Tuesday, March 26, 2013

Minnesota Governor Claims Everyone is to Blame for His Failure to Perform Rudimentary Due Diligence

Apparently intent on demonstrating that he is thoroughly unfit for his office, Minnesota Governor Mark Dayton is now contending that his gross error in judgment in accepting fanciful revenue figures for e-pull tabs is everyone's fault.  "The gaming commission, the legislature, my office, me...everyone's at fault," the Governor stated, attempting to draw the circle of blame--and presumably the circle of responsibility--as wide as the state. "We are all in this together," he arrogantly and ignorantly intoned, "and we will find a solution together."

Well, Mr. Governor, please feel free to count me out.  If you have any doubt about my position, please refer to my earlier articles calling into question both the imposed public commitment to the Vikings' stadium and the State's proposed funding mechanism.  There were many others who felt as I did and who voiced their opinions, only to have you ignore them.  

Mr. Governor, your time will come, probably sooner rather than later.  Politics and karma tend to work that way.  But, as you point the finger that you simultaneous claim need not be pointed, keep it out of my face and out of the faces of those whom you ignored on the stadium matter.  Point it, instead, at your circle of friends--DFL or GOP--and save some fingers for the media cheerleaders who continue to be in the Vikings' pocket and the fans who followed this cheerleading because they wanted a stadium no matter the cost.

Finally, Mr. Governor, take a page from Harry Truman and point the longest finger at yourself.  And, if you have any self-respect or even a modicum of accountability, tender your resignation.

Monday, March 25, 2013

Apparently It Is Possible to Get a Better Deal on a $1 Billion Stadium

Throughout the build-up to the final vote on a Vikings' stadium, residents of Minnesota were hammered by the local media and the Minnesota Vikings that a new stadium would cost $1 billion and that the team could not possibly be expected to pay for more than one-third of that deal.

After much hand-wringing--all on the side of the woefully unprepared public leaders leading the charge for a new stadium--a deal was struck leaving the Vikings with precisely what they wanted and the public with an enormous debt that it now appears has no funding viable funding mechanism.

"That's the way of the modern world," we were told.  "Build this or the team moves--we couldn't take a chance."

Far South of Minneapolis, in a land often mocked by Northerners as the land of the less educated, the City of Atlanta struck a far friendlier deal with the Atlanta Falcons.  Rather than flinching in the face of hints that the Falcons might move to L.A., the City made its best offer to the Falcons, offering a package that included $200 million in funding for an $1 billion stadium with a thirty-year lease.  The Falcons will be footing the remaining $800 million.

Maybe it's time for Minnesotans to stop assuming wisdom of leadership and start demanding it.

Governor Dayton's Handling of Stadium Issue Merits Recall

Minnesota Governor Mark Dayton, one of the primary champions of the so-called "Peoples' Stadium" being built to house the Minnesota Vikings, today stated that he was unaware that self-interested parties were behind the fanciful estimates that e-pull tabs would generate sufficient revenue to cover the state's portion of the Vikings' stadium bill.

Governor Dayton's leadership on the stadium issue has been both harmful and embarrassing.  If he is being honest now regarding his knowledge of the source of the e-pull tab revenue estimates, he should be recalled for failure to undertake even rudimentary due diligence before championing the revenue stream as the primary funding mechanism for over $1 billion in debt.  If Governor Dayton is not being honest on the matter, he should recalled for that reason.

Former Vikings' Owner and Stadium Agitator Facing Tax Fraud Charges

If nothing else, former Minnesota Vikings' owner Red McCombs came off as an oily con man.  His current troubles only reinforce this impression.  For most Vikings' fans, McCombs' legacy will be his trade of Randy Moss to the Oakland Raiders, a move solely made to avoid paying Moss' bonus.  Lost, unfortunately, will be the fact that McCombs set the bar so low for his predecessors that a $1 billion stadium appeared to many to be a reasonable quid pro quo for something less obnoxious than Red running the Vikings.

Sunday, March 24, 2013

Minnesota Stadium Deal: Bait-and-Switch or Ponzi Scheme?

First, there was the stimulus plan that put workers to work to build the Vikings a $1 billion stadium.  That plan won't go into effect until later this year, but spending on the plan is well under way.  Under the stadium stimulus plan, a relative handful of workers will have jobs for a few years to produce an edifice that will continue to be subsidized by the public mostly to maintain a very small number of part-time jobs.

The big catches on this deal, of course, are purportedly the tax revenue that the State of Minnesota reaps from NFL players playing in the state and the game day revenue streams.  Then there are labeling, branding, and marketing values purportedly associated with having an NFL team in the market.

Virtually every economic impact study ever done on the matter has found that, at best--not at worst, not on average, but at best--public financing of NFL stadiums is a wash for the funding municipality.  All of the previous studies have considered joint ventures in which the public subsidy for construction of a new stadium was no more than $150 million and all of the previous studies have considered joint ventures for which bonding was the primary source of public funding and realistic measures were in place to pay off bonds.

