Bubble? BUBBLE?

[HoosierCat]

HamCo commissioners unveil $1.2 billion stadium renovation plan, includes permanent practice facility, giant video screens, more club seats and luxury boxes.  Not included: plan to pay for it.
 

 

[AMPHAR]

Do they need a plan?   The sales tax is already on the books.   I guess it depends if they truly have been properly allocating the sales tax portion to the stadium fund or if they've been funneling it off to cover other budget shortfalls.

Looks like a cool stadium.    I don't really get the amount of video boards on the outside.   The banks draws a crowd in nice weather to watch on the Reds video board.  I guess that's the plan? 

Wouldn't be surprised to see them jack up in stadium ticket prices and then start charging outside stadium access. 

But remember when the NFLPA demands child care for their players.  Everyone is all for that, I guess.

[AMPHAR]

Also in one of the pictures there's "development" what appears to be several buildings added down town.    Looks like they are using the stadium as trojan horse for some other city planning stuff.

 

[TJJackson]

21 hours ago, HoosierCat said:

HamCo commissioners unveil $1.2 billion stadium renovation plan, includes permanent practice facility, giant video screens, more club seats and luxury boxes.  Not included: plan to pay for it.

dont worry......they increased the property tax for my house and Army's house by 600M per year each, so consider the stadium updates paid for

[ArmyBengal]

That levy last year equated to an additional $20.13 per each $100,000 of home valuation per month.
So the quick math tells you a $500,000 home, is a little over $100 per month, $1200 per year in taxes.

If there's a hint of descent  regarding the levy, the scare tactics come out and they simply threaten to cut jobs, cut programs, and of course your children are going to be stupid because the education is going to suffer.  Apparently, there are no other options than to raise taxes to solve the problems that exist.

 

Go Bengals....

[HoosierCat]

Well, no worries guys, as the reaction all around seems to be “thanks, I hate it.”

Quote

Both the Cincinnati Bengals and Hamilton County commissioners had tepid reactions to a $1.3 billion proposal released Sept. 17 to transform Paycor Stadium crafted by architects hired by the team and the county.

In a statement, the team said it would review the proposal and emphasized the need for “immediate repairs and improvements to remain competitive now and into the future.”

“The Bengals thank Hamilton County for sharing these concepts and designs that explore the future of Paycor Stadium. While concepts about transforming Paycor Stadium can be explored, the community is fortunate to have a strong, existing facility,” the statement said, adding that the team “believes an approach of responsible investing in this great public asset can serve the community for NFL games, major concerts and other events that bring vibrancy to The Banks, Greater Cincinnati and the entire region for years to come.”

If negotiations kick into high gear, the team and the county may be far apart. A year ago, the Bengals proposed a five-year extension in exchange for $300 million in taxpayer-funded updates, with the team kicking in $50 million. The Aug. 8, 2023, letter, where the Bengals first proposed the extension, also contemplated the possibility of a 10-year lease expansion.

The commissioners universally have talked publicly about a lease extension that would span decades, by definition, 20 years or longer.

After the commission received the proposal, Commissioner Alicia Reece said she wants any discussion of renovations tied to a long-term lease extension, which she indicated needs to change dramatically from its current terms. She also compared it to renting an apartment.

"There are a lot of landlords out there. When the lease is up, they don't run in there and make a whole lot of new investments. They say we'll talk about it if you're willing to extend your lease,” Reece said.

And the lease – so lopsided in favor of the team that the Wall Street Journalfamously called it one of the worst in American sports, an assertion that outraged the Bengals, who say it is fair – clearly sticks in the commissioners’ craw. None of the three Democrats who control the commission seats were in office when it was signed by an all-Republican group in the late 1990s. The lease expires in 2026, although the Bengals can extend it up to 10 years in two-year increments.

Reece quoted provisions she did not like, including that the county pays the utility bills, the Bengals pay no rent for team offices and that the Bengals manage the building and require the commissioners to make an appointment for coming down there.

“I don’t know who in the world was down here for the county,” Reece said.

“We know what not to put in there” for the next lease, added Commissioner Stephanie Summerow Dumas later in the meeting.

