WEBVTT - How to Rob a City: NBA Billionaire Edition 0:00:01.680 --> 0:00:02.360 Cool zone. 0:00:02.480 --> 0:00:09.360 Media, Welcome to it could happen here. I'm Kevin Foster, 0:00:09.560 --> 0:00:11.560 and for the past few months, I've witnessed what I 0:00:11.560 --> 0:00:14.880 would describe as an egregious billionaire handout going down in 0:00:14.920 --> 0:00:17.280 the city of Portland and the state of Oregon as 0:00:17.280 --> 0:00:20.319 a whole. You might feel nauseous thinking about your tax 0:00:20.360 --> 0:00:23.479 dollars going to some wealthy bastard, and trust me, he 0:00:23.640 --> 0:00:25.880 is a bastard. But what if I told you it 0:00:25.960 --> 0:00:29.280 was for basketball. That probably sounds silly to many of you, 0:00:29.640 --> 0:00:33.600 but that's the question Portlanders have been grappling with. Tom Dundon, 0:00:33.680 --> 0:00:38.239 a Texas billionaire businessman, bought the NBA's Portland Trailblazers in 0:00:38.360 --> 0:00:41.040 April of this year. You may or may not have 0:00:41.120 --> 0:00:43.560 heard of Dundon. He made the rounds not too long 0:00:43.600 --> 0:00:46.800 ago when the other sports team he owns, the NHL's 0:00:46.880 --> 0:00:51.120 Carolina Hurricanes, won the Stanley Cup. Notably, he engraved his 0:00:51.240 --> 0:00:54.760 dog's name on it, to the distaste of many hockey fans. 0:00:54.800 --> 0:00:58.080 Since Dundon took over the Blazers, he's fueled constant chatter 0:00:58.160 --> 0:01:01.160 about the possibility of moving the tea out of Portland. 0:01:01.480 --> 0:01:04.399 He's done so by demanding the city, county, and state 0:01:04.480 --> 0:01:08.520 handover approximately six hundred million dollars in public funds to 0:01:08.640 --> 0:01:12.640 renovate the Moda Center the Blazers Stadium, which our wonderful 0:01:12.680 --> 0:01:16.959 producer Sophie has informed me is already quite nice. Despite 0:01:17.000 --> 0:01:20.200 Forbes estimating Dundon's net worth at around two point three 0:01:20.240 --> 0:01:23.399 billion dollars, he has no plans of contributing to the 0:01:23.440 --> 0:01:28.120 renovation himself, leaving it all to the taxpayers. There's a 0:01:28.319 --> 0:01:32.040 very dedicated Blazer's community here in town, so the threats 0:01:32.040 --> 0:01:35.720 of leaving rang major alarm bells. But what has ensued 0:01:35.880 --> 0:01:40.800 is a revealing cascade of insights into local corruption, economic desperation, 0:01:41.280 --> 0:01:45.840 and a deep misunderstanding and or willful ignorance of sports economics. 0:01:46.760 --> 0:01:48.960 So today we're going to talk about the economics of 0:01:49.000 --> 0:01:52.640 sports and stadiums, why these investments are awful for your 0:01:52.640 --> 0:01:54.960 city to make, and what to watch out for as 0:01:55.040 --> 0:01:58.200 the business lobby and politicians in your town try to 0:01:58.360 --> 0:02:01.560 line the pockets of billion ais. While they will talk 0:02:01.600 --> 0:02:03.880 a lot about Portland, I want to be clear a 0:02:03.920 --> 0:02:06.840 great deal of this could very easily spread across the 0:02:06.880 --> 0:02:10.480 country as Dundon sets a new precedent for what executives 0:02:10.520 --> 0:02:13.840 can scrape from taxpayers. On that note, I'd like to 0:02:13.840 --> 0:02:16.360 do a mini dive into Tom Dundon and some of 0:02:16.400 --> 0:02:18.320 his co owners to give you a sense of the 0:02:18.360 --> 0:02:21.480 types of people we're dealing with here, a mini behind 0:02:21.520 --> 0:02:24.640 the bastards, if you will. For one, Dundon is a 0:02:24.800 --> 0:02:28.000 known penny pincher, in other words, a piece of shit. 0:02:28.680 --> 0:02:31.440 Some of his cost cutting measures just since taking over 0:02:31.480 --> 0:02:35.840 the Blazers include massive layoffs of up to seventy Blazers staff, 0:02:36.240 --> 0:02:38.920 leaving part time players at home in Portland in the 0:02:38.960 --> 0:02:42.600 middle of the playoffs, breaking playoff tradition by not giving 0:02:42.639 --> 0:02:47.359 fans free T shirts, ignoring players coaching requests, and undercutting 0:02:47.440 --> 0:02:50.000 the pay of the coach he did end up hiring. 