The Collusion of Big Government and Big Business, Stadium Welfare Edition

Writing at The Huffington Post, the Cato Institute's Ilya Shapiro and Nick Mosvick explain how the deal recently struck by Minnesota Gov. Mark Dayton to build a new publicly-subsidized stadium for the Minnesota Vikings will leave taxpayers "stuck with the check." They write:

The stadium costs $975 million on paper, with over half coming from public funds, $348 million from the state and $150 million from Minneapolis—not through parking taxes or other stadium-related user fees, but with a new city sales tax. In return, the public gets an annual $13 million fee and the right to rent out the stadium on non-game-days….

The reality of the Vikings deal is that the owners will gain the most, not taxpayers or fans. Taxpayers will bear most of the risk, while the expected increase in the franchise's value will accrue wholly to the owners—who will also be free from facility-financing costs. The owners will also have new revenue opportunities in the form of higher ticket prices, club seats, stadium-naming rights, and advertising. With all these luxury goodies, the only fans who will be able to actually attend the games are those with luxury incomes, many of whom will surely be writing the cost off their taxes as a business expense.

Read the rest here. For more on why stadium welfare is such a lousy deal for taxpayers, check out Reason.tv's "Take Us Out of the Ballgame: Are sports subsidies worth it?"

Comments

[Warty]

As with everything, blame that cocksucker Art Modell.

[sage]

Who is Art Modell and why should I not curb stomp his ass?

[Warty]

He’s a cocksucker. You should curb stomp his ass immediately.

[sage]

Ah. He fears for his life and physical being. Too bad.

[Rob.]

As a Clevelander who hates The Clowns, Art Modell is my hero.

[Father Jack]

Queen Howard — Ruler of All Chickenheads.

[Red Rocks Rockin]

And then, of course, Cleveland went ahead and built a new stadium for a team that’s been largely crap ever since it started playing (see Bobcats, Charlotte for the NBA version of this).

[AlmightyJB]

I was just gonna say the same thing triple R.

[hotsy totsy]

I always wondered when the taxpayers pay for the stadium, why they don’t get in free? Or at least cheap.

[sage]

Because then it would be welfare for taxpayers instead of billionaires. Doesn’t work that way.

[sage]

Fuck, they’re trying to get yet another new arena here in Seattle to house our NBA and NHL teams. Fortunately the public is against using tax money for it. Unfortunately that was also the case with the suck ass Mariners’ park; they built the fucking thing anyway.

[Pro Libertate]

We’re up. The Rays want a new stadium. And it looks like Tampa is going to take them from St. Pete. Which probably means another attempt to get some tax dollars. We rejected that last time this sort of thing happened, but who knows what voters will sign up for?

[Tulpa the White]

The Trop is a dump. It’s a friggin moldy cave; don’t touch the stalactytes.

[Pro Libertate]

I’ve never liked it. Well, that’s not quite right. When the Lightning played there, and it was called Thunderdome, I liked it plenty.

Anyway, my issues with it are (1) it’s a fucking dome, (2) it’s too far from the rest of the Bay Area, (3) it’s not a particularly nice venue, and (4) it’s a fucking dome.

That all said, I’d rather it remained the Rays’ venue than pay one red cent in tax dollars to move them.

[Isaac Bartram]

Never mind, maybe Mayors Dyer and Jacobs will work out a deal to bring them to Taintsville’s suburb called Orlando.

[Isaac Bartram]

They already got a brand new O-rena (to replace the barely twenty year old one) for the Tragic and got the whole NPR/Whole Foods crowd on board by promising them a new Performing Arts Center (which, for some reason does not seem to be materializing).

[Tulpa the White]

You need a dome in that area. Too many rainouts otherwise. Retractable rooves are nice but pricey.

[Isaac Bartram]

I used to work for the outfit that put the one up for the Blue Jays.

[Ted S.]

Isn’t it Miami that needed (and got) the dome?

[Tulpa the White]

You don’t have NBA and NHL teams in Seattle, do you?

[sage]

Nope. Makes perfect sense, doesn’t it?

[Episiarch]

No. Luring some here is one of the arguments/selling points used by the developer who wants to build them using taxpayer money. Essentially, he’s pulling the old “Seattle isn’t a big important city if it isn’t represented in all the major sports franchises!”

The best part of that argument is that you could append to it “yeah, and the Seahawks blow and the Mariners mostly suck (except for Ichiro) so now we can get a hockey team that stinks and a basketball team that chokes!”

[Pro Libertate]

What Seattle really needs is Manchester United.

[Episiarch]

We already have the Sounders. However, Manchester United would be a vast improvement.

