Why a city should not build a stadium for an NFL team
reuters.com
reuters.com
When they want to improve their stadium, they issue stock and sell more season tickets. This works because Packers stock cannot be sold or traded after purchase, and a season ticket is, for many working class Wisconsin families, an heirloom. A friend who's a Wisconsin native was put on the waiting list for season tickets at birth, and is in his parents' will to inherit his mother's ticket. His mom is probably going to die before he breaks 10,000th on the list, so that position will go to his kids. It's insane like that.
But it means that the taxpayers of Wisconsin, including those of us who, like myself, could really care less about football, don't have to foot the bill for maintenance and improvements to the Packers' stadium. But again, the Packers have a uniquely fanatical fan base, were created with provisions to keep them in Green Bay forever, and are owned by the fans.
"The NFL does not allow corporate membership. Instead, it requires clubs to be wholly owned either by a single owner, or small group of owners, and requires that at least one owner owns a 1/3 stake in the team. The Packers are granted an exemption to this rule, as they have been a publicly owned corporation since before the rule was in place."
- https://en.wikipedia.org/wiki/Green_Bay_Packers_Board_of_Dir...
http://www.sportsbusinessdaily.com/Journal/Issues/2015/05/25...
The loophole-finder in me wonders if it would be possible to create "The Mitochondrial Eve Family Trust", for all descendants of mitochondrial Eve, by invitation only. Assets could then be contributed into this trust in exchange for season tickets to a football team, and the trust would own the team. Additional restrictions (eg. X generations of residency in a certain metropolitan area) might apply.
Just have your team be owned by the Hominidae family.
1) The limit isn't 5% per individual, 30% per family. It's 200 shares. Total.
2) Shares can only be transferred to immediate family, defined as "the spouse, children, mother, father, brothers, sisters, or any lineal descendant of a shareholder". An improper transfer will give the Corporation the right to purchase the shares at 2 .5 cents per share.
3) "As is the case with holders of Outstanding Shares, a purchaser of Common Stock in the Offering will not receive any Packers merchandise, through the purchase of Common Stock. However, purchasers will play a key role in facilitating the continued viability of a professional football team in Green Bay and will have the opportunity to have a voice in the Corporation’s governance. In addition, shareholders will receive an invitation to the Corporation’s annual meeting and have the opportunity to purchase exclusive shareholder merchandise."[1]
Or in the words of Tom from "Lock, Stock and Two Smoking Barrels", "You get a gold plated Rolls-Royce, as long as you pay for it."
So what do you get? A piece of paper. The right to vote. The ability to purchase specially branded merchandise. It's not even really a fan club.
[1] http://media.broadridge.com/documents/GBP+2011+Offering+Docu...
[2] http://blogs.wsj.com/totalreturn/2012/01/13/are-the-green-ba...
[2] 26 U.S. Code § 501 - Exemption from tax on corporations, certain trusts, etc.
[1] https://www.law.cornell.edu/uscode/text/15/1291
[2] https://www.law.cornell.edu/uscode/text/26/501
There are also a few more places the Code references football: https://www.law.cornell.edu/search/site/football?f[0]=bundle...
[1] https://en.wikipedia.org/wiki/United_States_antitrust_law#Sc...
[1] http://espn.go.com/30for30/film?page=small-potatoes-who-kill...
http://www.huffingtonpost.com/2015/04/28/nfl-tax-exempt-stat... NFL Voluntarily Ends Tax-Exempt Status
"Beginning with the 2015 fiscal year, the NFL's league office and management council will file tax returns as taxable entities."
Doesn't the German football team system work like this too? I think it at least does for Bayern.
In the past, private ownership wasn't even allowed but that changed in the 90s.
Even cooler, the 2 largest football clubs on earth, Real Madrid & Barcelona are completely fan owned. They even vote for the presidency of the club! So refreshing compared to American sports, though without a salary cap their competitions are 1000x more predictable & boring. (ex. RM won their league match on Sunday 6-0, and Barca just won today 7-0)
Both systems, to put it mildly, have their warts.
There are are multiple classes of stock. The later issued ones are indeed basically paper trinkets bought by rabid "cheese heads" so they could claim "ownership".
There is apparently no reason the owners of the few voting shares couldn't change the bylaws.
Rumor is that the NFL had to step in the 1980s (90s ?) and force the Packer owners to run a better shop (and stop paying themselves dividends). Same rumor mill reports they had to step in and force the New York Giants (who were paralyzed by two incompetent owners that owned 50% each) to run a better ship.
Note that this intervention turned around the fortunes these two teams which had earned reputations for gridiron incompetence. Miracle in the Meadowlands? Bart Starr coach?
Both the Packers and Giants have been very competitive, well run franchises since.
[1] average low temp in MPLS, in January, is 8F, as compared to 9F in Green Bay.
That said, those of us in Brown County still got stuck with a 0.5% tax hike to pay for the stadium on sales tax, which I wouldn't mind so much except it stuck around about 4 years longer than it was supposed to.