0:02:50.639 --> 0:02:53.680 And it gets worse. Dundon made most of his money 0:02:53.720 --> 0:02:57.680 in the subprime auto loan industry with the company Santander 0:02:57.760 --> 0:03:03.000 Consumer USA. According to Boston University finance professor Mark Williams, 0:03:03.280 --> 0:03:07.320 as referenced in an Oregon Public Broadcasting article, Dundon was 0:03:07.400 --> 0:03:11.000 quote one of the individuals that really grew the industry. 0:03:11.360 --> 0:03:13.680 Many would argue he took it to a new level. 0:03:14.080 --> 0:03:17.200 Quote according to The New York Times, Part of how 0:03:17.280 --> 0:03:21.480 Dundon and other Cintender executives made millions was by packaging 0:03:21.560 --> 0:03:25.200 risky loans for low income people into securities that could 0:03:25.200 --> 0:03:28.480 be sold. Allah the two thousand and eight financial crisis 0:03:28.520 --> 0:03:33.480 and what Wall Street goruls did with mortgages. The various malpractices, 0:03:33.560 --> 0:03:36.880 which Cintender never had to admit to in court, resulted 0:03:36.960 --> 0:03:40.960 in five hundred and fifty million dollars worth of legal settlements, 0:03:41.000 --> 0:03:44.400 including in Oregon. If you're waiting for some sort of 0:03:44.480 --> 0:03:48.560 karmic relief, it isn't really coming. Dundon walked away from 0:03:48.640 --> 0:03:53.160 Santander in twenty fifteen with seven hundred million dollars. He 0:03:53.240 --> 0:03:57.080 then continued to invest in subprime auto lenders while expanding 0:03:57.160 --> 0:04:01.760 into professional sports. This man is not well liked, even 0:04:01.840 --> 0:04:04.960 by people who are clearly desperate to keep the Blazers here. 0:04:05.560 --> 0:04:08.560 For example, in a recent city council meeting, one fan 0:04:08.640 --> 0:04:11.000 who was in support of a public subsidy for the 0:04:11.040 --> 0:04:16.400 Blazers called Dundon a quote grade a douchebag quote. And 0:04:16.440 --> 0:04:18.719 in order to buy the Blazers, Dundon had to put 0:04:18.760 --> 0:04:22.800 together an ownership group. One lesser reported individual in that 0:04:22.880 --> 0:04:26.279 group is Mark Czar. The co president of the shadow 0:04:26.320 --> 0:04:30.040 bank blue Owl Capital. On their website, blue Owl calls 0:04:30.080 --> 0:04:33.960 themselves a quote partner to hyper Scalers unquote in the 0:04:34.080 --> 0:04:38.000 AI data center space, and according to Bloomberg, they also 0:04:38.080 --> 0:04:41.760 sold a warehouse to DHS for an ice megaprison for 0:04:41.880 --> 0:04:46.000 one hundred and twenty million dollars. Needless to say, these 0:04:46.000 --> 0:04:50.159 guys don't really embody the typical Portland energy to be 0:04:50.240 --> 0:04:52.839 fair to Dundon and Czar, not that I really feel 0:04:52.880 --> 0:04:56.960 the need to. They're in piss poor company among NBA owners. 0:04:57.520 --> 0:05:01.040 Oregon Public Broadcasting described the owner ship roster in the 0:05:01.120 --> 0:05:05.200 league as a quote billionaires club whose past and current 0:05:05.279 --> 0:05:08.840 members or their companies have been accused of housing discrimination, 0:05:09.400 --> 0:05:15.280 knowingly underwriting improper mortgages, exploiting prison inmates, making racist comments, 0:05:15.400 --> 0:05:21.119 and engaging in sexual misconduct unquote. Apparently, the former Blazer's owner, 0:05:21.240 --> 0:05:25.960 Jody Allen, settled lawsuits over alleged sexual harassment and attempting 0:05:26.000 --> 0:05:29.800 to smuggle penguin skulls and giraffe bones out of Antarctica 0:05:29.960 --> 0:05:34.160 and Africa. That's pretty much par for the course for billionaires, 0:05:34.200 --> 0:05:36.760 which is exactly why I think this issue is worth 0:05:36.760 --> 0:05:39.960 paying attention to. At some point, Dundon is going to 0:05:40.080 --> 0:05:42.120 end up in a room with all the other owners 0:05:42.160 --> 0:05:44.840 and talk about this sweet deal he got with just 0:05:44.880 --> 0:05:47.960 a bit of posturing and lobbying, and you don't have 0:05:48.000 --> 0:05:50.960 to take it for me. Here's renowned sports economist JC 0:05:51.200 --> 0:05:55.359 Bradberry talking about the dynamics between sports owners. This is 0:05:55.400 --> 0:05:58.000 from a webinar hosted by a few of the Portland 0:05:58.080 --> 0:06:01.320 City councilors who actually pushed back against this deal. 0:06:01.720 --> 0:06:04.560 There's a great quote in Kim Belson's recent book