If Shahid Khan isn’t happy with his investment’s performance in Jacksonville – and if he continues to insist on large public subsidies – maybe the city should just buy the team from him instead.
After another few disastrous seasons, Shahid Khan has once again driven panic in to the hearts of both Jaguars fans and local Jacksonville businesses. As we reported just two seasons ago, Khan went out of his way to quell rumors of what fans perceived as the team’s drift toward London.
Today, it was announced that the Jaguars will play a second home game in London next year – and the rumors seem more relevant than ever.
While the insistence of the PR reps is that this presents a unique financial opportunity for the team, it is matched with an increasing stream of hints that Khan isn’t happy with his investment’s performance in Jacksonville. He may also be a little less than pleased with Curry’s progress on the political front…
Considering the value of the franchise and what it means to the city of Jacksonville, I’d like to propose an offer: How about the city buys out the franchise, so Khan is free to spend more time in London?
“Small Market” Woes
Don’t be fooled – the Jaguars have been quite profitable in Jacksonville. Despite paying $700 million for the team, it is currently valued at about $2 billion. We might not be the most profitable team, but we’re a long way off from being some kind of charity funded by the benevolent billionaire. If anything, the profitability of the Jaguars has a lot to do with the part of the tab that the city is picking up.
Such a business would simply not exist without the explicit and implicit subsidies provided by the city of Jacksonville – and the ticket & merchandising purchases of the local fans over the last two and a half decades. The city owns the stadium (which would quickly become a major liability if the team left town) and the city provides the infrastructure, traffic management, security, utilities, and fans.
Fans that have probably been more loyal than the team deserves.
Fans who are probably starting to run out of patience, now that 25% of the team’s home games have been exported…
The Politics Behind the Profits
Mayor Curry and Shahid Khan have been known to spend quite a bit of time together and these lavish trips have involved specific discussions about the future of downtown Jacksonville.
Let’s review Mayor Curry has proposed and he has “accomplished” since then:
- Razed the Landing – no specific plans or funding to replace the venue or utilize the land
- Shuttered Met Park – no specific plans or funding to replace the venue or utilize the land
- Demolished Historic Fire Station #5 – might be replaced by a parking garage or driveway
- Attempted to sell off JEA – sparked state & federal investigations, a wave of fired politicians, and what some have called the biggest scandal in Jacksonville political history
- One less home game in 2020 – In addition to the rapid destruction of public spaces and landmarks, we’ll also have fewer football games in 2020
- End of Rockville in Jax – This past year was also the last year Rockville will perform in the city. The festival had become one of the biggest musical events in the region – and we were lucky to have it – right up until Met park closed down and the festival moved, permanently.
- Demolish Hart Expressway Ramp – use federal and state DOT funds to remove the ramp in to downtown. The intention is to slow down traffic and increase drive-by business in a currently non-existent entertainment district outside of the downtown core
- Lot J Development – city would front more than a hundred million dollars in funding so Khan can develop said entertainment district adjacent to the stadium.
- Investigate proposals for a new stadium – Despite huge public funds for upgrades to the current stadium (which can’t fill its seats), Khan seems to insist on getting a brand new one in the billion dollar range. Since he can’t pick the stadium up and move it, he’ll probably also want the city to pay for it.
Was JEA the gravy train that got derailed?
Two details stand out as particularly interesting.
The first is that Curry rushed in to demolition without much funding in place to rebuild.
The second is the timing of today’s London announcement – so soon after the deal to sell JEA failed.
Khan & Curry’s downtown wish list could cost as much as $2 billion – the entire worth of the Jaguars franchise – and provide very little benefit to the city outside of the indirect benefits that the city gets from the team.
Where was this money supposed to come from? I suspect that the plan was to cash out JEA in the following fashion:
- 1/4 to customer rebates
- 1/4 to management and executive bonuses to make the sale happen
- 1/4 to consultants and lawyers to dot the i’s and cross the t’s
- 1/4 to Khan for investment in the new stadium and Lot J area
Despite the up front rebates, the ultimate bill for this transaction would’ve fallen almost entirely on the rateholders of JEA.
To be fair to Khan, he did say that selling JEA was a terrible idea. He even lobbied to have JEA’s new headquarters moved to Lot J. It’s pretty clear that he’d like to invest in that section of real estate, but unfortunately he wants the city to pay up first and Curry doesn’t have a clue.
Here’s a proposed deal for the people of Jacksonville: instead of selling JEA and giving Khan a $2 billion subsidy, why don’t we just buy him out and own the team together, as a city? That’s how Green Bay deals with franchise ownership, and it’s worked out pretty well for them.
It’s clear that Khan would rather be spending his time in London, and that he’s disappointed in his Jaguars investment, so let’s help him out by helping him get out of his investment!
Hey Khan, if you act now, you can keep Curry, too!