WhoDeyRevolution

Prepared to Get Angry: Fantastic Stadium Deal Recap

A long expose in the latest Cincinnati Magazine sheds light on the stadium deal, both past and present. The article's author methodically lays out the timeline of events that has led to today's news that Hamilton County is selling Drake Hospital to fund the deficit caused by required stadium expenses and lower sales tax revenue.

Read the whole thing, please.  Here are some teasers:

The general thesis:

If you’ve turned on a TV or picked up The Cincinnati Enquirer lately, you know that instead the Bengals and Hamilton County have continued squabbling—and the stadium fund has continued hurtling toward financial disaster.

One reason, of course, is the economy. Since 1996, when voters agreed to increase the sales tax and build two new stadiums, Hamilton County has seen a lot of shops close or move to the exurbs (and a lot of shoppers shift their attention online). Tax revenues haven’t met projections, and each year the stadium fund has fallen further behind. Another reason is the Bengals lease, which requires the county to pay for everything from that new scoreboard to the stadium’s electric bill. Forget the team’s losing record—it’s the lease that earns national derision. In 2009, The New York Times devoted a long story to PBS’s “particularly lopsided lease.” This year, The Wall Street Journal devoted an even longer story to “one of the worst professional sports deals ever struck by a local government.”

The overall message:

At the stadium’s groundbreaking, Brown said the new facility deserved “a winning team. That’s what we plan to do.” Well, they haven’t, even as Brown has continued to turn enormous profits and to manhandle Hamilton County with a mix of business savvy and litigious bullying. But the county deserves some blame, too—and not just the previous administrations....That’s the first thing to remember about the stadium debate: The Bengals played rough from the beginning. The second is that a small and incestuous group has always driven the discussion. 

Crucial point:

The local media love to trumpet the county’s long-term projections—a $700 million deficit by 2032!—but that doesn’t make sense when the fund includes so many moving parts. In reality, we’re facing something far worse: a bruising annual argument in which the county looks bad, the Bengals look worse, and everyone wastes time and money. 

The summary:

Over the years, Brown has relied on peculiar logic to make his arguments. (Just one example: While he loves comparing PBS’s cost to that of stadiums in Jacksonville and Cleveland, Brown never mentions that owners in both cities have helpfully renegotiated their leases.) But even if his arguments were completely sound, why would an NFL owner pick such public fights with his city? It’s not classy. It creates heaps of bad press. And it all happens while Brown is earning crazy amounts of money in a stadium paid for by county taxpayers.

Go read the whole thing, get angry, and remember that's you are still not wasting your money on a team that is working to enrich themselves while bankrupting the city.

Just Stop, Bengals. Seriously.

Predictably, the Bengals responded to the recent WSJ article highlighting the burden their stadium deal via their whiny little Who Dey Perspective blog.  Their major point boils down to "the WSJ used sloppy math and conflated the costs of two stadiums instead of isolating just PBS".  Perhaps they're right, but that's beside this point on the whole issue.  Here is what matters:

1. The Bengals are not at fault for asking for as much as they could when they tried to get a stadium deal.  First and foremost, this is the fault of the county and its citizens for not playing hardball when we had the chance.
2. ANYONE who looks at stadium deals in a serious manner comes to the conclusion that the PBS deal was among, if not the most, lopsided deal for all publicly funded stadiums.  This book dedicates a whole chapter to it.  They focus on the Reds stadium too.  They still come to same conclusion.  I talked to them about it.  They said:  "The Bengals deal remains the single most lopsided stadium deal since 1993."  No amount of whiny Who Dey Perspective posts changes that fact.
3. Though you cannot fault the Bengals for simply grabbing all they could, it is also implies they viewed the county, its citizens and taxpayers as suckers to be looted for maximum personal gain.
4. Given that Bob Bedinghaus went to work for the Bengals, it actually throws into question the whole premise that the negotiations were fairly conducted in the first place.  It's among the grossest cases of revolving door public to private sector shenanigans I can think of in my lifetime.  Even if it had no impact on negotiations, it's embarrassing behavior by both Bedinghaus and the Bengals, and speaks to their sense of ethics and their respect for fans and the community.
5. The owners of the Bengals are not here to work in partnership with their fans and local community...they are here to exploit it for personal gain.
6. Go read what Doc said in his blog but it comes down to this:  the Bengals could serve a wonderful public function by helping to give our community an identity and common cause to rally around, instead they simply take our largesse and shit on us.