on 0:06:05.000 --> 0:06:07.800 the NFL and when he interviews Steven Jones, the son 0:06:07.839 --> 0:06:10.359 of Jerry Jones, owner of the Dallas Cowboys, and he 0:06:10.480 --> 0:06:14.039 describes the relationship as this. He said, as a competitive 0:06:14.800 --> 0:06:17.960 He describes a competitive businessman culture among owners of sports 0:06:17.960 --> 0:06:22.040 team owners. He says, accumulating money is keeping score. Jerry 0:06:22.080 --> 0:06:24.240 may not need more money, but if he doesn't make it, 0:06:24.279 --> 0:06:26.560 in his mind, he has failed. And I think that's 0:06:26.600 --> 0:06:28.479 what you're seeing a lot with owners. They're trying to 0:06:28.480 --> 0:06:30.560 one up here up each other. And I think it's interesting. 0:06:30.680 --> 0:06:32.479 A lot of times you see owners go out and 0:06:32.520 --> 0:06:34.920 they donate vast amounts of money to charity, but then 0:06:34.960 --> 0:06:36.880 they go and ask for subsidies, and that seems like 0:06:36.960 --> 0:06:39.440 a contradiction. And I think what people need to understand 0:06:39.880 --> 0:06:43.520 is that these owners they're not even necessarily interested in 0:06:43.600 --> 0:06:47.000 making money for themselves. They have billions of dollars, they're 0:06:47.120 --> 0:06:50.400 very wealthy. They're what they want to do is invite 0:06:50.480 --> 0:06:52.359 all the owners in and say, look at what I 0:06:52.360 --> 0:06:54.600 got these suckers to buy me, And they all high 0:06:54.640 --> 0:06:58.080 five each other and they laugh at politicians who back 0:06:58.120 --> 0:06:59.279 then when they leave the room. 0:06:59.520 --> 0:07:01.800 The thing about all this for me is I don't 0:07:01.800 --> 0:07:04.679 really care for basketball. I like to think this helps 0:07:04.680 --> 0:07:08.200 me approach the issue from a relatively objective standpoint, which 0:07:08.240 --> 0:07:10.720 is why I'm all the more confident in the experts 0:07:10.760 --> 0:07:12.800 on this saying, you'd have to be a fool to 0:07:12.840 --> 0:07:15.800 support these investments. But you know what else would be 0:07:15.840 --> 0:07:18.880 a good investment, maybe some of the products and services 0:07:18.920 --> 0:07:32.520 that support this podcast. And we're back now that we 0:07:32.600 --> 0:07:35.240 have a sense of the demons we're dealing with, let's 0:07:35.320 --> 0:07:38.760 talk about sports economics. If I learned anything from my 0:07:38.800 --> 0:07:42.920 degree in economics other than how pretentious most ECON majors are, 0:07:43.480 --> 0:07:46.320 it's that the answer to many questions is just it 0:07:46.400 --> 0:07:51.960 depends and there's rarely consensus on any given issue. Sports economics, though, 0:07:52.080 --> 0:07:57.280 is one of those rare cases where most people actually agree. Politicians, 0:07:57.360 --> 0:08:00.880 business leaders, and sports team representatives will boast about the 0:08:00.960 --> 0:08:04.240 economic boon a team is to your city. They'll talk 0:08:04.280 --> 0:08:07.200 about the jobs people going out to bars and restaurants 0:08:07.280 --> 0:08:11.720 in supposed economic growth. In reality, sports teams suffer from 0:08:11.760 --> 0:08:16.400 something called the substitution effect. In the Journal of Economic Perspectives, 0:08:16.480 --> 0:08:21.840 economists John Siegfried and Andrew Zimbolist explain this in detail. Quote, 0:08:21.880 --> 0:08:26.320 the vast majority of consumers has a relatively inflexible leisure budget. 0:08:26.560 --> 0:08:29.160 If a sports team moves to town, the money one 0:08:29.200 --> 0:08:32.200 spends taking a family to a game typically is money 0:08:32.240 --> 0:08:36.800 that is not spent at a local bowling alley, golf course, restaurant, 0:08:36.920 --> 0:08:40.320 or theater. The net effect on spending in the metropolitan 0:08:40.400 --> 0:08:44.160 area then is zero or very close to zero. While 0:08:44.160 --> 0:08:47.640 sports teams may rearrange the spending and economic activity in 0:08:47.679 --> 0:08:50.520 an urban area, they are not likely to add much 0:08:50.559 --> 0:08:53.640 to it. Unquote. Don't get me wrong, I'm all for 0:08:53.720 --> 0:08:57.160 defunding golf courses, but with sports stadiums, we're really just 0:08:57.240 --> 0:09:01.360 moving money around rather