Being a resident close by I can attest to what the evidence says: The argument that stadiums augment the local economy is hoo-hah. The area around the stadium is more built up, sure, and plenty of businesses do well there but the vast majority of the money goes right into the Stadium and of course the NFL, the only exceptions being the local motels (which can't be doing that well, they all look like slum housing).
Honestly I'd pay the 0.5% tax hike forever if we got rid of the stupid thing and stopped locking up the Green Bay metro area every Sunday.
Edit: For the record, it's not the amount of the tax hike, I realize I'm bitching over pennies. It's the principle that I'm subsidizing an industry that makes so much fucking money they have no business getting tax breaks on toilet paper, let alone facilities like Lambeau Field.
Annnd that's a downvote. This community prides itself on good, honest discourse and high-level language. Please don't bring us down to the level of a 7-year-old redneck.
If you think a comment is bad for Hacker News, you're welcome to flag it, but not to post abusive noise.
But what seems to infuriate people is that orchestras and ballets are typically not owned by billionaires, and they are not part of a league with a multi-billion dollar budget.
Naturally; orchestras and ballets would struggle to exist without taxpayer money. Sports teams do not have this issue, which is why people complain; essentially every dollar spent by the taxpayers on a stadium is another dollar in the pocket of the team owner. I don't know about football, but no owner in the history of baseball has lost money on their team; even those operating at a negative cash-flow have seen net increases due to the increasing value of their team.
With orchestras and ballets and performing arts centers everybody knows up front you have an ongoing financial liability. And the numbers are smaller.
The big stadiums and sports teams don't come even close to such an intimate level of involvement with the community.
It's primarily a transfer of money to players. In the next ten years players will earn around $50 to $55 billion in income. That's drastically beyond anything owners will either earn via operations or extract through capital gains via a sale.
Take the Houston Texans for example. They're stated as the 7th most valuable NFL franchise per Forbes, generating $114m in operating income (not net income) annually - the salary cap is $143m. Green Bay? Tenth most valuable, they only generate $63m in profit - every 10 to 12 years, the Green Bay players earn more total than the entire franchise is worth. The bottom 20 teams? Forget about it.
Most leagues are the same, the players overwhelmingly extract the value. The top 450 NBA players are set (with the new TV rights money) to earn more than all of the Fortune 500 CEOs combined in terms of salary (~$17 trillion in market cap of the companies those CEOs operate).
Fans paying high ticket prices, parking, meh whatever, make them pay more instead of begging from taxpayers though.
I'm happy to see my tax dollars go to schools, parks, community arenas and playfields, and, yes, performing arts centers.
For profit, successful (or at least extremely valuable) sports franchises ... not so much.
Also, I doubt there are as many concert halls where the public has sunk anything near the kind of money that frequently gets sunk into NFL stadiums
The Elbe Philharmonie in Hamburg comes to mind. Budgeted originally at EUR 241M. They're now at 789 Million and counting.That doesn't seem too bad for an entire parking lot (ducks)
This rests on the premise that is is reasonable for taxpayer money to fund any cultural activities at all, "high" or "low".
In any case, even accepting this premise, the difference is that the examples of "high" culture you cite are, unlike professional sports stadiums, generally not promoted on the basis of claims that they will contribute to the economic development of their communities; rather, they are generally promoted on the basis of unfalsifiable claims that they will have a positive cultural and educational impact.
There's also the fact that the cities are basically footing the bill for some rich people to make more money.
>I have said for a long time — and continue to strongly believe — that public money must be for public benefit and not private profit. [0]
I don't think he's necessarily against using public money, but he's not willing to just throw money at a stadium just because the Calgary Flames and the NHL say it's a good idea, or because 'that's the way it's done'.
[0] - http://calgaryherald.com/sports/hockey/nhl/calgary-flames/ma...
They will try again. Here is a Grantland picce that covert it: http://grantland.com/the-triangle/how-to-sell-a-stadium-in-s...
They just went out to restaurants more, and bars.
So hockey's loss = someone else's gains. If not, <
Calgary should be fine without a stadium for those games
Your first three points make sense, but don't lead to this conclusion at all. People are not going to rationally say "football leads to traffic so I'm not going to watch it anymore." Football is entertaining, which is why it has an audience. Whether or not the negatives you outlined above are funded by the gov't is an entirely different matter.
I used to enjoy it, at least when the Steelers are playing. Then I got into soccer, eventually getting a more expensive cable package to watch the Premier League.
Now when I watch football again, I am painfully aware of the time between plays, the incessant commercials, and now the ever increasing number of "official reviews". Seems like every 3rd or 4th play, an official has to leave the field, watch the play over and over and over and over again for 5 minutes, before announcing that, yes, they got the call right in the first place.
Soccer, the action flows pretty constantly, and it's all done in under 2 hours. Watching football is a grueling, four hour commitment. There goes your Sunday afternoon (and evening, if you are enough of a glutton to stick around for Sunday Night Football).