So Bengals, seriously, shut the fuck up trying to defend your stadium deal.  You got a good deal, whether it was negotiated in good faith or not.  It's tone deaf and misses the point that you continue to accept fan and taxpayer money without even bothering to a)seem grateful or b)make the changes needed to win.

Wall Street Journal Headline Shocker: Bengals Stadium Deal Continues to be Terrible

Here are some indicators your franchise has issues:

1. A leading sports periodical ranks you dead last of all professional sports teams
2. Your franchise player would rather pay $50 million to play with his kids than play for your team in his prime
3. THE UNITED STATES LARGEST DAILY CIRCULATING NEWSPAPER FEATURES YOUR TAXPAYER DESTROYING STADIUM DEAL ON ITS FRONT PAGE

We'll focus on the last of those points for now.  While notable for its prominence, it's not like this is the first credible journalistic source to focus on the Bengals' stadium deal.  Entire books have already been written on publicly financed stadiums and have also singled out the Bengals deal as the worst.  The article cites some additional studies I had not seen, and again, all pretty much agree the Bengals deal is as bad as it gets for taxpayers.

It's easy to see why.  The lead negotiator representing the county, Bob Bedinghaus, went to work for the Bengals after he was de-throned from his political seat largely based on backlash from the stadium deal.  Guess there were no hard feeling left over from those intense negotiations.  Even by todays' embarrassing ethical standards for politicians (actually, there are no standards), that was an appalling move.  We've written about this ad nauseum already, so there's nothing much to add.

Only the Who Dey Perspective, a sad little propanda article on bengals.com that specializes in spinning the abominable track record of the Bengals management, tries to defend the deal anymore.  That the Bengals felt the need to create a public outlet to justify their own ineptitude only serves to confirm it.  I don't know who Jack Brennan is, but I certainly hope they paid him quite well to ruin his name by associating it with this organization.

Two Promising Developments

Apologies for the lack of posts, but it's hard to get excited about all the non-news stories (Carson leaving - yes or no?  Chad continuing to do PR stunts, etc).  Two recent developments perked my ear, though.

The first is that the Bengals are at least considering building an indoor practice facility.  As Joe Reedy points out, "The Bengals are the northernmost NFL team without an indoor facility; coach Marvin Lewis has made it clear he wants one. Movement on the issue was considered one of the reasons he signed on in January for two more years." 

WDR has covered the lack of an indoor practice facility for some time. Check our old posts here and here.  We have covered the fact that the Bengals, a "professional" football team, force their players to practice in an indoor practice stadium in the winter months leading up to the playoffs, and that an indoor facility helps curb injuries.  And that the team, not the county, would be forced to pay for the construction and maintenence of the facility.   But it is certainly a promising sign that the Bengals are at least sniffing around to assess the possibility of building.  Though, I have my serious doubts that this will ever be built. Likely just going through the motions to satisfy Marvin and placate moronic Bengals fans like us.

Second, I was shocked when MLB was able to seize the Dodgers from owner Frank McCourt, using a vague "Best interest of baseball" clause that gives MLB Commishioner Bud Selig almost universal power over teams to do what he thinks is in the best interest in baseball.  Can we hold out hope for something in football?  

BengalLeaks: Corporate Suite Holders Revealed

WDR is able to reveal a list of 80 Bengals Corporate Suite owners.  Remember, income generated from leasing these luxury boxes are NOT included in the NFL's revenue sharing agreement, meaning all of it goes right into Mike Brown's pockets.

This is not an exhaustive list of all who lease the 114 "Privave Suites" at Paul Brown Stadium, as WDR also obtained a list of individuals who own Luxury Boxes and has decided not to reveal individual identities.

Is the company you work for listed?  Somewhere you do business?  More information and coverage of this list forthocming.

Bengals Demand $43M From City

In a move that makes you want to pull your hair out, the Bengals have sent a letter to Hamilton County asking for $43M over the next 10 years, four times the amount the County expected to spend, to pay for a new scoreboard and broad categories like "groundskeeping," "audio/visual," or "concession."

As the Enquirer stated, Mark Rosentraub, a professor of sports management at the University of Michigan, estimates the Bengals only need between $2-4 million each season for maintenance. 

Does Mike Brown know the budget struggles the City and County are going through right now?  Not only trying to keep fully funding schools and prevent laying off police and fire staff, but also working to pay down the $1B spent to build PBS and GABP? 

As the Enquirer wrote: "Since Paul Brown Stadium opened in 2000 and Great American Ball Park opened in 2003, taxpayers have made $10.2 million in improvements to the football stadium and $2.1 million in improvements to the baseball stadium.

