Why progressives should support the MLS to PDX proposal
By Jeremy Wright of Portland, Oregon. Jeremy is a writer and public affairs consultant who lives in North Portland. An avid politico and soccer fan, Jeremy ran the 1998 Vote by Mail initiative and worked Secretary of State Bill Bradbury’s 2000 and 2002 campaigns - as well as working on a number of conservation issues over the years.
Imagine if a renewable energy company was looking to relocate to Portland and invest $40-$60 million in private capital here that would create around 600 construction projects starting later this year and lasting for 15 months and create 300 jobs of which 200 would be full time. The excitement would be palatable right? Imagine if that same company was looking for help in the form of taxpayer backed bonds to build out their facilities and these bonds would be paid back over 30 years and guaranteed by the personal wealth of the business owners, regardless of performance. I am sure the majority of you would agree that in these tough economic times this would be a deal worth making.
Now replace the term “renewable energy company” with “Major League Soccer Franchise.” What has changed other than the product you are selling? I would argue very little.
Yet too often throughout this debate, hysteria and hyperbole have replaced rational thought. The argument against this proposal has typically gone like this:
“We have the highest unemployment in 10 years, a $3 billion shortfall in state budget, schools are underfunded and you want to invest $85 million in taxpayer backed bonds to remodel PGE park into a world class soccer stadium and build a separate baseball stadium for the Beavers?”
The answer is an unequivocal yes.
In fact, it is exactly these conditions that make it critical that we move forward with this project. Now, more than ever, we need to invest in people and publicly-owned infrastructure (remember: PGE Park is owned by the City of Portland) to get this economy moving again. And this proposal would help do just that.
The proposal would use $39 million in taxpayer backed bonds to upgrade taxpayer owned PGE Park to a world-class facility. The proposal would also build a boutique 9,000 seat Triple AAA baseball stadium at either the existing Memorial Coliseum site or Lents Park for approximately $45 million that would be paid for through a yet-to-be-determined combination of Urban Renewal funds, bonds on the Spectator Facilities Fund and private investment.
These bonds would be paid off through a combination of ticket surcharges, lease agreements and player salary tax over 30 years. No existing city of Portland programs would be impacted financially, and independent fiscal analysis shows that an updated stadium would generate significantly more revenue for the city.
In remodeling PGE Park and building a new Triple AAA ballpark, the city is investing publicly backed dollars into a publicly owned facility.
Isn’t that exactly what Barack Obama’s economic stimulus package was all about? Getting people back to work through investment in public infrastructure?
There also exists a strong grassroots movement for this proposal. This past Saturday I had the opportunity to attend a rally at City Hall with over 300 Portlanders of all ages, ethnicities and political persuasions who were united in sendinga common message to our City Council: bring Major League Soccer to Portland. It was inspiring to see so many people united as a community looking to the future despite these uncertain times.
But don’t just take my word for it that this would be good for our city. Last November, an 18 member citizen Task Force was appointed to review the proposal from the Portland Timbers and Beavers owner Merritt Paulson. This Task Force was charged with carefully reviewing all aspects of the proposal and to make a recommendation to City Council by early March.
After months of weekly meetings, independent financial analysis and public testimony the Task Force carefully weighed all aspects of the proposal and voted unanimously on Tuesday to recommend the Portland City Council move forward. They wrote:
“The Task Force recommends that the City Council support a proposal by Shortstop LLC (Merritt Paulson’s Company) to bring Major League Soccer to Portland, with the City refurbishing PGE Park and developing an alternative site for AAA Baseball.”
The Task Force also went a step further and outlined a series of conditions that protect the City and taxpayers while ensuring that Portland can land a Major League Soccer team. Key among the conditions were:
- There will be no risk to the basic services provided by the city's general fund.
- The general fund should not be exposed to risk associated with the City's sale of bonds to support the project.
- The Paulson family shall guarantee the bonds with their personal wealth (Merritt Paulson has already agreed to this provision.
- The City will be protected from project cost overruns.
- Portland should not lose the baseball team to get the MLS franchise.
- Public park space should not be diminished.
This is a project that is a win-win-win for everyone involved. It brings a Major League Soccer team to a city that is already known for its passionate support for the sport, creates more than 600 badly needed jobs this year in dire economic times, and protects taxpayer resources and the general fund.
Now is the time for City Council to vote yes to MLS.
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March 5, 2009 |
guest column | Comments (149 so far)
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Comments
Posted by: Nick Wirth | Mar 5, 2009 3:10:16 PM
I couldn't agree with you more.
Stand Up for the Rose City!
Posted by: mp97303 | Mar 5, 2009 3:11:22 PM
Owners of pro sports teams are usually VERY successful business people. There is a reason why they own the TEAMS but convince the CITY to own the facilities.....only ONE makes money.
Can you figure out which one?
Posted by: bradley | Mar 5, 2009 3:13:47 PM
I love sportspork, it's the other white meat. It's about time Portland brought in a Major League Soccer Team. Viva La Timbers!!!
