Enough Is Too Much
By Evan Weiner
It probably would not be too much of a stretch if Miami area residents are beginning to feel like the Warner Brothers cartoon character Professor Fritz Owl. In 1936, the musical “highbrow” screamed out, “enough is too much” when he learned his son wanted to be a jazz singer rather than a classical pianist or opera singer. Professor Owl might have the same feelings about the sports scene in Miami. Micky Arison wants more subsidies, an estimated $121 million in exchange for a lease extension from 2029 to 2040, for his National Basketball Association team which plays in an arena near the port. David Beckham wants a Major League Soccer franchise in Miami on a piece of land in the port and probably some heavy duty subsidies although Beckham right now is going on little more than artist renderings and wouldn’t be a great idea to put a stadium here or maybe there or how about over here.
The new owners of the Florida Panthers want more public subsidies to help support the franchise and the Sunrise arena. The owners want someone to take as much of the $80 million debt on the Sunrise, Florida arena over the next 14 years off of their hands.
Miami has a new baseball stadium that was heavily subsidized by public funding.
Miami Dolphins owner Stephen Ross knows the National Football League will not give the Miami area another Super Bowl unless more public money is thrown into the renovation of his stadium.
The question posed by Professor Fritz Owl is very valid. When does “enough is too much” kick in and does that enough is too much impact the Tampa Bay Rays ownership want of a new baseball park on Florida’s west coast and other major league professional franchises in the state of Florida?
Before the President Ronald Reagan signed 1986 tax code revision that shifted the responsibility of paying down the debt of a stadium or arena from a sports owner to the general public and allowed a sports owner to take as much as 92 percent of every dollar generated in a building leaving just eight percent of venue revenue to go for debt payment, Florida was a spring training base for baseball and housed two NFL teams, the Dolphins and the Tampa Bay Buccaneers.
Reagan’s signature changed all of that. All of a sudden Orlando and Miami got National Basketball Association expansion franchises thanks to new arenas. The catch with those arenas, both of them were outdated rather quickly and the owners began to ask for a new building—they got the buildings. The National Hockey League ownership group long before Gary Bettman became commissioner decided to enlarge the league’s American footprint and expanded the NHL from 21 to 30 teams as part of a “Sun Belt” strategy. When Bettman took over, the league owners decided Miami would be one of the then 26 areas that should have an NHL team. Bettman had nothing to do with the Tampa-St. Petersburg expansion which initially had the team playing in a 9,000 building and then a baseball park in St. Petersburg (a facility that Major League Baseball Commissioner Peter Ueberroth told St. Petersburg officials not to build).
Wayne Huizenga’s Florida Panthers played in that outdated Miami Arena and left in 1998. Arison moved his business in 2000. The arena which cost in excess of $50 million opened in 1988 and was demolished in 20008 and for a while Miami residents were paying down the debt on an abandoned building.
Ross wanted the Florida legislature to give him money for improvements at his facility but the legislature said no in 2013. Ross, a New York City real estate developer and a billionaire, wants the public to spend on his business facility. The argument is that the Miami area would enjoy a great deal of economic impact from the region hosting the Super Bowl. Economists can spin an argument for Miami either way. People would come to Miami for the big game and drop a lot of money at area hotels and motels, rent cars and eat at restaurants. But the flaw in the argument is Miami itself. People go to Miami in the winter and stay at hotels and motels, rent cars and dine at restaurants and those people who make annual trips during the Super Bowl period would be displaced and might go elsewhere for their winter stay. (The same holds true in Tampa and Phoenix). The “snowbird” might decide a different Florida venue is better and never return to the Miami area.
Ross is now willing to put up $400 million to renovate the facility but with it comes a proviso. Ross wants to stop paying property taxes which comes out to about $4 million annually. Ross, the New Yorker, knows that finding a willing politician and some political fortitude is all he needs to accomplish that. Ross is a real estate developer and knows that New York City Mayor Ed Koch in the early 1980s pushed to get Madison Square Garden off the city’s property tax roll. Koch lobbied state legislators in Albany and got them on board to drop the property tax on the building because Gulf and Western, the owner of the New York Knicks, New York Rangers, the building and the then fledgling Madison Square Garden Network claimed they could not compete with the Milwaukees and Kansas Citys of the NBA and the Winnipegs, Quebec Citys and Hartfords of the NHL.
The Knicks just fired Mike Woodson but will pay the former coach millions for not working yet the Garden cannot pay an estimated $13 million tax bill. New York politicians agree. Governor Andrew Cuomo thinks the property tax break is just fine and will not think about putting the Garden back on the tax rolls.
The Miami Marlins baseball stadium will cost taxpayers at least $500 million without the inclusion of the debt service which will balloon the cost. The stadium was built despite political turmoil which included a mayoral recall and a campaign to stop the building. The furor over the cost of the building is no longer a daily news issue but the cost of the baseball park and the basketball arena are not going away nor is Ross who wants subsidies and David Beckham. In Sunrise, the debate continues over what to do with the Panthers.
Major League Baseball wants more state and probably local subsidies for spring training complexes or Florida-based spring training franchises might look elsewhere. But Arizona has played the spring training spending game too and it hasn’t worked out well financially. Las Vegas never did put together a proposal that Major League Baseball liked that would have seen a few teams headquartered in the Las Vegas area for spring training.
The spending in Florida does continue. In Jacksonville the city is paying for a video board to satisfy for now the Jackson Jaguars ownership group. Orlando is building a soccer stadium for a MLS team for $84 million. If Orlando city officials think that stadium will be an economic engine, they should travel to Chester, Pennsylvania and Harrison, New Jersey and see what the promise and the reality of building a soccer facility really is. There is no economic turnaround in either place. Orlando is also renovating the Citrus Bowl.
In 1936, Professor Fritz Owl whined “enough is too much” and you can make the case for those in South Florida, “enough is too much” when it comes to sports subsidies.
Evan Weiner can be reached at email@example.com. His e-book, “The Business and Politics of Sports, Second Edition” is available (https://www.smashwords.com/books/view/365489 ) and his e-books, America’s Passion: How a Coal Miner’s Game Became the NFL in the 20th Century, (https://itunes.apple.com/us/book/americas-passion-how-coal/id595575002?mt=11 ), From Peach Baskets to Dance Halls and the Not-so-Stern NBA (https://itunes.apple.com/us/book/from-peach-baskets-to-dance/id636914196?mt=11 ) and the reissue of the 2005 book, The Business and Politics of Sports (http://www.barnesandnoble.com/w/business-and-politics-of-sports-evan-weiner/1101715508?ean=2940044505094) and reissue of the 2010 e-book The Business and Politics of Sports, Second Edition (https://itunes.apple.com/us/book/business-politics-sports-selection/id771331977?mt=11 ) are available from e-book distributors globally. 2014 e-book, sports business 2010-14(https://www.smashwords.com/books/view/393652 ). The e-books are available from e-book distributors globally