than growing. Funny enough, this can 0:09:01.400 --> 0:09:04.959 actually have a negative effect on surrounding businesses because people 0:09:04.960 --> 0:09:08.240 spend more at the game, putting money into Tom Dundan's 0:09:08.280 --> 0:09:12.000 pocket instead of the local community. The counter argument to 0:09:12.040 --> 0:09:14.840 this is that sports teams bring in tourists from out 0:09:14.840 --> 0:09:18.079 of region or out of state, leading to greater profits, 0:09:18.440 --> 0:09:22.800 but this also doesn't necessarily ring true. Here's Victor Matheson, 0:09:22.920 --> 0:09:26.160 another leading sports economist, in that same webinar with the 0:09:26.200 --> 0:09:27.640 Portland City councilors. 0:09:28.400 --> 0:09:33.520 I've actually studied this extensively. There is exactly zero impact 0:09:33.640 --> 0:09:36.679 on hotel rooms days, and by zero I mean literally zero, 0:09:36.920 --> 0:09:40.680 literally no hotel rooms anywhere. On the contrary, he gets 0:09:40.679 --> 0:09:44.040 sold because people decide to come to a city to 0:09:44.080 --> 0:09:45.080 go see the NBA. 0:09:45.800 --> 0:09:49.280 I'm not certain exactly which studies Matheson is referencing, but 0:09:49.360 --> 0:09:52.000 he says they've looked into at least a dozen major 0:09:52.040 --> 0:09:55.480 cities and hundreds of game nights, finding no effect on 0:09:55.600 --> 0:09:59.280 hotel stays from the NBA. One example backing this up 0:09:59.360 --> 0:10:02.040 is a twenty e eighteen study by Craig E. Depkin 0:10:02.200 --> 0:10:06.160 and E. Frank Stevenson of Charlotte, North Carolina, which found 0:10:06.160 --> 0:10:09.800 that NBA regular season games were not associated with a 0:10:09.840 --> 0:10:14.400 net increase in hotel registrations or hotel revenues the day before, 0:10:14.800 --> 0:10:18.160 the day of, or the day after a game. They 0:10:18.160 --> 0:10:21.400 did find some increases for multi day events, but the 0:10:21.440 --> 0:10:24.800 overall conclusion of the study is that hotel tax receipts 0:10:24.840 --> 0:10:28.720 fall short of the debt service incurred from stadium investments. 0:10:29.400 --> 0:10:32.400 On a larger scale, things like the Olympics and World 0:10:32.400 --> 0:10:35.760 Cup are a similar story, even with such a specific 0:10:35.920 --> 0:10:40.360 focus on international travel. A February twenty twenty six article 0:10:40.480 --> 0:10:44.520 from the Council on Foreign Relations indicates multiple Olympic host 0:10:44.520 --> 0:10:48.360 cities in recent decades lost billions and that the economic 0:10:48.400 --> 0:10:52.800 benefits are dubious at best. Matheson suggested in a two 0:10:52.840 --> 0:10:56.199 thousand and six paper that these mega events can potentially 0:10:56.280 --> 0:10:58.880 lead to a profit for a city if they use 0:10:59.040 --> 0:11:01.840 existing infra share structure, such as the case of the 0:11:02.000 --> 0:11:05.920 nineteen eighty four Los Angeles Olympics, but this isn't always 0:11:05.960 --> 0:11:08.720 the case, and to give a sense of the broader 0:11:08.760 --> 0:11:12.800 economic consensus, a two thousand and five random sample survey 0:11:13.000 --> 0:11:16.960 of the American Economic Association members found that eighty six 0:11:17.040 --> 0:11:21.160 percent agreed or strongly agreed with the elimination of state 0:11:21.240 --> 0:11:25.679 and local subsidies for sports franchises versus just five percent. 0:11:25.800 --> 0:11:29.320 In opposition, a two thousand and eight paper by Dennis 0:11:29.400 --> 0:11:33.120 Coates and Brad R. Humphreys states, quote the large and 0:11:33.200 --> 0:11:38.560 growing peer reviewed economics literature on the economic impacts of stadiums, arenas, 0:11:38.679 --> 0:11:43.040 sports franchises, and sport mega events has consistently found no 0:11:43.240 --> 0:11:47.600 substantial evidence of increased jobs, incomes, or tax revenues for 0:11:47.679 --> 0:11:52.559 a community associated with any of these things. Quote. Matheson 0:11:52.679 --> 0:11:55.680 himself examined the other side of the argument on stadium 0:11:55.760 --> 0:11:59.240 subsidies in a twenty eighteen paper published in the Journal 0:11:59.280 --> 0:12:02.520 of Policy and Analysis and Management. He points out that 0:12:02.559 --> 0:12:05.480 there may be rare cases where public subsidies make sense, 0:12:05.720 --> 0:12:10.440 but at nowhere near the level that American taxpayers are contributing. Basically, 0:12:10.480 --> 0:12:13.239 the percent of funding that should come from public contribution 0:12:13.480 --> 0:12:17.200 may be simply greater than zero, but not very significant. 