Public Funding Of Stadiums (2 Viewers)

[RC94]

I thought this would be an interesting topic to discuss here. John Oliver had IMO a great segment on this: http://www.cbssports.com/nfl/eye-on-football/25240491/watch-john-oliver-shred-public-funding-for-sports-stadiums

 

[msommer]

Makes no sense.

HTH

 

[Dinsy Ejotuz]

There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.

 

[RUSF18]

Politicians, with their pockets stuffed with public money, putting their hands out in front of wealthy owners who were happy to oblige. Got us in this situation where it became commonplace. Then you have the vocal fan(atic) base who would scream if there was a threat of their team leaving, continually buying the "economic benefit" bull#### the politicians/owners were selling.

 

[msommer]

Other than LA where would an NFL team realistically move with out a gifted stadum?

(I don't care about any of the other sports, so there's that)

 

[SaintsInDome2006]

Louisiana has poured millions into Tom Benson's pockets, personally. I try not to think about it because I love my team and my city but it's basically just conversion of public funds. Of course tourism and sports are our industry.

 

[Koya]

Generally speaking I agree. But the context of urban revitalization and economic development is a very deep and complex fabric.

For example, without Camden Yards, is Baltimore Harbor what it is today? How about the areas around Pac Bell or in Pittsburgh?

I'd need to have studies that delve far beyond the direct and even indirect economics of a stadium

or ballpark into the value created throughout a district that is created by that investment.

Btw, I still believe that direct public subsidy is a bad idea and not a good ROI, however I just wanted to point out the complexity for those (rare) occasions where benefits are far beyond the actual economic impact of the stadium and stretch to increased investment and revitalization in and around the area.

 

[Quez]

Louisiana has poured millions into Tom Benson's pockets, personally. I try not to think about it because I love my team and my city but it's basically just conversion of public funds. Of course tourism and sports are our industry.

Didn't FEMA pick up 300 mil in stadium repairs after Katrina?

 

[SaintsInDome2006]

Louisiana has poured millions into Tom Benson's pockets, personally. I try not to think about it because I love my team and my city but it's basically just conversion of public funds. Of course tourism and sports are our industry.

Didn't FEMA pick up 300 mil in stadium repairs after Katrina?

Yeah, I can't remember the total of what actually came through, but that number would not surprise me as being right. The state public assistance has gone well beyond that though and continues right now. If there is a concert or festival outside the Dome (and there's been a special area set up for that) old man Benson pockets that money, so he takes in all kinds of revenue generating activity outside the Saints too.

 

[Quez]

I am pretty interested in this issue as its always a big topic down here due to the Rays. Tampa also gave the Glaziers one of the best deals ever for Ray Jay.

 

[Ilov80s]

Also, who pays for the development of talent for the NFL? Tax payers. From high school to college, player development is mostly covered by the tax payers. On top of it, it's a tax free charitable organization. Hell of a set-up those owners have.

 

[SaintsInDome2006]

Also, who pays for the development of talent for the NFL? Tax payers. From high school to college, player development is mostly covered by the tax payers. On top of it, it's a tax free charitable organization. Hell of a set-up those owners have.

I've told this story, and maybe people know it, but it's true - the NFL got that exemption in exchange for granting a franchise to NO. There was a time when LA had extremely powerful people in the House and Senate. The NFL was faced with antitrust resistance and congressional investigations for expanding to block the AFL, then ... Bingo bango, deal got done, the NFL was treated as a trade guild essentially, the antitrust worries went away and NO got a team.

 

[cstu]

There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.

This is nonsense.

If you're to try to tell me that the Dallas Cowboys make no economic difference to the city of Dallas then I'm going say you're full of ####.

At the very least you're adding 53 millionaires who buy houses, cars, and support local businesses.

Is it worth hundreds of billions of tax payer money? No, but if you could spend $1 to get a team then it's worth it.

 

[SaintsInDome2006]

There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.

This is nonsense.

If you're to try to tell me that the Dallas Cowboys make no economic difference to the city of Dallas then I'm going say you're full of ####.

At the very least you're adding 53 millionaires who buy houses, cars, and support local businesses.

Is it worth hundreds of billions of tax payer money? No, but if you could spend $1 to get a team then it's worth it.

And don't forget the Super Bowls, that's the big carrot for getting new stadiums built. Hey City xyz, you will guaranteed get a SB if you build a shiny new stadium.

 

[Ilov80s]

There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.

This is nonsense.