It's starting to all seem like Farmville. Something terribly boring, that somehow the general public has convinced itself is a lot of fun.
(But please don't tell anyone I said this, I live in Pittsburgh!)
Is it really such a crazy idea that people like things that you don't? I like football and don't like soccer. Some people have fun playing Farmville. There's no objective criteria for entertainment, everyones' brain is tickled in different ways by different activities.
Do they? I had this in mind when I made that comment:
http://www.businessinsider.com/the-cleverest-explanation-as-...
Makes an interesting argument about Farmville's success being based more on creating social obligations, than on being inherently enjoyable. I was wondering if some of football's continuing popularity also rests on social obligations, like people in your municipality talking about the team, wearing the jerseys, posting messages on social media, participating in fantasy leagues, and using support of the team as a proxy for civic pride.
I suspect there are those, like yourself, who actually like watching the games. But I also suspect there are a large number of people who watch for social reasons.
I just can't be on the internet anymore without reading about 'social' anymore.
People watch teen mom for 'social' reasons, or 'the bachelor' for social reasons. Top chef, hells kitchen, x-files, I can keep going.
Humans are 'social' creatures by nature. Competition is human by nature. Survival of the fittest, feats of strength, preening, showing off, being knowledgeable about current events, speaking intelligently about the goings-on on the world, communication and idle chat about pop culture, thats how some people relate in their day-to-day 'shallow' interactions with others.
I can't do this whole 'social' thing anymore. Its almost getting to the point where prime numbers are offensive, because they're too unique, its not fair to the other numbers. Am I alone in this? Am I just that ignorant? Sincere question, as I'm a fairly left-leaning person highly motivated to bring the 'little guy' up and make a positive impact on humanity.
Amazed that people still think that other wide-held opinions can't be valid because one person doesn't like it.
Some people say "computer stuff" is boring. Doesn't change the fact that there are entire huge communities (this being one) dedicated to it.
Different people have different opinions. The inability to comprehend that says more about the person making that statement than it does about the people with a wide-held opinion.
"boring" and "fun" are subjective. That you find something boring doesn't mean that it is objectively boring and that those who find it fun have deluded themselves. It just means that people have different entertainment preferences. Which is, decidedly, not news.
Shirling though... Now that's a sport.
Also, as a fan of all sports, I have to say there is probably nothing more entertaining(at least to me) than the NFL Red Zone Channel. Almost no stop in the action, skip most replays, see all the big plays, often in real time. Of course playing fantasy football plays a big part in that.
Hockey is a great game to watch as well with pretty constant shots and action.
Lots of people I know don't understand how I like hockey or soccer. Some can't stand football. Some like watching sports I find boring, but I don't begrudge them or declare that a sport I find boring must be boring to everyone in the world and they're all somehow brainwashed or confused.
When I played in high school, our soccer league had unlimited substitutions, and, even though the skill level was pretty low, the games were more entertaining to watch than professional soccer, because people were actually trying. You start dogging it, and you'd get the hook.
I agree! Why spend time on something that I have no effect on the outcome of? That's why I prefer gaming (especially online, against real other people). (Some people think online gaming is boring. But the fact that I do not understand how someone could possibly think that, is not an argument against their opinion.)
> the action flows pretty constantly
Ah, yes, those gripping 2 hour matchups ending in a score of... 2-1. :P
> Pittsburgh
I like Pittsburgh! I have a couple of good friends who live there.
(And I do love the organization and what it means to the city, just finding it harder to actually enjoy the games as much as I used to.)
I do not know a lot about American football but I recall hearing or reading somewhere that the breaks in play make it a more popular spectator sport. As it allows for discussion and analysis of the prior event in a way more freeflowing sports do not.
You are not their target audience, I'm afraid
Yeah, but it's the same level of action in a single NFL play spread over an entire match.
There are constant one on one matchups of a dribbler trying to beat an attacker, or clever link up passes, or long balls contested by attackers and defenders, or, yes, shots on goal.
A fair number of NFL plays are just running up the middle for 1 or 2 yards gain.
So I really fail to see your point.
Football is boring too really.
[1] http://www.wsj.com/articles/SB100014240527487042812045750028...
"I don't understand why it exists as a popular sport anyways, it's 5 seconds of action followed by 30 seconds of two guys talking about it. The average football game has 11 minutes of action[1]. Everything but the last ~8 minutes of the 4th quarter is boring. Yet Americans love it. I don't get it."
better framed as a question like such:
"I'm not quite sure I understand the American fascination with football. Can someone provide context?"
http://www.bloombergview.com/articles/2014-08-12/only-stupid...
Football is typically held up as the quintessential American sport in many regions of the country. Those who don't proclaim their interest or love for it do so at the risk of being seen as outsiders and potentially treated as outcasts.
