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Thursday, February 2, 2006

Net Losses

Posted by on February 2 at 13:12 PM

When asked how much Seattle would be hurt if the Sonics left town, City Council President Nick Licata told Sports Illustrated, “On an economic basis, near zero.”

Licata is right. While the Sonics can trot out NBA studies showing how the team brings $200 million a year to the city, academic studies, like this recent CATO institute study, show that sports teams have no effect on, and may actually hurt, local economies.

Howard Schultz is currently seeking a $200 million subsidy that would tax Queen Anne restaurants and bars along with bars and restaurants all over the city to support a one-stop shop night out at Queen Anne’s Key Arena.

Schultz responds to Licata’s quote in today’s Seattle Times sports page saying, “I read that, and said, ‘Who is this guy representing?’”

Given that city already financed an estimated $70 plus million upgrade to KeyArena just 10 years ago, and given that the city is now paying out about $2.6 million a year (with a debt service schedule until 2014) to pay off that construction—a bill the Sonics were supposed to cover with their own revenues—I’d say Licata is representing Seattle tax payers.

At yesterday’s city council Parks Committee meeting, city staffer Bill Alves lays out exactly how the city is getting dinged by the Sonics. (Go to the “Parks, Education, Libraries, and Labor Committee 2/1/06” link and then fast forward to about 38:00 in the streaming video.)

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I'm a huge Sonics fan but until they git rid of Wally Walker I say good riddence.

If the NBA can't make money in Seattle, one of the most affluent metro areas in the country, they need to rethink their business model. And "get the taxpayers to cover our losses" doesn't count. Until then, I'm happy watching the Huskies and high school ball.

Saw your Stranger Suggests on the Rainier Beach H.S. basketball team, Seth. I wanted to go. How was the game? How'd Emkea Iweka do?

Seattle is one of a handful of cities with pro sports teams that doesn't have an "Athlete Tax". For instance, Detroit will make about $300,000 off of the Seahawks players this weekend for the bonus ducats they get for playing in the Superbowl, etc. With all the sports teams we have, Seattle should be able to collect enough revenue to subsidise all of these pet arenas/fields.

Take it from the rich, it's pocket change to all the pro players...

I've followed the "economic impact of sports teams" debate for a couple of decades now. I don't think it's fair to say there's NO impact. I remember a study that came out back before they built Safeco Field that showed the impact of the Mariners to be about the same as that of the downtown Jay Jacobs store. That sounds about right to me.

Of course, Jay Jacobs never asked the city or the state to build it a new $600 million store.

The city should tell the Sonics "we wish you the best of luck in the future, but we're not paying for it."

Make sure you all write to the Seattle and King County Councils and the state legislature letting them know how you feel. Wally and Schultz are going on the offensive against Licata, and it's always good when politicians get supportive emails from people who agree with them.

Write to Seattle City Council At: Jan Drago (; Richard Conlin (; Richard McIver (; Peter Steinbrueck (; Nick Licata (; David Della (; Tom Rasmussen (; Jean Godden (

Write to the King County Council at:;;;;;;;;

For your State Representatives go this link :


Washington State House Email Addresses:;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;

Washington State Senate email Addresses:;;;;;;;;;;;;;;;;;; honeyford.jim@leg.wa.;;;;;;;;;;;;;; prentice.margarita@leg.wa.;;;;;;;;;;;;;;;

The city would be crazy to give the Sonics money. There are 30 NBA teams now, and there are pretty much only 27 cities that can support teams. The Sonics have no where to go. Just call their fucking bluff and be done with it.

Owning an NBA team is just a billionaire's vanity purchase nowadays anyway. Why else did Howard Schultz buy the Sonics? It's his own damn fault if he's not making money -- he paid too much for his investment in the first place.

As a sports fan, I am pissed off at these millionaires asking for tax payer dough to subsidize their ventures.

I love pro sports, but we should not be held hostage by professional sports teams. They can go to hell or Bellevue for all I care, and I like the Soops; I say NO subsidies to sports teams, no matter how much we enjoy watching them play. The trend needs to stop. It’s bad enough that we built Qwest field despite the fact that it was voted down, now the Sonics want a new arena, as if there is something wrong with the Key. If they want to go, they can go, besides they already switched to a right wing radio station.

Good for Nick, he is consistent and principled on this. All the council members should get behind him on this. Do you or Erika know where the others stand Josh?

I sort of disagree, inasmuch as I think it's inherently good to have pro sports in the city, in ways that are mainly un-provable/intangible, but still felt (even by sports haters). I don't mind paying some taxes for that. I voted against the stadiums, but in the end, I'm actually glad they went up. Esp. Safeco.

HOWEVER, I think it's only fair to change the stakes of corporate welfare to demand that the teams perform. I think a kind of bonus schedule, based on playoff performance, won-loss pct., police records, TV revenues, civic involvement, and so forth, would be most welcome.

No one gave a FUCK about the Seahawks till they made it to the Superbowl. I think now we can demand that they at least make conference finals before they get another handout. Same goes for the Sonics (when was their last good season?) and the M's.

I'm at least 65% serious.

