united states project

The cost of Angels in the outfield

Reporters covering lease negotiations over Anaheim's Angel Stadium need to find their calculators--and their skepticism
November 13, 2013

SANTA BARBARA, CA — Judging from the initial coverage the Orange County Register and the Los Angeles Times gave to it, an agreement on the outline of negotiations for a new long-term lease of Angel Stadium might have been just another routine item on an Anaheim City Council meeting agenda.

Register reporter Art Marroquin’s story on a framework for lease negotiations–which the council approved early in September on a 4-1 vote–was dutiful, bland, and short. His piece focused on the city’s agreement to give Arte Moreno, owner of the Angels professional baseball franchise, an extension of three years before he must decide whether to opt out of the current lease and move the team. A city consultant said the Angels would be “impulsive and difficult to negotiate with” if the extension weren’t granted, Marroquin wrote.

The Times‘ Bill Shaikin offered up an even more pro forma account, noting that the same consultant told the City Council that Moreno “has emphasized he has the means to move the team elsewhere” if negotiations aren’t fruitful. Shaikin reported that Anaheim Mayor Tom Tait opposed the two memorandums of understanding approved by the council but did not quote or paraphrase him as to why.

The Times and Register articles mentioned, but otherwise made very little of a rather startling starting point for stadium negotiations: The city would lease 155 acres surrounding the stadium to Moreno and his companies for 66 years–at $1 per year. In exchange, Moreno would update the stadium, or maybe build a new one, and develop the parking lots around it in some way. Neither story even raised the question of the potentially enormous economic value of the long-term use of the real estate in question. (Nearly two months later, the Register did explore this question in a substantial piece–more on that to come).

Four days after the negotiating agreement was approved, the Times, in a journalistically unusual move, published an opinion column by Shaikin, who covers professional baseball on and off the field for the paper. Shaikin’s column argued in favor of the $1-per-year, 66-year lease. Without providing much in the way of financial information to support his position, he concluded that, because the land surrounding the stadium had not been developed in recent decades, “this is as good as it gets for Anaheim.”

Tait–a lawyer with an MBA–has a different view, to say the least. In an interview early in November, he called the memorandums of understanding “shocking” and “outrageous.” “I don’t know of a larger municipal giveaway,” he said, suggesting that the property in question has a conservative value of hundreds of millions of dollars. And he said that when he describes the negotiating agreements to constituents, “they are saying, `Why don’t more people know about this?'”

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The situation around the Angel Stadium lease is vague, complicated, and in flux. What the city and the Angels agreed to early in September is not a final deal; in general, it is an agreement to negotiate in “good faith,” based on the outlines of the memorandums of agreement approved by the City Council. Those negotiating memorandums were placed on the City Council meeting agenda on the Friday before a long Labor Day weekend and voted on the following Tuesday. There was little time for public debate before the council approved them.

The major newspapers that might be expected to stimulate such a debate did little of the sort in the month after that approval.

It was the Voice of OC, a small nonprofit investigative news organization, that presented the first genuinely enterprising coverage of the Angel Stadium lease. The Voice asked the central–and obvious–question raised by the lease negotiating framework in a Sept. 19 article headlined, “What is the Actual Value of the Angel Stadium Deal?” The story, written by Adam Elmahrek, acknowledged the difficulty of placing a value on the stadium and the land surrounding it, given the uncertainty about details of any deal, including what, if any, taxes might be rebated to a developer over the years. But at least the piece began to put parameters on the size of benefit being offered to the owner of the Angels, citing two city studies estimating the value of the land at somewhere between $30 million and $380 million.

Norberto Santana Jr., editor in chief of the Voice and a former investigative reporter for the Register, said the Times has been largely absent in terms of covering Orange County public affairs recently. But he was surprised by the Register‘s less than comprehensive coverage in the weeks after the agreement because the Angel Stadium negotiations “are the strangest I’ve ever seen in my life.”

“I don’t think I’ve ever seen a stadium negotiation so one-sided or so quick,” he said.

Marroquin disputed my suggestion that initial Register coverage of the stadium lease situation had been soft, saying that three reporters–he, Martin Wisckol, and Sarah Tully–are now digging into the stadium lease negotiations and that reporting on them is “definitely a priority.” And early in November, about two months after the city agreed to its negotiating framework with the Angels, the Register finally did weigh in with an important in-depth piece on the stadium.

In the article, Wisckol, who covers politics for the Register, turned a city-commissioned report on the Angels’ economic impact on Anaheim–a report that some city council members have used to support their efforts toward a new stadium lease–into Swiss cheese. The report claimed the team generated $204 million in new spending in the city and $4.7 million in annual revenue for the city treasury, Wisckol wrote, but it “is so replete with unsubstantiated assumptions that it can’t be used as a reliable indicator of the team’s financial impact on the city, interviews and public records show.”