This starts at a very early age for many Americans due to the close ties between the education systems and football programs. Starting while they're children, those who are capable of playing are often expected to play, and those who aren't capable are expected to participate as fans. This continues through to high school, college, and to the NFL.
Even if the fans don't particularly like the game itself, they often like the social aspect of it, or just pretend to like to to avoid being stigmatized.
Association football (soccer) and cricket play a similar role in other countries. They can be seen as a form of religion, in some sense.
"They can be seen as a form of religion, in some sense."
In my family it was Sunday School with mom and then football with Grandpa and Dad.
Football is kind of like drinking...even if you don't like it at some point it is easier to just pretend and fit in.
Ideally, all this effort would be put towards a more productive end, such as rooting for your local FIRST robotics team.
Though, since we're all humans, you'd think we have enough common ground with each other anyway, what with death, taxes, relationship problems, etc.
I dislike the game because the players get horribly injured, either immediately, or decades later. The NFL is a company that makes money by encouraging degenerative brain disease in its employees.
having some sort of depth is required for popularity, even if it is not sufficient. chess is not a popular sport for other reasons, probably the lack of money and the sheer marathon that is a high level game. soccer has been gaining ground in the US because moneyed interests have been pushing the sport and trying to build the franchises for years. the level of investment required for a nationally popular sport is steep. no one's going to put that money into chess any time soon. like all things in our world, capital is often the difference between "is" and "isn't", but other ingredients are also required.
Besides the hits,
1. The short season
You're always left wanting more.
There's an order of magnitude fewer NFL games compared to the NBA, MLB, or NHL. And it's convenient - you can follow pro football and have most of the year off and, during the season, most of the week off.
2. The action
Yeah, the ball is only in play for a few minutes, but there are 60-70 plays per game - that's a lot of punctuated action compared to the snail's pace of baseball or the constant back and forth of the other sports. And the plays are more likely to be do-or-die drive or game changers than in the other sports. It's way more edge-of-your-seat.
Those two features are somewhat "drug-like," imo.
Strongly agree. I've tried many a time to 'get into' baseball, but every day is just way too much. It also tends to increase the importance of each individual game, which (ignoring the quasi-nihilistic "it's just a sport, man") is another reason for the popularity.
That doesn't explain why it's more popular than, say, basketball, though...
When you think about what makes, say, movies exciting, it's plot twists. And a basketball game has a very high change of having none -- the better team plays a bit better than the lesser team, and at the end of the game, they have a few more points.
For football, baseball, hockey, and soccer, there are far more plot twists.
Football and baseball are more punctuated, stop-start action.
ESPN made poker entertaining. I wish they would try with Chess. I would watch something with good commentators explaining the game as it unfolded.
Baseball games are really fun to watch in person though, more so than football in my opinion. It's just an excuse to drink and shoot the shit while hearing a bat crack every once in a while, always a great night out
Also checkout basketball, especially if you're in the bay.
So, I couldn't imagine going just to have a few beers, in fact more likely to abstain on principle.
Didn't even see a minute of baseball.
If you live in the midwest (the middle of the country; from top to bottom) or the south (southwest of the country), football without a doubt.
If you live anywhere else, you can pick and choose. To me, baseball is a lot more intellectually stimulating and has a lot more interesting strategy, but the more I learn about football, the more I see how much goes into it as well. I was a rabid baseball fan as a youth, but these days can't be bothered to spend the time required to watch a game (let alone 160 games a season). As such, I'm more of a football fan now-- frankly, there is more action, and there are fewer games per year so it's easier to follow a team.
Unless you live in St. Louis, then it's baseball.
"...or the south (southwest of the country)"
I think you mean the southeast?
Texas?
Two totally different sports, really. Buy some tickets to some games and see what tickles your fancy.
If you do go to a baseball game though, I recommend at least once getting bleacher seats (basically equivalent to general entry). That's where the fun happens!
73.7 million attendance last year, by far the world's most attended league. There isn't a close second. To pull 30,517 fans per game to 2,417 games is truly astounding.
To put it into context, the MLB is almost as popular as the NBA and NHL combined.
College basketball can also be some of the most entertaining basketball to watch. There's a lot more variation in style and strategy than you typically see in NBA or international ball. As long as you don't get stuck seeing too many Big Ten style grind-it-out defensive slugfests.
It's kind of like the World Cup, with less flopping.
College sports are also fun to follow.
Football and baseball are things to which people are inoculated when young. I suppose the same is true of basketball but I'm just not familiar with it beyond attempting to play it in a pickup fashion while in school.
You'd think curling would be boring, but I've watched it a few times and there's a lot going on.
And never mind golf, which I love to watch. It's been compared to watching grass grow. I can't argue.
At least in the college game, there's the issue of "tempo", which has a tactical as well as (I'm sure) a desire to reduce that time between plays. "Tactical" because it puts pressure on the defense to assemble more quickly.
It gets even worse - I like college ball, but the pros look to me like they just run their pattern and stop, where you might find a college quarterback that will improve most of a game.