Posted by: Bob Tiernan | Mar 5, 2009 4:33:35 PM
Jeremy Wright:
The Paulson family shall guarantee the bonds with their personal wealth (Merritt Paulson has already agreed to
this provision.
Bob T:
Thier personal wealth should be used to pay for all of this to begin with. Not that there's anything wrong with them in the first place -- I just don't want them to use the tool and force of government to get taxpayer dollars or other privileged legislation.
But anyway, thanks for revealing the progressive (so called) support for this kind of scat.
Bob Tiernan
Mult Co.
Posted by: Buckman Res | Mar 5, 2009 4:33:55 PM
”The proposal would use $39 million in taxpayer backed bonds to upgrade taxpayer owned PGE Park to a world-class facility.”
PGE Park went through an extensive upgrade just a few years ago. Now we’re supposed to pour more money into it in order to get a franchise for a sport that has never generated anything more than a passing interest in America at a time when the economy in Oregon is tanking?
It’s irresponsible for Mr. Wright to even suggest a scheme like this.
Posted by: Andrew | Mar 5, 2009 4:34:09 PM
Great article, MLS makes sense in Portland. MLS will help the city by providing jobs and bringing in fans from outside the city. More people coming to games=more money spent in the city.
Posted by: Bob Tiernan | Mar 5, 2009 4:37:59 PM
mp97303:
Owners of pro sports teams are usually VERY successful business people. There is a reason why they own the TEAMS but convince the CITY to own the facilities.....only ONE makes money.
Can you figure out which one?
Bob T:
Kind of misleading. Huge stadiums are difficult to keep in the black. This means that, had government never gotten into the sports stadium or arena-building business in the first place, we'd see loads of lower-cost, smaller places. Not the 90-seat monsters. For indoor arena, we'd see hangar-like structures with cheaper bleacher seats all around. It would have found its own market level. But government skewed this market as usual.
Bob Tiernan
Mult Co.
Posted by: Jeremy Wright | Mar 5, 2009 4:39:46 PM
Bob,
Did you miss the part about how the City of Portland owns PGE Park and rents it to the Portland Timbers and Beavers as well as PSU Football and high school football?
So what you are saying is that the city of Portland should sell PGE Park to Paulson? Or should they sell part of it to him in return for fixing up the stadium?
Guess what? Portland has no interest in selling the stadium and in my opinion that is a very good thing. We have a crown jewel of a stadium in it's model of sustainability (65% of people attending matches today use public transit) with no parking to speak of.
So we have to figure out how to continue to invest in a publicly owned infrastructure in order to continue to get a return. Upgrading the park would double the rent Paulson pays, as well as attract international exhibitions and World Cup Qualifiers as well as allow PSU Football to go to Division 1A should they ever choose.
win-win-win.
Posted by: Bruce | Mar 5, 2009 4:40:33 PM
mp97303 - Only one makes money? Not true. They both generate revenue. I would agree that the team probably creates revenue at a greater rate, but that doesn't make it a bad deal for the city. Paulson would be investing at least $40 million of his own money to buy the team. He's got the greatest risk and is backing the bonds. Most value in Sports Franchises is in resale value decades down the line, not in yearly profits.
Paulson has also used very conservative attendance figures in the bonding predictions approved by the task force. MLS in Portland has a great chance to sell out an upgraded PGE Park. Sellouts would be 7K more tickets each match than the predictions. That's a huge surplus into the spectator fund.
There is big upside here. Big.
Posted by: TimC | Mar 5, 2009 4:42:11 PM
Bob T: why should the Paulsons pay to make major Capitol improvements to a facility that they rent from the City of Portland? Do you rent a house and then replace all the cabinets, the roof and maybe add an addition on the back? I know I don't.
If they (The Paulsons) were to build their own stadium then they would move out of PGE park in 2010 then the lease runs out and then the city would be stuck paying off the bonds from the previous renovation (that are being paid back now by ticket taxes and the good faith payments that Paulson is making on debt that someone else ran up). That doesn't sound that good either.
It is the City's responsibility to make the major upgrades to the city's property. Not the responsibility of the people that use that facility.
Posted by: bradley | Mar 5, 2009 4:44:02 PM
Bob,
The bonds are for upgrading property (PGE Park) that BELONGS to the city so it is entirely appropriate that bonds be used in this way. Man I am as progressive as the next guy but I loves me some soccer and I am sick and tired of Portland being a crap sports town. You can be liberal/progressive and support your city investing in it's own infrastructure in this manner. This will do loads for increasing interest in Portland and attracting visiting fans. Is it a better idea to stand pat and be known for the Forest Dragons and Lumberjacks forever? Sigh
Posted by: GLV | Mar 5, 2009 4:50:07 PM
”The proposal would use $39 million in taxpayer backed bonds to upgrade taxpayer owned PGE Park to a world-class facility.”
