Now that we’re NBA material, it’s time for a little two-man game. You know, John Stockton and Karl Malone, Dick Enberg and Bill Walton, Marv Albert and Doug Collins. Our team: Mr. Optimist and Mr. Pessimist.
Is this cause for celebration?
Optimist: Absolutely. The NBA was possibly Memphis’ last real chance for major-league sports. We’ll pay dearly, but the lesson of the NFL was that the high bidder wins.
Pessimist: Buying into the NBA today is like buying Yahoo at $400. The sports bubble is about to burst. When sportswriters like Steve Rushin of Sports Illustrated and Frank Deford of SI and National Public Radio see it coming, watch out.
If FedEx is involved, how can Memphis go wrong?
Optimist: It can’t. FedEx CFO Alan Graf and the marketing folks are delighted with FedEx Field in Washington, D.C., and, to come down a few pegs, the FedEx box at AutoZone Park. And before signing off, FedEx checked with its biggest institutional investor, Memphis-based Southeastern Asset Management and its top executives, Mason Hawkins and Staley Cates. Hawkins and Cates are all for it, and no less an authority than Warren Buffett has called them two of the best value investors in the game.
Pessimist: Sports ain’t stocks. Those guys don’t know any more than the rest of us on that score. FedEx and Southeastern have been wrong before and they’ll be wrong again. Rich guys are hard-wired to do deals. They don’t relate to ordinary Memphians struggling to make ends meet.
So Memphis can’t afford this?
Optimist: Nonsense. Memphis is no Silicon Valley but there are some very, very rich folks at local companies you don’t hear much about. Drive around Houston High School some time and check out the housing stock. And Memphis “saved” $200 million by not bidding up for an NFL team.
Pessimist: Sure the sky boxes will sell out, but to get to 13,000 season tickets you need breadth of wealth as well as depth, year after year. Seven out of 10 kids in the city schools are on free lunch, and the percentage has been rising, not falling. Season tickets for the Memphis NBA team will be the sucker buy of the year. The price structure will collapse the day after the opener, and you’ll be lucky to scalp a ticket for $20.
Don’t we have to have an answer to the Tunica casinos?
OptimistAbsolutely, and the NBA will keep some of that $500 million to $700 million a year in Memphis. Tunica is here to stay and it will bleed Memphis dry. You fight it with a major-league investment.
Pessimist: Scratch a gambler and you’re more likely to find a couch potato than an NBA fan. Phil Satre, the CEO of Harrah’s, has said Tunica’s biggest competitor is television, not sports. The sports honchos just don’t get it when it comes to the difference between interactive and passive entertainment. Arenas will compete with casinos when they put in slots and $6.95 buffets.
What about economic impact?
Optimist: The publicity alone is priceless. Suddenly Memphis is major-league, and the glass is half full, not half empty. It happened in Nashville and Jacksonville and it will happen here.
Pessimist: You want economic impact? Go look at the Mike Rose Soccer Complex when the parking lot is full of minivans and SUVs from three states. Memphis could do the same thing for youth swimming, basketball, tennis, and baseball.
Can the Tigers coexist with the NBA?
Optimist: Coach John Calipari says they can.
Pessimist: What do you expect Calipari to say? Right now he’s making about $500,000 less than Rick Pitino at Louisville. He gets a raise out of this deal either way.
So why do two NBA teams want to come to Memphis?
Optimist: Because of its long-term prospects and inherent strengths. It has a central location, low cost-of-living index, good companies and leadership, and corporations like Boeing and International Paper are fed up with places like Seattle and New York.
Pessimist: Heisley and the NBA cleverly played Memphis against Louisville, two second-tier cities worried about sliding into the third tier. Charlotte’s NBA outfit has worn out its welcome, and the owners and the league fear they will lose a referendum on a new arena.
How can we pay for a new arena?
Optimist: By raising the sales tax half a penny and giving half the money to schools and half to the arena. Put them in a referendum separately and both fail. Couple them and it passes. And both the city and county have hidden wealth in MLGW and Shelby Farms.
Pessimist: Mayor Herenton says media cynics and naysayers will try to scuttle this deal. Well, was Jim Rout a naysayer when he voted against The Pyramid when he was a county commissioner? After the hoopla, open-minded people with the best of motives will decide they can’t support a new publicly funded arena, if for no other reason than the experience of Vancouver and Charlotte.