Watching with other people is pretty good. You chat while the commentators are going on about whatever or they are playing yet another incessant commercial then you watch the play and go back to talking.
I also never understood the appeal of professional football games, with no band playing there at all. It feels like the "spectacle" type of gladiatorial games--the re-enactments of the Battle of Wherever, with condemned criminals portraying the Foovians on one side, and slaves portraying the Barrites on the other. But instead of getting killed outright, the participants just get a very mild case of severe brain damage. And instead of non-stop action, they stand around planning their next stratagem, as though it were not essentially "push the other guy away, so our guy can run past him".
Some people just enjoy the sport without all the ridiculous fanfare!
Some people enjoy the game. Those who do not enjoy it should not be forced to pay for the stadium. I would even oppose using eminent domain to acquire a contiguous area of land large enough to build one, with the sole possible exception of Green Bay, Wisconsin, where the Packers are very nearly a municipal corporation due to their "ownership" structure (non-voting, non-dividend-paying, restricted-resale stocks don't count as ownership, in my opinion).
Selling the naming rights to the stadium to the highest bidder is just twisting the knife in the back, really.
This article is similar in character to economic retrospectives of cities that hosted Olympics competitions. The IOC always promises an instant boost to prosperity, but that never seems to materialize. I have been to Turner Field (formerly the primary 1996 Olympic stadium), and the surrounding area does not look very boosted (although other parts of Atlanta are admittedly much worse). The stadium is coming down in 2017, as a 20-year-old building is apparently no longer good enough for the Braves to play baseball in it. Their previous home at Atlanta-Fulton Cty Stadium only lasted 30 years.
For reference purposes, Fenway Park and Wrigley Field are both more than 100 years old and still in use. Stadiums in Kansas City, LA, and Anaheim are pentagenarians. Milwaukee County Stadium made it to 50 before the Brewers traded up. Yankee Stadium retired at 85. Tiger Stadium lasted 87 years. Candlestick Park retired at 53. Memorial Stadium (Baltimore, 2nd) lasted 53 years.
From a cursory examination of history, a city is much better off building its own smaller stadium, sized for basketball, hockey, and rock concerts, than one that can only reasonably be filled by MLB baseball, NFL football, Olympic track and field, club soccer (in Europe), and musical superstars. Offering public subsidy to a privately owned single-sport stadium strikes me as brain-damaged beyond all reasonable measure, especially when the sports franchise seeking to build it is currently leasing a publicly-owned facility.
I think a better alternative is just tax breaks. The team can build a stadium but gets huge tax cuts on everything for a certain period of time to justify the build cost.
I also don't understand why stadiums have such limited lifespans. Wrigely field in nearly 100 years old.
And it's a dump. I mean, I get why people think it's charming, but it's a pretty uncomfortable place to watch a game compared to modern stadiums.
Warning: I'm a Cardinals fan, so take that for what you will.
I'd also be way more likely to care about and cheer for "our" team if they couldn't just pull up stakes and move to another city if we don't bribe them enough to keep them. Fan loyalty to commercial teams that don't have any real ties to the home city (they don't even have to give up their name if they leave!) strikes me as bizarre.
https://en.wikipedia.org/wiki/Green_Bay_Packers#Community_ow...
When the (first) Cleveland Browns moved, the city negotiated that they had to use a different name. They became the Baltimore Ravens, and Cleveland was able to call the new franchise the Browns.
That said, I make no argument it's a great choice. The public probably shouldn't be "investing" and like many would argue; it's a bit of overstep by the government to be managing team ownership. It's all murky but inextricable.
I was actually amazed when GE did move their headquarters from CT. Often that's a ploy to just get taxes lowered in place. The people who run economic development play along because then it looks like they actually did something "see they were going to leave but we got them to stay". This happens also at the county level in addition to obviously interstate. (WSJ story below).
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...
The corporations hold all the cards in that negotiation, since they're bringing jobs. Particularly corporations that do non-polluting things like software development and financial services.
If a state said "we'll give you a break but we want equity in return" they'd just get crossed off the list.
Take Austin at the moment, the "It" city that all the Cool Kids are flocking to, the darling of the business press for growth stories. Its population growth rate is faster than many cities much larger than it, by both absolute numbers and percentage growth. It is continuously growing a deeper pool of skilled knowledge worker talent; not nearly enough to rival giants like SV in tech, NYC in finance, BOS in bio, or Shenzen in hardware mfg., but enough to put it firmly on the heat map of "lots of eligible, skilled workers". Compared to those category-leading cities, the cost of housing in equivalent neighborhoods is cheap (though make no mistake, already out of reach of middle class households). There should be no tax concessions from a city in such a hyper-growth situation.