Tom Gabelman, a Frost Brown Todd attorney who advises the county on riverfront projects, said the $1.3 billion price tag of the renovations is in the range seen by other NFL teams who want to renovate their stadiums. A new stadium, such as the domed one proposed for Cleveland, would cost more than $2 billion, a cost Hamilton County cannot afford to contribute to. Commissioners long have said that they expect the team, the NFL and the state to share the cost of renovating Paycor Stadium.

Reece questioned a part of the plan that would put giant video screens on the outside of the stadium that would allow fans to watch the game from the plaza. Reece has been outraged that the NFL refused to allow the county to host a watch party for the 2022 AFC Championship game when the Bengals played the Kansas City Chiefs, but the team held one this past weekend for the Bengals-Chiefs game and charged $99.

“You think they’re going to let you see something for free out there?” Reece said. “The taxpayers, we’re tapped out. We’re exhausted. It can’t be we own it when the bills come due, then it’s privately owned when the revenue comes in.”

Reece also raised the possibility of sending any extension to Hamilton County voters. During the 2020 campaign, Reece said any lease extension and major capital repairs should go on the ballot. Currently, the sales tax funding both Paycor Stadium and Great American Ball Park never expires, although commissioners could send it back to voters.

Commissioner Denise Driehaus said her goal is to keep the team here for decades to come and to add public benefits for non-fans that are not present today.

“The first priority is my top priority: a better deal for the taxpayer,” Driehaus said in a statement.

 

[ArmyBengal]

"A better deal for taxpayers" ??

Better be careful using language like that when the only viable option apparently is raising taxes.

[HoosierCat]

Interesting salary cap related article from espn on teams insuring contracts for their highest-paid players.

Quote

The CBA labels insurance proceeds as a "refund from the player," which qualifies the amount as a cap credit for the club for the following season. In the simplest terms, if a player who eats up a significant portion of a club's salary cap misses significant time with injury or illness, a club doesn't have to take it as a total loss, but can recover space for the following year. Plus, insurance premium payments don't count against the salary cap.

"That's the crux of the loophole," the former club executive said. "You effectively can use cash to create cap space from scratch. In a closed system, that is one of the few ways to buy cap space."

It's a benefit that is discussed in hushed tones within the front offices that utilize it, and rarely with outsiders, including the media. The CBA provision has existed since 2006, and since then, the clubs that have taken advantage of this cap hack flew mostly under the radar.

It's still not a routine thing. For example, the Jets didn't have a policy on Rogers last year, so...oops.

Quote

ROUGHLY HALF OF NFL clubs currently have an insurance policy on at least one player contract, and many clubs only insure one player, their most expensive contract. One insurance industry source estimated that around 75% of teams have purchased insurance policies in their history.

And the slightly surprising kicker...

Quote

Cincinnati, a famously thrifty team that an insurance industry source said had never previously bought a policy, purchased one on Joe Burrow's contract extension in 2023. The deal included $146.5 million in guaranteed money, second highest behind Deshaun Watson's fully guaranteed contract. The Bengals did not respond to a request for confirmation that Burrow was their first policy.

Well, good job, Katie! And note, these policies ain't cheap.

Quote

Among the other teams that industry sources said don't buy insurance, or have simply opted against it to date, are the Bears, Colts, Panthers and Steelers.

For the most part, owners who don't buy insurance think the cost of the premium isn't worth spending on a claim unlikely to fully pay out, according to a former cap executive.

One club executive estimated the cost of a premium has increased around 30% to 40% in the past five years. Per insurance industry sources, if a club wanted to insure $40 or $50 million of a contract, it would cost them somewhere between $1 or $2 million per year.

So, did it pay off for the Bengals after Joe got hurt last year? The answer is: yes.

Quote

The Browns (Deshaun Watson, 11 games missed), Bengals (Joe Burrow, 7 games) and Chargers (Justin Herbert, 4 games) each insured a portion of their quarterback's contracts, and the NFLPA said both the Browns and Bengals received cap credit because of it.

Per Roster Management System, the Browns received $4.1 million in end-of-year cap adjustments for 2024, while the Bengals received $688,267.

So hey, props to the FO. They are definitely losing money on the insurance, but every bit of cap relief helps.

[AMPHAR]

If they got a cap credit then they must have collected a claim, I guess.  Sweet.

