Sunday, February 20, 2011

SIMPLY PUT? WE DON'T NEED AN NBA TEAM

For awhile now we have been told of J. Bruce Miller's never ending battle to seek once again an NBA team to come to Louisville. The intent is for them to play at Freedom Hall according to Councilman Dan Johnson through facebook. Yet when pressed for specifics Councilman Johnson can provide none yet acknowledges it is HIS lifelong dream to have an NBA team.

Fair enough but has anyone done the due diligence to see if one would even be sustainable here? Chances are they cannot and will cost us the taxpayer money subsidizing them. Here is a sample of a facebook conversation I had with Councilman Johnson and just one more reason why he and others don't seem to get it.

It comes down to basic math and basic business.

Dan Johnson everywhere there is a professional team in America they are the most liked thing in that city.

Ed Springston The issue isn't whether they are liked the issue is whether they are affordable. I like lots of things but that doesn't mean I can pay for them all.

Dan Johnson well watch them on TV and buy a big mac when McDonalds advertises on the game and you will be helping. A pro teams market is a lot bigger than Louisville and it will be successful and not subsidized by tax dollars they pay tax dollars

Ed Springston ‎40% lose money now in better markets than Louisville. How do you say they pay tax dollars. 40% don't pay for sure the other 60% are subsidized
(Note this figure was a rough estimate before I did the research after this and found that the losing teams are greater than 56%)

Dan Johnson Who says well have one of the 40 percent and the market as it is drawn will be tenth in the nba,

Ed Springston there is no basis of truth to back that statement up

Dan Johnson just as there is no basis of truth to back you up

Ed Springston No basis of truth to back me up? Have you studied NBA teams and their financial's? The FACT is that 40% are losing money which means they pay no taxes. That sir is the truth. To deny that means you haven't done your homework.

Dan Johnson You are not an owner and the players will pay taxes on their labor in this town that will amount to over 6 million.

Ed Springston while we subsidize the team owner with $10 million or so? A net loss of $3 million. It really is basic math......

Dan Johnson you DO NOT KNOW UNTIL WE HAVE ONE AND IT HAS BEEN IN BUSINESS. I HAPPEN TO KNOW THIS ONE WILL BE WILDLY SUCCESSFUL FOR THE OWNERS BECAUSE THEY INTEND TO BROADCAST THIS TEAM TO THEIR COUNTRY WHICH IS BIGGER THAN OURS BY FAR. IT WILL MAKE MONEY.

Ed Springston You just stated the obvious Dan. YOU DO NOT KNOW. I love the caps as it says a lot about an open discussion and your ability to handle it. If one does not know should they not research all available information and make an educated calculated decision on whether it will work or not? You just stated you DO NOT KNOW UNTIL WE HAVE ONE AND IT HAS BEEN IN BUSINESS. That sir explains the whole situation. I don't want my tax dollars used for a pipedream based on that mentality. And neither do the majority.

Why would I say that? Because it is documented that most NBA teams lose money even after receiving tax incentives from the State. While many would contend that I am wrong here are some basic facts.

17 of 30 teams lost money in 2010 The Business Of Basketball, 2011. Or perhaps we can read this article. Forbes ranks NBA team's value, most lost money KING5.com Seattle Sports News and Information.

Anyone remember our quest to land the Charlotte Hornets? They ultimately went to New Orleans because they had an arena already available. Those who wanted the KFC Yum arena built even used this as a reason why we needed a new arena of our own. To get an NBA team.

Well the Hornets have already all but folded as the NBA bought the Hornets themselves last year at a cost of $310 million. Which was an immediate loss of $30 million as the Hornets only have an estimated value at $280 million.

This after the Hornets lost money yet again last year of $6 million.

Why did the Hornets move in the first place? Because the people of Charlotte denied a referendum to build a new arena for them. The owners said they needed to relocate to avoid millions of dollars in annual losses, in part from drastically declining attendance.

Notice the words "drastically declining attendance." If this was the excuse and they could not make money because people did not want to see the product they offered, how in the world would a multi million dollar new arena paid for with our tax dollars change that fact?

No the owners wanted public funds to subsidize them with a new arena for their private business. It would give them bragging rights but be a poor decision by our officials with our tax money. It is their inherent problem to provide a place for their teams to play and market. It is not the problem of us citizens to provide a building for each and every business that wants one. Hence a private business not a public one.

