Part I: WDR Official Breakdown of the Bengals Offer to Hamilton County

Lots of news so far in this young offseason.  After some on-the-field stuff - Zimmer staying (hooray), Bratwurst staying (boo), Rey going all Ted Kennedy (Sunfire!) - we got some very significant off-the-field news about the Bengals offering to help the County improve its fiscal position.

WDR naturally views any move by the Bengals with skepticism.  Especially when the Bengals offer to "help" (run!!!).  We do not know what will ultimately come of the Bengals offer but at least we can get our full opinion on record here.

All I'll say before we break this down line by line is that the whole thing sort of smells.  The county has no leverage I know of in the first place and the Bengals have no demonstrable history of doing anything financially selfless.  Like Doc and C&C Music Factory, it makes me go "Hmmmm".

With that said, let's begin.

The wonders of basic software technology allowed us to convert Troy Blackburn's letter and official proposal to Hamilton County Adminstrator Patrick Thompson to a Word document so we can tear it apart FJM-Style.  Here's a copy if you're interested: Download Bengals Letter to Hamilton County

We'll do this by parts, as the letter has distinct sections to it.  The sections basically go like this:

1. The Bengals version of the history of the stadium deal
2. Changes that have occurred since the deal that explain why much of the costs aren't their fault
3. Despite this why the Bengals would like to help if they can
4. The Bengals detail their offer and what they want in return

After the jump, I'll dive into the first section (Bengals letter in Bold):

Dear Mr. Thompson,

I write to follow-up on our meeting last week. As a preliminary matter, let me say that the Club appreciated the tenor of your comments and certainly understands the difficult financial circumstances that have beset Hamilton County. The historic economic downturn we are all facing has placed substantial burdens on many local businesses, including ours. Governments have not been immune to the current recession, and we understand the real challenges Hamilton County must address.

Whatever.

As you pointed out during our meeting, you are new to the stadium discussion. That may be helpful because the stadium efforts here in Cincinnati have been the subject of considerable public discussion, much of it simply false. Some perspective is needed on the project:

Translation:  "Fantastic, Patrick.  You come from a position of ignorance.  Allow me to take advantage of this by creating my own biased history of the stadium that puts the Bengals in the best possible light."  Lots of bullet points now follow.

• In 1994, Hamilton County assumed a leadership position from the City of Cincinnati and began exploring ways to build new stadia for the Reds and the Bengals.

Side note: the city and county could probably benefit from a broad, single metro government.  In what ways?  I don't know.  Off the top of my head, I think this might have helped prevent the Bengals from exploiting the fractured nature of local authority during stadium negotiations.

• In March 1996, when the public voted overwhelmingly in favor of building two new stadia, the ballot proposal was represented as being for stadia only - as we will discuss later, it has been expanded greatly beyond its original intent.

This will be the first of many times where Troy tries to deflect attention from the specifics of the Paul Brown Stadium deal and instead tries to focus them elsewhere.  Also, notice his overt attempt to manipulate the reader by unnecessarily describing the vote as "overwhelmingly in favor" (no need for the overwhelming) so that the politician is reminded just how popular/important NFL football is to County residents - and hence reelection.

• In September 1996, the Bengals and the County agreed on economic terms for the football stadium. Those terms were incorporated into the 1997 lease and have not changed in the past 13 years.

True. Though nothing much happened as far as construction is concerned until 1998 and that gave people plenty of time to second guess.

• The County negotiated its stadium deals with the Reds and Bengals using national experts (a Chicago law firm experienced in stadium deals and a Philadelphia financial firm it still uses today). These experts had worked on stadium projects in Chicago, Denver, Baltimore, Los Angeles, Nashville, Phoenix, San Diego and St. Louis. Their competence and expertise cannot be seriously questioned.

What the hell is a "national expert" anyway?  And good point Troy.  Professional organizations can never have their expertise or competence seriously questioned.  Just ask shareholders for Lehman Brothers and AIG.

In case you didn't notice, this is Troy's attempt to claim that negotiations were fair and both sides brought equal expertise.

And he's got a point, I don't understand why anyone cares that the Commissioner who negotiated the deal on behalf of taxpayers now works as an employee for the Bengals.  It's still an "arm's length deal" even if you're shaking your own hand, right?

Actually, who knows, maybe it's a strategic error for Troy to neglect the part about Bedinghaus now working for them.  I mean maybe our boy Patrick wants a job after he's done as Administrator?  Can't rule it out.

• The County's experts opined at the time - as did the media - that the County signed a standard NFL deal with the Bengals, and it signed a standard MLB deal with the Reds. See attached. Indeed, the recent Indianapolis Colts' deal for Lucas Oil Stadium mirrors our stadium deal.

Here are some quotes from the media at the time of the stadium's opening.

Terri Lynn Ritenour, Sports Business Analyst:  “They've got a pretty sweet deal, definitely, it's a good lease from the team's standpoint."

