How the NFL Fleeces Taxpayers

[Genx87]

That's what is happening in Cleveland. The Browns can't even win a game, yet they want millions of dollars to 'fix up' the stadium, or the looming threat of them going elsewhere. Why their billionaire owners can't use some of their change to fix their own business...

Watch Cleveland schools get even worse and have more cuts, so a tiny minority of football fans can watch the Browns screw up another season - really pisses me off.

What I love is their argument they need more money from luxury suites. And what they will claim is they will spend more on the team with this new revenue stream. The Twins got a new stadium and within 3 seasons of its opening were putting on some of the most putrid baseball known to man. We just finished our 3rd season of flirting with 100 losses. So clearly all that new money going to the Pohlads didnt go to acquire talent like they promised.

 

[waggy]

Not enough to make up for the lost opportunity cost to the tax payers.

/this

it has been proven time and time again. yet cities keep throwing NFL/NBA/Baseball etc teams huge tax breaks, property for cheap, etc.

it NEVER works out in the favor of the city or the taxpayers.

 

[fskimospy]

Yeap. Every time you hear about some sports complex revitalizing downtown somewhere, keep both hands on your wallet. I love sports... big time... but stadium deals are basically always a waste of money.

 

[theeedude]

I don't understand the need for the 49ers stadium in Santa Clara.
The economy is already booming, housing is already too expensive, traffic is already too high. Why subsidize a stadium that's going to create more headaches than it brings benefits? We already have Stanford football in the area. This seems ego driven more than anything.

 

[berzerker60]

This really is an issue on which everyone should be on the same page. The NFL is fun to watch, but it's ridiculous that it's not treated like every other industry and instead is tax-free, hugely profitable, has a specific waiver against being sued for acting as a monopoly, and gets enormous subsidies. If they paid taxes, then the next time we get a sequester or deficit talks, we could cut less from economically useful things like education and food stamps.

Then, they go out of their way to fight tooth and nail against supporting the former players who have serious brain trauma from their time playing, and pay 'scientists' to deny that this is even happening. (http://www.pbs.org/wgbh/pages/frontline/league-of-denial/)

Also, continue to fight for specific FCC policies to let them specially fuck over local fans through black-out policies: http://www.usatoday.com/story/sports/nfl/2013/12/18/nfl-television-blackout-rule-lifted-fcc/4118993/

The NFL (and God knows, the NCAA too) needs serious reform, but I seriously doubt any is coming. It would require someone to act against the interest of the 1%, for one thing, and no politician in either party is interested in that. They all "have some great friends that are NASCAR [or NFL or NBA] team owners."

 

[Vic]

How about a libertarian that believes the government needs to stay out of people's lives and stop telling us that they know better how to manage our money, run our healthcare, and control our schools?

And guess what - poor people don't pay taxes.

Libertarians also believe that special interests shouldn't be allowed to feed at the public trough.

Read the article next time.

 

[Fern]

So, exactly how much money does an NFL team bring into a city? How many jobs does the stadium provide?

It brings in a metric crap ton and that's their leverage.

What's the FMV of stadium being used by a team versus an abandoned one? (Huge difference in real estate taxes if they're being charged).

How much in sales tax does a team bring to the city/county? A ton.

If the city has an income tax I imagine an annual payroll of +$100 million brings in quite a bit.

If a city/county isn't making bank on the team's presence then they're idiots.

Fern

 

[Fern]

-snip-
The NFL (and God knows, the NCAA too) needs serious reform, but I seriously doubt any is coming. It would require someone to act against the interest of the 1%, for one thing, and no politician in either party is interested in that. They all "have some great friends that are NASCAR [or NFL or NBA] team owners."

Cities and counties are acting in their own interest. They're making revenue from the team. Teams are just another taxpayer, although a great big juicy fat one.

Fern

 

[fskimospy]

It brings in a metric crap ton and that's their leverage.

What's the FMV of stadium being used by a team versus an abandoned one? (Huge difference in real estate taxes if they're being charged).

How much in sales tax does a team bring to the city/county? A ton.

If the city has an income tax I imagine an annual payroll of +$100 million brings in quite a bit.

If a city/county isn't making bank on the team's presence then they're idiots.