Hogwash. Wembley Stadium...that's world class. PGE Park will never be anything remotely resembling "world class."
Posted by: Marissa Madrigal | Mar 5, 2009 4:53:51 PM
You say: "These bonds would be paid off through a combination of ticket surcharges, lease agreements and player salary tax over 30 years. No existing city of Portland programs would be impacted financially, and independent fiscal analysis shows that an updated stadium would generate significantly more revenue for the city."
WHy You're Wrong: While it could be true no City of Portland programs would be impacted, plenty of Multnomah County Programs, Portland Public School programs and Special District programs would be negatively impacted by the use of urban renewal dollars here. Urban Renewal Areas freeze the property taxes flowing to the County and Schools and use the growth in property taxes to pay back the bonds. The County, Schools and Others would have their revenues frozen in place with no increases for inflation for twenty years or more to pay for this stadium.
Multnomah County is facing a $45 million dollar deficit this year. Do you think we can afford to lose any more? For a privately funded project, no less? What programs would you cut to pay for this to make it worth it? Drug and alcohol treatment? Kid's Health Clinics? Jail Beds? Mental Health Treatment? Homeless Services? Just curious.
Posted by: bradley | Mar 5, 2009 4:56:08 PM
Buckmanres,
Please do some quick research on NHL, NBA and MLS attendance trends and then decide if you want to stick to your comment about soccer never being more than a passing fancy. You may be very surprised by what you find. This gets more interesting when you factor in that we are talking about Soccer City USA. This will be huge here!
Posted by: Dave Porter | Mar 5, 2009 5:00:55 PM
(1) There is a difference between investing in soccer facilities and investing in a renewable energy company. Renewable energy has been targeted in Oregon’s vision of its economic future. We’re not trying to attract just one company but a cluster of companies. We’re competing to become one of the global knowledge and innovation centers in this new industry. Soccer has none of this larger economic vision. It’s just a one shot deal.
(2) Given past deals gone bad, the public should be suspicious about claims that the bonds will be “guaranteed by the personal wealth of the business owners, regardless of performance.” And does that personal wealth backing include the $45 million for the new AAA baseball stadium? Are the Paulsons going to put their funds in some trust account or what?
Posted by: Frank | Mar 5, 2009 5:05:07 PM
I'm a huge futbol fan. I get up at 7 AM on the weekends to watch English Premier League matches on one of the 3 digit channels way, way up the digital dial. I so biased towards bringing an MLS team here to town that I probably shouldn't comment.
That said, there's some important points that haven't been mentioned for even people who hate sports to consider, I'm going to point them out.
-There's no way Portland is going to stay just a one major league sports franchise town for very long. Portland is the largest city in the US with just one major league franchise. The various pro sports leagues are looking at Blazers current 50+ game sellout streak right now and openly drooling. Forget suggesting the Blazers are enough pro sports for Portland. Another pro sports franchise is coming to Portland.
With it being a given another pro sports franchise is coming to Portland, which addition is least likely to be a mistake. MLS. There's already an established fan base. MLS ongoing franchise costs are a fraction of the costs of either MLB or the NFL. The MLS schedule fits nicely along side the Blazers schedule. Not a huge amount of overlap between the two league seasons.
-Pro baseball would fail in Portland. After you spend $100-200 MIL on the stadium, the best Portland could hope for would be to us to be another Kansas City or Pittsburgh buried in the basement season after season because that's what happens to small market teams in a sport that has no salary cap.
-NFL? You think refitting PGE park for soccer is expensive, build a NFL football stadium. Cowboys' new stadium is going to cost ONE BILLION before they're through.
-NHL? The whole league is dying a slow death on... Frack... what's the name of the network the NHL is on again? I just thought of that as the Lance Armstrong channel...
If you hate sports, support this plan that brings MLS to Portland. You'll have a much better case to defeat future proposals to bring pro sports leagues that really cost big money in the future.
Posted by: Kurt Chapman | Mar 5, 2009 5:11:09 PM
COrrect me if I am wrong, but the LAST PGE Stadium upgrade was done in anticipation of a MLB franchise. That didn't happen.
I love soccer and would like nothing better to see a revival of the Vancouver Canucks, Seattle Sounders, Portland Timbers rivalry like in the old NASL days. Of course it wasn't sustainable then and most likely isn't now. MLS is still a crap shoot as a viable sports league in the US.
Look, Seattle just moved up to MLS level and will have trouble competing in a mediocre league when compared to La Liga, The Premier League, Budesleague, etc, etc,etc. The so-called marquee player, David Beckham is currently on loan to AC Milan and has no intention of returning to LA Galaxy. He wants (and needs) world level play to get fit enough to play for England again in the next World Cup campaign.
There are more than enough good turf fields (FC out at Liberty) in the Portland metroplex that would support a fledgling first division team without comitting public bonds to a renovation of PGE Park.
