Look to the NFL for taypayer funded stadiums, sweet tax deals

Gregg Easterbrook provides a reminder of the amount of public money funneled to NFL owners in recent decades:

Judith Grant Long, a Harvard University professor of urban planning, calculates that league-wide, 70 percent of the capital cost of NFL stadiums has been provided by taxpayers, not NFL owners. Many cities, counties, and states also pay the stadiums’ ongoing costs, by providing power, sewer services, other infrastructure, and stadium improvements. When ongoing costs are added, Long’s research finds, the Buffalo Bills, Cincinnati Bengals, Cleveland Browns, Houston Texans, Indianapolis Colts, Jacksonville Jaguars, Kansas City Chiefs, New Orleans Saints, San Diego Chargers, St. Louis Rams, Tampa Bay Buccaneers, and Tennessee Titans have turned a profit on stadium subsidies alone—receiving more money from the public than they needed to build their facilities. Long’s estimates show that just three NFL franchises—the New England Patriots, New York Giants, and New York Jets—have paid three-quarters or more of their stadium capital costs.

Many NFL teams have also cut sweetheart deals to avoid taxes. The futuristic new field where the Dallas Cowboys play, with its 80,000 seats, go-go dancers on upper decks, and built-in nightclubs, has been appraised at nearly $1 billion. At the basic property-tax rate of Arlington, Texas, where the stadium is located, Cowboys owner Jerry Jones would owe at least $6 million a year in property taxes. Instead he receives no property-tax bill, so Tarrant County taxes the property of average people more than it otherwise would…

The insertion of professional football leagues into the definition of not-for-profit organizations was a transparent sellout of public interest. This decision has saved the NFL uncounted millions in tax obligations, which means that ordinary people must pay higher taxes, public spending must decline, or the national debt must increase to make up for the shortfall. Nonprofit status applies to the NFL’s headquarters, which administers the league and its all-important television contracts. Individual teams are for-profit and presumably pay income taxes—though because all except the Green Bay Packers are privately held and do not disclose their finances, it’s impossible to be sure.

It is more difficult to justify such public spending when it is laid out like this. But, the money spent is complicated by two factors:

1. Americans like football. What if they wanted to provide taxpayer dollars for football? The assumption Easterbrook and others make who point out the public money spent on football is that people who read the stories will get outraged and demand change. But, football is the most popular sport and the money problems aren’t just present in the NFL – look at how college football continues to be a financial juggernaut even as it struggles with issues of amateurism. If the money isn’t spent on football, would the public be confident that money would be spent effectively elsewhere?

2. Individual cities, states, and other bodies of government are put in tough spots when teams threaten to leave unless they get a good stadium deal. Even with studies that show the economic benefits tend to be primarily in the direction of the team owners and not the taxpayers, losing the team might be even worse. Who wants to be the politician who let the team go? On one hand, spending tax money on sports might be unpopular but so would be politicians who let a source of civic pride walk away.

Just thinking out loud, it seems like the main way politicians and local governments could fight back is to all band together and refuse to spend public money this way. In a time of tough economic competition between communities for jobs and prestige, all it takes is one city to be the escape hatch for teams. Look at how NFL teams in recent years have used Los Angeles as a bargaining chip. Even though no one has moved there, they can all say plans are in the works in Los Angeles unless you give us a better deal. At the same time, politicians across the board could examine cities without major football teams and how they “survive” the lack of a team. How does Portland make it? What about Los Angeles? San Antonio? Las Vegas? In other words, having a football team is not a necessity and there are other ways to spend the money that might go towards sports teams. Individually, cities have a hard time standing up to teams but collectively they might have the ability.

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