The messaging that "taxpayers have to give corporations a break for the jobs else the corporations take their ball and go elsewhere with the jobs" is a canard. These tax break arrangements last 5+ years, sometimes decades, sometimes effectively in perpetuity with constant re-negotiations the norm as agreements come up to expiration. There is often no, little, or lax monitoring of benefits received for the consideration. I haven't heard of big municipalities negotiating performance bonds, nor breakup fees. Some deals won't even "break even" until long after an agreement expires, so they need an investment horizon where the corporation stays after an expiration for anything to pencil out. Typical financial traders call parties negotiating these kind of terms "chumps" and "muppets" on days they're feeling charitable; NSFW pejoratives are used more often.
Many of these tax break arrangements are thin facades over what are effectively irrationally-expensive political bribes footed by taxpayers for sitting politicians to claim PR points in the political arena, especially for re-election fodder, frequently negotiated under conditions and terms that are effectively between private parties, and in representative systems frequently with little direct access by citizens to vote up or down. On the corporation side of the table, they pay a professional negotiator and get a return in the orders of magnitudes range that drops straight to the bottom line, Other People's Money else pays for the deal, in the vast majority of cases they can lay off and outsource/offshore the ostensible jobs that the jurisdiction was going to benefit from without penalty, or even close up and move away to a better offer before the arrangement is even expired and the jurisdiction even breaks even. It's free money for the corporations, and if taxpayers are foolish enough to sign off (by not voting out or better yet insta-recalling politicians who arrange these deals) on this, the taxpayers only have themselves to blame. Shareholders in the corporations should be upset that these deals suck up finite executive team time; no matter how much is sent to the bottom line, it's a one-shot that doesn't represent the highest and best use of that time, while the same execs spending the time putting in place revenue generators that grow the top line is far more valuable.
There are many (I'd go as far as to say most, and in many specific instances, all) on the corporation side of the negotiating table who do have good intentions and believe the ostensible messaging, but the financial returns history of these deals is so bad that in an open market the deals would have long since been punished with appropriate interest rates for the high risks they bring to the buyers (the taxpayers). I'd say the same about the politicians, as I think most of these deals are a case of a tragic mix of wishful thinking, inexperience with evaluating complex economic policy, cognitive biases, and go-fever combining into a perfect storm to create poor deals.
TL;DR: human nature, yo.
The mayor went around telling everyone it was a good idea. Of course the touted economic benefits are usually an order of magnitude above reality.
IMO basically capitalized on a huge inferiority complex.
Busch Stadium had a final cost of $365 million when it opened in 2006. Of that cost, $45 million (12%) came from a long-term loan from St. Louis County. Private financing came in the tune of $90.1 million in cash from the Cardinals, $200.5 in bonds paid by the team, and $9.2 million in interest earned on the construction fund the Cardinals held. The stadium has a seating capacity of 46,861 and is owned by the St. Louis Cardinals. The stadium does not have a roof, or its own named expressway. I was unable to determine who paid for the cost overruns of $20.2 million.
http://urbanmilwaukee.com/2009/05/28/miller-park-vs-busch-st...
http://www.lindenwood.edu/moPolicyJournal/issue02/articles/c...
>However, the Cardinals also receive significant returns through an estimated $520 million in public subsidies: $350 million from St. Louis City’s five percent admission tax 30-year waiver, $20 million from St. Louis City’s 25-year property tax abatement, $108 million paid by St. Louis County to retire the $45 million in stadium bonds, and $42 million from Missouri tax credits and highway ramp construction. Further, the Cardinals also receive an additional estimated $150 million in new stadium selling sources: $100 million over 30 years on stadium naming rights, $40 million from the Ballpark Founders Program that charges season ticket holders $2,000- $7,500 for new stadium seats, and $10 million from old Busch Stadium memorabilia sales
Here, square stadiums are used by rugby (union and league) in the winter and soccer in the summer. Oval stadiums are used by AFL in the winter and cricket in the summer. In between, they occasionally host concerts - for example, when there's away games, or mid-week, or between seasons.
This seems like a way better approach than the NFL one. Is it just because NFL / baseball / basketball (the 'big 3' in the US as far as I can tell) are all so radically different in field/court size and design that they can't be housed together? Is there any overlap that can occur in stadium mixed-use?
Because nothing about this whole thing is rational. Sharing makes sense if the owners want to split costs and get year-round use out of it, but if every major sports team in the area can strong-arm its own special-purpose stadium from the local government, then they will.
There are exceptions, like sibling comments note. In LA, the Staples Center is actually shared by 3 teams (2 NBA, 1 NHL) and is also a popular concert venue. It works great for the city having the one building in the heart of downtown to build an ecosystem around rather than 3 or 4 similar ones spread out.
But you will find things like monster truck events, dirt bike racing. or concerts at sports stadiums quite often.
Baseball needs a large oval and foot ball needs a rectangle. The compromise to support both baseball and football leads to a suboptimal solution for both.
The problem with football stadiums is that you really don't get a good view of the field since they are all about packing in the maximum number of people at a single event. Consequently, nobody really wants to host anything there.