John J. Byczkowski:  "The team got everything most other NFL teams have been getting in recent stadium leases — and more."

Rick Eckstein, Author of Public Dollars, Private Stadiums: "The Bengals deal remains the single most lopsided stadium deal since 1993, at least as far as I know..."

(okay - that quote is from 2009, but he researched the book at the time)

See this article here as the source of the quotes.  We'll be coming back to it.  A lot.

Also, the Colts exploiting a town with nothing going for it besides those same Colts over a decade after the Bengals exploited Cincy does not mean the deal was standard for the NFL.  This is just more lawyerly misdirection.  Of course the Colts got a good deal, if you think Cincinnati was desperate to keep the Bengals, just imagine how desperate Indianapolis would be to keep their Colts.

Oh, and one other thing, THE COLTS ARE IN THE MIDST OF PERHAPS THE MOST SUCCESSFUL STRETCH OF FOOTBALL IN THE HISTORY OF THE NFL WHILE THE BENGALS ARE IN THE MIDST OF PERHAPS THE LEAST SUCCESSFUL.

• To support its stadium plans, Hamilton County assumed an historically conservative sales tax growth of 2% - an assumption which remained unchanged during Paul Brown Stadiums construction. With that level of growth, the County could meet its stadium obligations without the need for other adjustments. Only later did the County increase the assumed growth rate to 3%. Through the end of last year, actual growth of the sales tax had exceeded that 2% rate.

More sneaky stuff here.  Notice how Troy says the sales tax assumption was historically conservative.  Based on what history?  2% growth in a county like Hamilton sounds about right to me. 

Also, who cares if the growth target was on pace for the TWO years it took to build Paul Brown stadium.  It's not like the sales tax was supposed to pay off the cost in only TWO years.  That is a totally irrelevant time period.  The costs, according to this Enquirer article, were projected over 27 years.

So basically, Troy's note about the 2% growth assumption is a shady misrepresentation of the real truth which is this:  the sales tax revenues will likely fail to meet their targeted growth level for the majority of the time it takes to pay for the stadiums.

But he doesn't stop there, he actually has the audacity to state that the growth of the tax exceeded it's initial bogey of 2%.  I wrote here about the failure of the sales tax growth to stay on target but I'll reproduce the key chart here:

Bottom line:  A 2 % growth rate in sales tax revenues implies that 2009 revenues should have been around $73 million. In 2009 revenues were around $63 million.  Well short of 2% growth.  Almost no growth actually.

That takes care of the first part.  Lots of stuff for me to nitpick.  But overall, really all the Bengals are doing here is trying to show that they don't need to be at this negotiating table.  And they are right.  But all of the points they just listed aren't really relevant, some are downright misleading, and they are just trying to steer the dialogue so it makes them look better than they are.

Part II to come soon.

Comments

[Sly Vramavomovich]

In Part II Troy seduces Patrick with a smooth jazz rendition of Sade's "Smooth Operator".

[wch]

Well here's the 'end-all-to-be-all' on this situation.

If it wouldn't have been for egotistical asses who didn't give a shit about the repercussions for being the spoiled brats that they are, if it weren't for the various politicians waiting on their respective kickbacks, if it weren't for a bunch of people willing to lie to others in order to allow for the first two situations, we wouldn't be in this mess.

Those people who decided that because THEY couldn't do without something and forced us -- who didn't give a shit about having a pro-football team -- those specious "It's MY world!" POS's -- they ALL combined in this perfect shit storm to give us this garbage we have now. And, if you think that these 'problem children' are going to 'learn their lesson' from this debacle and 1) not let it happen again and 2) will become better people and not just focus only on their self-serving selves -- you'd be sorely mistaken. These types of people don't change (by and large) and you will see them rear their ugly collective heads yet again. Some are already approaching this point via asking for an indoor practice facility. A 'shot across the bow' to be sure but I'd be willing that the same people barking about such a needless facility are more than likely the same people who only gave a crap about themselves and let this shit happen in the first place.

I'm just sayin'...

[Wyatt]

wch,

An honest question here, and not an attempt at flaming, as I can certainly see where you're coming from, being a polisci guy and having some inkling of how the political system functions on its various levels - if you consider yourself in the "us" group that you reference in the following quote from your post: "...and forced us -- who didn't give a shit about having a pro-football team--...", then why, pray tell, do you visit this site? If you admittedly "don't give a shit about having a pro-football team", then why go out of your way to contribute vocally to a site that's essentially dedicated to said pro football team? I'm trying to better understand things from your point of view, but this is, by far, the largest obstacle that keeps me from doing so, and I feel like if you can better explain your position to me, it'll help me immensely in better understanding your points from here on out.