Until or unless players like Beckham, Kaka, Ronaldinho Van NisilRoy, Howard, Ronaldo, Rooney, Berbatov, Mesi, Henri and others seek out MLS as a first choice rather than a late career swan song, there is no reason to pour public dollars into stadiums for exclusive use by soccer.
Posted by: Jeremy Wright | Mar 5, 2009 5:17:43 PM
Marissa,
While I certainly can sympathize with any reductions in basic services it would appear that you would be arguing against the creation of any one URD.
The use of URD has been key to Portland's growth and will continue to be. They are successful because the growth spurred and resultant income taxes, property taxes etc. typically significantly offset the freeze in property taxes. Additionally, there are a couple of things you are not considering:
1) What property taxes are currently flowing from city owned PGE Park to Multnomah County?
2)How would the resultant increase in jobs at the park and development around the park affect the state and county's coffers in terms of income taxes, business taxes etc?
Posted by: Jeremy Wright | Mar 5, 2009 5:23:50 PM
Kurt,
I wouls respectfully request that you please do some research on the league and it's progress before commenting.
Of course it is not the EPL. But we don't have to be the EPL to be successful. Portland is not NYC but we do alright yeah?
MLS averaged more fans last year than the NBA. Would you consider the NBA a dying league?
Seattle has pre-sold over 20,000 SEASON tickets in anticipation of it's opening MLS season this month. 20,000. We would easily beat that here in Portland as we have a far greater soccer culture down here (Portland Timbers average 8,500 a game at PGE in the USL 1st Division)
As for PGE Park - it was never intended for MLB. 20,000 seats is not MLB size. It is however MLS size.
The vast majority of work down in 1999 was seismic upgrades and concourse refubishment.
Posted by: Frank | Mar 5, 2009 5:29:19 PM
Kurt Chapman: "I love soccer and would like nothing better to see a revival of the Vancouver Canucks, Seattle Sounders, Portland Timbers rivalry like in the old NASL days. Of course it wasn't sustainable then and most likely isn't now."
Apparently, you haven't even glanced at financial structure of pro soccer in the US since the days of the old NASL either.
Totally different financial structure in the MLS. It's been intentionally built not to bring in stars from Europe and South America, but to build up the skills of US/Canadian players. The Portland Timbers already average enough ticket sales right now to make the Timbers a financial success in MLS.
Oh, and forget Beckham. That was one franchise owner making a big screw-up going against the league plan.
Posted by: Anon | Mar 5, 2009 5:35:01 PM
It's nice to see that "progressive" buzz words can be so easily co-opted to support corporate welfare for Henry Merritt Paulson III (hereinafter "Young Master Paulson"), the son of the former Chairman of Goldman Sachs and Treasury Secretary, Henry Merritt Paulson II (hereinafter "Hank 'Bailout' Paulson") whose net worth was estimated to be north of $700 million.
Let's look at the supposed income source to pay off the debt: the MLS.
The MLS has lost $350 million since it was founded, and in 2008 only three of its franchises made a profit, all of which were in significantly larger markets than Portland (LA, Dallas, Toronto). ESPN pays the MLS a paltry $8 million per year for its TV contract, and ratings for MLS games on ESPN are in the 0.2 to 0.3 range (200,000-280,000 households watching nation wide). These are C-SPAN2 Book TV type ratings.
The NASL collapsed in the early 1980's economic downturn, and lifetime of these bonds is 30 years. So, what happens if Portland's soccer franchise doesn't happen to last the 30 year term of the bonds issued to finance this project? Who will be left with the bill? Young Master Paulson, or the people or Portland?
PGE park was renovated less than 10 years ago, and the city is still in substantial debt for that renovation. Also, "urban renewal funds" are not magical money that falls from the sky. Those funds come from exempting certain properties from property taxation. That means there is a direct trade off with other municipal government spending priorities that would otherwise rely on those property tax dollars.
If the Hank "Bailout" Paulson is really were willing to guarantee the bonds with his substantial wealth, then Young Master Paulson wouldn't be coming to the city of Portland to get the financing in the first place. If the Paulson's want financing, I'm pretty sure there might be someone in that family who knows how to go about getting private debt financing...
But hey, socializing risk and privatizing profits is the hip new "progressive" way!
Posted by: Frank | Mar 5, 2009 5:41:44 PM
”The proposal would use $39 million in taxpayer backed bonds to upgrade taxpayer owned PGE Park to a world-class facility.”
GLV: Hogwash. Wembley Stadium...that's world class. PGE Park will never be anything remotely resembling "world class."
Fail.
Portsmouth F.C. is not just a one of the clubs in the English Premier League, they won the English FA Cup. Portsmouth play at Fratton Park, which seats 20,688.
Posted by: Kurt Chapman | Mar 5, 2009 5:44:40 PM
Frank, I respectfully disagree. The MLS is no more financially sustainable than the NASL of 25 years ago. They can talk all they want about bringing up North american players, but the best players, and best teams in the world are everywhere BUT North America. Donovan who many point to as a US "star" was at best a becnh player on his European team. He came back home and has never reached his potential as a result.