That's partly because of differences in the leases: The Bengals lease, signed in 1997, says the county must pay for routine maintenance and all capital repairs at Paul Brown Stadium. The Reds lease, signed in 2003, says the county only has to pay for capital improvements at Great American; the team pays the rest."

Yes, the team has recently started contributing to some capital improvements (new cash registers, as if that isn't ironic enough that the only thing the Bengals will invest in is better cash registers), but this is just a boneheaded move all around.  You have a team falling apart, fans revolting and not buying tickets and a County struggling to keep basic services afloat - and you demand $40M for unspecified improvements?

Do the Bengals not understand how the stadium fund was set up?  Basically, the stadiums and improvmetns were paid for by an increase in the sales tax.  That sales tax increase was projected to provide the County with enough revenue to build the stadiums and fund improvements.  But, suprise suprise, the projections have not been met and the sales tax fund is not driving enough revenue to the County to even make the debt payments on the intial stadium fund.  So the County must decide where to pull the money from to be able to make the debt payments - if they default, the County's credit rating would go in the tank and then every other service would become more expensive as financing terms would significantly appreciate. 

It is moves like this that really show the Bengals true colors.  Not wanting to come to table to negotiate, not being a real corporate citizen, no compassion for the County's current budget crisis - just a demand for more without making any real effort to change anything that would produce a winner. If the Bengals were winning playoff games, I am sure this money would not be an issue.  But when you consistently lose and fail to show any committment to the City and its fans, this kind of cold-hearted demand will fall on deaf ears.

 

Blackout vs. Buffalo Most Likely

While many fans are expecting the end of the Bengals sellout streak this weekend vs. Miami, they will probably have to wait two more home games before not being subject to 2010 Bengals football on TV.  

A streak that dates back to a November 9th game in 2003 vs. Houston will extend through Miami and Pittsburgh, before ending on November 21st vs. Buffalo.

The Bengals will be playing just their 3rd home game of the season this Sunday, and most casual fans (including women and those from the East Side) that buy tickets to 1-2 games per season do so in September and October, to avoid the potential cold weather/2-10 record later in the season.  As a result, my guess is that the Bengals are sufficiently 'within range' for this Sunday due to sales earlier in the season, with Kroger and other sponsors picking up the slack later this week.

With the Monday night tilt vs. Pittsburgh effectively sold out, that leaves the Buffalo game as the streak-buster. 

Over seven years of sellouts and a combined record (including playoffs) of 54-56-1 will soon come to a screeching halt. 

Things That Please WDR: Bengals Help Pay for Stadium Upgrades

The Enquirer brings us this article, which describes how the Bengals paid the majority (55%) of the costs to upgrade the cash registers in Paul Brown Stadium when they legally had no obligation to pay anything.  It's a small but good gesture and causes even mega-cynics such as ourselves to hope the Brown Family may start working more with the community.

(side note:  not thrilled with the Enquirer title "Taxpayers spend $400k for new Paul Brown Stadium cash registers" as even to our admittedly biased eyes that seems horribly biased against the Bengals.  The story is not that the taxpayers have to pay for stadium upgrades, that's been known since the lease was signed.  The real story is that taxpayers saved $490k because the Bengals let them).

This was not some frivolous upgrade either.  See this passage:

Terry Evans, who oversees riverfront operations for the county, reminded the commission at the meeting why the new cash registers were needed: Last year, just before the playoff game with the New York Jets, half the stadium didn’t have working cash registers.

Like a string of Christmas lights, when one register crashed, all those on the system after it went down.

Sounds like a really poorly designed system to me.  Of course, it's not an entirely selfless move by the Bengals:

That could have meant long walks for beer and souvenirs. And on the flip side, less revenue for the team.

Emphasis mine.  I'll be charitable and say this is one case where fan and mgmt interests dovetail.  Can't go without precious, delicious $8 beers!

Of course, the Reds still set a higher standard, footing 100% of a much larger upgrade bill:

The Reds have been in a giving mood too. Last year the Reds cut a similar deal with the county when it agreed to pay the $10 million cost of replacing the entire scoreboard system. Legally, they could have forced the county to foot the bill.

Fuck St Louis.