[Pro Libertate]

You should start a movement to lure ManU to Seattle. That would be so awesome. Not only would it cause a ruckus in Seattle, just imagine the angst it would cause in England. They already are freaked out by having the team owned by Americans.

[Episiarch]

Oh, I forgot, we have a WNBA team too.

Femputer: Hmm. Perhaps men are not as evil as Femputer thinks.

Thog: But they make fun women’s basketball.

Femputer: What? Did you explain how the women’s good fundamentals make up for their inability to dunk?

Ornik: Yes. They still laugh.

Femputer: The men must die!

[Ted S.]

Real Mancunians root for City.

[affenkopf]

But American band wagoners root for United
(heja BVB!)

[Ted S.]

You root for Dortmund? {pukes}

At least you don’t root for Schlacke 04.

[sage]

This town needs an enema!

[Episiarch]

sage…you…are my number one…guy.

[sage]

Wanna get nuts?

[Pro Libertate]

A hot lava/mudflow enema?

[Paul.]

A hot lava/mudflow enema?

Enumclaw gets those.

[Hugh Akston]

Lovely beast like that walking around, puts steam in a man’s stride.

[Isaac Bartram]

So, if God decided the whole world needed an enema where would He stick the tube?

Of all the places I ever lived, I would have voted for Regina, Saskatchewan but others of my acquaintance have nominated the Nickel Capitol of the world Sudbury, ON.

[juris imprudent]

Good grief, how can there be any question but Washington DC as the orifice to be the lucky recipient of divine douchery.

[Red Rocks Rockin]

Of all the places I ever lived, I would have voted for Regina, Saskatchewan but others of my acquaintance have nominated the Nickel Capitol of the world Sudbury, ON.

No love for Saskatoon?

[Isaac Bartram]

I’ve never lived in Saskatoon, though from two short visits I found it a more attractive place than “The Queen City of the Plains.”

If I had to live anywhere in Canuckistan it would be either Calgary or Vancouver.

[Red Rocks Rockin]

Luring some here is one of the arguments/selling points used by the developer who wants to build them using taxpayer money. Essentially, he’s pulling the old “Seattle isn’t a big important city if it isn’t represented in all the major sports franchises!”

This argument is used for a lot of public/private partnership bullcrap. Denver went through the same damn thing when they were trying to get the Rockies. People were so desperate for MLB (stocked in no small part by the local media, who breathlessly touted rumors of everyone from the Giants to the A’s moving here), they swallowed the “we’re not a WORLD CLASS CITY without a major league baseball team!!” line and voted for a new stadium.

The irony is that the suburbs ended up pushing the vote over the top, not the City and County of Denver. Without that vote, the Rockies don’t exist. Arapahoe, Boulder, and Jefferson county residents got tired of dodging drug dealers in LoDo, and figured a stadium right in the heart of the tenderloin would push out the winos and various undesireables.

[Paul.]

You don’t have NBA and NHL teams in Seattle, do you?

Not anymore.

[Hyperion]

Well, if you Seattle elitists would stop oppressing the poor Portlandians, then maybe you would deserve a new stadim, you racists anti-Portlandians.

[Episiarch]

You can’t oppress Portland. No one can oppress Portland.

[Hyperion]

There is something very strange going on there.

First time I was there( as an adult ), I was driving around the city and noticed several very strange things.

First of all, all of the motorists were driving at almost exactly the same speed on interstate highways, about 45 mph. WTF? After driving on 695 and the 495 beltwayfor the last 4 years.. ok, what has been done to these people? Did they have something implanted into their brains surgically?

I am 100% convinced that normal driving pattern is drive as fast as possible, weave into and out of traffic at suicical speeds while chatting on your cell phone… unless it is raining, and then suddenly forget how to drive, drive 25 mph, and try to get involved in a 35 car pile up accident.

[Hyperion]

suicidal, smartaSSes. Thanks for the edit feature, Reason. Do you need some help with that?

[Episiarch]

Pacific Northwest drivers are absolutely horrible, and do things like block passing on a multi-lane highway by having cars in all the lanes going the same speed, and they don’t even notice. The Oregonians and British Columbians are worst of them, which is really saying something. As a former New Yorker, I often fly into fits of incandescent rage at the drivers here.

[Paul.]

Getting a northwest driver to do the speed limit is like pulling teeth. In addition, I have been offering drivers classes in making unprotected left turns at intersections for years, no one seems interested. They’re happy to sit at the light through 7 or 8 cycles until they finally get a clearing.

And it’s not like the Unprotected Left is a novel feature in Seattle.

[robc]

Ive discussed writing introductory and advanced courseware on merging, which is a skill unknown in my area.