It was pretty smart to invent another sport that could use those oval cricket fields! And Aussie rules is great in its own right. Actually the first Polo Grounds in Manhattan was originally used for polo but hosted lots of baseball and football as well.
1. Without going too far out on a tangent, there was more to the story, see here: http://www.mercurynews.com/ci_20107165
2. "Stabler is the seventh former N.F.L. quarterback to be found to have had C.T.E. by Boston University, which has found C.T.E. in 90 of the 94 former N.F.L. players it has examined" http://www.nytimes.com/2016/02/04/sports/football/ken-stable...
Santa Clara City residents approved $400 million in financing.
City Council went ahead with a promise for ... $1.3 billion so far. So most of it was not voted on at all.
A lot of folks seem to believe there's a legal apparatus we need to invent that can solve this, when it's perfectly sufficient to just get traction for a critical stance on concussionball (gasp!)
Kinda late, since the stadium is already built.
> Even before the team decided to leave, the city's stadium revenues didn't cover its payments, leaving the city with annual shortfalls.
That said, I most certainly agree that cities should not be in the business of subsidizing sports teams, when those are private money making enterprises.
St. Louis should sue the NFL and all cities in the same position (potentially liable for stadium costs, if team were to leave) should hold out till the NFL guarantees debts.
Build schools, get more teachers, do something worthwhile with the tax dollars you have.
It's worth noting that the Astrodome sits in the NRG complex, next door to the NRG Stadium where the Texans play, and in the same parking lot as the NRG Center, where events like the Houston Livestock and Rodeo take place. Just this week they were planting grass outside of the Astrodome to beautify it for the upcoming Rodeo. (NRG Arena is in the same complex) In other words, it's not the isolated abandoned property that other properties in the article describe. (it's not finalized, but it will likely become a park to bridge NRG Center and Stadium)
Only because so many people are too sentimental for the damn thing to knock it down. It's likely to become a greater boondoggle than anything else that exists on the property.
"So does it makes sense for metro areas to use public funds to attract and retain major league sports franchises? The answer is definitely not if benefits are limited to increases in economic activity and tax revenue collection. A strong case can be made, however, that the quality-of-life benefits from hosting a major league team can sometimes justify the large public outlays associated with doing so"
Either way, there's always a risk of teams relocating, and this should be taken into account.
It is devoid of facts and has questionable logic and very questionable conclusions. Honestly it is junk.
Essentially their entire quality of life argument boils down to "BUT SPORTS ARE AWESOME!!!" then just pull random dollar figures out of thin air and attach them to how awesome it is for fans to enjoy watching sports (????).
Nope, this is real economic theory. It's not something the Fed invented out of thin air, and it's used in a wide variety of fields. Of course, there is a (widely-acknowledged) epistemic problem in assuming a person's desire for something is proportional to the happiness they will receive from it -- this is called "the theory of revealed preferences", and it is used primarily because all of the alternatives people have been able to think of so far (for assessing happiness) are even worse.
If the citizenry of a municipality votes to spend their money to ensure that a local team stays, that is up to them. That said, they are idiots if they come away with a deal like St Louis did that doesn't even protect them from a potential team move and any politician who pushes it through without a vote isn't fit for their job.
Because tickets to enter the stadium are not free.
If they were free, like how parks are free, that would be different.
And yes, both of those examples are of clubs moving from one place in London to another. But if you live in Woolwich, your club might as well move to the moon as Highbury.
Deleted comment
I mean, it's pretty necessary for the context of what the OP is saying. Americans say "As an American" less often because they just assume everyone is an American in the first place. I'm not sure that's better and, come on, it's not like Americans aren't capable of smugness now, is it?
Anyway, you guys have almost exactly the same behavior in UEFA teams
Do they? I'm certainly not aware of any, and the lack of franchising makes the whole situation different (a team will very, very rarely ever move city. It's basically unheard of).
And yes, I agree the original comment was flippant. But citing fan racism in soccer isn't exactly raising the tone either.
You should not build any stadiums for a private team using public money, the only stuff you should build with public money is stuff aiming for public use (example: community centers, bicycle race tracks that anyone can use, public olympic swimming pools for anyone that wanna learn and train, and so on).
The World Cup stadiums are right now mostly abandoned, and giving us lots of trouble, some of them saw like 3 games during the tournament, and were never used again, it is a waste of money and land.
Other stadiums now we found out that were just a means to funnel corruption money in certain people pockets, and even the stadiums that ARE in use, don't made the government profit.
The World Cup in fact made the country lose money, the tourist spending don't covered all the money we lost. (and no, it didn't drove the economy either, one of the effects of the World Cup is that the government defaulted on many companies, that were forced to also default, and so on, resulting in my parents shop being defaulted too, and now we are in deep shit, including struggling to buy food sometimes, my parents are unsure when a potential new costumer shows up, if they sell because we desperately need the money, or if they refuse the sale because we've been defaulted too much and cannot afford another default).
... held up as the conservative free market jingoistic ideal.