Mike Brown's Compassion for T.O. vs. Hamilton County Taxpayers

As Joe Reedy reported on Monday, Mike Brown used his annual media appearance to make it very clear that the he feels that no longer feels any responsibility for working with the County to re-structure the financial mess the Stadium Fund has created for the County.  The Fund, approved by Hamilton County Taxpayers, build Paul Brown Stadium (and GABP) and continues to pay for upkeep and improvements.  Because tax receipts have not met their projections, the County is considering many options to cover the gap, from raising taxes to shifting revenue.WDR has covered this issue extensively, and instead of rehashing old arguments, scroll through these past posts. 

The quick overview is this:

• Mike Brown and his team of lawyers completely out-lawyered lead Hamilton County Commissioner Bob Bedinghaus.
• The Bengals got one of this most lucrative sweetheart stadium deals ever.
• Mike Brown then hired Bob Bedinghaus, who is still currently employed by the team as a "Director of Business Development."
• As the financial problems mounted, the Bengals did offer to make a $40M concession, though with the caveat that they could get out of the contract in 2017, or 15 years before it is supposed to expire on 2032.
• The Bengals have now pulled this offer after a non-response from Hamilton County, who have set an August 31st deadline to respond.

On Monday, Mike said that: "We made a deal with the county. We’ve lived up to it and we expect them to live up to their end of it." In yesterday's TML, Doc does a great job putting Mike Brown's recent comments about the stadium in the proper context.  WDR mostly agrees with his summary of Mike Brown, which we will further summarize thusly:

• If you know Mike Brown personally, he is generally a nice guy. 
• In his public life, however, Mike Brown often says things that make him come off as cold, without emotion and generally heartless.
• Mike Brown has surprised many by spending money on free agents this offseason, albeit ones with a history of questionable character decisions.

WDR agrees that Mr. Brown is under no legal obligation to Hamilton County or Hamilton County Taxpayers to renegotiate any part of the 1996 lease.  He got the deal he wanted and we are on the hook.  But for a team struggling to sell tickets coming off a division championship,it might help for Mr. Brown to display some of that compassion he shows for players with character issues to Hamilton County taxpayers.  Mr. Brown has cited his warm heart as a leading reason for bringing in guys like Matt and Pacman Jones.  Perhaps he should extend some of that good will towards Hamilton County Taxpayers who will have to deal with the deficits, potential cuts to schools/hospitals or tax hikes to pay for Mr. Brown's free stadium.

Part V: Concluding Thoughts on Bengals Offer to Hamilton County

Okay - I am as ready to be done with this issue as you are but I need to sum up in one place what I think of the Bengals offer and what I think the County should do in response.  If you want to engage in a little self-flagellation, here are the links to parts I, II, III, & IV.

To start, let's put the whole issue in perspective. 

The deficits the Stadium Fund faces will be around $27 million in the next 2 years and will increase thereafter according to County officials.  It is not unrealistic to assume that, if nothing changes, those deficits could reach $100 million or more in due time.

By my ultimately futile calculations in the first 4 parts, I estimated the Bengals offered the County about $9 million in net benefits.

It's something, but not enough to solve even 1 year's worth of problems.

And for that 1 year of help, the Bengals would get way too much control in return.  Mainly because of the following:

1. They would be free to move cities a decade earlier than they otherwise would
2. They would gain total control of all revenue for any uses of Paul Brown Stadium
3. The County would forfeit the right to tax tickets

There are other things I could list but those are the biggest ones I can think of.  Now, with a few tweaks I think the Bengals offer could be considered quite a decent gesture.  HOWEVER, the Bengals made it quite clear in the last paragraph of their letter that these terms are not the baseline to be used in a series of negotiations.  This is their one and only offer.  Take it or leave it.

And because of that, County officials should leave it. 

The only exception would be if you think the Bengals really don't want to leave even if they could.  Then this appears to be an excellent gesture on behalf of the Bengals.  Some would argue (WDR writers in fact) that the Bengals don't have a viable alternative to Cincy and they can't leave, which again would make this a good deal for the County in all likelihood.  But that just means the Bengals are making a stupid deal, not that they are making a good gesture.

Regardless, I do not think they have earned the trust from us to believe that they have no intention of leaving.  I am also not willing to take the chance that no home exists for them outside of Cincy even if they do want to leave.

The bottom line is that there is too much uncertainty around what the Bengals are asking for in exchange for what they are willing to concede.  The County is better off just trying to maximize it's own potential and growing smartly to solve this problem (I happen to think this is possible, even despite epic mismanagement of Cincinnati for much of the past 30+ years) rather than hoping to save a few million by making a deal with an organization that is notoriously shrewd at everything except winning football games.