Chapter 1: The Zipper.
etc etc

[Episiarch]

I’ll give you one better. I was driving south on 1st Ave. just above the market, and someone was waiting to turn left onto Blanchard or Virginia. Behind them, waiting, was a full block of cars. I went “shit, what’s going on?”, but noticed the right lane was clear, so I changed lanes and blasted past. Just as I got past, the car finally turned, and I watched in my rear view as all the cars waiting behind it went straight. None of them were waiting to turn. They just…waited, with the right lane free and clear, rather than just bust out of the line.

[GozWa]

i’m glad it’s not just me 🙂

[Cdr Lytton]

What, the left lane isn’t for cruising?

It’s gotten worse over the years. Now I find the middle or right lanes are faster and less crowded in the three lane stretches of I-5. Then there’s the semi obstructing traffic for 5+ miles in the two lane sections just to pass another semi at a crawl.

[Hyperion]

And the 2nd thing; what the fuck is it with no left turns on the main drags in Portlandia? So effecttively, you have to go one block past your desired left turn, turn right, turn left, turn left again, cross main drag again, make another left, and then another right… Damn I am confused, are there people retarded?

[wareagle]

it’s like NASCAR in reverse.

[Brandon]

What NBA team?

[Paul.]

Trying to bring one back.

[Jerryskids]

Atlanta is going to get boned as well. Field of Schemes.

[A Serious Man]

I’m not up to date on the issue, but I understand LA is pushing ahead in constructing a new football stadium downtown next to Staples Center and the Nokia Theatre.

Struggling NFL markets like Minnesota, Jacksonville, and Buffalo are afraid that LA will take their team away, hence the pressure for local and state government’s to provide incentives to stay.

[Hyperion]

LA, the biggest city not to have a pro football team. WTF did they spend all of their money on?

So if I live in LA, what team do I support, the gay 49ers, those cocksuckers in SD, or da Raiiiiiderzzzzz!!!!

[A Serious Man]

You can support whomever you want. I’m from Orange County and am a Packers fan while my brother likes the Cowboys.

[Hyperion]

East coast Raiders fan here, bro, I am with ya!

[Pope Jimbo]

LA is the biggest threat to existing NFL teams that there is. After watching how the threat of moving caused a complete reversal here in Sunny MN, I am convinced that the NFL loves having that city open more than they would with a team there.

Also, you have to remember that LA didn’t support two other teams, so it might be sort of like the Facebook IPO. Everyone swears it will be huge, but in reality no one wants it.

[daveInAustin]

Facebook’s IPO was huge. The interpretation that “no one wants it” is due to the fact that it was priced for the market, rather than as a gift to favored clients.

[Hugh Akston]

I live in the Valley and mourn the Broncos each year. Moreso now that we’ve moved into the Manning era.

[Episiarch]

Hugh’s a Valley Girl?

[Hyperion]

Like, what are you talking about, like…

[Hugh Akston]

I’m not a Valley native. I’m just here for the…uh, local industry.

[Episiarch]

Hugh’s a female porn star?

[Hugh Akston]

I’m too ugly for porn. But I make a steady living as a fluffer.

[Hyperion]

Donkeys?, ugh, Tebow is gone donkey fan, weep and mourn as the Raiderzzz aseert their dominance.

[Hugh Akston]

Lisa: Well, I like the 49ers because they’re pure of heart. Seattle because they got something to prove, and the Raiders because they always cheat.

[Red Rocks Rockin]

Honestly, the most pathetic thing in modern US culture is the cult of identification people have with their local professional teams.

1) A city is not entitled to have a pro sports team in perpetuity just because it’s “always been there.” Otherwise, let’s bring back the Canton Bulldogs and Syracuse Nationals.

2) Owners know how emotionally invested people are in their sports teams, and have blackmailed them for decades to get their flashy new palaces. If the owners can’t pony up the dough to get a sports stadium, let them sell the team to someone who can. And if there’s no takers, then maybe the team isn’t as valuable as people think it is and it needs to die.

3) All pro sports would be better off with fewer teams anyway, as the competition for fewer slots would increase the quality of play on the field.

[A Serious Man]

There are exceptions, I think with regard to apporpriating the land needed to build a stadium.

Walter O’Malley kicked Brooklynites in the balls when he moved the Dodgers to LA, but he did it because he got a great deal on Chavez Ravine. The Federal government had planned on building a housing project there, but agreed to sell the land back to the city of Los Angeles if it was used for a public purpose. So instead of another barrio we got a nice ballpark that was 100% privately financed. So I feel better about being a devoted Dodger fan.

