A Tale of Two Stadia
In the United States there is a certain amount of gnashing of teeth at the upcoming movement of the
Oakland Los Angeles Oakland Raiders to Las Vegas. The Raiders are being bribed enticed to move by the LV government promising to build them an enormous white elephant stadium at a cost of about $2 Billion and allegedly the stadium will be ready by 2020. Meanwhile, in the UK, there has also been a recent announcement of a team move. Everton, a premier league club of similar status to the Raiders (i.e. pretty good but not a regular champion contender), has agreed a deal with the city of Liverpool to move a few miles down the road from its current location.
It is worth comparing the two deals. Both Everton and the Raiders are what one might call working class teams in leagues that have sold out to the gentrifiers and both are in port cities. But there really isn’t that much else in common between the teams.
Unlike the Raiders, who have moved both within Oakland and down to Los Angeles for 12 years in their half century or so of existence, Everton have been at their current Goodison Park location since 1892 when the land was rented, then bought, and the first stands constructed. Goodison Park is one of the oldest sports grounds for a professional team but the team has sought options to move for the last couple of decades because the current ground is cramped – a church intrudes on a corner for example – and the stadium seats a hair under 40,000 which is on the low side these days for a top Premier League team.
Various schemes, including sharing a ground with close neighbours and rivals Liverpool*, have been proposed and failed for one reason or another over the years but the current scheme looks like it will succeed. There’s a touch of controversy about it because, thanks in part to one of the earlier failed attempts, the city council is helping Everton with the financing of the £300 million + stadium. What’s happening is that a shell company (SPV) is being formed by the council to raise the money with the council as the guarantor. This SPV then loans the money to the team which builds the stadium and pays a rent of some £4 million/year until the loan is paid off. The repayments are more or less guaranteed because the SPV has first dibs on income from ticket sales which is placed in some sort of escrow account until the payment to the SPV is made.
As I say, there’s a touch of controversy but it’s muted because the project is going to be regenerating a part of the former Liverpool docklands that urgently needs to be turned into something other than a rusting wasteland and anyway the new stadium (unlike the old one) will be able to be used for concerts and other events, potentially including the Commonwealth games in 2022 or 2026 if Liverpool
draws the short straw wins the bidding to host them. It’s not clear to me exactly what’s going to happen to the old ground but I imagine Everton will be trying to sell it to someone to knock down and build something else.
Compare this to the Raiders who are leaving because the city of Oakland wasn’t willing to give them a sufficiently nice stadium. As the NY Times explains this is far from uncommon:
The Raiders are also the third N.F.L. team to move, or announce a move, in a little more than a year, ending a period of turmoil in which the owners agreed to abandon longtime N.F.L. cities that were unable to appease the owners’ desire for bigger markets and more public financing for new stadiums.
In contrast to Liverpool who are merely acting as a guarantor on a loan, Las Vegas is paying for a large chunk of the new stadium:
The Raiders, known for a passionate fan base that delights in a rough-hewed image, are likely to begin playing in Las Vegas as soon as 2019, in temporary quarters, with the lease at their current stadium expiring after the 2018 season. In 2020, they are expected to move into a nearly $2 billion stadium, with $750 million in public financing, an arrangement that helped attract the league’s interest. The rest of the money was expected to come from a $600 million loan from Bank of America to the team, $200 million from the league and revenue from naming rights and other deals.
I do note some interesting math failures here. Various places state the stadium will cost between $1.8 and $2 billion. The sums from the article provide just $1.55 billion, which makes me wonder where the rest of the money is going to come from – especially given that large public works like stadia have a history of cost overruns.
At the start of the year, I discussed the Chargers’ attempts to extort a sweetheart deal from San Diego and how they were moving to LA in a huff. It is my sincere hope that the Las Vegas Raiders fail miserably (after all their most dedicated fans may have to violate their parole** to attend 🙂 ).
The USA claims to be a free market capitalist society but it seems to me that it allows a lot more cronyism than other, allegedly less free, countries do. At some point the money-go-round is going stop and the resulting collapse will hurt many people, sadly I’m pretty sure it won’t be the owners of the NFL teams, instead it will be the property tax payers in the cities where their stadia have been built.
*Liverpool FC’s Anfield site was the original location of Everton when the team was first established, but some late 19th century tiffs between various interested parties led to Everton moving across Stanley Park to Goodison Park while the owner of the Anfield Road site formed his own competing team
** This is a spoof article but funny because it has a core of truth
The Shadow of the Olive Tree