0:12:17.679 --> 0:12:19.760 At the end of the day, what this really amounts 0:12:19.800 --> 0:12:23.120 to is another massive handout for the wealthy while the 0:12:23.200 --> 0:12:26.520 poor and working class pay the price in taxes or 0:12:26.559 --> 0:12:30.480 cut services. It's big business fucking over the little guy 0:12:30.520 --> 0:12:33.360 who often can't afford to go to the game or 0:12:33.520 --> 0:12:37.280 is making a dog shit, part time wage working concessions 0:12:37.360 --> 0:12:40.520 at the stadium and to bring it back to Portland. 0:12:40.679 --> 0:12:44.360 The mayor has talked about financing this deal with climate funds, 0:12:44.520 --> 0:12:48.439 which are already allocated to different projects. There's a real 0:12:48.559 --> 0:12:52.480 opportunity cost to using public funding for sports rather than 0:12:52.520 --> 0:12:56.080 on city needs, and that absolutely needs to be factored 0:12:56.080 --> 0:12:59.120 into the equation. One of the most basic sort of 0:12:59.200 --> 0:13:02.520 capitalists econ one oh one lessons is that there's just 0:13:02.760 --> 0:13:05.719 no such thing as a free lunch. This money has 0:13:05.760 --> 0:13:08.640 to come from somewhere, and that means other programs get 0:13:08.640 --> 0:13:11.720 the short end of the stick. Over the past few weeks, 0:13:11.760 --> 0:13:15.600 I've noticed there's this perception that Portland is somehow unique, 0:13:15.960 --> 0:13:19.640 that losing the Blazers would send the city into financial ruin. 0:13:20.000 --> 0:13:23.440 Apparently this is quite common, as J. C. Bradbury's new 0:13:23.480 --> 0:13:26.960 book is literally titled this one will be Different, False 0:13:27.040 --> 0:13:31.920 Promises and fiscal realities of publicly funded stadiums. In just 0:13:31.960 --> 0:13:34.920 a bit, I'm going to dive into the tactics owners 0:13:35.080 --> 0:13:38.040 used to shake down cities, but one way they've done 0:13:38.040 --> 0:13:41.600 so in Portland is by broadening the conversation to our 0:13:41.760 --> 0:13:46.439 entire economy. I've watched city councilors play directly into this, 0:13:46.800 --> 0:13:50.840 claiming this city's economy is heavily based on perception, while 0:13:50.840 --> 0:13:55.000 they make decisions that arguably worsen that perception. It's a 0:13:55.200 --> 0:13:59.160 paradoxical position. We're struggling, so we need to spend a 0:13:59.200 --> 0:14:01.600 bunch of money on something that won't make us that 0:14:01.760 --> 0:14:05.480 money back. That's the level of cognitive dissonance we're dealing 0:14:05.520 --> 0:14:08.720 with here, and it's all backed up by the business lobby. 0:14:09.200 --> 0:14:12.679 Our previous city council system penned a deal buying the 0:14:12.720 --> 0:14:16.520 Moda Center for one dollar. Very clearly they took on 0:14:16.600 --> 0:14:20.400 a liability, not an asset, and left us on the hook. 0:14:20.920 --> 0:14:24.120 There's the sphere of the Moda Center becoming a derelict 0:14:24.240 --> 0:14:27.280 mass in a stain on the city if it's not renovated. 0:14:27.720 --> 0:14:31.440 People generally seem to agree that it needs renovations, whether 0:14:31.520 --> 0:14:35.360 for basketball or for concerts, but looking at other cities 0:14:35.360 --> 0:14:38.960 who lost their sports teams, a rotting concrete corpse is 0:14:39.040 --> 0:14:43.520 just simply not an inevitability. An article in Blazer's Edge, 0:14:43.600 --> 0:14:46.880 a blazer's news blog and community site owned by sports 0:14:46.920 --> 0:14:51.280 media conglomerate SB Nation, pointed out how multiple other arenas 0:14:51.320 --> 0:14:54.800 across the US have seen record profits after losing their 0:14:54.840 --> 0:14:59.800 anchored tenant. The Desert Diamond Arena in Glendale, Arizona, lost 0:14:59.800 --> 0:15:03.720 the NHL's Arizona Coyotes in twenty twenty two. In the 0:15:03.800 --> 0:15:07.840 year after, according to Glendale City Manager Kevin Phelps, the 0:15:07.920 --> 0:15:11.800 arena broke its revenue record by nearly ten million dollars. 