If you're to try to tell me that the Dallas Cowboys make no economic difference to the city of Dallas then I'm going say you're full of ####.

At the very least you're adding 53 millionaires who buy houses, cars, and support local businesses.

Is it worth hundreds of billions of tax payer money? No, but if you could spend $1 to get a team then it's worth it.

And don't forget the Super Bowls, that's the big carrot for getting new stadiums built. Hey City xyz, you will guaranteed get a SB if you build a shiny new stadium.

Very interesting read on how much the SB does or doesn't benefit a local economy.http://www.sportsonearth.com/article/66544296/

 

[rustycolts]

Flavio Augusto decided to build the Soccer stadium in Orlando on his own instead of using public funds.Now he gets to keep all the profit from the 11 dollar beers they will sell there.

 

[Ilov80s]

There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.

This is nonsense.

If you're to try to tell me that the Dallas Cowboys make no economic difference to the city of Dallas then I'm going say you're full of ####.

At the very least you're adding 53 millionaires who buy houses, cars, and support local businesses.

Is it worth hundreds of billions of tax payer money? No, but if you could spend $1 to get a team then it's worth it.

Many of the players don't live where they play so they may not be spending as much as you initially think.

 

[Dickies]

There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.

This is nonsense.

If you're to try to tell me that the Dallas Cowboys make no economic difference to the city of Dallas then I'm going say you're full of ####.

At the very least you're adding 53 millionaires who buy houses, cars, and support local businesses.

Is it worth hundreds of billions of tax payer money? No, but if you could spend $1 to get a team then it's worth it.

Perhaps they do have an economic impact, but they already had a stadium to play in. How much of a difference does a new stadium make? I don't think cities see much benefit from it, except in a few rare cases. Certainly not enough to justify the price tag.

 

[cstu]

There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.

This is nonsense.

If you're to try to tell me that the Dallas Cowboys make no economic difference to the city of Dallas then I'm going say you're full of ####.

At the very least you're adding 53 millionaires who buy houses, cars, and support local businesses.

Is it worth hundreds of billions of tax payer money? No, but if you could spend $1 to get a team then it's worth it.

Many of the players don't live where they play so they may not be spending as much as you initially think.

All I'm saying is that it's undeniable that a NFL team has an economic impact.

Let's say for example that the cost to go to a NFL game is $100 a person (ticket, parking, food, drinks, etc.). That's $7,000,000 in sales, which at a 9% tax rate is $630,000 in sales tax revenue. Multiply that by 10 games (including preseason) and you have about $6,000,000 in tax revenue per year. Then add in all the out of town people who stay at hotels, rent cars, eat at restaurants, go shopping, etc.

Up to $100 million is a reasonable amount for a city to pitch in for a new stadium, especially if it can be given as tax breaks instead of upfront money.

 

[cstu]

Perhaps they do have an economic impact, but they already had a stadium to play in. How much of a difference does a new stadium make? I don't think cities see much benefit from it, except in a few rare cases. Certainly not enough to justify the price tag.

It depends on how likely it is for the team to move. For example, the Cowboys aren't moving from Dallas even if the city gives them no money, but a city like St. Louis has no hold on their team since it lacks much of a history. Even a history isn't good enough sometimes, like with the Baltimore Colts.

 

[dparker713]

There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.

This is nonsense.

If you're to try to tell me that the Dallas Cowboys make no economic difference to the city of Dallas then I'm going say you're full of ####.

At the very least you're adding 53 millionaires who buy houses, cars, and support local businesses.

Is it worth hundreds of billions of tax payer money? No, but if you could spend $1 to get a team then it's worth it.

Many of the players don't live where they play so they may not be spending as much as you initially think.

All I'm saying is that it's undeniable that a NFL team has an economic impact.

Let's say for example that the cost to go to a NFL game is $100 a person (ticket, parking, food, drinks, etc.). That's $7,000,000 in sales, which at a 9% tax rate is $630,000 in sales tax revenue. Multiply that by 10 games (including preseason) and you have about $6,000,000 in tax revenue per year. Then add in all the out of town people who stay at hotels, rent cars, eat at restaurants, go shopping, etc.

Up to $100 million is a reasonable amount for a city to pitch in for a new stadium, especially if it can be given as tax breaks instead of upfront money.

That revenue is offset by not only the increased police and public services necessary, but it should also be offset by the opportunity cost the stadium presents. Other businesses could have occupied the land, or cheap housing, or public parks even. An NFL stadium is rarely used and even MLB ballparks which are occupied much more often offer much worse tax bases than an office building. And the jobs associated with sports venues are seasonal and have crap pay.

