Oakland A's Never Said Las Vegas Ballpark Needed To Sellout To Pencil-Out, Bad Journalists Did - Oaknews
Oakland A's Never Said Las Vegas Ballpark Needed To Sellout To Pencil-Out, Bad Journalists Did
It's sad that in sports in America, an unpopular team relocation decision automatically leads to bad journalism, but that's the case with the Oakland Athletics' plan to build a $1.5 billion ballpark in Las Vegas, and on land currently occupied by the Tropicana Hotel. The Oakland A's recently announced that the ballpark is expected to draw 2.5 million visitors. The whole mess started with Bally's press release, which read, in part, “The ballpark is expected to welcome more than 2.5 million fans and visitors annually, and will be a one-of-a-kind asset for the Las Vegas Strip” and “The new ballpark will accommodate approximately 30,000 fans.” No where in the press release did Bally's say that the proposed ballpark would need 30,000 fans for the bond issue to be paid. Journalists (most notably with the L.A. Times) unthinkingly hopped on that “2.5 million fans “ number to assume that it meant the A's were saying each game would draw over 30,000 visitors, and that each person would have a seat. In point of fact, neither Bally's nor the A's said that. Given that Bally's announced its intention to attract other developer partners, writing “Bally's retains the ability to assign the rights to all aspects of this development and has received material interest from development partners”, it's fair to assume that there will be a standing-room-only ticket sales provision, the better to assure that patrons flow from ballpark to other land uses in the sports and entertainment district. The trouble is, folks who call themselves journalists, didn't stop to think about the ballpark from the perspective of a stadium developer, let alone ask questions that would reflect a stadium developer's perspective. Indeed, this entire affair reveals that the modern journalist is really a blogger absent the number one rule of Blogger's Ethics: always state your biases and never fein objectivity. So, the biased journalist trots out my friend, Stanford Profesor Roger Noll, who's a really heck of a nice man, but has a terrible bias that comes into his work in evaluating the economic performance of stadium proposals. We know each other from my days as Founder and CEO of Sports Business Simulations, where I created the Oakland Baseball Simworld game for the classroom. Anyway, Roger did the unthinking thing, where he forgot that the stadium's part of a larger development project, and assumed that the A's were projecting that each ticket sold was for a seat, rather than SRO and seating. In other words, Professor Noll tried to assume something wrong with the proposal, rather that follow its land use layout to its logical conclusion that bears repeating: the ballpark is part of a sports and entertainment complex where visitors can watch baseball and do other things, all in one visit. Call it a compact version of what Oakland Coliseum City is supposed to be, just in Las Vegas. And as for the numbers Bally's put out, Roger was clearly missing the real news: that the projected tax revenues would be enough to pay off the $120 million bond issue in 5 years, even though the debt service is spread over 30 years. Assuming an interest rate of 6 percent, the debt service over 30 years totals $261,536,081, or $8,717,869, annually. Meanwhile the expected tax revenue is $38.8 million from one-time construction, $17 million annually, and $36.5 million, annually from “incremental visitation”, totals $92.3 million in year one, and then $53.5 million each year, thereafter. So, over a four year period, that totals $306 million, or a difference of a positive $44.764 million, and that's leaving another 25 years of tax revenue collection for the bond. So, it's quite clear that just taking a little time to crunch the numbers reveals that the ballpark complex does pay for itself. If journalists of today acted like objective operators they claim to be, perhaps we'd get a real, honest look at stadium proposals, Stay tuned.
via YouTube https://www.youtube.com/watch?v=goDXSTqo2pQ
It's sad that in sports in America, an unpopular team relocation decision automatically leads to bad journalism, but that's the case with the Oakland Athletics' plan to build a $1.5 billion ballpark in Las Vegas, and on land currently occupied by the Tropicana Hotel. The Oakland A's recently announced that the ballpark is expected to draw 2.5 million visitors. The whole mess started with Bally's press release, which read, in part, “The ballpark is expected to welcome more than 2.5 million fans and visitors annually, and will be a one-of-a-kind asset for the Las Vegas Strip” and “The new ballpark will accommodate approximately 30,000 fans.” No where in the press release did Bally's say that the proposed ballpark would need 30,000 fans for the bond issue to be paid. Journalists (most notably with the L.A. Times) unthinkingly hopped on that “2.5 million fans “ number to assume that it meant the A's were saying each game would draw over 30,000 visitors, and that each person would have a seat. In point of fact, neither Bally's nor the A's said that. Given that Bally's announced its intention to attract other developer partners, writing “Bally's retains the ability to assign the rights to all aspects of this development and has received material interest from development partners”, it's fair to assume that there will be a standing-room-only ticket sales provision, the better to assure that patrons flow from ballpark to other land uses in the sports and entertainment district. The trouble is, folks who call themselves journalists, didn't stop to think about the ballpark from the perspective of a stadium developer, let alone ask questions that would reflect a stadium developer's perspective. Indeed, this entire affair reveals that the modern journalist is really a blogger absent the number one rule of Blogger's Ethics: always state your biases and never fein objectivity. So, the biased journalist trots out my friend, Stanford Profesor Roger Noll, who's a really heck of a nice man, but has a terrible bias that comes into his work in evaluating the economic performance of stadium proposals. We know each other from my days as Founder and CEO of Sports Business Simulations, where I created the Oakland Baseball Simworld game for the classroom. Anyway, Roger did the unthinking thing, where he forgot that the stadium's part of a larger development project, and assumed that the A's were projecting that each ticket sold was for a seat, rather than SRO and seating. In other words, Professor Noll tried to assume something wrong with the proposal, rather that follow its land use layout to its logical conclusion that bears repeating: the ballpark is part of a sports and entertainment complex where visitors can watch baseball and do other things, all in one visit. Call it a compact version of what Oakland Coliseum City is supposed to be, just in Las Vegas. And as for the numbers Bally's put out, Roger was clearly missing the real news: that the projected tax revenues would be enough to pay off the $120 million bond issue in 5 years, even though the debt service is spread over 30 years. Assuming an interest rate of 6 percent, the debt service over 30 years totals $261,536,081, or $8,717,869, annually. Meanwhile the expected tax revenue is $38.8 million from one-time construction, $17 million annually, and $36.5 million, annually from “incremental visitation”, totals $92.3 million in year one, and then $53.5 million each year, thereafter. So, over a four year period, that totals $306 million, or a difference of a positive $44.764 million, and that's leaving another 25 years of tax revenue collection for the bond. So, it's quite clear that just taking a little time to crunch the numbers reveals that the ballpark complex does pay for itself. If journalists of today acted like objective operators they claim to be, perhaps we'd get a real, honest look at stadium proposals, Stay tuned.
via YouTube https://www.youtube.com/watch?v=goDXSTqo2pQ
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