0:15:12.400 --> 0:15:15.280 After the Golden State Warriors left the Oakland Arena in 0:15:15.320 --> 0:15:18.760 twenty nineteen, it had its best fiscal year ever in 0:15:18.840 --> 0:15:22.720 twenty twenty three and reduced its operating deficit by ninety 0:15:22.840 --> 0:15:26.560 seven percent over the four years. And Key Arena, once 0:15:26.600 --> 0:15:30.880 hosting the Seattle SuperSonics, a team referenced heavily by supporters 0:15:30.880 --> 0:15:34.400 of a Blazer's subsidy, operated at a loss under the 0:15:34.520 --> 0:15:37.720 NBA team, according to Blazer's Edge, but it turned a 0:15:37.800 --> 0:15:41.880 bigger profit than ever after they left by quote freeing 0:15:41.960 --> 0:15:45.160 up the stadium revenue the sports teams were hoarding for 0:15:45.200 --> 0:15:50.000 themselves unquote. I have to emphasize, even with mountains of evidence, 0:15:50.160 --> 0:15:52.600 reporting on this deal in Portland has felt like a 0:15:52.800 --> 0:15:57.840 truly Sissipician task, with the sheer volume of misinformation being 0:15:57.880 --> 0:16:00.840 thrown out by our own elected officials, and at times 0:16:00.880 --> 0:16:04.640 the media. Surprisingly, some of the broadcast outlets have had 0:16:04.680 --> 0:16:07.480 some solid articles on this in the past few months, 0:16:07.840 --> 0:16:10.680 though I still would have liked better at times. I 0:16:10.720 --> 0:16:13.320 have a lot of respect for Dave Deckerd, the author 0:16:13.440 --> 0:16:16.400 of The Blazer's Edge piece, because his job seems to 0:16:16.440 --> 0:16:19.600 rely on the Blazer's staying here, which he openly points 0:16:19.600 --> 0:16:22.400 out in his own article. I have a lot less 0:16:22.440 --> 0:16:26.600 respect for legacy outlets like The Oregonian, especially Bill Orum 0:16:26.680 --> 0:16:30.720 and the editorial board, who repeatedly chastise people for pushing 0:16:30.760 --> 0:16:33.640 back against this deal. Some of what I've seen from 0:16:33.680 --> 0:16:37.480 the media has been more akin to stenography than journalism. 0:16:37.760 --> 0:16:41.480 The Journalist's Resource and organization, aiming to bridge the gap 0:16:41.520 --> 0:16:45.680 between reporters and academic research, says in these sports deals, 0:16:45.800 --> 0:16:50.160 journalists quote often report figures from press releases and economic 0:16:50.240 --> 0:16:55.520 impact statements without questioning the assumptions of those analyzes. The 0:16:55.600 --> 0:16:58.000 worst part of all this has been watching people fall 0:16:58.080 --> 0:17:02.080 for the propaganda in public common that some individuals even 0:17:02.120 --> 0:17:05.520 brought their children to speak at Portland City Council. It's 0:17:05.720 --> 0:17:08.560 painful to feel like I couldn't keep up as a reporter. 0:17:09.040 --> 0:17:11.400 So for the last quarter of this episode, I want 0:17:11.400 --> 0:17:14.520 to dive into all of the just head spinning madness 0:17:14.560 --> 0:17:16.840 that has gone down in recent months in hopes of 0:17:16.880 --> 0:17:20.320 providing contexts that can help constituents in other cities fight 0:17:20.359 --> 0:17:24.439 off these terrible investments. Before we do that, here's some 0:17:24.520 --> 0:17:38.840 ads and we're back. Many of Oregon and Portland's leaders 0:17:39.000 --> 0:17:42.280 like to wear the badge of fiscal responsibility, yet they've 0:17:42.320 --> 0:17:47.159 done the exact opposite of what economists suggest. Unfortunately, it 0:17:47.320 --> 0:17:49.159 just so happens that this may be one of the 0:17:49.320 --> 0:17:53.320 worst arena deals of all time. According to data compiled 0:17:53.320 --> 0:17:56.800 by J. C. Bradbury. For that webinar, six hundred million 0:17:56.880 --> 0:17:59.680 dollars is in the realm of a sixty to seventy 0:17:59.680 --> 0:18:03.359 percent an increase over the median public contribution for a 0:18:03.400 --> 0:18:08.159 stadium renovation from twenty twenty five onward. Stadiums like the 0:18:08.200 --> 0:18:11.800 Delta Center in Salt Lake City have lower projected renovation 0:18:12.000 --> 0:18:15.800 costs than Moda despite needing a complete conversion from a 0:18:15.880 --> 0:18:19.840 basketball arena into an arena that can accommodate both basketball 0:18:19.960 --> 