I wonder who wrote the Deshaun Watson policy? 

[COB]

On 9/17/2024 at 3:27 PM, HoosierCat said:

HamCo commissioners unveil $1.2 billion stadium renovation plan, includes permanent practice facility, giant video screens, more club seats and luxury boxes.  Not included: plan to pay for it.
 

 

Taxpayers subsidizing infrastructure for the entertainment industry is one of the strangest phenomena in capitalism.  
 

Defense and safety related industries, yes I understand those subsidies at times.  The current CHIPS act is an example.  

We need to manufacture those chips domestically so we can make our own weapons systems even in a time of war, and so we can supply essential industries (automotive) even in a time of social or financial crisis.  
 

But pro football?  These rich fuckheads can build their own stadiums.  Your infrastructure is simply part of the cost of doing business.  

[HoosierCat]

2 hours ago, COB said:

Taxpayers subsidizing infrastructure for the entertainment industry is one of the strangest phenomena in capitalism.  
 

Defense and safety related industries, yes I understand those subsidies at times.  The current CHIPS act is an example.  

We need to manufacture those chips domestically so we can make our own weapons systems even in a time of war, and so we can supply essential industries (automotive) even in a time of social or financial crisis.  
 

But pro football?  These rich fuckheads can build their own stadiums.  Your infrastructure is simply part of the cost of doing business.  

The main argument is usually couched in terms of economic development. The idea being that the stadium will serve as an anchor for new businesses and new jobs (restaurants, retail, etc) that will boost local tax revenues and thus justify public investment. The problem is that most studies done on the actual economic impact of these nfl sports palaces say this doesn’t actually happen. Bottom line, there are a lot more effective ways for the city and county to spend the kind of money being batted around here.

[glasgowbengal]

As an outsider looking in, the fact that the public purse finances these private enterprises still fills me with complete and utter bewilderment 

[AMPHAR]

On 9/21/2024 at 1:16 PM, HoosierCat said:

The main argument is usually couched in terms of economic development. The idea being that the stadium will serve as an anchor for new businesses and new jobs (restaurants, retail, etc) that will boost local tax revenues and thus justify public investment. The problem is that most studies done on the actual economic impact of these nfl sports palaces say this doesn’t actually happen. Bottom line, there are a lot more effective ways for the city and county to spend the kind of money being batted around here.

I don't know about that.   Government spending is rarely effective.   The results of these projects and judging of the effectiveness is highly influence by a person's political view.

Case in point.  The NFLPA gives an annual hit list that puts ownership in the cross hairs.  That gets a lot of play.    The NFLPA also contends there's hundreds of millions of economic benefits to a city that hosts their player's games.   So now they aren't accurate? 

People don't want to admit it but its all about your POV that determines IF these projects are worth it.  

Its hard for me to believe the 1995 Cincinnati riverfront would become what you'll see today without the public money spent on sports stadiums.   

 

 

[AMPHAR]

On 9/21/2024 at 5:18 PM, glasgowbengal said:

As an outsider looking in, the fact that the public purse finances these private enterprises still fills me with complete and utter bewilderment 

About 3pm eastern time,  what is known as the "the banks" will be drenched in orange.  Bars will be 5 deep.   Thousands will stand outside the Reds stadium and watch MNF on their video.   Thousand more will watch inside one of a few bars.  Then a few thousand more will watch from a tailgate of some sort.

Once you see it, then you'll begin to understand why.  If you visited the Cincinnati riverfront prior to 1995 you'll appreciate the difference.

Then if you ever go to any SEC town for a football weekend take whatever Cincinnati is today and times it by 100.  That's why the governmental entities support public financed stadiums across this country.

Now did Cincinnati do it the best way?  Maybe, maybe not.   I think Indy has had the best plan, I've seen for a football stadium because allowed them also attract several top youth sports tournaments because they linked it to a convention center.   They've proven to attract NCAA events etc.

 

 

 

 

[HoosierCat]

38 minutes ago, AMPHAR said:

I don't know about that.   Government spending is rarely effective.   The results of these projects and judging of the effectiveness is highly influence by a person's political view.

