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Ales Spanos – beneficiary of public largesse
Subsidies to billionaires lead to civic indigestion
Drawing of proposed Carson stadium
Billionaires make us bilious — suffering from indigestion, accompanied by nausea and perhaps vomiting. Billionaire pro sports team owners seem to take delight in making us feel this way.
Dean Spanos
The owners of the San Diego Chargers, the Spanos family, are petty billionaires — only worth $1.26 billion, according to Forbes magazine. The family’s net worth ranks a mere 16th among National Football League owners.
Stan Kroenke
The Spanos family would love to steer its Chargers to Los Angeles. Stan Kroenke, a real estate developer worth $6.3 billion, according to Forbes, could either block or aid the Chargers’ bid to get to L.A. Kroenke got rich building Walmart stores and then married a member of the founding Walton family. She is Ann Walton Kroenke, worth $5.6 billion.
Kroenke plans to build a $1.86 billion stadium in the Los Angeles suburb of Inglewood. Sports scribes expect him to move the St. Louis Rams, which he owns, to Inglewood, although he could sell that team and buy into another, perhaps the Chargers or Oakland Raiders, who together claim that they will build a $1.7 billion stadium in Carson, also in the L.A. area.
Because the National Football League is essentially a shrine for wealth worship, the smart money is on Kroenke when owners vote on who gets to go to L.A. Since the Raiders’ major owner isn’t even a billionaire, the Chargers, rather than the Raiders, could be a second team performing in Inglewood.
What about other sports? Does basketball reek of greed, too? Yes. The richest pro sports team owner, Steve Ballmer, is worth $21.5 billion. He was one of the early employees of Microsoft and its chief executive for years, and he recently bought basketball’s Los Angeles Clippers. The second-richest sports team owner is Paul Allen, a cofounder of Microsoft, who is worth $17.5 billion and owns basketball’s Portland Trail Blazers, as well as football’s Seattle Seahawks.
Scott Walker
The most nauseous adventure is now going on in Wisconsin. Governor Scott Walker wants citizens to subsidize principal owners of the Milwaukee Bucks basketball team — three New York–based hedge-fund plutocrats together worth well over $5 billion. They are demanding a new arena supported by taxpayers. Or else the team will be moved. Heard that before?
Walker is saying the cost of the subsidy will be $220 million, but financial sophisticates say if you count the real cost over the life of the bonds, the subsidy more than doubles that figure.
At the same time, Walker slashed $250 million out of the University of Wisconsin budget. He says a new basketball arena will enhance the economy — something that economists have shown conclusively doesn’t happen. Walker wants to be president of the United States.
A similarly regurgitative tale comes from the Atlanta Hawks professional basketball team. It was owned by Bruce Levenson, who made his money in communications but is a pauper worth only half a billion dollars. Last year, it came out that Levenson had sent an offensive message to his general manager in 2012. Levenson complained that the audience at games was “70 percent black. The cheerleaders are black. The music is hip hop. At the bars it’s 90 percent black.… Even [Washington, D.C.] with its affluent black community never has more than a 15 percent black audience.” Before he purchased the team, “in an effort to make the arena look full… thousands and thousands of tickets were being given away, predominantly in the black community, adding to the overwhelming black audience. My theory is that the black crowd scared away the whites and there are simply not enough affluent black fans to build a significant season ticket base.”
Last fall, Levenson, not surprisingly, decided to sell the team. The buyer this year was Antony Ressler, a Los Angeles financier worth $1.51 billion by Forbes’ reckoning. The first thing Ressler declared was that the Hawks’ arena, which was built in 1999, had to be remodeled or rebuilt because it was not in the upper quartile of arenas. “Declaring that your arena is obsolete because it’s 16 years old and there are seven nicer ones elsewhere is pretty ballsy,” says Neil deMause, who runs the fieldofschemes.com website. Verbiage like Levenson’s forced former San Diegan Donald Sterling (net worth $2.9 billion) to sell the Los Angeles Clippers to Ballmer for $2 billion.
