The In’s & Out’s : Washington Nationals vs Orlando City Soccer

Filed under: Business,Orlando Sport |


It’s an interesting time to be around Central Florida sport. At Monday night’s Osceola County Commission meeting, the board eventually voted 5-0 to revisit a final decision on whether to cough up $98 million on a new spring training stadium facility for Major League Baseball’s Washington Nationals.

Contrast this then with Orange County where Orlando City Soccer are still struggling after many months to convince Mayor Theresa Jacobs that a $25 million investment is a sure thing in bringing Major League Soccer to the area.

Studying the numbers behind both deals makes for interesting reading. Studying the logic behind the decision making sometimes bewilders. So let’s examine in further depth…

Osceola County has for some time been aware that their current deal with the Houston Astros is to end in 2016. That means pressure is on county staff to find a replacement and to try and make some use out of a facility that last had a major rehab costing millions of dollars in the mid 2000’s. Further, a piece of property called the Judge Farms property has entered the fray and that’s now become a further complication as the county seeks to find its highest and best use for the land.

So, when someone suggested a deal be made with the Washington Nationals, a potential solution seemed at hand. Over the last 12 months county staff has been working with the Nationals and only recently did the business and tourism industry in the county get to learn what was at stake.

Over in Orange County, everything seems set for Major League Soccer to become the second major league sport in Orlando or does it? It seems, Mayor Theresa Jacobs is still spinning her wheels on whether to go forward or not.

What it all comes down to is how to appropriately spend the tourist development tax dollars. For those not aware, this is a tax that the lodging industry voted to tax itself in order to support and promote tourism. Something various parties have abused over the years, not least the County Commission.

So, where are we today and what are the differences in the projects?

At first glance, both deals seem similar. Similar sorts of money are needed to make things happen. However, there is one major difference. Skin in the game.

In Osceola, the Washington Nationals are putting no money in. All they are doing is paying a use fee for the facility every year for the next 30 years. Of particular note, is the fact that in 30 years’ time, that use fee is still over $185,000 lower than they are now paying at their current Viera, Florida facility.

In Orlando, Orlando City Soccer is invested. Not only will it have to pay a rumored $50 million franchise fee but it is also paying approximately $50 million towards the stadium construction.

We then delve into further statistics and take a look at some of the differences there. In 2013, 15 MLB teams called Florida home. In total, the attendance for all teams across all games was 1,638,457 with an economic impact of $753 million. The Houston Astros, the current Osceola incumbent, brought in 53,602 people over their 16 home games for an average of 3,350 people each game. The economic impact of this was allegedly $65.6 million.

Orlando City Soccer, meanwhile, already averages some 6,500 to 7,000 per game playing a level below MLS. That means over 125,000 people are already attending their season’s games. Further, their economic impact study report shows that when a team transitions from a lower league to Major League Soccer that they can at least expect a doubling in attendance and in many cases a tripling effect.

The projected attendance for Orlando City Soccer is 360,000 while the Washington Nationals currently attract just 85,000 in Space Coast Stadium, Viera. Further, the stadium size is also an important consideration. For roughly the same money, Orlando City Soccer is going to get a 20,000 seater stadium with 20 executive boxes while the Nationals new stadium in Osceola would have a capacity of 8,600 people with between 4 and 6 executive boxes that generally, the Nationals retain rights on.

Economic impact is always an important discussion point and some interesting differences apply in both bids. The construction costs are remarkably similar with $98M being spent in Osceola and $96.M being spent in Orange. However, Orlando City commits to spending 71% on local labor and materials while the Washington Nationals just 10%.

The total output in the Orlando City plan is $83.2 million per annum supporting 780 jobs with personal earnings projected at $38.9 million for an average of $49,871 and tax revenue of $1.8million per year.

Over in Osceola, the Washington Nationals show an impact of $90.8 million with a claimed 1919 jobs being created.  Unfortunately, this plan also calls for an operating loss of some $2.3 million per annum and no property tax to be paid by the Nationals in a deal that also sees them claim all naming rights, concessions revenue and a further $5 million dollars to be held for capital improvements.  This is an investment of between $7 million to $13 million in tourist development taxes per year to see a return of just $569K tourist development tax per annum. In all, the total investment needed over 30 years will be closer to $291 million with the operating losses and debt service repayments taken into consideration.

Seems to me that Orlando is getting the significantly better deal and while some Orlando residents don’t want the county to build the soccer stadium, it might indeed be welcomed in Osceola County given the willingness of the team to invest its own money in its future. Of course, the team would prefer a more central location in Orlando for its fans to get to but if it’s a choice of MLS soccer or not, then they may have to consider a move to a place that would surely welcome a team that was prepared to pay its way?

Interesting times… and some big decisions will be made in regard to the future of sport in the Central Florida area before long.

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