Fern

I'm seriously unaware of a single stadium deal that has resulted in a positive return on investment for the municipality. These cities are acting against their own best interests.

While this study is somewhat old at this point, it encapsulates the issues present pretty well:

http://www.brookings.edu/research/articles/1997/06/summer-taxes-noll

 

[waggy]

This really is an issue on which everyone should be on the same page. The NFL is fun to watch, but it's ridiculous that it's not treated like every other industry and instead is tax-free, hugely profitable, has a specific waiver against being sued for acting as a monopoly, and gets enormous subsidies. If they paid taxes, then the next time we get a sequester or deficit talks, we could cut less from economically useful things like education and food stamps.

Then, they go out of their way to fight tooth and nail against supporting the former players who have serious brain trauma from their time playing, and pay 'scientists' to deny that this is even happening. (http://www.pbs.org/wgbh/pages/frontline/league-of-denial/)

Also, continue to fight for specific FCC policies to let them specially fuck over local fans through black-out policies: http://www.usatoday.com/story/sports/nfl/2013/12/18/nfl-television-blackout-rule-lifted-fcc/4118993/

The NFL (and God knows, the NCAA too) needs serious reform, but I seriously doubt any is coming. It would require someone to act against the interest of the 1%, for one thing, and no politician in either party is interested in that. They all "have some great friends that are NASCAR [or NFL or NBA] team owners."

also i seem to recall when the NFL started the NFL channel that they promised they wouldn't black out games and any game shown on NFL would also be shown on all local channels.

it seems they are putting more and more on the NFL channel also.

 

[ElFenix]

It brings in a metric crap ton and that's their leverage.

What's the FMV of stadium being used by a team versus an abandoned one? (Huge difference in real estate taxes if they're being charged).

How much in sales tax does a team bring to the city/county? A ton.

If the city has an income tax I imagine an annual payroll of +$100 million brings in quite a bit.

If a city/county isn't making bank on the team's presence then they're idiots.

Fern

then most cities/counties are idiots because most are losing money on the deal.

 

[nehalem256]

Seems like a new NFL stadium costs around $1 Billion.

Salary cap is around $120 million a year.

Reduce salary cap from $120 -> $100 million. Reduce owner profits by $10 million a year.

With this each NFL team could get a new stadium every ~30 years.

Note that for example the new Vikings stadium the team is already covering almost half the price tag for the stadium.

Clearly the money is there for NFL teams to operate without subsidies for stadiums.

 

[Genx87]

afaik there hasnt been a study yet that showed a net benefit of public funding for these stadiums. The immediate area around the stadium benefits. But that is simply taking entertainment dollars away from elsewhere. The cost of servicing the debt is not made up through tax generated. The whole thing is just ridiculous.

 

[berzerker60]

I actually wonder what would happen if the government passed a law saying that if the NFL wants to keep its non-profit status, it has to pay for its own stadiums in full (and maybe encourage them to set up a special subsidy program like nehalem mentioned to pay for a new one in full every few decades for each team). If the NFL wanted to play hardball, they own an awful lot of eyeballs come commercial time, and that's if the usual method of just straight out buying politicians with campaign contributions somehow failed.

 

[Svnla]

Louisiana (one of the poorest states in the US) taxpayers are paying million and million of dollars for years in direct support to Tom Benson, one of the wealthiest man in the state to keep the Saints in New Orleans.


http://www.bloomberg.com/news/2013-...nts-owner-open-new-orleans-to-super-bowl.html

Two financial deals that kept the National Football League playing in the Superdome, allowing New Orleans to host a 10th Super Bowl, were expensive for taxpayers and enriched Saints owner Tom Benson, said former Louisiana Governor Kathleen Blanco.


In the years before Katrina, the Saints were one of eight NFL teams to play in a building paid for entirely with public money, and one of two that had substantial revenue guarantees, according to a 2005 report by the Bureau of Governmental Research, a nonprofit research group in New Orleans (182MF). Along with tax breaks and the public expense of building and operating the Superdome, which cost the state $163 million to build, the team’s pre-Katrina lease provided for $180.5 million in cash subsidy payments over 10 years starting in 2001.

 

[Anarchist420]

if any part of the NFL needs subsidies when it already holds patents, then the market needs to be allowed to end it.