Then come basketball’s Cleveland Cavaliers. They were bought in 1983 by Gordon Gund and George Gund III, sons of George Gund II, who was worth $600 million in the 1960s, when billionaires were scarce. The Gund brothers, worth $3.5 billion, got a new arena in downtown Cleveland, financed with sin taxes on the populace. They sold 72 percent of the team to Dan Gilbert, cofounder and chairman of Detroit’s Quicken Loans.
The Quicken Loans Arena in downtown Cleveland was built in 1994. This year, Gilbert wanted it to host a future National Basketball Association All-Star game. But the league commissioner said arena improvements would have to be made. The Cavaliers want a multimillion-dollar enlargement of the arena. “It sounds as if the county’s involvement is critical to getting it all accomplished,” says cleveland.com. Of course, taxpayer money will be used: Gilbert, who owns a Cleveland casino, is worth $4.7 billion and might plead poverty to local government.
Gilbert is a big landholder in downtown Detroit and a local hero for shelling out bucks to revive the place.
Michael Ilitch
In July of 2013, Detroit went into Chapter 9 bankruptcy. But a taxpayer subsidy for the family of Michael and Marian Ilitch, worth $4.8 billion, according to Forbes, has gone ahead. Ilitch, who made the bulk of his fortune from Little Caesars Pizza, owns the Detroit Red Wings hockey team. His wife is listed as owner of the Detroit Tigers baseball team and a casino.
Now Ilitch has arranged to build a $450 million hockey arena near downtown. But only 42 percent of the money will come from private sources. The rest will come from public financing, largely through 30-year bonds.
Billionaire Tom Gores, whose company briefly owned the Union-Tribune, owns the Detroit Pistons basketball team, based in a Detroit suburb. There is talk of his moving the team to central Detroit — with a fat subsidy, of course.
Here's something you might be interested in.
Ales Spanos – beneficiary of public largesse
Subsidies to billionaires lead to civic indigestion
Ales Spanos – beneficiary of public largesse
Subsidies to billionaires lead to civic indigestion
Drawing of proposed Carson stadium
Billionaires make us bilious — suffering from indigestion, accompanied by nausea and perhaps vomiting. Billionaire pro sports team owners seem to take delight in making us feel this way.
Dean Spanos
The owners of the San Diego Chargers, the Spanos family, are petty billionaires — only worth $1.26 billion, according to Forbes magazine. The family’s net worth ranks a mere 16th among National Football League owners.
Stan Kroenke
The Spanos family would love to steer its Chargers to Los Angeles. Stan Kroenke, a real estate developer worth $6.3 billion, according to Forbes, could either block or aid the Chargers’ bid to get to L.A. Kroenke got rich building Walmart stores and then married a member of the founding Walton family. She is Ann Walton Kroenke, worth $5.6 billion.
Kroenke plans to build a $1.86 billion stadium in the Los Angeles suburb of Inglewood. Sports scribes expect him to move the St. Louis Rams, which he owns, to Inglewood, although he could sell that team and buy into another, perhaps the Chargers or Oakland Raiders, who together claim that they will build a $1.7 billion stadium in Carson, also in the L.A. area.
Because the National Football League is essentially a shrine for wealth worship, the smart money is on Kroenke when owners vote on who gets to go to L.A. Since the Raiders’ major owner isn’t even a billionaire, the Chargers, rather than the Raiders, could be a second team performing in Inglewood.
What about other sports? Does basketball reek of greed, too? Yes. The richest pro sports team owner, Steve Ballmer, is worth $21.5 billion. He was one of the early employees of Microsoft and its chief executive for years, and he recently bought basketball’s Los Angeles Clippers. The second-richest sports team owner is Paul Allen, a cofounder of Microsoft, who is worth $17.5 billion and owns basketball’s Portland Trail Blazers, as well as football’s Seattle Seahawks.