The only reasonable amount to pitch in for a new stadium is zero, including tax breaks or tax free bonds. They're a waste of tax payer money and serve no purpose other than enriching billionaires.

 

[fatguyinalittlecoat]

I like how everyone in here dismisses all the serious scholarship on this subject by performing a couple of back-of-the-envelope calculations.

 

[The Kerminator]

Also, who pays for the development of talent for the NFL? Tax payers. From high school to college, player development is mostly covered by the tax payers. On top of it, it's a tax free charitable organization. Hell of a set-up those owners have.

I guess you could make this same argument for any professional, couldn't you? Who pays for an engineer's development? Who pays for a nurse's development? Who pays for a fireman's development? Taxpayers. We should just get rid of public education.

 

[njherdfan]

There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.

This is nonsense.

If you're to try to tell me that the Dallas Cowboys make no economic difference to the city of Dallas then I'm going say you're full of ####.

At the very least you're adding 53 millionaires who buy houses, cars, and support local businesses.

Is it worth hundreds of billions of tax payer money? No, but if you could spend $1 to get a team then it's worth it.

I was under the impression that the articles referred to the construction of new stadiums. It makes intuitive sense that having a local sports franchise creates jobs and brings value to a local economy, but it's hard to see how building a new stadium with public money benefits an area more than leaving the old stadium in place.

 

[Ignoramus]

There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.

This is nonsense.

If you're to try to tell me that the Dallas Cowboys make no economic difference to the city of Dallas then I'm going say you're full of ####.

At the very least you're adding 53 millionaires who buy houses, cars, and support local businesses.

Is it worth hundreds of billions of tax payer money? No, but if you could spend $1 to get a team then it's worth it.

From where do those 53 millionaires get their money?

 

[Quez]

Here is an old, long article, but cites studies by economist regarding the issue.

http://www.aei.org/publication/a-closer-look-at-stadium-subsidies/

 

[roadkill1292]

I'm not opposed to subsidies in principle but I am opposed to subsidies for 31 rich bastards operating what should be an illegal cartel. That's not a subsidy, that's sodomy.

 

[Jack White]

This is not a difficult issue.

It's yet another case of politicians stealing YOUR money and giving it to their buddies.

In this case, billionaires.

 

[Statcruncher]

All I'm saying is that it's undeniable that a NFL team has an economic impact.


Let's say for example that the cost to go to a NFL game is $100 a person (ticket, parking, food, drinks, etc.). That's $7,000,000 in sales, which at a 9% tax rate is $630,000 in sales tax revenue. Multiply that by 10 games (including preseason) and you have about $6,000,000 in tax revenue per year. Then add in all the out of town people who stay at hotels, rent cars, eat at restaurants, go shopping, etc.

Up to $100 million is a reasonable amount for a city to pitch in for a new stadium, especially if it can be given as tax breaks instead of upfront money.

Finally we have an in-depth financial assessment of the impact.

It depends on how likely it is for the team to move. For example, the Cowboys aren't moving from Dallas even if the city gives them no money, but a city like St. Louis has no hold on their team since it lacks much of a history. Even a history isn't good enough sometimes, like with the Baltimore Colts.

You do realize that the Cowboys haven't played a home game in Dallas since 1971? Neither Dallas' headquarters nor stadium are in Dallas. Jerry wanted the new stadium in Dallas (Fair Park) but the city of Dallas wouldn't give him the concessions he wanted. So it went to the highest bidder, the city of Arlington which pitched in 325 million. Now would be a good time for you to stop posting in this thread.

IMO new stadiums publicly funded are simply a bull#### money grab.

 

[TobiasFunke]

This is not a difficult issue.

It's yet another case of politicians stealing YOUR money and giving it to their buddies.

In this case, billionaires.

That's not true. The funding is sometimes approved by ballot. When it's not, the city officials that approve it often find themselves more popular with the public after approving the stadium financing than before. link

The solution here is not to change the political status quo but to educate the public.

 

[roadkill1292]

This is not a difficult issue.

It's yet another case of politicians stealing YOUR money and giving it to their buddies.

In this case, billionaires.

That's not true. The funding is sometimes approved by ballot. When it's not, the city officials that approve it often find themselves more popular with the public after approving the stadium financing than before. link

The solution here is not to change the political status quo but to educate the public.

The job starts here. With a fairly hostile crowd in opposition. Which is kinda fun.