Again, I love soccer and hope it is successful here, but public financing for stadiums won't make it happen. When even the best US players go overseas to play and earn a living that should tell you something. The only franchises to make some money do so because of the largess of World Class Teams coming over here to play exhibition matches. Man U, Chelsea, Inter, Juventas and AC Milan all outclass our season fit teams when they are coming off of a 2 month break.
And Beckham is not a single team mistake. The entire league backed up Galaxy in that huge contract.
Posted by: Pedro | Mar 5, 2009 5:46:19 PM
The only way I would support this proposal to fund the Timbers and a possible MLS franchise is if the citizens of Portland actually owned the team(s).
I see no advantage to financing Hank Paulson's son and daughter in law with gimmicks like TIF bonds and some of the other tricks that were explained on the excellent "Think Outloud" program that aired yesterday on Oregon Public Radio.
If an urban renewal district is warranted in the Goose Hollow neighborhood then by all means establish one and improve the neighborhood, all of it. This proposal does nothing for Goose Hollow except rebuild the recently rebuilt stadium and kick the Bevos out to Lents.
I would like to ask those who support this proposal to tell us exactly how many of those taxpayer dollars will be used to build "luxury suites" for our very un-progressive elephant neighbors, you know the ones that own the companies in Oregon who pay exactly $10.00 in state of oregon income tax.
My apologies to all my futbol fan buddies.
Posted by: Anon | Mar 5, 2009 5:49:25 PM
Frank,
You're living in a dream universe if you think it appropriate to compare an Enligh Premier League team (the most successful football association on the planet in the country that invented the sport) and a hypothetical Portland MLS team (the fifth most popular professional league in the US). MLS takes in $8 million for its TV contract; EPL takes in £1.8 billion.
Posted by: icefunk | Mar 5, 2009 5:51:28 PM
THIS NEEDS TO HAPPEN NOW!! THIS WOULD ONLY HELP THE LOCAL ECONOMY!!!
RISE UP FOR THE ROSE CITY!
MLS 2 PDX NOW!!!
Posted by: Jim | Mar 5, 2009 5:51:42 PM
This seems very simple: if you want major league soccer here in Portland, ask the would-be owners of the MLS team to pony up the dough, not me. You wrote:
Now, more than ever, we need to invest in people and publicly-owned infrastructure (remember: PGE Park is owned by the City of Portland) to get this economy moving again.
Yes, so lets get going on better schools and fixing the bridges to get this economy moving again.
And as far as all the jobs created, even if you count all the ways the stadium is rented out (I won't bother with construction--a study was done regarding New Comiskey Park in Chicago that showed the construction thing was hogwash, that in the end people ended up paying more than the putative benefits from the construction), those are hardly good jobs; a few hours a day for the days there are games.
You want a major league city? Get rid of houselessness and poverty, and improve education. Building stadiums for millionaires and their toys is just another way to redistribute wealth upward.
Me, I'd rather play soccer.
Posted by: Anon | Mar 5, 2009 5:54:19 PM
Thanks icefunk. Your ALLCAPS Timbers Army chanting is really enriching the discussion.
Though stepping back for a moment, it's amusing how plutocrats and wannabe hooligans have become political bedfellows in support of this boondoggle.
Posted by: Frank | Mar 5, 2009 6:02:40 PM
Mr. so-called "Anon"
-You're awful quick off the top of you head with those talking points. Almost like you had a lot of practice using them. Like maybe when you were promoting moving a Major League Baseball franchise to Portland.
-PGE Park ALREADY IS a world class futbol stadium. It's already been the site of World Cup matches. Ooooopss, forgot about that, huh?
Posted by: Paddy McGuire | Mar 5, 2009 6:05:57 PM
Jeremy,
How on earth does going from a minor league soccer team and a minor league baseball team to a major league soccer team and a minor league baseball team "create 300 jobs of which 200 would be full time?" I understand the construction jobs, but 300 new jobs? What on earth will these people do?
How many people does the current Beavers/Timbers operation currently employ? Is an MLS team really going to employ 300 more people? Please explain this to me.
Posted by: Anon | Mar 5, 2009 6:24:37 PM
Frank,
Thanks for complimenting my arguments; it's amazing what one can do with a critical mind and google.
I'm glad you managed to find a covert pro-baseball agenda in my arguments rather than actually contesting the obvious fact that MLS has been a consistent money loser over the years. This is why Portland tax payers will be left holding the bag when soccer revenues don't cover the cost of debt payments for the fancy new soccer stadium.
Paddy,
Pro sports create lots of jobs, such as: peanut vendor, hot dog vendor, Timber's Army beer provider, ticket collector, and even a few soccer players.
Fun fact: The 2008 median MLS salary was $61,000 (world class!).