Scott Walker
The most nauseous adventure is now going on in Wisconsin. Governor Scott Walker wants citizens to subsidize principal owners of the Milwaukee Bucks basketball team — three New York–based hedge-fund plutocrats together worth well over $5 billion. They are demanding a new arena supported by taxpayers. Or else the team will be moved. Heard that before?
Walker is saying the cost of the subsidy will be $220 million, but financial sophisticates say if you count the real cost over the life of the bonds, the subsidy more than doubles that figure.
At the same time, Walker slashed $250 million out of the University of Wisconsin budget. He says a new basketball arena will enhance the economy — something that economists have shown conclusively doesn’t happen. Walker wants to be president of the United States.
A similarly regurgitative tale comes from the Atlanta Hawks professional basketball team. It was owned by Bruce Levenson, who made his money in communications but is a pauper worth only half a billion dollars. Last year, it came out that Levenson had sent an offensive message to his general manager in 2012. Levenson complained that the audience at games was “70 percent black. The cheerleaders are black. The music is hip hop. At the bars it’s 90 percent black.… Even [Washington, D.C.] with its affluent black community never has more than a 15 percent black audience.” Before he purchased the team, “in an effort to make the arena look full… thousands and thousands of tickets were being given away, predominantly in the black community, adding to the overwhelming black audience. My theory is that the black crowd scared away the whites and there are simply not enough affluent black fans to build a significant season ticket base.”
Last fall, Levenson, not surprisingly, decided to sell the team. The buyer this year was Antony Ressler, a Los Angeles financier worth $1.51 billion by Forbes’ reckoning. The first thing Ressler declared was that the Hawks’ arena, which was built in 1999, had to be remodeled or rebuilt because it was not in the upper quartile of arenas. “Declaring that your arena is obsolete because it’s 16 years old and there are seven nicer ones elsewhere is pretty ballsy,” says Neil deMause, who runs the fieldofschemes.com website. Verbiage like Levenson’s forced former San Diegan Donald Sterling (net worth $2.9 billion) to sell the Los Angeles Clippers to Ballmer for $2 billion.
Then come basketball’s Cleveland Cavaliers. They were bought in 1983 by Gordon Gund and George Gund III, sons of George Gund II, who was worth $600 million in the 1960s, when billionaires were scarce. The Gund brothers, worth $3.5 billion, got a new arena in downtown Cleveland, financed with sin taxes on the populace. They sold 72 percent of the team to Dan Gilbert, cofounder and chairman of Detroit’s Quicken Loans.
The Quicken Loans Arena in downtown Cleveland was built in 1994. This year, Gilbert wanted it to host a future National Basketball Association All-Star game. But the league commissioner said arena improvements would have to be made. The Cavaliers want a multimillion-dollar enlargement of the arena. “It sounds as if the county’s involvement is critical to getting it all accomplished,” says cleveland.com. Of course, taxpayer money will be used: Gilbert, who owns a Cleveland casino, is worth $4.7 billion and might plead poverty to local government.
Gilbert is a big landholder in downtown Detroit and a local hero for shelling out bucks to revive the place.
Michael Ilitch
In July of 2013, Detroit went into Chapter 9 bankruptcy. But a taxpayer subsidy for the family of Michael and Marian Ilitch, worth $4.8 billion, according to Forbes, has gone ahead. Ilitch, who made the bulk of his fortune from Little Caesars Pizza, owns the Detroit Red Wings hockey team. His wife is listed as owner of the Detroit Tigers baseball team and a casino.
Now Ilitch has arranged to build a $450 million hockey arena near downtown. But only 42 percent of the money will come from private sources. The rest will come from public financing, largely through 30-year bonds.
Billionaire Tom Gores, whose company briefly owned the Union-Tribune, owns the Detroit Pistons basketball team, based in a Detroit suburb. There is talk of his moving the team to central Detroit — with a fat subsidy, of course.
