Wilfs.

That fact won't keep the local wags from spouting their rehearsed rhetoric regarding the Vikings' "need," not just for a new stadium, but for one largely funded by the public, but it might dampen the prospects that Vikings' fans will take the bait.

I've said it before and I am certain that I will be compelled to say it again. If the Vikings want a new, publicly financed stadium, they need to work with the public rather than threatening the public and they need to be willing to share in revenues to the extent that the team receives public funding. If that is not appealing to the team's ownership, it remains free to build its own stadium; a route other NFL owners have taken with great success.

Up Next: Time to Run.


MN said...

As a Twins fan whose team DOES get the short end of the stick vis-a-vis the Vikings in terms of HHH revenue--let me say, see ya Vikings.

I was against the Twins Stadium as well. Public funding of sports stadiums simply does not break even for a city.

Luft Krigare said...

Who do you think owns the Metrodome?