0:18:23.920 and hockey. That is a very expensive renovation, and yet 0:18:24.000 --> 0:18:27.320 they also negotiated a thirty year contract instead of the 0:18:27.440 --> 0:18:31.080 twenty year contract we have in Portland. Here, we're on 0:18:31.160 --> 0:18:34.919 track for a fully publicly funded renovation because, as I 0:18:35.000 --> 0:18:38.560 highlighted earlier, Tom Dundon said he didn't want to put 0:18:38.600 --> 0:18:43.360 any money in. The Oregon state legislature capitulated almost immediately 0:18:43.560 --> 0:18:47.600 along with our extremely unpopular governor, showing out about three 0:18:47.680 --> 0:18:51.600 hundred and sixty five million dollars, not including interest, and 0:18:51.640 --> 0:18:55.160 the county followed suit with approximately another one hundred million. 0:18:55.880 --> 0:18:58.639 In this process, the Blazers have not actually shared what 0:18:58.720 --> 0:19:01.440 they want to use the city six hundred million dollars for. 0:19:01.960 --> 0:19:05.840 We're riding blind because they've effectively stone walled ust while 0:19:05.880 --> 0:19:09.440 simultaneously making threats that they'll leave if we don't meet 0:19:09.480 --> 0:19:13.600 their every demand. They've justified this by claiming they're worried 0:19:13.640 --> 0:19:16.720 we'll sue them if they leave, leveraging language in the 0:19:16.760 --> 0:19:20.480 previous lease which states the primary tenant is required to 0:19:20.600 --> 0:19:25.080 maintain the arena in quote first class condition. Let me 0:19:25.119 --> 0:19:28.639 put that another way. Rip City Management, the operator of 0:19:28.680 --> 0:19:32.520 the Moda Center, asked for essentially a blind contribution of 0:19:32.600 --> 0:19:37.120 six hundred million dollars while simultaneously maintaining that the stadium 0:19:37.240 --> 0:19:40.879 is already in first class condition. Because they're afraid of 0:19:40.920 --> 0:19:44.240 a lawsuit due to the contract they signed a few 0:19:44.320 --> 0:19:47.760 years ago. The math does not add up. It kind 0:19:47.760 --> 0:19:50.520 of sounds like the stadium is not actually in first 0:19:50.520 --> 0:19:55.520 class condition, or they're scraping the taxpayers for unnecessary renovations. 0:19:56.359 --> 0:19:58.400 And all they really had to do to enforce their 0:19:58.400 --> 0:20:02.240 agenda was dump a couple one hundred thousand dollars into lobbying, 0:20:02.359 --> 0:20:06.560 then refuse to participate in good faith negotiations. It really 0:20:06.560 --> 0:20:10.040 should go without saying your city, state, and county should 0:20:10.040 --> 0:20:13.640 not throw out hundreds of millions of dollars technically more 0:20:13.680 --> 0:20:16.240 than a billion when you consider debt and other payments 0:20:16.680 --> 0:20:20.800 without seeing the actual details of the renovation. It's like 0:20:20.840 --> 0:20:24.720 a fucking loot box, except we might literally get nothing 0:20:24.760 --> 0:20:29.480 of substance back. Beyond stonewalling and lobbying, the other tactics 0:20:29.480 --> 0:20:33.720 i'll call creative math and finding a fool. Finding a 0:20:33.720 --> 0:20:37.320 fool is simply grabbing business shills who will publicly support 0:20:37.320 --> 0:20:41.919 your propaganda campaign. In Oregon were spoiled for choice, and 0:20:42.119 --> 0:20:46.200 creative math is the coal that fuels the flames. For example, 0:20:46.480 --> 0:20:50.119 the Portland mayor, city councilors and county commissioners have thrown 0:20:50.160 --> 0:20:53.240 around that the region containing the Mota Center produces six 0:20:53.359 --> 0:20:58.320 hundred seventy million dollars in annual economic activity. According to 0:20:58.320 --> 0:21:02.560 the website Ripcity not Ripoff, a community effort posing the 0:21:02.600 --> 0:21:06.359 billionaire handout. About two hundred and ninety million dollars of 0:21:06.440 --> 0:21:09.639 this is just from players salaries. A lot of this 0:21:09.760 --> 0:21:13.080 money likely does not stay within Portland. This concept is 0:21:13.119 --> 0:21:17.600 called leakages in that paper by Seagfreed and Simplest. When 0:21:17.600 --> 0:21:20.400 this creative math doesn't do the trick, sports teams apparently 0:21:20.480 --> 0:21:24.239 will often seek out impact analyses from consulting firms. And 0:21:24.320 --> 0:21:27.240 here's the particular the animated clip of Brad Burry talking 0:21:27.280 --> 0:21:27.760 about this. 0:21:28.440 --> 0:21:30.159 I want to jump here. I want to talk about 0:21:30.200 --> 0:21:34.959 these economic impact studies. We would tell you they don't exist. 