Minneapolis and Minnesota will be funding over half of the Vikings' new stadium, contributing $498 million to construction and paving the way for downtown land space.  Minneapolis will pay off its $150 million portion of the stadium debt by raising hospitality taxes beyond their already exorbitant levels.  Ultimately, Minneapolis will pay at least $678 million on the stadium deal.  In exchange, the City will host two exhibition games that nobody attends and eight regular season home games--seven in the years that the Wilfs elect to sell a home game to the NFL to be played in London.

The State is on the hook for an even larger chunk of debt on the stadium, having committed to principal in the amount of $348 million.  The State will pay close to $2 billion to retire the $348 million debt.  That almost makes the State's quarter-on-the dollar sale of the tobacco settlement deal wondrously wise in comparison.

As if sensing that paying nearly $2 billion on a $348 million debt were not enough, however, those pulling the levers in Minnesota went one better, opting for electronic pull-tabs as the funding mechanism for the state's portion of the debt.  That might have worked except for the fact that it was clear from the beginning that electronic pull-tabs--a novelty at best--could not do what supporters claimed they could do.

Now we know, because now, after everyone with a vested interest received their piece of the pie, those with the vested interested are acknowledging what it no longer serves anyone to keep secret.  Like the fact that there not only are not two stadium plans for the LA area but not even one, like the fact that the NFL has zero interest in allowing any NFL team to relocate to LA, like the fact that the sun rises in the East and sets in the West, we now know--beyond even the doubt of nearly the most myopic of fans--that the electronic pull-tabs were the canard that they appeared to be.  And now, everyone in Minnesota is on notice that they will be the poorer for it--at least everyone without a hand already in a velvet-lined pocket.

Soon, we will hear of more stimulus, the stimulus that will be necessary to move the stadium deal ahead.  Perhaps we can borrow, yet again, from the school fund or delay repairs of roads, or ramp up property taxes or offer more of the same at a far higher cost.

And while all of this is going on--when the honest residents of the State, who refuse to shut their eyes and pretend that this is not one large con with but a few well-connected individuals benefitting therefrom, decide that shaking their heads is the best that they can do, believing that at least all of the proverbial cards are now on the table--there will be yet another shoe falling.  And nobody will hear the shoe fall in the din of distraction about pull-tabs.

That shoe, of course, will be the final lease agreement between the Stadium Authority and the Vikings. The agreement ostensibly has no certain outcome.  The stadium legislation authorizes the authority to grant anywhere from none to all of the stadium revenue streams to the Vikings and to otherwise work out a lease agreement with the team.

You will hear little about the lease negotiations until they are completed.  Then, and only then, will there be any demonstration of angst in the local media about the possibility that neither Minnesotans nor Minneapolis residents are getting anything short of conned on the stadium deal.  By then, unfortunately, it certainly will be too late to do anything about a decision that has already been undermined by deceit at most every level and a willingness to pawn off the consequences of that deceit on those already deceived.

Friday, March 22, 2013

Vikings in Talks with Urlacher's Agent

With Percy Harvin traded to Seattle, the Minnesota Vikings were left without a number one (or number two or three) wide receiver in 2013.  Part of that short-fall at wide-out changed last week for the better when the Vikings inked former Green Bay Packer receiver Greg Jennings to a five-year, $47 million deal that includes $18 million in guaranteed money.

Prior to the Jennings deal, the Vikings were approximately $25 million below the 2013 salary cap.  If Minnesota relied exclusively on a signing bonus to cover the guaranteed portion of Jennings' deal, Jennings' contract will translate to a hit of approximately $9 million per year.  If the team relied entirely on a roster bonus, the hit to the Vikings in 2013 would be nearly $23 million in 2013 and $5 million per year thereafter.

Given the Vikings' previous modus operandi, Jennings' contract is probably structured to cover at least a quarter of his guaranteed money through a roster bonus.  Assuming that to be true, Jennings' deal would count approximately $12 million against the Vikings' 2013 cap.  Without further restructuring of other contracts or other cuts, that would leave the Vikings approximately $13 million under the 2013 salary cap.

Having signed a number one wide-receiver, the Vikings are still without a slot receiver and are in dire need of a middle or strong-side linebacker, depending on where Chad Greenway plays in 2013.  Assuming $13 million left under the cap, the Vikings still have money to sign players that they need to step into starter roles next year.

Earlier this week, former Chicago Bears' linebacker, Brian Urlacher, turned down a $2 million one-year deal from the Bears.  Urlacher reportedly was seeking a $3.5 million deal with $500,000 in incentives.  When the Bears refused to budge, the market was essentially set on Urlacher as something below $3 million with possible incentives for playing time and hitting other marks.

On Friday, Urlacher acknowledged that the Vikings were in talks with his agent.  If the Vikings are convinced that Urlacher is healthy, a one-year deal at $2.5 million with incentives up to $3.5 million probably would suffice to lure Urlacher to Minnesota, where he would have the opportunity to remind the Bears of his value twice during the regular season.

Assuming a $2.5 million hit for signing Urlacher, the Vikings could next turn to filling their need for a slot receiver.  The best free-agent options for filling this role are Josh Cribbs and Austin Collie.  Collie has a history of serious injury including recurring concussions.  Cribbs has proven both mercurial off and inconsistent on the field.