Query: Will the state income tax revenues from these players' salaries cover the debt payments?
Posted by: Frank | Mar 5, 2009 6:29:16 PM
Kurt Chapman: "....The MLS is no more financially sustainable than the NASL of 25 years ago. They can talk all they want about bringing up North american players, but the best players, and best teams in the world are everywhere BUT North America. Donovan who many point to as a US "star" was at best a becnh player on his European team. He came back home and has never reached his potential as a result...."
According to you the only place futbol is financially sustainable is that handful of pro futbol leagues where the world's best play.
Oh really? Then explain why there are successful pro futbol leagues in Australia, and Japan, and Belgium, and Denmark, and Sweden, and Ukraine, and Israel, and Saudi Arabia, and Belgium, and Northern Ireland, and Poland, and Wales, and... how long do you want me to go on here.
The whole frackin' planet is covered by pro futbol leagues that feature local players that leave for England, Spain, Italy or Germany the microsecond a scout from a team in a top league calls.
All these various national leagues play matches every week, and have cup winners, and build up the skills for potential future players on national teams, and sell a whole lot of tickets while they are doing it, and don't have to make big money, because the players that aren't superstars don't demand superstar contracts.
The Portland Timbers ALREADY SELL enough tickets right now to succeed at the MLS level.
Posted by: Frank | Mar 5, 2009 6:29:16 PM
Kurt Chapman: "....The MLS is no more financially sustainable than the NASL of 25 years ago. They can talk all they want about bringing up North american players, but the best players, and best teams in the world are everywhere BUT North America. Donovan who many point to as a US "star" was at best a becnh player on his European team. He came back home and has never reached his potential as a result...."
According to you the only place futbol is financially sustainable is that handful of pro futbol leagues where the world's best play.
Oh really? Then explain why there are successful pro futbol leagues in Australia, and Japan, and Belgium, and Denmark, and Sweden, and Ukraine, and Israel, and Saudi Arabia, and Belgium, and Northern Ireland, and Poland, and Wales, and... how long do you want me to go on here.
The whole frackin' planet is covered by pro futbol leagues that feature local players that leave for England, Spain, Italy or Germany the microsecond a scout from a team in a top league calls.
All these various national leagues play matches every week, and have cup winners, and build up the skills for potential future players on national teams, and sell a whole lot of tickets while they are doing it, and don't have to make big money, because the players that aren't superstars don't demand superstar contracts.
The Portland Timbers ALREADY SELL enough tickets right now to succeed at the MLS level.
Posted by: Marissa Madrigal | Mar 5, 2009 6:34:28 PM
Jeremy:
Do you really sympathize with basic service reductions? Because if you did I think you would try to consider a few other things yourself.
1) You seem to be suggesting that the new Urban Renewal District created to fund this would only include PGE Park and therefore not impact Mult.Co. tax revenues. I'd like to see you make the case that the recently renovated stadium is "blighted" and therefore in need of urban renewal. I suppose you could expand the district to make the case, but where would you go? The MAC Club? The Civic? NW 23rd?
2) You said yourself that the player salary taxes would go to pay back the bonds. Do you have any actual numbers on the income taxes generated by other, non-player new jobs this soccer team would bring? I'd like to see those.
I think urban renewal and tax increment financing is a great tool when used appropriately (to address urban blight) and the public understands and supports the trade-offs involved.
But despite whatever good urban renewal has done, there is no escaping that it has forced Multnomah County to forgo about $20 million a year in property taxes. Business taxes account for less than 13 percent of the County's general fund. This year we'll get about $42 million in business taxes for the ENTIRE county. I can check, but I doubt that we get our $20 million back in business taxes from the 14 percent of the City of Portland that is currently in an urban renewal area.
By the way, this:
"They are successful because the growth spurred and resultant income taxes, property taxes etc. typically significantly offset the freeze in property taxes."
is only true if the urban renewal areas are actually shut down and go back on the tax rolls after they've removed blight. Downtown Waterfront has been an urban renewal district since 1974. Central Eastside since 1986. And so on.
Posted by: Frank | Mar 5, 2009 6:35:38 PM
Anon. MLB promoter: "rather than actually contesting the obvious fact that MLS has been a consistent money loser over the years. This is why Portland tax payers will be left holding the bag when soccer revenues don't cover the cost of debt payments for the fancy new soccer stadium."
FAIL.
I've told you this twice. Learn to read what is posted.
The Portland Timbers have already proven they will be a success at the MLS level. Portland Timbers fans ALREADY bought enough tickets over multiple season to ensure the Timbers will be a success at the MLS level.
Posted by: Anon | Mar 5, 2009 6:41:46 PM
Ticket sales alone do not a financially successful sports league make.
For better or worse, American sports viewers have not flocked to soccer on television in any great numbers (ESPN's MLS broadcasts hover at near undetectable ratings levels), and the sport remains a popular sport to play but not an especially popular one to watch. As such, the MLS makes next to nothing on its TV contract, which is where the NFL, MLB, NBA, and all of the major soccer leagues in countries where soccer is the most popular sport make the lion's share of their money.