 

[Ilov80s]

Also, who pays for the development of talent for the NFL? Tax payers. From high school to college, player development is mostly covered by the tax payers. On top of it, it's a tax free charitable organization. Hell of a set-up those owners have.

I guess you could make this same argument for any professional, couldn't you? Who pays for an engineer's development? Who pays for a nurse's development? Who pays for a fireman's development? Taxpayers. We should just get rid of public education.

Most people in those professions didn't get full ride scholarships.

 

[Bruce Dickinson]

Generally speaking I agree. But the context of urban revitalization and economic development is a very deep and complex fabric.

For example, without Camden Yards, is Baltimore Harbor what it is today? How about the areas around Pac Bell or in Pittsburgh?

I'd need to have studies that delve far beyond the direct and even indirect economics of a stadium

or ballpark into the value created throughout a district that is created by that investment.

Btw, I still believe that direct public subsidy is a bad idea and not a good ROI, however I just wanted to point out the complexity for those (rare) occasions where benefits are far beyond the actual economic impact of the stadium and stretch to increased investment and revitalization in and around the area.

Agreed. I'll watch that John Oliver video and laugh and nod and agree with his POV. I've read studies that show sports tickets are for the most part spent with money that would otherwise be spent on other entertainment options - there aren't piles of money being kept under mattresses and couches that suddenly stimulate the local economy if a new NFL stadium gets built. The limited use options of NFL stadiums are particularly bad given how few dates they operate.

Sprint Center here in KC successfully bucked the trend, but few cities will encounter the perfect storm of available cheap real estate to drop a 17K-20K arena in a busted downtown neighborhood with potential, and get a bunch of promises broken that save the arena from bad business deals. Damn thing fell back-asswards into profitability.

 

[Leroy Hoard]

IMO new stadiums publicly funded are simply a bull#### money grab.

 

[Instinctive]

Also, who pays for the development of talent for the NFL? Tax payers. From high school to college, player development is mostly covered by the tax payers. On top of it, it's a tax free charitable organization. Hell of a set-up those owners have.

I've told this story, and maybe people know it, but it's true - the NFL got that exemption in exchange for granting a franchise to NO. There was a time when LA had extremely powerful people in the House and Senate. The NFL was faced with antitrust resistance and congressional investigations for expanding to block the AFL, then ... Bingo bango, deal got done, the NFL was treated as a trade guild essentially, the antitrust worries went away and NO got a team.

NFL is not tax exempt as of April of this year:

http://www.huffingtonpost.com/2015/04/28/nfl-tax-exempt-status_n_7162874.html?utm_hp_ref=sports&ir=Sports

http://espn.go.com/nfl/story/_/id/12780874/nfl-league-office-gives-tax-exempt-status

http://www.bloomberg.com/politics/articles/2015-04-28/nfl-will-end-its-tax-exempt-status-goodell-tells-team-owners

Now, there are lots of nefarious reasons they did so, and we shouldn't paint it in an altruistic light, by any means...but they are no longer tax exempt. And even when they were tax exempt, it should be noted that they were 501©(4), and not 501©(3), which also had some important differences.

Might change the stadium picture a little bit, but I haven't seen any new research on it yet. I imagine it's still a loser for cities.

 

[Mr Anonymous]

The deal passed in the Wisconsin State Senate yesterday to help build a new arena in Milwaukee will bring in $3 for every $1 of public money spent. Those studies about economic impact account for entertainment dollars spent but rarely if ever account for income tax collected by the athletes from both teams playing in the arena on any given night. Wisconsin currently collects over $6 million in income tax from home and visiting NBA players each year. That money helps fund schools, social programs, etc. And it's conservatively expected to nearly double in the very near future with the coming massive NBA salary cap increase.

Since the arena being replaced was privately funded, the Bucks leaving actually would have left the state with a funding gap. Every situation is unique. In this case it was actually a good business deal for the state of Wisconsin. And that's not even mentioning that half a billion dollar private investment promised to surround the new arena. In the end, there will be $1 billion in new development in an area that sat vacant for 20 years, 3/4 of which will be paid for by private investment.

Again, every situation is unique. Sometimes states and local governments get bent over. Sometimes they don't.

 

[RUSF18]

The deal passed in the Wisconsin State Senate yesterday to help build a new arena in Milwaukee will bring in $3 for every $1 of public money spent. Those studies about economic impact account for entertainment dollars spent but rarely if ever account for income tax collected by the athletes from both teams playing in the arena on any given night. Wisconsin currently collects over $6 million in income tax from home and visiting NBA players each year. That money helps fund schools, social programs, etc. And it's conservatively expected to nearly double in the very near future with the coming massive NBA salary cap increase.

