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Carolina Beat

Negotiating Poorly With The Big Cat

Jan. 10th, 2013
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CHARLOTTE -- Government is a different animal from a business. But that doesn't mean city and county governments can't benefit from applying some basic business practices to how they operate.

The city of Charlotte's attempts to negotiate with the National Football League's Carolina Panthers over stadium improvements offer a perfect example of ignoring business basics.

The Panthers moved into their current home at what is now called Bank of America Stadium in 1996. A 16-year-old venue that's undergone few renovations is almost ancient by NFL standards. The Panthers are well aware of this and are planning a stadium refit.

The team has said little about what that might involve, though, beyond the latest-generation scoreboards and, perhaps, escalators to the upper level of the stadium. Adding a dome apparently is not envisioned. And no cost estimate has been released.

This general lack of detail hasn't stopped many Charlotte leaders from freaking out and offering to help pay for improvements at the privately owned stadium.

There are 32 teams in the NFL. None plays in Los Angeles, a fact that's not lost on the Queen City's movers and shakers. Charlotte Chamber President Bob Morgan told the Charlotte Business Journal that he was quite concerned that the Panthers might move out west. "That reality scares the hell out of me," he said. "It's sobering."

Among the things Morgan and others find frightening is that the Panthers own their own stadium. There is no lease tying the team to Charlotte.

This view is odd. Since the Panthers own the stadium, they are less likely to leave town -- to move would render an expensive asset essentially worthless while the team would continue to be on the hook for property taxes.

The city, meanwhile, has taken this fear to the next level. In October, Charlotte City Council voted for city staff to see how much public money the Panthers wanted toward the upgrades.

And the council wants more than information on how big a check the city should write the Panthers. Primary team owner Jerry Richardson is 76 and has had a heart transplant. He has not announced what will happen to the franchise after he is no longer capable of running it.

"What's he going to do with the team?" The Charlotte Observer quoted council member Claire Fallon as asking. "We need to know about the succession plan. I think it's smart business for the council to look ahead."

This is lame-brained reasoning. Negotiating is a game, which the city is playing poorly. In a process placing great value on information, it's generally best not to make the first offer. Charlotte City Council has let the Panthers know it's negotiating out of fear and is willing to spend a lot of money before knowing what it might be asked to pay for.

Succession plans for privately owned businesses are none of the government's concern. And in any case, city leaders don't need to know the succession plan. It could change tomorrow. Or next year. Or the day after upgrades are complete.

More importantly, any succession problems are most likely to emerge after a succession occurred-- when personality conflicts, divided loyalties, distracted management, or a desire to move would play out.

The majority of city council members are seeking assurances where none can exist. In doing so, Fallon and friends are demonstrating a lack of confidence that Charlotte is viable as an NFL market, further undermining the city's negotiating position.

A private business that consistently engaged in such poor negotiating practices likely would go bust. Cities can't go out of business, but their mistakes can cost their residents dearly.

Michael Lowrey is an associate editor of Carolina Journal.