http://www.dfw.com/mld/dfw/sports/4386799.htm Gives info on why the McKinney deal for a new Burn stadium feel through and the Burn's new attempt at a new stadium in Frisco Texas...a good read!
Nice work, detective. Does anyone know: Is there anything on the Nov 5 elections in Frisco specific to this stadium or is this 30-60 timetable Garber mentions reffering to something else? The McKinney study ended with this: "The study projects the stadium to help increase economic development in nearby areas, but concluded by stating: "No reasonable person expects a municipally financed stadium to be a revenue generator." But also said this: "An economic impact study created for McKinney estimated that the stadium would have added "$20.6 million to local economic activity each year." How do those two statements jibe?
The way I see that they jive is that the revenues of the stadium itself will generate income. That is the day to day operation of the facility. This is different than the economic impact of a stadium being built and the ancillary benefits to the community. More people will move to the area. Business will open to support/take advantage of the facility, etc.
what are you talking about.... the article included lots of stuff that was new... Location of the proposed McKinney deal, names of Frisco and Hunt people, source of potential money to pay for Frisco stadiumin and amount, info from the economic study done in McKinney, $ info from McKinney deal and why it collapsed... For those of us in Dallas, this is a very eye opening article.
Yeah, but as National said. its not new info. well not new if you keep up with the expansion forum. Glad it was written, but not worth a new thread
that was new information... no numbers had been given... provide a link if you can find otherwise, but i imagine that you won't be able to
According to the article, it costs $4 million to run the Burn annually. From this figure we can determine the break even point.
Hopefully. Since the details of most lease agreemnts can be obtained, only travel costs, marketing and local TV timebuys remain sizable unkowns. The $4M figure reveals that the front office is paid more than the players. That is surprising.
I was curious about the same thing. However, things are probably cheaper in Dallas than they are in NE, so I was looking for some local help. Try starting with $5.5 million, though, including travel, tv buys, and stadium, plus incidentals(?). If you average 15k for 15 dates at $15 per ticket, plus 5k cars at $5 per car, plus $7 per person profit from concessions and merchandise. That adds up to $5.25 million. In addition, you would have at least some money from commercials. If the tv is a timebuy, the Burn get any commercial revenues. Add in any revenues from corporate sponsorships and they would probably be in the black. Hunt could probably earn more money from hosting other events from the stadium. The question is, where do they go from there? They only have (if it's a 20k seat SSS) another 5k seats. That brings them another $2 million. They could also raise ticket prices, but they won't sell out every game. After that, it's either merchandise or tv revenues or corporate sponsorships.
Or that the players are paid more than the official salary cap figure, something we've suspected for a long time.
I should point out that paying players say 2 million dollars would not cost the team 2 million. The cost to the team is far more than the salary cap. Federal taxes, State taxes, Social Security, local taxes. 401k medical, disabilities etc. I do not recall the exact formula, but it costs an employer something like 2X the actual wages of his employee. Also, as far as overhead, there are just tons of things you wouldn’t think of that add up big time. Take all your major expenses add them, and then add 30% to that. As far as TV contract goes. I think I may be wrong on this one, but MLS doesn’t pay a dime for it. That SUM Company or whatever it is takes the loss on that. That is why they separated the two. So it looks like teams make money to potential investors. And to show that when there is actually a profitable TV contract, the teams will do quite well. On a completely random guess, I would say that the Average MLS team costs a little over 10 mill a year to operate. And show less than $1 million in losses. (Mainly due to bad deals like in NY) I doubt the execs are making that much.
I think you're forgetting stadium rent, I'm sure that takes a significant chunk of that $4mil figure.
According to the newspaper article, the $4 mil figure is payroll alone. Per the Burn's official website, 38 or so folks work in their front office (coaching staff, team executives, sales reps, etc). If the average staff salary including commissions/bonuses is $50,000, that makes for a $2 mil payroll for the team's front office. Add to that the $2 million or so team salary cap, and you have a total payroll of $4 million for the club.
Supposedly, it costs between $7M (Columbus, probably) and $10M (Metros, probably) to run an MLS team. That's according to Express Sports, anyway. If I had to guess, I would estimate that MLS lost $13M this year, and that the league-wide break-even point is currently a shade under 20,000.
These statements jibe because the first point is explaining that a stadium fincanced by the city will not pay for itself in terms of tax revenue for the city earned directly off of ticket sales, parking taxes, etc. The second comment relates to the income earned in the private sector directly off the stadium and the increased comercial activity it generates. To settle whether the stadium is a good financial move for the city, the author could have calculated the municipal tax revenue from these higher private sector earnings. Application of the accounting method of "discounted present value" would reveal whether this figure justified the expense of a new arena.
There does seem to be some confusion here... the $4 million was the reported payroll, not the total expenses. That jives with the quoted Express Sports figure, I should think. And it also seems clear that even the explanations of taxes etc and front office salaries do not explain all of the difference between $1.7 million (that's not the exact figure of the cap today, but it's ballpark) and $4 million. I think you have to conclude that players are being paid more than that. I don't regard that as any scandal or shock news (the Washington Post has reported that signing bonuses don't count, and I'm sure many kinds of performance bonuses don't, either). And it's not like the salary cap is totally divorced from reality. I just think it's worth noting that this article seems to confirm something a lot of BS posters have been speculating.
Right. The city only gets $500k directly per year. PV accounting would make this figure decline with the passage of time. The $20.6m figures would tend to stay the same (because the nominal figure ouwld tend to rise in proportion to the oerall level of economic activity), but the city would only get a very small proportion of that (becuse the proportion of the sales tax that goes to the city is small, and even at that, some of the economic activity generated in the area would end up going to other jursidictions, as the stadium was right on the border of theirs). 1%, I would think, would be a generous estimate. Given that, it's not surprising that the city didn't figure they'd get back the money they put into it in any quantifiable way (you could argue things like, 'increased reputation' and such, but those are pretty fuzzy-headed concepts that are hard to get any handle on). They were probably right. The fact that the money was alredy raised by wouldn't stop McKinney from spending it on something else. As to Frisco, the supposedly have more businesses in the jurisdiction, and thus see more economic impact. If that's right, then we may be able to work something out. The equation is also changed if we assume the Burn's popularity will grow significantly over the years. If one assumes it would, then a deal is much easier.
Federal, state and local taxes as well as half the Social security comes out of the player's check, it's not an additional expense. And I doubt if they spend a lot on 401k payments. All you're really looking at is medical. As to the tv contract, I was talkign about the local tv contract. Doesn't SUM only handle the national contracts?
For SS/Medicare taxes, you only pay tax on the first $80,400 you make. 7.65% comes out of your check, your employer chips in another 7.65%. So... for everyone making over $80,400 the club pays $6,150.00. If you figure that is somewhere around 10 players, plus everyone else, you're looking at roughly $80k in tax.
The sales tax in the Dallas area is around 8% for non-essential items (like restaurant food, beer, etc...) so could we not assume that the $ 20.6 mil the stadium would generate would equate to $1.0 -1.6 mil to the city they would not otherwise get? Side Note: I have a friend who is a fireman for the city of McKinney, and despite not being interested in soccer he was upset that McKinney did not do the stadium deal. He said that he and several of his co-workers have seen many city empoyees leave for surrounding cities for higher pay and that this stadium would have brought in more tax revenue that could have been used to increase city worker salaries.
Well, how much of that is state sales tax vs. county or local sales tax? I'm unfamiliar with rates in Texas, but most states keep a majority of the sales tax revenues and the local communities only get 1-2 cents of the tax. (Unless it is a big city like NYC or DC).