Since the arena being replaced was privately funded, the Bucks leaving actually would have left the state with a funding gap. Every situation is unique. In this case it was actually a good business deal for the state of Wisconsin. And that's not even mentioning that half a billion dollar private investment promised to surround the new arena. In the end, there will be $1 billion in new development in an area that sat vacant for 20 years, 3/4 of which will be paid for by private investment.

Again, every situation is unique. Sometimes states and local governments get bent over. Sometimes they don't.

And literally every time, the same argument is made..."$Y will be brought in for every $X spent" and it seemingly never materializes. The data shows this.

How much was committed by the state that will result in $6MM in annual tax revenue (what's the ROI)? Is it accounting for the costs of police, traffic control, infrastructure costs, etc?

 

[Mr Anonymous]

The deal passed in the Wisconsin State Senate yesterday to help build a new arena in Milwaukee will bring in $3 for every $1 of public money spent. Those studies about economic impact account for entertainment dollars spent but rarely if ever account for income tax collected by the athletes from both teams playing in the arena on any given night. Wisconsin currently collects over $6 million in income tax from home and visiting NBA players each year. That money helps fund schools, social programs, etc. And it's conservatively expected to nearly double in the very near future with the coming massive NBA salary cap increase.

Since the arena being replaced was privately funded, the Bucks leaving actually would have left the state with a funding gap. Every situation is unique. In this case it was actually a good business deal for the state of Wisconsin. And that's not even mentioning that half a billion dollar private investment promised to surround the new arena. In the end, there will be $1 billion in new development in an area that sat vacant for 20 years, 3/4 of which will be paid for by private investment.

Again, every situation is unique. Sometimes states and local governments get bent over. Sometimes they don't.

And literally every time, the same argument is made..."$Y will be brought in for every $X spent" and it seemingly never materializes. The data shows this.

How much was committed by the state that will result in $6MM in annual tax revenue (what's the ROI)? Is it accounting for the costs of police, traffic control, infrastructure costs, etc?

These numbers are set in stone. All overruns are the team's responsibility. Even if the current $6 million collected in athlete and employee income tax remained flat, it would still exceed the state's commitment.

You started your reply with "And literally every time". Again, for the sake of clarity...each deal is unique. Some are good, some are bad. Much like with everything in the world, it's misguided to paint with broad strokes.

And I'd also like to mention that it's funny John Oliver made public funding a topic on his show since they film in New York because of a massive tax credit they get to bring their production there.

 

[dparker713]

The deal passed in the Wisconsin State Senate yesterday to help build a new arena in Milwaukee will bring in $3 for every $1 of public money spent. Those studies about economic impact account for entertainment dollars spent but rarely if ever account for income tax collected by the athletes from both teams playing in the arena on any given night. Wisconsin currently collects over $6 million in income tax from home and visiting NBA players each year. That money helps fund schools, social programs, etc. And it's conservatively expected to nearly double in the very near future with the coming massive NBA salary cap increase.

Since the arena being replaced was privately funded, the Bucks leaving actually would have left the state with a funding gap. Every situation is unique. In this case it was actually a good business deal for the state of Wisconsin. And that's not even mentioning that half a billion dollar private investment promised to surround the new arena. In the end, there will be $1 billion in new development in an area that sat vacant for 20 years, 3/4 of which will be paid for by private investment.

Again, every situation is unique. Sometimes states and local governments get bent over. Sometimes they don't.

Disregarding inflation cause I'm being lazy, it would take 33 years of double the current income tax collections to cover the cost of the bonds - which need to be paid in 20 years.

Make no mistake, Wisconsin is getting screwed too, just less than some other localities.

 

[njherdfan]

Also, who pays for the development of talent for the NFL? Tax payers. From high school to college, player development is mostly covered by the tax payers. On top of it, it's a tax free charitable organization. Hell of a set-up those owners have.

I've told this story, and maybe people know it, but it's true - the NFL got that exemption in exchange for granting a franchise to NO. There was a time when LA had extremely powerful people in the House and Senate. The NFL was faced with antitrust resistance and congressional investigations for expanding to block the AFL, then ... Bingo bango, deal got done, the NFL was treated as a trade guild essentially, the antitrust worries went away and NO got a team.

