Don't Give Public Funds to the Washington Redskins

The NFL team should not receive taxpayer support.

Virginia Gov. Terry McAuliffe recently said he was in "very serious negotiations" with the Washington Redskins about building a stadium in Virginia. In plain English, the literal translation of that statement is: "Hide your wallet."

When it comes to taking money from the poor and giving it to the rich, McAuliffe is like his predecessors, only more so. Since 2010 Virginia has ladled out nearly $700 million worth of economic incentives trying to lure businesses to the commonwealth. Such handouts have nearly tripled in the past decade. In his first year alone McAuliffe handed out more than $68 million—then went to the General Assembly and asked for more.

Those efforts have not always gone well. In one instance, the commonwealth shelled out $1.4 million to help a Chinese subsidiary ramp up operations in Appomattox. The project—which McAuliffe had lauded as "transformational"—turned out to be vaporware, and 300-plus jobs that had been promised never materialized.

In another instance, the state paid Norfolk Southern $2 million to shift jobs from Roanoke to Norfolk, in defiance of a state law prohibiting the use of incentives for relocation projects.

Lately the governor has been offering subsidies to companies like Dollar Tree ($9 million) and Motley Fool ($350,000). But such figures are chump change compared to the funds shelled out for sports teams, which routinely fleece the public out of huge sums for fancy new arenas.

Over the past two decades, taxpayers have been forced to fork over more than $7 billion to build or renovate NFL stadiums. In some cases, taxpayers are still paying off the bonds for stadiums that have since been abandoned.

Civic boosters routinely claim that new stadiums will generate all sorts of ancillary economic benefits. But multiple studies have debunked that talking point. A survey of the literature, by scholars at the Brookings Institute, found "no discernible positive relationship between sports facility construction and economic development."

Most evidence suggests that sports subsidies cannot be justified on the grounds of local economic development, income growth, or job-creation. In fact, after 20 years of academic research on the topic, "peer reviewed economics journals contain almost no evidence that sports stadiums or franchises measurably improve local economies."

This seems to be Richmond's experience. Some of the city's schools are crumbling, to the point that a ceiling tile fell and hit a student on the head—not once but twice. Yet four years ago the city took money from schools to build a new $10-million practice field for the Redskins training camp. Republican Gov. Bob McDonnell kicked in another $4 million. The city's Economic Development Authority agreed to guarantee the Redskins another $500,000 per year.

But fan attendance is down and much of the spin-off economic activity that was supposed to materialize has not. As one Arby's owner near the training camp told The Times-Dispatch last year, "We thought we'd get a bigger impact with all those people right across the street." (Things do seem to be going a bit better this year.)
Small wonder, then, that last week a survey showed three-fourths of respondents think the city's investment in the training camp has not paid off, and it should stop forking over a half-million dollars a year to the team. That's true even of Redskins fans who have attended a training session—72 percent of whom also think the annual fee is a lousy deal.

And really, can you blame them? According to Forbes, in 2015 the Redskins were worth $2.85 billion, and the year before enjoyed revenue of $439 million. The average value of an NFL team rose 38 percent last year, thanks in part to $4.4 billion in TV broadcast revenue.

Collectively, the NFL is worth about $62 billion, which makes it considerably more valuable than Ford Motor Company ($48 billion). The average Redskins player salary is $1.7 million, the median around a half-million—and owner Dan Snyder is worth about $1 billion.

Median household income in Virginia is about $63,000. The Redskins' current home, FedEx Field in suburban Maryland, is only 19 years old. If the team wants a newer one, that's fine—it should certainly build one. At its own expense.

"What I always say is it's got to make sense for the taxpayers of Virginia," McAuliffe recently told a radio program. There's only kind of deal that can do that: a deal that leaves the taxpayers out of it.

This article originally appeared in the Richmond Times-Dispatch.