In terms of this renegotiation, all the Bengals are trying to do is gain additional leverage to get a new stadium built in 2017 or be able to leave (or is it 2019 when their opt-out clause would take effect?), so why waste time talking about anything else? I appreciate the FJM-style breakdown because the mockery of all things Family are to be commended; however, when you get down to brass tacks, all that this negotiation is trying to accomplish is pretty plain and simple - I'm sure the Family paid for a study to see how long the average lifespan of an NFL stadium is expected to be going forward (rather than paying for scouts and whatnot), and the Family want to make sure they have the "Build us a new stadium or we'll walk" leverage before PBS becomes obsolete and they'd actually have to consider lowering ticket prices (vis a vis inflation, anyway).

[the truth]

Making your side look better is just part of negotiations that are public, anyone will tell you that. Would you expect AIG etc to go to Congress and say "yes we screwed up because we are greedy??" Is this what this site is turning into, finding silly ways to complain about the Bengals?? I get the scout, GM, MB is the devil arguments but really what is there to bitch about here??? P&G gets tax breaks from the city, do you really think their lawyers would act any different than the Bengals if the city tried to revoke those tax breaks? Uh no they would be as bad if not worse.

It is basic business to try and get the best deal possible, short of Dallas every other NFL team has done the same thing. There is a reason the Vikings are threatening to move to LA and it isn't the weather. If you owned a business and you were negotiating the rent you pay for your office space would you feel guilty if you were able to get a great deal.

[Sleeping With Bieniemy]

@the truth,

Right, I don't fault the Bengals at all, and I state they don't even need to come to the table to try to offer anything in the first place. However, when Troy makes complete misrepresentations of the truth, like the 2% growth rate figure he says was on target, that needs to be called out. That is not spinning to put yourself in the best light, it is just lying.

I am just here to walk through the letter, make comments and point out what is really going on. You are also missing the entire point of this Bengals offer and the entire post once again. The whole point of this is the County is in a bad fiscal position and reached out to the Bengals to try to help by making some concessions on the lease if the Bengals are willing.

The Bengals should offer something that genuinely helps if they are willing or they should just do nothing. We are just trying to figure out if the Bengals offer actually helps the County or if it just allows them to exploit the County once again.

Sly, in Part II, it gets steamy.

[the truth]

ok ok Sleeping bienemy i haven't missed the entire "point" of your post. I'm jsut pointing out that 1. it is very very slanted, and 2. is again showing how this site went from good criticism of the Bengals to complaining to complain.

"What the hell is a "national expert" anyway? And good point Troy. Professional organizations can never have their expertise or competence seriously questioned. Just ask shareholders for Lehman Brothers and AIG."

So you nitpick his use of an expert and then in your next paragraph try using "quotes from experts" to prove your point?

[the truth]

"Also, the Colts exploiting a town with nothing going for it besides those same Colts over a decade after the Bengals exploited Cincy does not mean the deal was standard for the NFL. This is just more lawyerly misdirection."

How is this lawyerly misdirection?? He is using an example to prove his point last time i check that is how you prove a point, but i guess in your mind just saying it is a certain way makes it that way. Like when you try to insinuate the Bengals deal is unlike any other stadium deal but don't back it up with examples.

Why should anyone really care about what the Bengals wrote to the County?? Again to me it seems like again you are just trying to complain about something the Bengals have done just to have a reason to complain.

[Sleeping With Bieniemy]

Just read this whole article to see how it differs:

http://bengals.enquirer.com/2000/08/19/ben_bengals_lease_pretty.html

Or read that entire book Public Dollars, Private Stadiums which is the definitive book written on the subject and uses Cincinnati as its flagship example.

Look, I don't even know what the Colts deal was. But I would be skeptical of using that as the benchmark deal for the Bengals because it was done over a decade after the major wave of NFL publicly funded stadiums was done.

Again, all the Bengals are saying with this is, "hey our lease is standard, the fiscal problem is the County's, not ours, and we don't need be here." I am just pointing out that the fiscal problem is the county's, the Bengals don't need to be here BUT the stadium deal was not standard.

Anyway, none of this matters, I am just going through it line by line and making comments. What matters is whether their current offer will help or hurt.

[PAl]

wch is an "I told you so guy". All of his posts are the same. This type of guy loves to lecture everybody else how smart he is, after the fact but has no solution or anything constructive to say, just how dumb the rest of us are. .............I'm just sayin

[the truth]

Yes but that article also talks about how St. Louis paid nearly a Billion for a team (and now is endanger of losing it) and list Baltimore, Nashville, and Tampa Bay as also having heavily funded stadiums.

I'm not saying the Bengals didn't get an overly benefical deal or defending it in any way shape or form. I'm just pointing out that Blackburn does have a valid arguement to say their deal was unprecidented at the time. Back in the 90's cities over the county were paying millions upon millions to fund stadiums. That is only now starting to change with Dallas and New York.

I understand your point that the Bengals didn't need to say anything but since the city put it out in the press they had to come back with something or they would look like the bad guys, hence the letter that is both beneficial to them and "seemingly" benefical to the county. (though i agree it probably isnt')