Public Price Of Subsidized Sports In Las Vegas: How Hype Doesn’t Include Public Cost

By Alan Snel

LVSportsBiz.com

 

It was April 16 at T-Mobile Arena and it turned out the date marked the last time the Vegas Golden Knights won a game in the 2018-19 season. The Knights whitewashed the San Jose Sharks, 5-0, in Game 4 of the first round of the Stanley Cup playoffs and seized what they thought was a stranglehold on the series, leading three games to one. The hockey world knows now how that series ended.

 

April 16 also marked another occasion. Before the Knights-Sharks game, a bunch of middle-aged guys were assembled for the media in an arena press conference room where Golden Knights coach Gerard Gallant has been known to tell sports reporters the Knights are taking one game at a time. Three of the five guys were named Steve — Steve Hill, president/CEO of the Las Vegas Convention & Visitors Authority, the local public tourism agency; Steve Mayer, NHL chief content officer; and Steve Webb, NHLPA divisional player representative. VGK President Kerry Bubolz  and Mandalay Bay hotel-casino President and Chief Operating Officer Chuck Bowling joined, too.

 

 

 

 

 

 

They announced the news that the annual NHL awards show will be at the Mandalay Bay Events Center June 19. The NHL and LVCVA gathered the media for this Chamber-of-Commerce-style announcement in hopes it would give free plugs for the event and info on ticket sales. Fair enough.

 

But there’s always a part in these sports event announcements that you will never hear — the part about how much public money is spent on supporting sports events and building venues. After the media event, I asked Hill how much is the LVCVA spending on the awards show. He didn’t know. Hill advised me to ask a tourism agency PR representative. She didn’t know either.

 

It took five days and we found out the public cost from the LVCVA: The awards show is part of a three-year $3.85 million sponsorship agreement between the LVCVA and the National Hockey League. Here’s the exact LVCVA statement: “The Las Vegas Convention and Visitors Authority (LVCVA) is in the second year of a three-year sponsorship agreement with the National Hockey League (NHL). The agreement includes dozens of marketing elements which benefit the destination, one of which is support for the NHL Awards held in Las Vegas. The total sponsorship agreement for three years with the NHL is $3.85 million.”

 

These days, $3.85 million for a three-year deal between a public agency and private sports league is chump change when you consider how much public money is being spent to subsidize and support private sports in Las Vegas. This story isn’t about whether spending public dollars on sports is a wise or unwise investment of public resources.

 

It’s about telling the public how much a local public agency is spending on private sports. At least give the public the money information so that people can decide for themselves whether it’s a good investment.

 

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Giving public money to private team owners and leagues is hardly new. About 20 years ago as a Denver Post city hall reporter, I covered the city of Denver, which owned Mile High Stadium, the home of the NFL Denver Broncos. I was fascinated that the owner of the Broncos, Pat Bowlen, one of the most affluent residents in the area, could saunter into a public government building and ask for free money to build a football stadium to replace Mile High. I have reported on the intersection of sports, government and business in several markets around the country ever since Denver because documenting communities trying to shape public policy on stadium and sports subsidies in places where sports rival religion in terms of intensity of personal beliefs and faith is a challenging professional endeavor for me.

 

Giving free public money to professional teams and leagues has been a public policy debate for decades. Interestingly enough, giving public subsidies to team owners is one of those rare partisan issues that does not run along party lines. Take Las Vegas and Nevada, for example.

 

The new governor, Steve Sisolak, is a Democrat who loves the Raiders and is a big supporter of the public subsidy of $750 million for the new Raiders stadium set to open in mid-2020. And local casino tycoon billionaire Sheldon Adelson is one of the most powerful Republicans in the country who paid for the political lobbying effort that resulted in the Nevada Legislature approving the biggest NFL stadium subsidy in U.S. history for the Raiders stadium. (Strangely, Adelson dropped out of the Raiders stadium process but well after the stadium subsidy deal was approved by state lawmakers.)

 

Las Vegas, for years, has been tempted to build stadiums on the public dime in its pursuit of being considered “major league.” Former Las Vegas Mayor Oscar Goodman made it his personal mission, but the Big Leagues stuck to spring training baseball games at Cashman Field or NHL exhibition games on the Strip. His wife and current Las Vegas mayor, Carolyn Goodman, tried unsuccessfully to build a city-subsidized Major League Soccer (MLS) in Symphony Park in 2015.