Ultimately the Hornets ended up in New Orleans even after we offered tax incentives only to become a burden there as well. They went there because Gov. Mike Foster promised and delivered legislative approval of millions of dollars in incentive expenditures for the team: $10 million to upgrade the state-owned New Orleans Arena, which was empty at the time thus not having to schedule against a team like U of L, plus several million more to be generated each year from the New Orleans area hotel tax.
USATODAY.com - Owners approve Hornets' move to New Orleans.

Yep public tax money went to subsidize the Hornets who ultimately never made a dime for the tax paying citizens and had to be taken over by the league itself. Ultimately many believe the league will now disband the Hornets and send the players to other teams.

So much for the New Orleans investment.

This is just the tip of the iceberg on this story folks. I can write and cite many other examples but you get the drift.

The NBA was not interested in Freedom Hall and wanted anew arena in the first place. Now what is the incentive for them to play at Freedom Hall with a new KFC Yum arena downtown? They want control over scheduling and they cannot obtain that at the new arena because U of L has that control right now.

Speaking of which has anyone ever noticed that even U of L in a college sports town cannot fill the seats at Football and basketball in most cases without free ticket giveaways?

That isn't conducive to a good business model and certainly is just one more example of why we cannot afford an NBA team. If we cannot afford a college game thanks to this low wage service economy Abramson built, then we most certainly cannot sustain an NBA team in a league where most lose money without tax dollars.

Sorry Councilman Johnson you can have your dream. We simply cannot afford to pay for your dream.

Some of us live in the real world......

12 comments:

  1. This news article shows why Metro Councilman Dan Johnson is so out of touch. We have posted a web link to Kentuckiana GrassRoots Radio today.

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  2. You are trying to have a rationale conversation with Dan Johnson - that's problem #1. Problem #2 is that this guy has been in office for 20 years and is a supposed leader in this community.

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  3. I have very mixed feelings about bringing an NBA team to our community. I am an avid U of L fan and often attend the basketball and football games, I am also fan of the Cinci Reds and yes, the Bengals, my brother and I have season tickets to both teams and make the short drive up I-71 frequently. While we are there we often see neighbors, co-workers, and friends attending the games. My ex was originally from St. Louis and was a huge fan of the Cardinals and the Rams we would make long weekends out of those trips and I know we were not alone in this community. I realize the aforementioned teams are MLB and NFL teams but I know lots of people who drive up to Indianapolis to watch the Pacers, and the Colts for that matter. If people are willing to drive to Cincinnati, St. Louis, and Indianapolis to watch those pro teams why wouldn't people be willing to support a pro team in their own, I know I would and I don't think I would be the only one.

    Also, I can't recall where I read the statistic but more officially licensed NBA apparel is sold in Louisville than in any other major city WITHOUT their own team.

    However, I do agree with the points you have made here on your blog and on your podcast about the tickets being out of reach for some people in our community, especially with the current economic climate. However, people seem to come up with the money to see Kid Rock, Justin Bieber, Lady Gaga, and the Eagles.

    I also wonder if we as a community aren't supporting the orcharstra or the ballet will we as a community support a pro team. I think we will but you never know. If you look at high schools attendance to sporting events is far greater than that of concerts, recitals or plays.

    Personally, I would like to see us bring a NBA team to Louisville, but my opinion on this issue is based more on emotion and anecdotal information rather than hard facts. I will say, that this is a tricky issue with a lot of gray area. It should be given a fair honest evaluation filled with spirited debate, where all sides are heard and I don't really see that at the moment, as your commentary is really the only outlet giving the opposite opinion of Messrs Miller and Johnson. I look forward to reading and hearing more on this topic. Thanks for making me think.

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  4. NBA tickets are PRICED TOO HIGH!
    It seems the Average Price for an NBA ticket is about $48.
    Source: ESPN: NBA average ticket price: $48 per game - Nov. 2010

    (BTW, Comedian Ron White & Horseshoe Casino in Indiana are getting $54+ for a 1.5 hour show! And Jeff Foxworthy & friends are getting $60 at the YUM! Center in Louisville.)

    So take a 4 person family.
    $192 on NBA tickets.
    $40 on snacks & drinks.
    $10 on parking.

    That's a whopping $242 out of a family's budget for about 3 hours of entertainment.

    Obviously this whole NBA team idea is not going to be affordable to Joe Six-pack. But ol' Joe can apply for one of the minimum wage jobs that will be created!

    Gawd, I love corporate America!

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  5. From the CJ: Rick Pitino says the NBA would be lucky to have Louisville, but it would be expensive for a family of four to have season tickets and would compete with Louisville football and basketball. Kentucky is a poor state he said.