It's not a point of view or political issue, it's just math.

https://www.brookings.edu/articles/sports-jobs-taxes-are-new-stadiums-worth-the-cost/

https://onlinelibrary.wiley.com/doi/abs/10.1002/pam.22534

https://econofact.org/stadiums-as-public-investments

https://journalistsresource.org/economics/sports-stadium-public-financing/

The bottom line is that the economic benefits of an NFL stadium to anyone other than the owner and players is highly overblown.

Now, can you make an argument that, fine, stadiums are a public money pit, but cities are still smart to spend on them anyhow? Sure. Government routinely spends on things that don't make money; that's one of the whole points of government. Should stadiums be one of them? Maybe. Depends on what the municipality's goals are, what other needs there are the money might be spent on, what level of support is being discussed, etc.

[AMPHAR]

57 minutes ago, HoosierCat said:

It's not a point of view or political issue, it's just math.

https://www.brookings.edu/articles/sports-jobs-taxes-are-new-stadiums-worth-the-cost/

https://onlinelibrary.wiley.com/doi/abs/10.1002/pam.22534

https://econofact.org/stadiums-as-public-investments

https://journalistsresource.org/economics/sports-stadium-public-financing/

The bottom line is that the economic benefits of an NFL stadium to anyone other than the owner and players is highly overblown.

Now, can you make an argument that, fine, stadiums are a public money pit, but cities are still smart to spend on them anyhow? Sure. Government routinely spends on things that don't make money; that's one of the whole points of government. Should stadiums be one of them? Maybe. Depends on what the municipality's goals are, what other needs there are the money might be spent on, what level of support is being discussed, etc.

 These studies take the cost of the stadium or operation from gov entity POV.    They look at it from a traditional P/L stand point from the gov entity which is highly flawed.   This is highly flawed logic and it isn't hard to disprove.

The impact of the construction wages paid and materials purchased covered the initial cost of the stadium project. 

Wealth is neither created or destroyed.   The transfer  and how its accounted for depends on the political view of the study.

Unless you believe the Brown family was hanging dry wall, pouring concrete etc.    Thousands of people were paid wages and taxed on those wages.  The materials were produced etc.

Hamilton county would not have accounted for any of this revenue under the stadium authority.

It is also the opinion of the Hamilton County auditor that the county used sales tax funds to fund additional infrastructure projects.    Its never cut and dry.   But if you just look at the riverfront today vs. then its obvious there's a huge economic impact.  

 

 

 

[HoosierCat]

1 hour ago, AMPHAR said:

 These studies take the cost of the stadium or operation from gov entity POV.    They look at it from a traditional P/L stand point from the gov entity which is highly flawed.   This is highly flawed logic and it isn't hard to disprove.

The impact of the construction wages paid and materials purchased covered the initial cost of the stadium project. 

Wealth is neither created or destroyed.   The transfer  and how its accounted for depends on the political view of the study.

Unless you believe the Brown family was hanging dry wall, pouring concrete etc.    Thousands of people were paid wages and taxed on those wages.  The materials were produced etc.

Hamilton county would not have accounted for any of this revenue under the stadium authority.

It is also the opinion of the Hamilton County auditor that the county used sales tax funds to fund additional infrastructure projects.    Its never cut and dry.   But if you just look at the riverfront today vs. then its obvious there's a huge economic impact. 

The materials produced would have still been produced; whether or not PBS was built had no impact on the production of steel, concrete, plastic resin, etc. It just would have been used on something else. Same for the construction workers. They just would have been working on some other jobsite. As for the economic activity on the riverfront, sure, lots of people go there and spend lots of money. But the vast majority of those people live in the greater Cincinnati market. If they didn't spend the money on the riverfront, they'd just spend it somewhere else in the market. At best it's a wealth transfer within the area.

[AMPHAR]

57 minutes ago, HoosierCat said:

The materials produced would have still been produced; whether or not PBS was built had no impact on the production of steel, concrete, plastic resin, etc. It just would have been used on something else. Same for the construction workers. They just would have been working on some other jobsite. As for the economic activity on the riverfront, sure, lots of people go there and spend lots of money. But the vast majority of those people live in the greater Cincinnati market. If they didn't spend the money on the riverfront, they'd just spend it somewhere else in the market. At best it's a wealth transfer within the area.