0:21:35.040 --> 0:21:40.159 Economists don't do analyzes like that. These things are totally 0:21:40.600 --> 0:21:42.840 made up garbage. And I'm not even going to be 0:21:42.880 --> 0:21:44.760 nice anymore because I'm tired of having to deal with 0:21:44.760 --> 0:21:47.879 this from city to city. That's not how economists do studies. 0:21:47.920 --> 0:21:50.200 They simply just throw numbers in a barrel and roll 0:21:50.240 --> 0:21:53.119 out bigger numbers. And I'll tell you how you know 0:21:53.200 --> 0:21:55.239 this is true because you most people don't know. They 0:21:55.280 --> 0:21:57.040 hear me say that's not true. Someone says, oh no, 0:21:57.119 --> 0:21:59.119 but the other side says it is true. And the 0:21:59.200 --> 0:22:01.120 way you know it is you say, could you show 0:22:01.160 --> 0:22:04.000 me some examples where you've predicted a number and that 0:22:04.080 --> 0:22:08.000 it came true? And they will never ever respond because 0:22:08.000 --> 0:22:10.280 they have never once predicted it right. And I've been 0:22:10.359 --> 0:22:12.800 asking for years can you show me one example? And 0:22:12.840 --> 0:22:15.960 every time I meet one of these consultans, can you 0:22:16.000 --> 0:22:18.560 show me an example where you predicted correctly? They say, 0:22:18.560 --> 0:22:20.080 I'll get back to you, and I never hear from 0:22:20.080 --> 0:22:22.680 them ever again. These people are just their shields or 0:22:22.760 --> 0:22:25.000 just that they make a living doing this, and we 0:22:25.080 --> 0:22:26.960 need to start calling them out for doing that. 0:22:27.400 --> 0:22:31.040 In Portland's case, one of the DSA City councilors, Mitch Green, 0:22:31.200 --> 0:22:33.680 said he asked to see the data for the impact 0:22:33.680 --> 0:22:38.160 analysis put together by consulting firm Echo Northwest. According to Green, 0:22:38.280 --> 0:22:41.000 the person who conducted the analysis wanted to give him 0:22:41.040 --> 0:22:43.920 the data, but the blazer said it was under an NDA. 0:22:44.400 --> 0:22:47.400 So we've kind of gone full circle back to stonewalling. 0:22:47.920 --> 0:22:50.919 If all those fails, teams may rely on astroturfing and 0:22:51.000 --> 0:22:54.080 bold faced corruption to get a deal through. In Portland, 0:22:54.160 --> 0:22:56.640 a group known as we Are Rip City started up 0:22:56.680 --> 0:22:59.639 claiming to be an independent community effort, but they have 0:22:59.720 --> 0:23:03.880 the tail signs of a corporate astroturfing campaign. They list 0:23:03.960 --> 0:23:07.280 hundreds of coalition supporters on their website, from real estate 0:23:07.320 --> 0:23:11.000 groups to local businesses to unions, but their leadership is 0:23:11.000 --> 0:23:13.560 made up of business executives and they worked with the 0:23:13.600 --> 0:23:17.879 political consulting firm March Strategies, who previously contracted with the 0:23:17.920 --> 0:23:20.800 Blazers and is made up of former high level Oregon 0:23:20.840 --> 0:23:24.119 government staffers. The head of we Are Rip City is 0:23:24.240 --> 0:23:28.240 Jim Etzel, the CEO of Sport Oregon, a nonprofit promoting 0:23:28.280 --> 0:23:31.719 sports in the region, but Sport Oregon is funded in 0:23:31.800 --> 0:23:35.119 part by the city of Portland. In effect, the city 0:23:35.160 --> 0:23:39.000 has paid to lobby itself and it somehow gets even worse. 0:23:39.520 --> 0:23:42.920 Portland is located in Moltnomah County, which is currently set 0:23:42.960 --> 0:23:45.480 up to contribute around one hundred million dollars to the 0:23:45.520 --> 0:23:49.520 arena themselves. A chair of the Moltnomah County Commission, Jessica 0:23:49.560 --> 0:23:52.960 Vega Peterson, who is not running for reelection this fall, 0:23:53.160 --> 0:23:56.760 hired the county's negotiator for the deal. Guess who she 0:23:56.880 --> 0:24:02.200 hired the fucking board president of Oregon who also used 0:24:02.200 --> 0:24:04.960 to work for the Blazers. Here's a clip from the 0:24:05.000 --> 0:24:09.240