An email seeking an interview with Register Editor Ken Brusic about coverage of the Angel Stadium lease was answered by Eric Morgan, who is listed as a communications manager on the Register‘s website and who wrote, “we’ll cover this story in the same way we cover all of our news stories–we’ll report the facts in a fair and objective way, with perspectives from the parties involved and report this Orange County-based story with team coverage and in great depth.” Morgan said he would pass along an interview request to Register Publisher Aaron Kushner, who did not contact me.

It’s unclear to me whether the Times‘ minimal coverage of the Angel Stadium lease negotiations is a reflection of conscious choice or disorganization.

Shaikin said he was asked on short notice to provide news coverage of the Anaheim City Council’s vote on the lease negotiations. His editors approved his column on the lease, he said, and if they had wanted something different, they would have said so. When asked about future coverage of the lease, Shaikin said, “If you’re asking what our long-term plan is for covering this, I’d have to refer you to the editors.”

Times sports editor Mike James said Shaikin was assigned to the new Angels lease story because he had experience covering the Angels current lease, and because “the metro staff has not jumped on this one.” Shaikin will probably continue covering the lease situation, James said. But when he was asked about the column Shaikin had written–in which he gave his opinion on lease negotiations he had covered as a news reporter–James said, “That’s a gray area, and we don’t do a lot of that.” In fact, James said, he’s “not positive” he’d allow Shaikin to do it again.

The business side of big league sports is often a tough cover for local media. In a telephone interview, Neil deMause, co-author of the book Field of Schemes: How the great stadium swindle turns public money into private profit, said the unquestioning initial coverage of the Angel Stadium lease negotiations by the Times and the Register is “very typical.” In general terms, he said, news outlets tend to cover professional stadium and arena issues with either sports reporters “who don’t know anything about economics” or news reporters “who tend not to bring all their critical faculties” when confronted with the pizazz of professional sports.

Several days after the interview, deMause made a point of emailing to note that Wisckol’s piece eviscerating the city-commissioned report on the Angels’ economic impact on Anaheim, published after we’d first spoken, was “pretty excellent”–a verdict with which I and others (including the Voice of OC’s Santana) generally agree. I also know that Shaikin is a quality journalist and anything but an economic naïf, and that he did yeoman’s work covering the complex, soap opera-like financial saga of former Los Angeles Dodgers owner Frank McCourt. I suspect that if he were given the time and directed to do so, Shaikin would bring light to the proposed Angel Stadium lease negotiations in fairly short order.

Clearly, though, overall coverage of the Angel Stadium lease has so far been insufficient to the import of the subject. Fortunately, there is time to do better. The Anaheim city staff has said they expect an appraisal of the land around Angel Stadium to be finished by January. But a Nov. 6 story by the Register‘s Marroquin paraphrases Anaheim City Manager Marcie Edwards as saying that the appraisal will not be made public until just before the City Council votes on the lease, to avoid undercutting the city’s negotiating position.

The value of the property surrounding Angel Stadium is a critical component of any lease that would include conveying use of that land to Moreno or his companies, and reporters covering the lease need to press hard for the appraisal report to be made public well ahead of a City Council vote, so there is time to assess the reasonableness of the proposed lease. Reporters also should push for revelation of the proposed lease well in advance of any City Council vote on it. In long-term leases of major public facilities, many expensive devils can be hidden in the seemingly smallest of details. The public interest would be poorly served if the City Council approved a lease that was found, afterward, to be tilted toward Moreno and the Angels.

And overall, reporters covering the negotiations on a new lease for the Angel Stadium and surrounding property need to recharge their skepticism batteries, and their calculators. Tait told me the property surrounding the stadium has been permitted for the construction of 5,100 residential units and a total of 6 million square feet of commercial and office space. That the property is already approved for these uses raises its value considerably in regulation-happy California. Tait suggests that a conservative estimate of the property’s value would run in the $300 million range. Tait could be wrong. But it is reasonable to ask: What if he is right? In theory, the stadium property could simply be sold. Would trading 66 years of use of $300 million be a reasonable cost to pay to keep the Angels in Anaheim?

There are ways to calculate the future value of $300 million. My calculations, using an interest rate of 5 percent, compounded annually over the 66 years of the proposed lease, produce a total over that time of about $7.5 billion. Perhaps it is time for the media that most directly serve the Anaheim market to tell their readers and viewers what their calculations show.

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John Mecklin is the California and Nevada correspondent for the United States Project, CJR’s politics and policy desk. He is the deputy editor of the Bulletin of the Atomic Scientists. Follow him on Twitter @meckdevil.