[Mickey Rat]

That was still the pebble that started the avalanche of sports teams expecting ever better sweetheart deals from their local governments.

[Hyperion]

There is no cronyism, you Libertarian extremists, we just care about you and are looking out for your own good.

Signed: The Goverment, we are here to help.

[Joe M]

I’m a lifetime Vikings fan, but this is bullshit. It’s like financial eminent domain abuse.

[Brutus]

And here in STL, the Rams are demanding $700 million (yes, that’s not a misprint) in upgrades to the Edward Jones Dome or they stumble out to greener pastures.

Don’t let the door hit you, assholes.

[Anonymous Coward]

The Rams fucking suck. Everything about them sucks. 1999 was a fluke season. Their offensive line couldn’t block a girl scout troop. Their defense is tissue paper vs. the run.

If LA wants these blue and gold losers, they are welcome to them.

[Randian]

You mean if they want them back.

[juris imprudent]

Maybe they should go back to their original home – Cleveland.

However Los Angeles can not take the Browns because that would be RAAAAACIST.

[Peter L]

How is “The Browns” not racist in Cleveland if it would be in LA?

[Brutus]

I wouldn’t change a letter of that.

[Pope Jimbo]

There were a couple of facts wrong with the article. The majority of the tax money is supposed to come from electronic pull tab money. A smaller amount is going to come from the city of Minneapolis.

In theory if you don’t gamble on pull tabs or live in Minneapolis, you won’t pay any extra taxes.

A big controversy is whether the electronic pull tabs are a) going to generate enough revenue or b) even legal. If the money doesn’t come from there, then some alternate tax sources are supposed to kick in. The last I heard, they other taxes were supposed to be user fees on luxury boxes and other football paraphernalia.

I’m not holding my breath. I’m sure in the small print, the real taxes will come from state taxpayers.

The big concession that sealed the deal was that the Vikes would split the naming rights with the state.

[Pope Jimbo]

The Vikes were able to spin that in a way that made it seem as if they were paying more $$. No one in the media even portrayed it as “they will just get less money from their new stadium”.

The saddest part of this fiasco is that the bill was killed a couple times, but at the end the Vikes started threatening to move to LA and the local media went bat shit crazy with teh stories about losing the Vikes. The legislators panicked and went along with the deal.

The other fun fact was that this legislature is the first one in 40 years with GOP majorities in both the house and the senate. They got those majorities in large part because they promised to cut spending.

I’d like to tell you that they will be severely punished at the polls this election, but I doubt they will.

[AlmightyJB]

Here’s the thing. A lot of people totally get it. They understand but they don’t care. They want the team there.

[JZIII]

Yeah. Like me and a lot of other fans, who probably had something to do with the stadium bill getting passed by pestering their legislators when the stadium bill finally came up for a vote.

As a Vikings fan, at least I will now have some tangible, usable evidence of my taxpayer dollars at work.

[Ken Shultz]

The stadium costs $975 million on paper, with over half coming from public funds, $348 million from the state and $150 million from Minneapolis….In return, the public gets an annual $13 million fee.

Just goes to show, once again, that government money is the dumbest money out there.

$13 million annually on a $498 investment is a 2.6% preferred return. …on a speculative real estate investment–and they don’t get their money back out in equity?!

Any private equity that made an investment on those terms for their investors? Would be worried about getting thrown in jail.

Any other money in the world would demand an equity stake in the Vikings for that investment. You get your money back at some point–or you get equity in the deal.

Anything else is free money–excuse me–2.6% annually? With no return of principal?!

It isn’t exactly free money, but it might as well be.

No one else but the government would do that deal. No one.

Dumbest money evar!

[buntpunt]

Dude that jsut sounds like a good plan to me man, Wow.

http://www.Privacy-Geeks.tk

[TomD]

When the numbers start rolling in a few years from now about the steep decline in youth football participation — putting the longterm viability of this whole “big-time football” endeavor into doubt — these insane stadium projects are going to look even crazier.

[Lyle]

It’s pretty foolish to believe American football will be declining anytime soon.

[TomD]

Do you think youth-football participation is set to decline? Do you think this decline could be steep?

[Archduke PantsFan]

Here’s a mess
http://en.wikipedia.org/wiki/Investors_Group_Field

[Lyle]

Public financed stadiums should be seen as monuments or museums… they are there for the cultural value less so the cultural value.

[Lyle]

economic value. Something is wrong with me.

[Peter L]

But the part that should get more people angry is that the team owners clearly have enough money to build their own stadiums. They are just ripping off the gullible masses because they can get away with it.

Where are all the progressives who complain about rich people? They should be going after these rich, rent-seeking bastards with a vengance!