Portland voters are being asked to invest in a sports league that does not have a proven financial track record. If soccer revenues are not as rosy as the forecasts predict, the debt payments will fall on all Portland taxpayers, and it's unfair for all of us to share the (substantial) finacial risk of the Paulson's private business.
Posted by: Garrett | Mar 5, 2009 6:52:48 PM
NIMBYs EVERYWHERE!!! My god people chill out. We're talking about an $85 million loan over the course of 30 years or so. This isn't even a spackle on the city budget.
All of you so called "progressives" that seem to think the sins of the father translate to the son seem pretty self righteous right now.
I've been an active participator on Blue Oregon, in the city of Portland and in the local community. I have voted for tax increases on education, volunteered in schools and done anything I thought could help. If I thought for 2 seconds the stadium deal was bad for the city I'd be the first person at city hall protesting the idea. This is a solid, solid deal from a guy who is very genuine about investing in Portland.
Can we really run another businessman out of town because we automatically think they're all trying to rip up off rather than accepting that maybe Merritt Paulson is a businessman who actually wants to give back to the community?
I'm for this plan and it will get my endorsement to the commissioners. I hope it will get yours too. It's about time Portland grows up and starts thinking big and acting like other big cities.
Posted by: Anon | Mar 5, 2009 6:53:26 PM
Marissa Madrigal,
Your points are well taken.
The salary tax benefits would not be especially huge. Only four MLS players in 2008 had salaries over $1 million, and the median player salary was just over $61,000. The state income tax on one or two Portland Trailblazer players would likely add more to Oregon's coffers than an entire staff of any Portland MLS franchise.
Posted by: Garrett | Mar 5, 2009 6:55:17 PM
@Marissa Madrigal
Who is going to pay the current stadium fees and PFE bonds if we run another potential renter out of town? You know Mr. Paulson is paying those right? He doesn't have to pay them you know that too right?
Tell me who is going to pay all that if he leaves town?
Posted by: Andrew | Mar 5, 2009 6:56:28 PM
@ anon
you say
"debt payments will fall on all Portland taxpayers"
that is an outright lie. Merritt Paulson has backed these bonds with his families money. He will be the one on the hook in the unlikely case MLS fails.
MLS is a great business model and is growing every year. We have a chance to get in now and we must take it.
Posted by: YoungOregonMoonbat | Mar 5, 2009 7:01:14 PM
MLS is going to be a disaster in a couple years, you just watch it.
The simple thing is this:
If David Beckham, the 'Michael Jordan' of soccer, cannot sell out stadiums in a bigcity (Los Angeles) with much more diversity than ours, then what in the hell makes you think that MLS will be selling out stadiums in Portland, OR?
Where is the evidence to support your position?
My position is that MLS is an utter failure in the USA in comparison to MLB, NBA and the NFL. Thus, no big city in the USA should ever pursue MLS.
The support for my position is David Beckham unable to have stadiums sell out of tickets and recently entertaining the thought about playing in country that actually gives a shit about soccer, Italy.
To all your soccer-loving Europhiles, I am laughing at you now and I will be laughing at you in 2 years when your hobby is a financial failure.
Posted by: Frank | Mar 5, 2009 7:02:46 PM
anon MLB promoter: "Ticket sales alone do not a financially successful sports league make"
As this "anonymous" guy already read off his "Bring MLB Baseball to Oregon" talking points sheet, the average salary of MLS players is $61,000 a year.
You don't need TV to be successful when the average players salary is $61,000 a year. That's no more than (and may now be less than) AAA baseball players make per season. AAA baseball has needed NO television to be financially successful for a more than century. Just decent ticket sales. Portland Timbers fans have proven they buy more than enough tickets for the Timbers to be successful at the MLS level.
Posted by: Anon | Mar 5, 2009 7:05:12 PM
Can we really run another businessman out of town because we automatically think they're all trying to rip up off rather than accepting that maybe Merritt Paulson is a businessman who actually wants to give back to the community?
If Young Master Paulson weren't asking for public financing to enable the operation of his privately held business, I might believe he was trying to "give back" to the city. His actual proposal, however, asks the city to take on the lions share of the financial risk, in case revenues aren't as high as projected--a very high probability given that only 3 MLS franchises were profitable last year, all located in metro areas 3-6 times as populous as Portland.
If Paul Allen was able to privately finance the Rose Garden, then I'm sure Young Master Paulson should be able to privately finance a suitable soccer stadium in Soccer City USA.
Posted by: Al in SE | Mar 5, 2009 7:09:30 PM
The MLS proposal is anything but progressive. In fact, it's trickle-down economics.
Using urban renewal funding to build a new baseball stadium and refurbish (again) PGE Park will take tax revenue away from the county ... you know, that government entity that would use it for human services.