So all of the money spent on the Riverfront comes from Hamilton county?  I mean come that as ignorant as saying there was material just lying around to throw up a $300m dollar stadium and workers just sitting around. 

I can assure you hourly labor does not work the same amount of hours at the same rate year after year.   

 

 

 

[ArmyBengal]

I think you may have read that wrong AMPHAR, but I'll let Hoosier continue his thoughts.

Please continue gentlemen.  I do enjoy reading your thoughts.
The varying opinions and thoughts are what I like when it comes to topics like these.

[HoosierCat]

2 hours ago, AMPHAR said:

So all of the money spent on the Riverfront comes from Hamilton county?  I mean come that as ignorant as saying there was material just lying around to throw up a $300m dollar stadium and workers just sitting around. 

I can assure you hourly labor does not work the same amount of hours at the same rate year after year.  

Yeah, I didn't specify Hamilton County, but the greater Cincinnati area. That said, given that HamCo alone accounts for more than a third of the MSA's population, I would not be surprised if the majority of regular PBS-goers are HamCo residents.

As for the "material just lying around," well, things like steel and concrete are commodities. I can assure you U.S. Steel isn't waiting around for Mike Brown to call in an order before they fire up the blast furnace. I'm sure there were items that were custom orders (I doubt that you can just buy one of those big-assed stadium video screen at Wal Mart) so someone(s) got paid to do that. Probably not local tho.

Workers just sitting around? Well, that's kind of my point: outside of a major economic downturn there are usually construction projects going on, so it's unlikely that any given worker's ability to draw a wage and pay taxes will be impacted by a stadium project. Might they make more or less on project X versus project Stadium? Sure, but now again we are getting into a discussion of goals/needs/level of support etc. Is "increasing the average hourly wage for construction workers" a goal for the public entity financing a project? If so then providing public funding with the "string" of a prevailing wage requirement attached might be worthwhile.

[AMPHAR]

1. Rebirth of the Riverfront project was completely geared to attract people outside the county to the riverfront.   It does.  Either you haven't been down there or are closed minded.  Any suggestion the revenue generated by the Riverfront options is just Hamilton county trading pennies is false.

2. I'm pretty sure the workers,contractors etc were happy with the approval of the project.  I'm guessing the bids on the work were competitive.   So the point about labor just sitting around is laughable.

But the over all point is Wages were paid.  Materials shipped and bought.  The tax revenue generated and collected by whatever municipality is never matched against the project expenses in those studies.   Its not the NFL responsibility to handle the procurement SO IF Hamilton county didn't use local then that's on them.  Although, I'm pretty sure there was an agreement to use local resources for X percent of the project.

No one can honestly look at Cincinnati riverfront prior to 1995 vs. today and honestly conclude the benefits of these projects are overblown.   Crazy talk.    Its generated parks, housing all sorts of year round use.   Taylor Swift alone brought $92m outside spending. 

 

[AMPHAR]

County exploring the possibility of putting a dome on Paycor.    Not a against a dome at all, but at that point might as well build an entire new structure.   The new domes that have been built put a lot of effort into having a dome but not feel like your in a dome. 

[HoosierCat]

A dome has always made far more sense than an open-air field in Cincy, but Mike & Co. have always opposed the idea.

If they go that route, I would expect something more like Lucas Oil in Indy versus, say, SoFi.

[COB]

I love Lucas Oil.  I’ve attended 3 big ten championship games there and it’s a great setup.  Here’s a great idea - Mike sells the team to Bezos and he builds  Lucas Oil 2.0 and we all live happily ever after.

[ArmyBengal]

Lucas Oil Stadium is incredible.  The ability to open the side wall of the stadium to view the city is absolutely brilliant.  We were up there for the Colts Texans game earlier in the season.  Always a great time.  I was back down in Houston and NRG is the same way.  The Raiders new stadium in Vegas is always really cool to see.

That being said, I like football in the elements as well.  You just know going into it that you can't do the same things a dome affords you opportunity to do.  For how much money they want from the public these days, having something which has the ability to bring in more revenue throughout the year is ideal.  Concerts, other sporting events, the draft, so on and so on.

A dome is the smart thing.