NFL is not tax exempt as of April of this year:

http://www.huffingtonpost.com/2015/04/28/nfl-tax-exempt-status_n_7162874.html?utm_hp_ref=sports&ir=Sports

http://espn.go.com/nfl/story/_/id/12780874/nfl-league-office-gives-tax-exempt-status

http://www.bloomberg.com/politics/articles/2015-04-28/nfl-will-end-its-tax-exempt-status-goodell-tells-team-owners

Now, there are lots of nefarious reasons they did so, and we shouldn't paint it in an altruistic light, by any means...but they are no longer tax exempt. And even when they were tax exempt, it should be noted that they were 501©(4), and not 501©(3), which also had some important differences.

Might change the stadium picture a little bit, but I haven't seen any new research on it yet. I imagine it's still a loser for cities.

But that was pretty much meaningless. While the NFL itself was tax-exempt, the teams never have been, and I'm pretty sure the NFL's revenues are just distributed to the teams.

 

[Mr Anonymous]

The deal passed in the Wisconsin State Senate yesterday to help build a new arena in Milwaukee will bring in $3 for every $1 of public money spent. Those studies about economic impact account for entertainment dollars spent but rarely if ever account for income tax collected by the athletes from both teams playing in the arena on any given night. Wisconsin currently collects over $6 million in income tax from home and visiting NBA players each year. That money helps fund schools, social programs, etc. And it's conservatively expected to nearly double in the very near future with the coming massive NBA salary cap increase.

Since the arena being replaced was privately funded, the Bucks leaving actually would have left the state with a funding gap. Every situation is unique. In this case it was actually a good business deal for the state of Wisconsin. And that's not even mentioning that half a billion dollar private investment promised to surround the new arena. In the end, there will be $1 billion in new development in an area that sat vacant for 20 years, 3/4 of which will be paid for by private investment.

Again, every situation is unique. Sometimes states and local governments get bent over. Sometimes they don't.

Disregarding inflation cause I'm being lazy, it would take 33 years of double the current income tax collections to cover the cost of the bonds - which need to be paid in 20 years.

Make no mistake, Wisconsin is getting screwed too, just less than some other localities.

You're leaving out the other very real, concrete costs the state of Wisconsin is on the hook for if the Bucks leave. The state is bleeding money paying for the upkeep and maintenance of the current arena. That was the obligation they took on when the current arena was donated. The Bucks are responsible for maintenance of the new arena.

 

[Instinctive]

Also, who pays for the development of talent for the NFL? Tax payers. From high school to college, player development is mostly covered by the tax payers. On top of it, it's a tax free charitable organization. Hell of a set-up those owners have.

I've told this story, and maybe people know it, but it's true - the NFL got that exemption in exchange for granting a franchise to NO. There was a time when LA had extremely powerful people in the House and Senate. The NFL was faced with antitrust resistance and congressional investigations for expanding to block the AFL, then ... Bingo bango, deal got done, the NFL was treated as a trade guild essentially, the antitrust worries went away and NO got a team.

NFL is not tax exempt as of April of this year:

http://www.huffingtonpost.com/2015/04/28/nfl-tax-exempt-status_n_7162874.html?utm_hp_ref=sports&ir=Sports

http://espn.go.com/nfl/story/_/id/12780874/nfl-league-office-gives-tax-exempt-status

http://www.bloomberg.com/politics/articles/2015-04-28/nfl-will-end-its-tax-exempt-status-goodell-tells-team-owners

Now, there are lots of nefarious reasons they did so, and we shouldn't paint it in an altruistic light, by any means...but they are no longer tax exempt. And even when they were tax exempt, it should be noted that they were 501©(4), and not 501©(3), which also had some important differences.

Might change the stadium picture a little bit, but I haven't seen any new research on it yet. I imagine it's still a loser for cities.

But that was pretty much meaningless. While the NFL itself was tax-exempt, the teams never have been, and I'm pretty sure the NFL's revenues are just distributed to the teams.

Also true. Just pointing out that it has NEVER been a charitable organization, and is no longer a tax exempt organization in any case.

 

[dparker713]

The deal passed in the Wisconsin State Senate yesterday to help build a new arena in Milwaukee will bring in $3 for every $1 of public money spent. Those studies about economic impact account for entertainment dollars spent but rarely if ever account for income tax collected by the athletes from both teams playing in the arena on any given night. Wisconsin currently collects over $6 million in income tax from home and visiting NBA players each year. That money helps fund schools, social programs, etc. And it's conservatively expected to nearly double in the very near future with the coming massive NBA salary cap increase.

