The NFL lends some heat to the Vikings’ hot potato stadium issue. Will it matter?
It’s been nearly 12 years since the Minnesota Vikings organization started making serious noise about leaving the Metrodome – albeit under different ownership – but despite a decade-plus of bargaining and begging, the last 10 days have had a greater impact over where the Vikings will play in 2012 and beyond. In a year of collapses, from the Vikings’ line play to the Dome’s roof, count the past legistative resistance to a new Vikings’ stadium among the fallen.
Incoming Gov. Mark Dayton’s support, wafting between lukewarm and simmering, is certainly more than a few degrees warmer than his predecessor (although Dayton just announced he doesn’t intend to push for his own stadium bill). And already some GOP legislators are attempting to craft a Vikings stadium bill. On cue, NFL Commissioner Roger Goodell landed in the Twin Cities for Monday’s game, likely putting more pressure on the local politicos than on the local press:
The former public relations intern at the NFL who worked his way up to league CEO had his talking points down pat after meeting with Gov.-elect Mark Dayton, a score of CEOs who belong to the Minnesota Business Partnership, Speaker Kurt Zellars, DFL leaders Tom Bakk and Paul Thissen, and some union leaders.
“We had a series of meetings today … they were all productive,” Goodell said at a news conference. “I think there is a recognition that we need to find a long-term solution for the Vikings here and get a new stadium built…
And it was Dayton, not Goodell, who ratcheted up the potential pace, telling reporters, according to the Star Tribune, “I really believe 2011 is the final opportunity for all of us to put forward a proposal … I think the writing’s on the wall. We need to get it done in this session.”
Short of the Vikings expressing a willingness to wait another year until the outcome of the 2012 legislative session (when presumably the $6.2 billion deficit will have fully addressed and the only major issue will be any bonding bill), the future of the franchise will be decided by the early summer of 2011. And regardless of what does or doesn’t pass, something new will be with the Vikings – either a new stadium, a new owner, or a new location.
So which will it be?
Since Zygi Wilf bought one last lemon sold by the former used car salesman in Texas, Red McCombs, Wilf has watched his investment experience anemic growth at best. The Vikings accurately lost value in the past year, down to $774 million (a 7% decline); still a $174 million improvement from Wilf’s purchase in 2005 but poor enough to rank 30th out of the NFL’s 32 teams. This ranking is amazingly an improvement from 2007 when the Vikings’ ranked dead last in team value. Coupled with word that Wilf has only been making interest payments on the loan he took out to buy the team, one has to wonder what exactly is Wilf’s personal financial picture. No one knows the Wilfs’ net worth and given that the family makes their money in commercial real estate, it’s doubtful the Wilfs are doing as well as they once did.
Whether the Wilfs are credit rich and cash poor or not, Zygi’s options are all dictated by what the NFL wants. And working to Wilf’s advantage, in addition to the Metrodome lease expiring after next season, is the first real progress in building a stadium in Los Angeles in the last 15-plus years. Los Angeles Stadium, the brainchild of Lakers & Kings part owner Ed Roski, looks set to deliver a 75,000 seat stadium just 20-minutes outside of LA in the City of Industry – and has his eye on Minnesota.
Despite their overwhelming desire to get a team back to LA, the NFL isn’t terribly interested in moving the Vikings out of Minnesota. Yet the Vikings remain behind in the battle for attendence with the other two most likely franchises heading west – Jacksonville and Buffalo. Both the Jaguars and Bills play before less than capacity crowds in markets already saturated by multiple NFL teams (the Bucs & Dolphins in Florida and the Giants & Jets in NYC).
The reality is that the Wilfs will be more willing to move than sell – and sans a new stadium the NFL will be more than willing to consider it. All of which begs an answer to the fundamental question – what are the Vikings worth to Minnesota?:
Economists Aju Fenn and John Crooker tried to answer the question in a study published in July 2009 in the Southern Economic Journal.
The two used “contingent valuation methodology,” which is a nerdy way of saying they surveyed people and used statistical models to turn the answers into an average price Minnesotans place on the Vikings.
The result: The Vikings’ “welfare value” is $702,351,890— $530.65 for each of the roughly 1.32 million households in Minnesota…
It’s tough putting a price on feelings, which is why some economists are skeptical of contingent value studies.
“It’s not that this is capturing nothing, it’s just that it’s not legitimate to interpret people’s answers as if folks were spending their own money,” says Peter Diamond, an MIT economist.
Assessing the Vikings’ “true worth” to Minnesota is microcosm of the stadium debate itself – overly detailed and largely symoblic. In pure dollars, the stadium appears to be a massive loser. Even Vikings Public Affiairs VP Lester Bagley only estimates the taxable revenue generated by the Dome at $250 million since it opened in the early 1980s. At that rate, the Vikings’ proposed new stadium would pay for itself sometime towards the end of this century. But whether counted in dollars real or imagined, the money to pay for any new stadium simply doesn’t exist. Forget arguments whether or not Minnesotans are willing to pay for a better cup holder, even if additional revenue is “created”, most legislators are going to be more interested in turning such funds to the bottomless chasm that is the state budget.
Why not simply give the Metrodome to the Vikings? The team remains the only tenant in a building that will become worthless should the Vikings relocate – unless the Metropolitian Stadium Commission truly believes a line-up of Monster Truck rallies and Prep Bowls can equal the millions generated per Vikes game. Ownership of the property would give the Wilfs at least some additional revenue and the flexibility to remodel the property – albeit on their dime. And given that one of the Vikings’ options is to rebuild on the same site, why not skip the expensive middleman and merely refurbish the Dome?
Of course, the Vikings aren’t likely to go for such an alternative. Which is precisely why you should enjoy the Purple and Gold as much as you can now – because they probably won’t be around after next year.