Comments
the current lawsuit is akin to two whores fighting over a cash customer.
Murphyjunk: The most common phenomenon is two men fighting over one whore in a bordello.
We visited a small town in Nevada. In the 1890s, it had 10,000 men and at most 1000 women. One can leaf through the local newspaper from those days. Almost every week, there was a murder -- two men fighting over one prostitute in a brothel. The town's cemetery had something like 250 people buried there before there was anyone who had died of natural causes. Best, Don Bauder
being that the charger owners and the politicians are the whores, I don't seen any one willing to die for them. ( or give a spit)
Murphyjunk: Here is a morbidity report or, I suppose, a morbidity prediction. Some Charger fans in San Diego will have a near-death experience if the team manages to get to L.A.
But if for one reason or another (possibly lack of money), the Chargers cannot get to L.A., the team will have a death-like experience in San Diego. It has deliberately alienated San Diegans so management can tell the NFL the Chargers aren't wanted in San Diego.
No amount of schmozing or advertising is going to win over many San Diegans, although some naifs will welcome the team back like the prodigal son. The Chargers have seldom found it easy to fill the stadium. Now they will really have a tough time, particularly if, as Fabiani claims, they now get 25 percent of their business from L.A. If one or two teams go to L.A., the Chargers can kiss that 25 percent goodbye. Attendance and particularly TV revenue would plunge.
This might be a near-death experience. Or it might be a death experience. Best, Don Bauder
"SPORTS OWNERS DIP INTO PUBLIC'S PURSE, DESPITE THEIR BILLIONS IN THE BANK." That's a headline in the New York Times this morning (July 22). The story is about beleaguered Cleveland, which has a poverty rate near 37 percent, and an infant mortality rate of 13.0 per thousand births, compared with New York City's 4.0.
Each of the owners of the Indians, Browns, and Cavaliers is a billionaire or multi-billionaire. Yet taxpayers have already pumped $800 million into three facilities for these billionaires' teams. And over the next 20 years, taxpayers are scheduled to plunk another $262 million into these pro sports facilities.
George Zeller, an economist who has reported on Cleveland for decades, tells the Times, "The theory that all of these sports teams are producing a gigantic boom is completely false." The billionaires spent a bundle to beat back an attempt to put a $3 surtax on tickets instead imposing another sin tax. Best, Don Bauder
All proof that sports fans are stupid.
AlexClarke: That all-inclusve characterization may be a bit extreme, but I concede that sports fans who let billionaire sports team owners pick their pockets are lacking in, shall we say gently, "awareness." Best, Don Bauder
WOW. That's pretty harsh.
So I guess you don't watch any sports??
I watch sports and I'm far from stupid.
Don Bauder watches sports and he's even farther from stupid than I am.
My kid watches sports and she's even father from stupid than either myself or Don and probably both of us combined.
I guess sports must have treated you badly at some point.
danfogel and Don: I guess that was a little harsh and painting with too broad a brush. I was thinking primarily of the rabid "my team" no matter what nut jobs that think that some sports team will somehow make or break them. I too like to watch sports but I am not a rabid fan.
sports fans that don't realize its all about money, no real sport involved may be a bit dense though.
Murphyjunk: Even the densest players realize it is all about money. Best, Don Bauder
AlexClarke: I have known people who, if their team loses on Sunday, don't psychologically recover until Thursday. They become apoplectic if told that some games are fixed. I would think sociologists and psychologists have studied this phenomenon. Best, Don Bauder
This. The people who are crying that San Diego will have a "void" if the Chargers leave, who proclaim their "pride" in and "loyalty" to the Chargers, etc. Very literally some of the stupidest people on the face of the planet.