As for creating 300 jobs? Doing what? Does anyone believe that moving up from the current minor-league soccer team to a "major league" team will add anything like 300 jobs?
And that new baseball stadium Paulson wants? It will have less than half the capacity of PGE Park. Say goodbye to the cheap seats ... and hello to luxury boxes.
A major construction project would certainly mean new jobs for a couple of years. But why not a project that would benefit the community at large, rather than allow some rich kid to play big-time sports franchise owner.
And as far as Paulson's "guarantee," what happens a few years down the road if he sells the team(s)? Try collecting on that guarantee then.
Posted by: mp97303 | Mar 5, 2009 7:11:49 PM
Who knew BO had soccer trolls.
In re: farce of sports team economic development
Dennis Coates (Professor of Economics at University of Maryland, Baltimore County and President-Elect of the North American Association of Sports Economists) provides a nice survey of the academic literature on the economic impact of sports stadiums in The American.
The most basic question about stadiums, arenas, and sports franchises is the extent to which they contribute to the vitality of the local economy. Supporters of publicly financed stadiums argue that the benefits are substantial, while opponents say they are small and highly concentrated among the wealthiest citizens. To buttress their case, supporters mostly use economic impact studies that predict how the local economy will be affected by the stadium, while opponents compare the economy before and after the facility is constructed. Supporters tend to imply that redistribution of economic activity from the suburbs or outlying areas of a city to the downtown is desirable, while opponents generally oppose this sort of redistribution and focus instead on job and income creation.
The typical economic impact study gathers data on all aspects of spending related to a stadium, including the money spent to build it and the money spent by fans in connection with the stadium (including on tickets, at restaurants, and at hotels). The impact of this spending ripples outward into other areas of the economy through a multiplier. By linking spending to employment, the study then calculates how many jobs a stadium has created. It does not perform a cost-benefit analysis, which would address the opportunity costs of raising taxes to pay for a stadium and consider alternative uses of those funds.
Academic researchers have examined the prospective economic impact studies and found a variety of methodological errors in them, all of which raise doubts about the magnitude of the predicted spending and job increases. Other scholars use data from multiple years before and after stadium construction to measure the impact of the stadium. These ex post studies reject stadium subsidies as an effective tool for generating local economic development.
My own research, conducted with economist Brad Humphreys (who is now at the University of Alberta), has used perhaps the most extensive data, incorporating yearly observations on per capita personal income, employment, and wages in each of the metropolitan areas that was home to a professional football, basketball, or baseball team between 1969 and the late 1990s. Our analysis tried to determine the consequences of stadium construction and franchise relocations while controlling for other circumstances in the local economy. Scholars Robert Baade, Allen Sanderson, Victor Matheson, and others have taken slightly different approaches, but the results are fairly constant from one analysis to another. There is little evidence of large increases in income or employment associated with the introduction of professional sports or the construction of new stadiums. (Emphasis added)
I know, it's cut-n-paste, but if I didn't do it, the trolls would never read it.
Posted by: Anon | Mar 5, 2009 7:13:45 PM
Merritt Paulson has backed these bonds with his families money.
If you believe this will happen, you are insane.
The Task Force has called for this to be a precondition the City of Portland to issue any municipal bonds, but I'll believe it when I see it.
At any rate, if the Paulson family is really so keen on putting their own money at stake, then they should pursue private financing. They are not doing this, however, and any bonds will be issued by the city of Portland. Ultimately, it's the issuer of the bond who has to pay the debt.
Posted by: conspiracyzach | Mar 5, 2009 7:16:22 PM
Uh oh spaghetti Oh. Looks like the word is getting out that the "let's prop up our city economy with a field of schemes" model is not fooling many people anymore. Hire another consultant, feed more into the various funny money P.A.C.s and we can stage another fake protest. Just do it!
Posted by: Anon | Mar 5, 2009 7:19:39 PM
Who is going to pay the current stadium fees and PFE bonds if we run another potential renter out of town? You know Mr. Paulson is paying those right? He doesn't have to pay them you know that too right?
Tell me who is going to pay all that if he leaves town?
Are the Beaver's or Timber's going anywhere? Both do fairly well in the recently renovated PGE Park. Even if Young Master Paulson took his marbles and went home (presumably to New York), someone would likely purchase those franchises from the Paulson clan or another minor league baseball and soccer would move to PGE Park. It's a fine facility, and Portland is a solid market for both AAA baseball and the USL.
Posted by: conspiracyzach | Mar 5, 2009 7:23:42 PM
The Oregon Ducks are learning that they might be able to pay for their new arena....as long as they always win. They are losing over and over again. Big surprise. Go Ducks...into Bankruptcy.(a quarter of a billion dollar arena or more!)
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Posted by: conspiracyzach | Mar 5, 2009 2:54:55 PM
More sportspork ? Unreal. Economic development steroids undermine our society. www.youtube.com/luddite333