I think Bunker is on to something with the "Athlete Tax" idea. Hell, if you wanna play on Seattle Parks fields you gotta pay. Why the fuck don't pro athletes in this town?

inherently 'good'? As in like, morally or religiously 'good'? Is that 'good' worth $260 million of our money when we need to build roads, bridges, public transit, schools, beds for homeless shelters, etc?

If the Sonics staff took a 15% pay decrease they would have the money themselves.

I don't mind the government investing in things that have a justifiable return. No one so far has made any argument that the city would ever get $260 mill of value back from their investment. The links Josh point to contend it is a bad deal for cities.

Chris hits the nail on the head. League expansion has hurt the teams' bargaining position. The Sonics have nowhere to go. Unlike the Mariners and the Seahawks, who would both likely have left town had their stadium deals not gone through, the Sonics can't make that threat credible. Maybe they could get a better deal in Tacoma, but there is no NBA-less region in America that could support the team anywhere near as well as the Northwest.

Josh, the CATO Institute could hardly be described as "objective" and could barely be described as "academic". I agree with the findings of the study because there are better, more carefully reseached, and more objective studies coming from less interested parties to back it up. But, you should be more aware of the CATO Institute's libertarian, everything-the-government-does-is-bad bias. Remember that these are the folks most interested in privatizing Social Security, and anything they say should be viewed with the skeptism due to an organization largely funded by Wall Street tycoons.

Seconded. CATO is nowhere near the ballpark of objectivity, unless you call Objectivism objective. Which I do not.

That said, I couldn't give a rip about the threat from the Sonics. There's not many places for them to go, and for them to disregard the favors accorded them a decade ago - that's just a total airball.

The number one thing that pisses me off about the Sonics' ultimatum is their plan for financing. (By the way, with interest, the new Key Arena will cost $400 million.) They want to finance these upgrades by taxing bars and restaurants. Almost all of their upgrades are intended to increase Key Arena's concession sales. By increasing concession sales, they're draining the money that bars and restaurants on Lower Queen Anne can make before and after games.

Why the hell should bars and restaurants have to pay to have their revenue drained?

The argument that sports teams provide no cultural benefit is without merit. If you've ever been to an M's game on a sunny afternoon you know it's just plain good fun even if you don't like baseball (which I don't). I had the good fortune to get a free ticket to a Sonics game at the Key Wednesday and while it was a little boring, it was still pretty cool.

I'm sure the bars and restaurants of Queen Anne would definitely hate to see thousands of customers with loads of dough just disappear. Seems like the Sonics are a huge benefit in that area. If the SupersSonics were having a better year there wouldn't be much of an argument about this.

I hear you guys on CATO.
But check out the study itself. Pretty damn convincing—and based on several prior academic studies.
Much different than something coming from the NBA.

I'm a big sports fan--no one gets more benefit from pro sports than I do. AND, frighteningly, here is somewhere for the Sonics to go...Las Vegas, the fastest growing metropolitan area in the country, which is desperate to lure a major pro sports franchise.

That said, I think intelligent people in intelligent cities have to put a stop to the ridiculous practice of taxpayer funded stadia. In S.F., they called the Giants' bluff over and over and over again until the team finally built their own stadium. The Sonics (or some other franchise) would eventually do the same.

Oh--this for SNCC Kid--Emeka Iweka had a subpar game. He could stand to work on his conditioning--he tires too easily to be an effective force for an entire game.

Uh, what about those ginormous player salaries? Maybe the Sonics shouldn't sign contracts they can't afford to pay.
Couldn't they save 40 Million over 5 years by axing one player or something?
Should the working poor really be subsidizing these guys?

Anyway, I have the answer. Anytime, any sports team anywhere asks for public subsidy it should trade it for some public ownership. After a while the process would take care of itself. All teams would be publicly owned and the public would be spared all poor-little-rich-man tempertantrums. Forever.

This actually worked in Green Bay.

Yeah, Dave, like morally or religiously 'good.' Jesus.

KBentley, I think you'd be surprised how little money Sonics ticketgoers pour into the LQA businesses outside of Key Arena. While I see that argument flying with the Mariners and Seahawks, a visit to KeyArena to see the Sonics seems more like a get-in-watch-get-out affair.

Hey, blowjobs are "pretty cool" too, but I wouldn't pay $400 million for one. Or even 41 of them.

Tell ya what, KBENTLEY, you give me $400 million, and I'll build the most awesome patio you could possibly imagine, and you can come over and sit in the sunshine anytime you want (for an extra $35 per time, of course). Still seem like a good deal?

The whole sports team thing is all pretty fair weather when it comes down to it. I'm not a huge sports fan but having pro sports teams is something many in our city value (especially when they win it.)

Granted, this kind of team blackmail is bullshit and in light of the NBA players/employess salaries and ticket prices it's very difficult to see justifying paying $400 mil.

FNARF - My argument was purely about a sports teams cultural significance to a city. I'm just trying to point out that Licata's remarks about teams bringing no cultural ssignificance to the city is pretty over the top. Whether we want to pay for that culture should be left to a vote.

No where in my post did I mention paying for blowjobs.

If you are really going to build that patio you should seriously consider trying to get some sports team to play some games there. It would be boring just to sit there on a $400 deck with nothing to do. You could even serve beer and stuff.

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