 

Then those nomadic Raiders, always looking for a new stadium, found their match in Adelson. Southern Nevada will raise more than $1 billion during the next 30 years to pay the debt for the $750 million it is giving to the Raiders for a domed, 65,000-seat stadium that will cost $1.35 billion to build as part of an overall $1.8 billion stadium project. It’s on 62 acres on the west side of I-15 across the highway from Mandalay Bay in an industrial neighborhood bordered by Hacienda Avenue on the north,  Russell Road on the south and Polaris Avenue on the west.

 

The Raiders stadium will be used for other other sports and music events. It’s inevitable that a Super Bowl will be played there in early February one year. The stadium will be in the running to host major college championships in football and basketball, too. Lawrence Epstein, UFC chief operating officer, told LVSportsBiz.com in the past his MMA fight show outfit will stage at least one mega event a year in the new stadium, which is scheduled to be completed July 31, 2020. The Raiders stadium’s ability to draw major sports and music events that are currently bypassing Las Vegas will likely determine whether the public investment is worth it.

 

 

The local minor league baseball team, owned by Summerlin master developer Howard Hughes Corporation, also received a healthy public payout when the LVCVA gave the Las Vegas Aviators $80 million for their new ballpark as part of a “naming rights deal.”

 

Not much public information has been furnished by the LVCVA on that $80 million deal. Then again, not too many Triple A minor league baseball parks draw an $80 million naming rights arrangement from a public agency. The $150 million ballpark is popular these days as every single game since the luxurious venue opened April 9 has been a sellout for the Aviators and Howard Hughes Corporation, which also owns Downtown Summerlin where the 10,000-seat, 22-suite and one-swimming pool venue is located.

 

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Las Vegas is in the tourism business, so it’s no surprise that the LVCVA is spending millions of dollars of the public’s money on sports because many tourists visit Southern Nevada for sports events. The agency’s former president and CEO, Rossi Ralenkotter, is a big sports fan and enjoyed wearing his baseball jersey during Big League Weekends at Cashman Field. Ralenkotter left the LVCVA after the local newspaper, the Las Vegas Review-Journal, hammered him for misuse of airline gift cards and other alleged public money misuses.

 

It’s hard getting information from the LVCVA. LVSportsBiz.com asked the LVCVA several times to explain how its agency will work with the Raiders on attracting events to the stadium. No answers. LVSportsBiz.com also asked the LVCVA for a one-on-one interview with Hill, but received the sound of crickets instead. One of the easier ways of finding out how much public money is spent on the National Finals Rodeo, for example, is to get a photo showing a $14 million payout to to the Professional Rodeo Cowboys Association, the NFR’s sanctioning body. Here’s the big check for the December 2017 rodeo at Thomas & Mack Center.

 

Many locals know the public is giving $750 million to the Raiders for the construction of their stadium.

 

But you might not know the LVCVA approved a partnership with Las Vegas Motor Speedway on March 8, 2017 for a sponsorship of $2.5 million per year for seven years, which equates out to $17.5 million. The Speedway hosts two NASCAR weekends a year among its many racing events held annually.

 

You know those college basketball tournaments that are held in Las Vegas in March? Well, the LVCVA’s non-profit event-organizing arm, Las Vegas Events, pays a total of $1.3 million a year for the West Coast, Mountain West and Pac-12 conferences to stage their tourneys in Las Vegas.

 

 

The LVCVA funds Las Vegas Events, which, in effect, is using public dollars to entice sports events to come to Las Vegas.

 

Even the Golden Knights gets a sponsorship from the LVCVA — a $300,000 sponsorship handled via the tourism agency’s advertising partner, R&R Partners, which received a $101.5 million from the LVCVA for fiscal year 2018-19. Though, it should be noted the Golden Knights play in a privately-financed arena, paid for by MGM Resorts International and Anschutz Entertainment Group (AEG), which owns the Knights’ Pacific Division rival, the Los Angeles Kings. VGK owner Bill Foley also owns a 15 percent share of T-Mobile Arena.

 

The LVCVA is a public agency with total appropriations of nearly $360 million.

Debates will rage forever about whether public money being spent on sports teams, stadiums, events and leagues is a wise use of public resources — especially in Nevada with a reputation of schools and health services that are underfunded.

 

More public money will be flowing to sports as the NFL hosts its draft event in Las Vegas in April 2020 as a tasty appetizer for the opening of the Raiders stadium a few months after that. (An amusing side note is the NFL will not accept a TV spot from the LVCVA via R&R Partners if it includes an image of the Strip. R&R’s Rob Dondero, who does the sports media buys for the LVCVA, shared that nugget during an LVCVA sports-business session in February.)

 

But at least give the money information to the public so that locals can decide for themselves whether public dollars for sports are being spent appropriately.

 

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