 

[michal1980]

Yeap. Every time you hear about some sports complex revitalizing downtown somewhere, keep both hands on your wallet. I love sports... big time... but stadium deals are basically always a waste of money.

probably the one time you and me will see eye to eye.

 

[Darwin333]

I'm seriously unaware of a single stadium deal that has resulted in a positive return on investment for the municipality. These cities are acting against their own best interests.

While this study is somewhat old at this point, it encapsulates the issues present pretty well:

http://www.brookings.edu/research/articles/1997/06/summer-taxes-noll

I dunno... Lets assume that without the tax exempt bonds, which really don't "cost" any money out of pocket it just doesn't put any money into them, the stadiums don't get built. Is the city, state and Fed better off now? They still didn't make money off of the bonds but now they don't make any money from the stadium. No taxes on ticket sales, revenue from the sales at the event, people traveling from out of town to see the game, people working at the stadium, people building and maintaining the stadium, and the list goes on...

Does that all add up to a net gain for the government? BTW, I saw the Superdome listed, did they take into account all of the non-sports activities that are held there year round? The dome ALWAYS has some sort of event going on in it, not sure what the revenue is from it but its gotta be better than nothing. Then you have the fact that, at least in NOLA, the area surrounding the dome is absurdly more valuable than 1/2 a mile away in the downtown area. That means a fuckton more in property taxes that aren't even coming from the facility.

I will admit, I have never ran the numbers so I can't give a definitive answer to the above but it seems to me that it isn't nearly as cut and dry as some make it to be.

 

[Matt1970]

I dunno... Lets assume that without the tax exempt bonds, which really don't "cost" any money out of pocket it just doesn't put any money into them, the stadiums don't get built. Is the city, state and Fed better off now? They still didn't make money off of the bonds but now they don't make any money from the stadium. No taxes on ticket sales, revenue from the sales at the event, people traveling from out of town to see the game, people working at the stadium, people building and maintaining the stadium, and the list goes on...

Does that all add up to a net gain for the government? BTW, I saw the Superdome listed, did they take into account all of the non-sports activities that are held there year round? The dome ALWAYS has some sort of event going on in it, not sure what the revenue is from it but its gotta be better than nothing. Then you have the fact that, at least in NOLA, the area surrounding the dome is absurdly more valuable than 1/2 a mile away in the downtown area. That means a fuckton more in property taxes that aren't even coming from the facility.

I will admit, I have never ran the numbers so I can't give a definitive answer to the above but it seems to me that it isn't nearly as cut and dry as some make it to be.

This. I think the tax revenue from just the player salaries alone would just about cover any subsidies.

 

[sandorski]

Cadillac driving Welfare Queens.

 

[fskimospy]

This. I think the tax revenue from just the player salaries alone would just about cover any subsidies.

Well you need to go work for the Brookings Institute then as their conclusion was:

In our forthcoming Brookings book, Sports, Jobs, and Taxes, we and 15 collaborators examine the local economic development argument from all angles: case studies of the effect of specific facilities, as well as comparisons among cities and even neighborhoods that have and have not sunk hundreds of millions of dollars into sports development. In every case, the conclusions are the same. A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.

 

[Spungo]

afaik there hasnt been a study yet that showed a net benefit of public funding for these stadiums.

If it were profitable to build a stadium, private investors would already be doing it. Government funding is exclusively done for things that private investors won't touch. This alone should be a red flag saying that building a stadium will not generate money.

 

[ElFenix]

If it were profitable to build a stadium, private investors would already be doing it. Government funding is exclusively done for things that private investors won't touch.

well, no. why would the private investor (team owner) build a stadium himself when he can get the government to do it for him? is someone really going to turn down a half a billion $+ subsidy? no.

it may not be profitable but the fact that the government is building it isn't evidence of that.

 

[Vic]

Private investors frequently turn to government for funding in order to externalize risk and obtain more favorable financing.

 

[JimKiler]

Well you need to go work for the Brookings Institute then as their conclusion was:

I don't think this is a new study, but the emotional ties to teams are what causes the government to do bad deals.

In Minnesota i believe the state legislature is using bonds to at least mitigate the loss for the stadium.