I've never heard anyone claim the NFL is an example of a free market, even by fans of both.
The NFL is certainly not maximally-regulated, in that more regulations are possible.
But the key here is that corrupt corporate wealthy powerful people are always happy to claim that whatever they are doing to stay wealthy and powerful is actually based on some ideal whether that's socialism or capitalism or whatever. It's basically never true, of course.
What about unions of public workers? Even in the USSR there were unions. Worker cooperatives are not the only alternative to capitalism.
It would be a fascinating experiment if more teams did this, but I can't imagine an owner giving up control like that.
http://www.theonion.com/article/congress-threatens-to-leave-...
http://www.sfgate.com/news/article/U-S-satire-tricks-Beijing...
There has to be SOMETHING you can do with a structure like that.
They levy a tax of several bucks on every car rental called the "stadium tax", ostensibly to help fund the stadium, although critics say it punishes tourists and locals who need a rental car, and anyway the money is apparently routed to other uses.
I see nothing wrong with building a world class sports facility. Build it, and they will come. It brings in millions of dollars in tourism and related business. The problem is when cities that build these things don't know how to budget properly, don't monetize the stadium properly, and piss away a lot of the money in corruption, fraud, nepotism, are taken advantage of by unscrupulous contractors and unions, and so forth.
Probably a public-private consortium would do a better job in the long run. Public to get the initial rights-of-way and easements, private to run the thing efficiently and profitably and defend against the con artists who plague all such major projects.
Scott Walker for example signed a stadium deal in Wisconsin and campaigns on small government.
http://www.alternet.org/noam-chomsky-why-americans-know-so-m...
While European soccer clubs are punished by relegation into a lower league for sustained mediocrity, the pro sports monopolies in the U.S. ensure that even the most poorly-managed franchises are still immensely profitable.
Brilliant, when will the so called "fans" comprehend this?
The problem was for years the Convention Authority couldn't use the stadium 6 months a year (August to Jan) as NFL releases their schedule around March (I think). Conventions are typically planned far ahead than NFL.
Now maybe the Convention Authority can start to utilize the space and pare down the debt faster. Who knows.
You would think at being the 3rd largest market, Chicago would be in the same situation as NY/LA, but I'm assuming the systemic corruption led to the bad deal on Soldier Field.
[0] http://www.amazon.com/New-Cathedrals-Politics-Construction-E...
But...I can see spending some public money towards sports venues.
I mean not everyone takes a stroll in city parks, or uses the library or visits the aquarium, but it would be peevish to insist that people only pay for what they themselves use.
That isn't to say that building a stadium or hosting the Olympics is inherently a profitable affair.
Not that it matters because that still wouldn't justify a huge investment by the public into a private entity without any ownership stake.
If the idea was really to create something resembling a grant to private organizations to create business that stimulates the economy, you would rationally have some kind of process around for screening candidates based on merit and be more diversified in your awards.
I'd like to believe it's anything other than a kind of blackmail where these organizations use their media power (== public opinion) with impunity to bully municipalities into providing them the tax revenue of citizens, wasting money that could otherwise be used for individual or public good, but that's all I can make out of it.
That's akin to saying that the money for any government funded project only go to the party directly responsible for building/supporting it, and all of the consequences from the initial project are inherently zero.
Given the level of profitability to owners, the statistically insignificant economic impact of teams on cities, and the accumulated data to date continuing to support these conclusions drawn so far, city managers giving away valuable consideration as if they're supporting charity cases are simply using taxpayers to purchase extremely expensive political points.
[1] http://www.forbes.com/sites/mikeozanian/2015/09/14/the-most-...
[2] http://www.marketplace.org/2015/03/19/business/are-pro-sport...
[3] http://uknowledge.uky.edu/cgi/viewcontent.cgi?article=1024&c...
I don't claim that building a stadium/arena for a professional sports team will generate profit for the city. It's supposed to be an investment. The city foots the bill for the stadium. The team generates revenue over X years to cover the costs, and it also provides jobs for the city's residents. It's an idealistic win-win.
Again - this doesn't always work as intended.
A better question would be whether these grand spectacles actually increase sport participation in the general population, and if that same effect can't be attained in a cheaper way.
Everybody complains about sweetheart deals that so often go along with the seduction of an employer into their area, but almost nobody complains about the jobs. Perhaps in San Francisco the situation is reversed, but almost anywhere else is happy to accept your runoff, even if profitability isn't in the short term agenda.
More jobs means more people employed which in turn drives up employee competition, and hence wages, which equate to increased tax revenues and better quality of living.
I think that the stadium deals tend to be overboard, but not only is it not a net negative, it is at least more straight-forward plot than the backroom deals done as enticement for businesses.
http://www.marketplace.org/2015/03/19/business/are-pro-sport...
Probably because, in most cases, the amount that those jobs cost has not been worth it.
If only that were the case. Unfortunately, it's the taxpayers, not the smaller subset that are fans, who are left holding the bag.