In a healthy Collie, the Vikings would have a speedy, sure-handed receiver with a good off-field reputation.  In Cribbs, Minnesota would have a fast and elusive receiver who is one of the better kick- and punt-return specialists in the league.  Given the baggage that both players carry, the dollar figure for either ought also to be reasonable--probably in the range of $2 million per season per player with a bonus to match on a per year basis.  Given injury history, Cribbs is the safer bet.  Given personality, Collie gets the nod.

Signing Urlacher and Cribbs or Collie would fill two pressing needs for the Vikings and allow Minnesota to use their two number one picks in this year's draft to focus on players who will develop into solid, long-term starters for several years--preferably at linebacker and defensive tackle.  The signings would also leave the Vikings with sufficient cap space to sign a cornerback capable of starting this season.

Up Next:  Is Cassel an Upgrade?

Wednesday, March 13, 2013

Nothing Adds Up In Harvin Trade

On Monday, the Minnesota Vikings traded their sole proven wide-receiver, Percy Harvin.  The trade netted the Vikings the 25th pick in the first round of this year's draft and a third- and seventh-round pick.  Some Vikings' fans are ecstatic, pointing to the purported "haul" that the Vikings received for Harvin.  There is little reason to be even remotely happy about this dead, however.

That the picks are not adequate compensation for a player of Harvin's abilities is indisputable.  The Vikings, however, have manipulated the conversation, offering the given that Harvin was damaged goods in the public eye.  Of course, he was damaged goods because the Vikings damaged him.  They started the ball rolling down hill when they offered tight end John Carlson $25 million last off-season when Harvin was receiving a pittance in comparison--and that was before Carlson produced 43 receiving yards over the entire 2012 season.

The Vikings exacerbated the Harvin situation by standing by struggling quarterback Christian Ponder in the face of public and private criticism from Harvin regarding the play of the quarterback and the need for a quarterback who can produce at the NFL level.  Harvin was put in his place and the Vikings sent yet another signal to Ponder that they will do all that they can to protect his apparent egg-shell psyche.

Despite being cleared to play at the end of last season, the Vikings perpetuated the wedge with Harvin, opting to deactivate him.  Harvin was further disenchanted and the Vikings were further emboldened, by their own design, to view Harvin as a problem rather than a solution.

Moving Harvin saved the Vikings approximately $10 million per year in cap space.  Minnesota finished last season with approximately $12 million in unspent cap space that could have been used to sign Harvin with a more limited cap hit going forward had the team taken a one-year roster bonus cap hit on the contract with the remainder of the contract pro-rated at approximately $8 million per year over the remainder of the contract.

After the Harvin trade, the Vikings are left without a proven wide receiver, without one of the top players in the NFL, and with a late first-round pick that they hope to parlay into a player remotely as good as Harvin.  They would be fortunate even to come close.

Up Next:  Vikings Blow Boldin Deal--If It Even Matters.  Plus, with a stadium deal done--but for the unreported revenue stream negotiations--the Vikings offer yet another page from the Twins' financial handbook.

Monday, March 11, 2013

Minnesota Vikings Teeter on Edge of Another Disastrous Moment in Team History

Several media outlets are reporting that the Minnesota Vikings have agreed to terms of a trade that would send their only legitimate wide-receiver, Percy Harvin, to the already talent-laden Seattle Seahawks, pending a physical.

No matter the return, the Vikings stand to be the overwhelming losers in this deal, forfeiting a player that was vital to their offense in 2012 and a player nearly impossible to stop when used even in the Vikings' one-yard passing system.

Any fair return on Harvin would have to net the Vikings at least three first-round draft picks and a capable starter from a team likely to be selecting closer to the beginning of round two than the middle of round one for the next several years.  Given the Vikings' absolute mishandling of Harvin's situation, there is little chance that Minnesota will realize such a return, however.

Even were the Vikings to receive numerous high draft choices and a starter for Harvin, however, the deal would be worse for Minnesota than the Randy Moss trade to the Raiders--which netted the Vikings a top-ten pick that they then wasted--and second only to the Herschel Walker deal that gutted the team for years after.

In trading Harvin, the Vikings would be removing from their roster the one true complement to Adrian Peterson.  Already suffering at wide receiver, the Vikings would only complicate their predicament.

The only possible Harvin trade scenario that will play well for the Vikings--on and off the field--is if the Vikings sign both Wes Welker and Mike Wallace, receive from Seattle a starting linebacker or cornerback, and use their two first-round picks and second-round pick to select a defensive tackle, linebacker, and cornerback.  And, still, the Vikings would enter the 2013 season without clarity at the quarterback position.  Receiving Matt Flynn and his enormous contract in return for Harvin would be but one more blot on what almost certainly will otherwise be an awful deal already.

For those who prefer to see good in all that is, there is the anticipation of being able to see how a properly functioning coaching staff utilizes a great running back and a great combo receiver/back.  Just a guess that Seattle might find a way to keep Harvin and Marshawn Lynch on the field at the same time.

Up Next:  Does Free-Agency Matter for this Squad?