Since the arena being replaced was privately funded, the Bucks leaving actually would have left the state with a funding gap. Every situation is unique. In this case it was actually a good business deal for the state of Wisconsin. And that's not even mentioning that half a billion dollar private investment promised to surround the new arena. In the end, there will be $1 billion in new development in an area that sat vacant for 20 years, 3/4 of which will be paid for by private investment.

Again, every situation is unique. Sometimes states and local governments get bent over. Sometimes they don't.

Disregarding inflation cause I'm being lazy, it would take 33 years of double the current income tax collections to cover the cost of the bonds - which need to be paid in 20 years.

Make no mistake, Wisconsin is getting screwed too, just less than some other localities.

You're leaving out the other very real, concrete costs the state of Wisconsin is on the hook for if the Bucks leave. The state is bleeding money paying for the upkeep and maintenance of the current arena. That was the obligation they took on when the current arena was donated. The Bucks are responsible for maintenance of the new arena.

This is amazing to me. The original, privately funded and then gifted arena is a negative on the state. In all likelihood, the state will receive no direct revenue from the new arena, yet you somehow think this will be a financial boon to the state?

If the Bucks leave, the state will presumably regain control of whatever revenue streams they've given to the Bucks. If concerts and the like are not enough pay to the upkeep the arena, then the responsible thing is to pay significantly less than $250 million to implode it. Especially if the alternative is to gift $250 million to the owners of the Bucks and also commit to paying out $150 million in interest payments over the next 20 years.

 

[Dickies]

The deal passed in the Wisconsin State Senate yesterday to help build a new arena in Milwaukee will bring in $3 for every $1 of public money spent. Those studies about economic impact account for entertainment dollars spent but rarely if ever account for income tax collected by the athletes from both teams playing in the arena on any given night. Wisconsin currently collects over $6 million in income tax from home and visiting NBA players each year. That money helps fund schools, social programs, etc. And it's conservatively expected to nearly double in the very near future with the coming massive NBA salary cap increase.

Since the arena being replaced was privately funded, the Bucks leaving actually would have left the state with a funding gap. Every situation is unique. In this case it was actually a good business deal for the state of Wisconsin. And that's not even mentioning that half a billion dollar private investment promised to surround the new arena. In the end, there will be $1 billion in new development in an area that sat vacant for 20 years, 3/4 of which will be paid for by private investment.

Again, every situation is unique. Sometimes states and local governments get bent over. Sometimes they don't.

Disregarding inflation cause I'm being lazy, it would take 33 years of double the current income tax collections to cover the cost of the bonds - which need to be paid in 20 years.

Make no mistake, Wisconsin is getting screwed too, just less than some other localities.

You're leaving out the other very real, concrete costs the state of Wisconsin is on the hook for if the Bucks leave. The state is bleeding money paying for the upkeep and maintenance of the current arena. That was the obligation they took on when the current arena was donated. The Bucks are responsible for maintenance of the new arena.

Why pay upkeep on the new arena if the state will just buy them a new one in 20 years?

 

[Mr Anonymous]

The deal passed in the Wisconsin State Senate yesterday to help build a new arena in Milwaukee will bring in $3 for every $1 of public money spent. Those studies about economic impact account for entertainment dollars spent but rarely if ever account for income tax collected by the athletes from both teams playing in the arena on any given night. Wisconsin currently collects over $6 million in income tax from home and visiting NBA players each year. That money helps fund schools, social programs, etc. And it's conservatively expected to nearly double in the very near future with the coming massive NBA salary cap increase.

Since the arena being replaced was privately funded, the Bucks leaving actually would have left the state with a funding gap. Every situation is unique. In this case it was actually a good business deal for the state of Wisconsin. And that's not even mentioning that half a billion dollar private investment promised to surround the new arena. In the end, there will be $1 billion in new development in an area that sat vacant for 20 years, 3/4 of which will be paid for by private investment.

Again, every situation is unique. Sometimes states and local governments get bent over. Sometimes they don't.

Disregarding inflation cause I'm being lazy, it would take 33 years of double the current income tax collections to cover the cost of the bonds - which need to be paid in 20 years.

Make no mistake, Wisconsin is getting screwed too, just less than some other localities.

You're leaving out the other very real, concrete costs the state of Wisconsin is on the hook for if the Bucks leave. The state is bleeding money paying for the upkeep and maintenance of the current arena. That was the obligation they took on when the current arena was donated. The Bucks are responsible for maintenance of the new arena.

