Friday, December 10, 2010

Vikings' Stadium Push Policy Ought to Focus on State Blight

Since Red McCombs purchased the Minnesota Vikings in 1998, the team has spent considerable time and money in an attempt to gain public funding for a new stadium. Four years ago, just one year after purchasing the team from McCombs, current Vikings' owner Zygi Wilf orchestrated a deal for a new stadium in Anoka County, before backing out of the arrangement. Rejecting a deal that, in hindsight, was nearly too good to be true, the Wilfs opted to continue their push for a downtown Minneapolis stadium--a stadium that would take advantage of the Wilfs' recent land purchases in the area.

During the entire new stadium push process, the Vikings have used local radio, television, and newspapers, and the NFL-induced, weekly assistance of FOX, CBS, and ESPN (and, presumably, NFL Network) play-by-play and color analysts to pitch their agenda. The focus from outside has been two-fold: (1) that the Vikings sit near the bottom of the league in stadium-generated revenue (never mind what the actually means) and (2) that a new stadium like team "X" has would be really cool.

Internally, the Vikings continue to lob the fireball that the team might just have to move to LA. They have recently suggested, while maintaining that they are not suggesting, that LA is looking for two teams, not just one. Apparently, that is meant to make Minnesota fans twice as nervous as were LA merely looking for one team.

Standing in the way of the rhetoric, however, are the details: (1) LA is not looking even for one team, rather it is the NFL that wants a team in LA; (2) the NFL is not interested and will not permit a move of a current team to LA, thereby foregoing the largesse that would be the franchise fee for any team in LA; (3) there is no stadium suitable for the NFL in LA, with the Coliseum long-ago discarded as a viable option; (4) the NFL does not want to lose a team in Minneapolis, the 12th largest NFL market with arguably one of the most loyal fan bases; and (5) even if the NFL were to permit the Vikings to move to LA, not even the NFL's or Vikings' concocted stories about LA would benefit the Wilfs; nobody is inviting the Wilfs to move to LA, rather, they are offering to buy the team from the Wilfs and, to be fiscally viable, that almost certainly would mean that the Wilfs would have to sell at a loss.

All of which means that the Wilfs, as they clearly understand, have only two meaningful options. One is to fold-up shop, thereby foregoing the annual $50-60 million that they clear just for being part of the NFL brotherhood. The second is to get a stadium deal done in Minnesota and/or renew their lease at the built-for-football Metrodome.

For Minnesotans, a new stadium could mean additional revenues, if the deal is properly structured. Assuming such a deal associated with anyone who has brought you a $6.2 billion deficit and believes that a salary freeze when others are losing their jobs is a meaningful "spending cut" might not be as far-fetched as it seems, as many of the same players who brought the now profitable Metrodome to the Minneapolis skyscape probably will also have a hand in any new stadium deal for the Vikings.

Of course the Vikings will make much more money on a new stadium than they do in the Metrodome--hand over fist, in fact, with reasonable estimates north of $100 million per season. That makes the entire dance offered by the Vikings both stomach-churning and foolish. Had the Wilfs and the NFL simply invested their own money in a new stadium when the Wilfs purchased the team, they would have, by now, far exceeded in revenue the investment that they are seeking from Minnesotans. That's stupid math both by the NFL and the Vikings. But the Vikings are erring even in the source of their angst and in their focus for gaining legislative support for their new shrine.

While the Vikings essentially point to the fans--those fans who shell out over $150/person, on average, for the privilege of attending just one Vikings' game and who buy Vikings' merchandise even away from the field--where they ought to be focusing their attention is across the river, at another Minnesota institution, the University of Minnesota.

Even with the clear potential for revenue gains (again, assuming a well-struck deal that returns stadium revenues to the State), Minnesota legislators and the Governor are stuck with considerable public debt. And, though relatively small compared to the State's projected budget deficit, the University of Minnesota Athletic Department's annual budget deficit serves as both the poster child and rallying point for those opposed to public funding of sports venues and ventures, in general.

In 2010, the University of Minnesota Athletic Department ran its now customary $3 million budget deficit. That deficit must, of course, be balanced. To meet this dictate, the Athletic Department must borrow from the University's central fund. And the University obtains most of its money--either directly or indirectly--from the State of Minnesota and the tax payer.

Since Clem Haskins' $1.5 million bailout--an amount paid upfront to Haskins but still being paid on borrowed money by the University of Minnesota--the University of Minnesota Athletics Department has spent $6 million, also in borrowed money, to buy out the contracts of Glen Mason, Dan Monson, and Tim Brewster. It has also spent in excess of $300,000 on coaching searches, with approximately half of that amount going to search firms that identified Brewster as a viable head coach and that did nothing to identify Bill Kill as a coaching candidate. All of this money spent, and, still, the Athletic Department is running a $3 million annual deficit.

If the Vikings truly wanted to ingratiate themselves to Minnesota politicians, rather than promising "not to move to LA," they would dig into their pockets and buy out the University of Minnesota Athletic Director before he makes another costly, state-funded mistake, pay to lure a true AD to Minnesota, and endow several scholarships to help the U avoid future budget deficits. It would cost the Vikings quite little to gain a tremendous windfall. And it almost assuredly would allow Minnesota politicians to reassess where the Vikings fit into Minnesota's financial landscape and to do so sooner rather than later.

Up Next: That Roof Thing. Plus, a wasted year for Peterson.


SupaFan said...

I always appreciate your viewpoints that you share in your blog. It gives me something to think about, thanks

vikes geek said...

Not a problem. Thanks for reading.