    And who could argue with that? We simply do not have the funds to support an NBA team, either with our tax dollars or our personal wallets.

    Whiel some reference SINGLE events, such as a concert or other type entertainment,a single event is a far cry from being able to afford something like season tickets.

    Many may be able to afford a one time one game experience but to support an NBA team full time requires thousands of dollars a year and that just isn't realistic for most Louisvillians.

    Thanks for writing folks!

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  6. With all of the talk about the Yum Center being needed and for the U of L program, now they are talking about renovating Freedom Hall one has to question why not the Yum Center. Seems like a lot of money is to be wasted on having two basketball facilities in the same city.

    But here's the real point. Why is it that certain people and certain groups get subsidies for their businesses just like the NBA teams often get breaks and subsidies for their business? Secondly, has anyone seen how many farm subsidies are given out by the USDA and Conservation programs. I know of some farmers in the country getting 100k in farm subsidies and turning around and you see a 30 or 40k truck running the roads. As a small business, I don't get that sort of tax subsidy from the taxpayers. Yet if I was certain companies or certain people, I could probably get that money. Do I think its right? No. I think its letting taxpayers subsidize businesses to where the taxes are raised on everyone so a few can make the profits. Interesting how certain groups get tax free assistance to maintain their businesses and lifestyles but the average small businessman doesn't and is mortgaged to the hilt while the Cordishes and the rest of these new service industry jobs are created downtown with free taxpayer money. At least free to the owners of these bars and restaurants. If one talks about private business at least they shouldn't be running around with their hands out and government giving them freebies.

    Yet whats even more strange is to hear those receiving their goodies complain about other groups getting welfare, food stamps, or other government benefits. What is good for the goose is good for the gander

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  7. Miller's book - Airball - includes a lot of statistical info on demographics and why this region can support an NBA franchise. If you have not read it you should; and then consider commenting/debating this idea on the merits of the information he presents.

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  8. In all honesty I wouldn't really enjoy reading Miller's book. based on histroy and his involvement in wanting an NBA team I am failry sure it is a self serving book not necessarily looking at ALL facets.

    Anyone can dispute facts with yep different facts. I stand by mine and will continue to contend we cannot afford nor do we need an NBA team.

    I have seen anecdotal "demographic" data in regards to this issue but disagree with teh findings. I have not seen any forward argument yet based with facts that would support the conclusions.

    Thanks for writing.

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  9. Miller's book also praises Dan Johnson repeatedly, any coincidence that Miller is getting all this Council money now?

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  10. Miller's book has the true reasons the Hornets wound up in New Orleans instead of Louisville. A college president who was more interested in finding a new job near his mistress (she had moved jobs after they got caught at UofL) rather than keeping his promises to control his athletic director. A just-signed college basketball coach who said every UofL all-American played his home games in Freedom Hall and as long as he was coach, they'd NEVER play in a downtown arena(!). Mayor Dave Armstrong. Even so, Louisville had a binding agreement (including a plan to have a NBA-subsidized Muhammad Ali Museum & Conflict Resolution Center included as part of the downtown arena for the team to play in) on the way to be signed in the governor's mansion before the whole deal fell apart.
    BTW, most families don't go to 41 NBA home games; they split season tickets with other families/friends.

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  11. Not sure how many families in Louisville can afford roughly 10 grand a year for games and I definitely don't buy the argument that they didn't come here because ex U of L President John Shumaker was having an affair. That is tabloid journalism at best.

    If we make that argument then why would they come here now with Ramsey and all of his messes including the Robert Felner scandals.

    Again a self aggrandizing book by Miller filled with substandard arguments like this are not factual ones proving we can support an NBA team.

    They didn't come here because they know we can't support it financially. That is business. If they come here now it is only because the NBA itself is desperate for venues as their teams continue to lose money and so do the taxpayers.

    Thanks for writing.

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  12. you really need to read the book. I'm no JBM fan, and I don't agree with everything he says in the book. He does, however, give interesting and credible information, and he - like you - is very critical of the powers that be in this community. I think you'll find some of his positions very congruant with yours.

    You stand more to gain by reading his book and then challenging - as it is your unilateral dismissal of the book without even reading it takes away from your credibility. It is an easy read and would not take very long.

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Thank you for reading LNP. Open and honest discussions of local politics and relevant issues is important to voter understanding. Please listen to the "Ed Springston Show". We broadcast Monday through Thursday evenings at 7 PM on local media outlets. Please check for the links.
Yours truly,
Ed Springston

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