Why pay upkeep on the new arena if the state will just buy them a new one in 20 years?

It's a concession the Bucks were forced to make. Wisconsin legislators rightfully asked about revenue from naming rights and why that money wan't being factored into the equation. The Bucks relented and agreed to use naming rights revenue to go towards maintenance. That's maintenance on an arena they will only be using 41 nights a year. The remaining nights will be used to host concerts, Marquette basketball, WWE, etc.

Also, the number has been reduced significantly from $250 million by the public sector due to another last minute concession by the Bucks. They agreed to add a $2 ticket surcharge in place of a debt collection plan that was set to pay the local county's portion. Technically still public dollars but at least it's voluntary by those who choose to attend an event in the new arena. I believe the surcharge pays around $50 million of the cost, bringing the state's contribution down to around $200 million.

 

[RUSF18]

I'm not sure you realize that you're continuing to make the case for why Wisconsin shouldn't be giving them any money. Keep fighting the pressure and the team will keep relenting and making these concessions.

 

[Mr Anonymous]

I know a lot more about this particular situation than you do. There is much more I could add but it would take hours to type it all out. The simplest way I can put it is that Milwaukee is not a strong enough market to 100% privately finance a modern NBA arena, much less the surrounding development to come. The NBA has a provision to buy back the team and put it up for sale to the highest bidder if this deal didn't get done. On the open market a group from Seattle or Las Vegas pays $900+ million to bring the Bucks to their markets where they'd be worth more.

Make no mistake, this deal doesn't get done if not for the fact that the state wanted to get out from under the costs of maintaining the current arena and for their dependence on income tax paid by the players.

Which is why I stress again, every situation is different. To broadly state that all public funding is bad for every project is misguided. Cities with a large enough of corporate base support projects fully funded privately. Medium sized markets looking to grow to that point often need to kick in some public money to reach that point. Small markets with big aspirations often need to kick in 100%.

When you're a market like Milwaukee, teetering on becoming even smaller, you either kick in a little now or kick in the full amount later once you've become a minor league city. And by minor league I mean in all business aspects, not just sports business.

 

[NCCommish]

The deal passed in the Wisconsin State Senate yesterday to help build a new arena in Milwaukee will bring in $3 for every $1 of public money spent. Those studies about economic impact account for entertainment dollars spent but rarely if ever account for income tax collected by the athletes from both teams playing in the arena on any given night. Wisconsin currently collects over $6 million in income tax from home and visiting NBA players each year. That money helps fund schools, social programs, etc. And it's conservatively expected to nearly double in the very near future with the coming massive NBA salary cap increase.

Since the arena being replaced was privately funded, the Bucks leaving actually would have left the state with a funding gap. Every situation is unique. In this case it was actually a good business deal for the state of Wisconsin. And that's not even mentioning that half a billion dollar private investment promised to surround the new arena. In the end, there will be $1 billion in new development in an area that sat vacant for 20 years, 3/4 of which will be paid for by private investment.

Again, every situation is unique. Sometimes states and local governments get bent over. Sometimes they don't.

. If that stadium returns 3 to 1 it will be the first in 20/years of studies. I am calling BS on those projections.

 

[Ignoramus]

The deal passed in the Wisconsin State Senate yesterday to help build a new arena in Milwaukee will bring in $3 for every $1 of public money spent. Those studies about economic impact account for entertainment dollars spent but rarely if ever account for income tax collected by the athletes from both teams playing in the arena on any given night. Wisconsin currently collects over $6 million in income tax from home and visiting NBA players each year. That money helps fund schools, social programs, etc. And it's conservatively expected to nearly double in the very near future with the coming massive NBA salary cap increase.

Since the arena being replaced was privately funded, the Bucks leaving actually would have left the state with a funding gap. Every situation is unique. In this case it was actually a good business deal for the state of Wisconsin. And that's not even mentioning that half a billion dollar private investment promised to surround the new arena. In the end, there will be $1 billion in new development in an area that sat vacant for 20 years, 3/4 of which will be paid for by private investment.

Again, every situation is unique. Sometimes states and local governments get bent over. Sometimes they don't.

. If that stadium returns 3 to 1 it will be the first in 20/years of studies. I am calling BS on those projections.

Hush. He knows a lot more about it than you do.

 

[Mr Anonymous]

I give up. Everyone seems to know exactly what's going on in cities they don't live in.