Sports is a fun diversion. If it's more to you, you really should seek some help... you can never achieve happiness from external sources. If "your team" winning fulfills your life, what are you going to do when they lose?
jnojr: If San Diego will have a void if the Chargers leave, it will have a worse void if they stay and get their stadium. That void will be a huge hole in the city's budget, which will have to be filled with taxpayer money. Best, Don Bauder
danfogel: When I watch sports, my wife does not call me "far from stupid." Sometimes she is honest and calls me stupid. Best, Don Bauder
Sports fans aren't the stupid ones, the citizens in the cities/counties/states/country who allow this to happen are the stupid ones. Sports fans at least get a shot at a pastime they enjoy for their contribution.
Wabbitsd: Politicians and voters who cave in to these billionaires' subsidy schemes are the guilty ones, although we can't call them all stupid. Best, Don Bauder
don bauder, Here's a questioIn for you. Who actually owns the Chargers? By that I mean who legally owns the team? We know that Alex had a 97% interest with George Pernicano owning the other 3%. And we all know that Deano has been running the team for the last dozen or so years and now that his old man has lost his faculties, seems to have total control. But is the team still Alex's or has ownership been officially shifted to the family.
If Alex retains ownership, he is the billionaire, along with his wife, obviously. That makes the kids merely "the family of billionaire owner Alex Spanos." The Spanos family could only be billionaires collectively if Alex has transferred ownership of the team to his kids. And even at that, with only a 97% share, unless the kids also now own the family businesses, they wouldn't even be worth a billion collectively, and none of them as individuals.
My point is this. The Walton family are billionaires. Alex Spanos may be a billionaire, but his kids are not. Let us NOT give his puke kids something they don't deserve, even if it's merely a title.
danfogel: The Spanos clan owns 97 percent and Pernicano and Bill Fox own 3 percent.
Alex and his wife Faye, majority owners, have split up ownership among the family: Dean Spanos, Dea Spanos Berberian, Alexis Spanos Ruhl, Michael Spanos. That was done a few years ago, as I recall, possibly for tax, estate reasons. I got this primarily from ESPN. Best, Don Bauder
don bauder, After posting my questions, I remembered that back about 5 years ago when Spanos hired GS to look for potential buyers for part of the team for estate planning. Fabio said at the time it was about the difference between the taxes Spanos would have to pay in the sale versus the insane 37% inheritance taxes the kids will pay upon his demise. Spanos and his wife own 36%, and the kids each own 15%. Pernicano owns 3 %, and the one I forgot about, Bill Fox owns 1% So, based on that, even with his business holdings, if he has not already transferred part, if not all of them to the kids, neither Papa Spanos or any of his kids are actually billionaires themselves. So why don't w e not refer to them as such going forward.
danfogel: I usually, if not always, refer to the Spanos family -- not Alex -- as the billionaire. The inheritance taxes are an important factor. I do not know if the money for those taxes has already been set aside. That can make a difference in whether the team can afford L.A. Best, Don Bauder
don bauder, Here's a thought. As far as I can remember, if Spanos and his wife are joint owners, then it wouldn't be considered an inheritance, hence no federal estate tax or state inheritance tax. So if she out lives him, it shouldn't be a problem; she would retain their 36%, the kids have their 15% each, and she could then transfer ownership when and as she sees fit.
danfogel: Ownership of the team was probably handed, in part, to the four children as an attempt to dodge inheritance taxes. But if dodging inheritance taxes were that simple, nobody would pay them.
