Look at this (bad deal) in simplistic terms of just ticket sales….
Anytime you do an upgrade to your business, you expect the payoff to…well pay off…but in the Rangers’ owners case, the CITY would be REMOVING half to 80% of the upgrade costs OUT of the Rangers’ owners pocket books and into our laps…NO WONDER they want this.
And after the bonds are paid off, the $2M annual rent the Rangers pay the city (possibly going down to $1M rent?) will go towards maintenance and not our budget….hmmn!
WFAA reported of the newly built A/C stadium in Miami Florida that the average additional attendance was only 1,000 more game goers. That is an additional 2 million people over the next 37 years over a billion dollar deal which equates to a $500 liability per seat per game!*
The average number of Rangers home game attendees over the last 21 years is 33,000 people. Attendance would pick up a whopping 3% ….tisk
(just) T I C K E T S A L E S A N A LY S I S
1,000 extra seats sold per game that the A/C attracts:
So if the average ticket is say $25 a ticket times 1,000 extra tickets sold times an average of 54 home games per season = $1.4 million per year ($1,350,000) x 37 years of commitment has an overall additional revenue created of about $50 million in ticket sales for the Rangers owners…. it would take 740 years to pay off that billion dollar debt WITHOUT counting interest for the bonds!
$50 million over 37 years is only 5% of one billion dollars (in misguided investment) just to bring in an additional 1,000 people per game.
—————frowney face here——–OK now lets take ALL ticket sales (and not count any expenses or concessions income) and look at the annual ticket sales revenues to see if we can get that 740 year pay back on bad investment thang down————————
ALL seats sold per game with current stadium:
Ave ticket price of $25 times 33,000 seats times 54 home games =$45 million per year the Rangers owners make in ticket sales. AAh thats better now…so at $45M per year it would take 22 years (not counting ANY expenses, salaries, RENT to the city, utility bills, being offset with concessions etc.) to pay off a billion dollar investment.
In 22 years we will have another “old” stadium and the city could have possibly LOTS of bond debt (INCLUDING INTEREST) risk!
I’ve come to think with this ticket sales analysis that the Rangers don’t think they can make more money with a new A/C stadium…they just want us to incur most of the costs for an upgrade!
*1,000 additional people per game times 54 games per year for 37 years is 2 million people in total. Divide one billion dollars by 2 million people = one thousand seats would have a $500 per person seat ticket liability per game over the next 37 years to justify the A/C upgrade.
This is by Warren Norred about the operational expenses…..
“In the (well-named) Master Agreement, the utility costs are mentioned specifically as part of the Operations and Maintenance Costs (capitalized because it is a defined term). The Agreement obviously gives a lot of direction about the flow of money. First, the Rangers pay an initial amount, up to $50M, to get the project going. Arlington then sells a bunch of bonds, which is limited to $500M, and is used to pay for construction.
To pay for the debt service payments, the sales/hotel/car rental taxes are collected into an account, and that account pays for the bond payments. When the bond payments are current, excess funds collected go into a Reimbursement Account, and that account can pay the Operations and Maintenance Costs, i.e., the electricity for the a/c.
Summarizing into one sentence – once the city has collected what it needs to pay on the bond service, the extra money can be used to pay the utilities, along with all other maintenance costs.
We can make this a “real answer” – it tends to reveal to me that a major reason for doing this deal for the Rangers is the non-trivial costs of getting someone else to pay the bills, because they are paying all this now. Over time, this is a good number I suspect”.
Here is the link to the US taxpayer article