I am not saying you are wrong. I am just saying that I question if this maneuver would get them off the hook completely. Best, Don Bauder
We built the Chargers training facility, provide them a stadium, we end up paying them at the end of the year, and I can't remember the the Chargers doing tenant improvements and thanking the people of San Diego. If they decide to leave we should takeover the training facility and raise the rent while their new stadium is being built.
asbestos: Absolutely. If the Chargers are departing, San Diego should take back the training facility. Best, Don Bauder
Donny - swear to all that is holy, I vomited frequently enough to fill many troghs. Now I'm sure I'm intuitive and about the fact a smart mind can't change crazy.
shirleyberan: Yes, "a smart mind can't change crazy." If you are schizophrenic, it really doesn't matter how smart you are. Best, Don Bauder
"All proof that sports fans are stupid. "
Yes, a strong statement. But as everyone knows, you can tell a true sports fan by his/her tattoos, his cap & t-shirt, and the logo on his pickup truck. Are there any true sports fans here? A true sports fan is happy to donate a few hundred for those players and owners who do so much to enhance her life. Otherwise she might have to think about who should be on the city council or whether SDGE is looking out for her interests...
swell: I think you should use the word "he" and not "she" in describing the fanatic. While there are female sports team fanatics, I think the male of the species is more likely to be bonkers over a team. Best, Don Bauder
Coruscating Don. I'm sure you mean schizophrenic bilious billionaires we constantly try to help.
shirleyberan: I know of no schizophrenic billionaire sports owner -- at least, I can't think of any. Best, Don Bauder
I'm not going to touch the relationship between stupidity and being a sports fan, but it may reduce the confusion to separate the phrase "sports fans" from "sports." Professional big league sports are entertainment. Those who watch have little relation with sports, which is an activity. Watching is hardly an activity. Too bad all the interest in professional "sports" doesn't encourage more "fans" to get off the couch and do sports. The difference between watching and doing may not be stupid, it may be perverse.
rehftmann: The guy who sits on his couch, drinking beer after beer, watching pro sports, thinks of himself as a macho male. Nonsense. The real macho fans are birdwatchers. They get up very early, scramble through brush and briar, sometimes are attacked by mountain lions, etc. Best, Don Bauder
Just one thing--the artist rendering above is of the proposed (by CSAG) new Chargers stadium in San Diego, not the one proposed for Carson.
aardvark: Our art department selected that rendering. But I look over the layout before it goes to press. If you are right, I missed that. Mea culpa. Best, Don Bauder
Don: The other piece of evidence on that is if you look in the far endzone, it says "San Diego".
aardvark: Good point, but if there were a new stadium in Carson -- and do NOT count on that -- the Chargers name might be in one end zone and the Raiders name in the other.
Your point, however, is well taken. Best, Don Bauder
Rich Gibson: I would agree: Detroit is the most egregious case of sports corporate welfare. But Cleveland is pretty close. Best, Don Bauder
Richard May: I have been writing articles blasting subsidization of pro sports stadiums since 1996, when I was financial columnist of the Union-Tribune. In fact, in 1973 I tried to get articles about organized crime ownership of pro sports teams into Business Week, but I could never get them into print. Best, Don Bauder
John Oliver: I catch your sarcasm, but in San Diego and other metro areas, it is largely the Republicans that favor massive subsidization of billionaires' sports teams, thus raising taxes, and Democrats who are in opposition. Best, Don Bauder
Alan Peter: That is an interesting article, but remember the author is talking about enlightened Boston. When Kraft, the owner of the New England Patriots, was trying to get public money for a new stadium, he tried every ruse in the owner playbook, including threatening to move the team to Hartford, Connecticut, a naked and laughable artifice to deceive.
Boston and Massachusetts pols would not give in. So Kraft built the stadium himself, although public money went into infrastructure. Best, Don Bauder
I still can't believe the Red Sox play in such an old and outdated stadium. Boston cannot possibly be a "world class city".
ImJustABill: Absolutely. Boston and Chicago can't be world class because their teams play in old stadiums. L.A. is not world class because it has no NFL team. In Boston, the owner of the NFL team paid for the stadium with his own money, after local taxpayers refused to subsidize it. That makes Boston a scummy city. Best, Don Bauder
Yes - let's forget about all of the vibrant culture, museums, and excellent universities both these cities have. An old ballpark means a backwards city.
And now I see Boston has turned down the chance to go billions of dollars in debt to host an Olympics. What are they thinking?