"Let's Eliminate Sports Welfare"

[Flannel Boy]

http://www.sportsonearth.com/article/40595178/

The total cost to the public of the 78 pro stadiums built or renovated between 1991 and 2004 was nearly $16 billion . . .  bigger than the 2010 GDP of 84 different nations.

Vikings owner Ziggy Wilf -- a man personally worth more than $1 billion -- just  ransomed his way into $498 million in state and city funding for a new stadium. You probably know that Miami-Dade county ponied up roughly $500 million for the Miami Marlins’ new stadium . . . by issuing bonds that eventually will cost the public $2.4 billion.

What you don’t know is that the actual costs of stadium construction -- like the estimated $500 million to $4 billion in public subsidies that went into new stadiums for the New York Yankees and Mets, two supposedly private projects

Long calculates the average public subsidy . . . is actually $89 million higher. . . .  How so? Think land giveaways. Infrastructure freebies. Tax breaks. Government subsidies. . . . The Colts don’t pay rent. The Vikings’ new stadium reportedly will be property tax-free. In the late 1990s, the city of San Diego was buying unsold San Diego Chargers tickets as part of a sweetheart lease deal . . . while from 2002 to 2010, the state of Louisiana gave New Orleans Saints owner Tom Benson $186.5 million in straight cash, homey, just for keeping the team around.

Then there’s Paul Brown Stadium. . . . Hamilton County, which assumed more than $1 billion in debt to pay for the stadium . . . Moreover, local residents are on the hook for Paul Brown Stadium’s security costs, as well as most current and future operating and capital improvement expenses -- including . . . a potential future “holographic replay machine. . . .” Hamilton County’s annual stadium debt payment . . . was . . . nearly 17 percent of the county’s total budget, and a big reason local lawmakers had to slash spending on schools, police and a program that helped troubled adolescents.
Meanwhile, the Bengals collect parking revenue from the stadium.

Numerous studies have shown that the local economic impact of stadium construction is nil. Dennis Coates, an economics professor . . .,  calculates that . . . having stadiums and teams in a particular area --  may actually reduce local incomes. . . . There are a number of possible explanations. One of them -- and I think this is the most plausible -- is that a large amount of the money spent inside a stadium simply leaves the community. Think about the revenues generated. Fifty percent is player salaries. In most leagues, players don’t live where they play.

Worse still, Coates notes that stadiums typically are paid for in regressive ways, via lotteries and sales taxes -- Minneapolis, for example, is set to boast the highest downtown sales taxes in the nation -- that disproportionately burden the poor, while the benefits of the stadium go mostly to relatively wealthy. . . .

Particularly galling are stadium-supporting hotel and rental car taxes, which literally attempt to pass the buck to visitors and non-residents. . . . Testifying before Congress last February, fan advocate Frederick highlighted the absurdity of this arrangement:

“If I were to go home this weekend to see the Kansas Jayhawks take on the Missouri Tigers, I’d rent an economy car in Kansas City for three days . . . 16 percent of my bill will go to fund the Sprint Center, even though I am not attending any games there. Nor is there an actual team that plays there!”

Bigger handouts written directly into the federal tax code. Steve Piascik . . . says that when leagues donate the fines to charity -- as the NFL, NBA and others do -- offending players can deduct the expense on their income tax returns. . . . Meanwhile, the Internal Revenue Service allows team owners to treat players and their salaries as both regular expenses and depreciable assets -- the same as aging livestock, or office computers -- a legal quirk that makes team rosters tax deductible in two different ways, and effectively creates a profit-hiding tax shelter. Is this quirk a legal accident? Not quite. It was created by former baseball owner Bill Veeck. A man whose memoir is titled “The Hustler’s Handbook.” A man who wrote, “Look, we play the Star-Spangled Banner before every game -- you want us to pay income taxes, too?"

In order to help municipalities reduce their borrowing costs for things like roads, sewers and schools -- you know, things people kinda sorta need -- Congress exempts certain types of local and state industrial development bonds from federal income tax. Guess what else qualifies? Stadium construction. As former North Dakota Senator Byron Dorgan said " . . . it looks to me like the only healthy public housing program in America today is the one that builds sports stadiums with luxury skyboxes with public funds to house professional sports teams with private ownership.”

The Tax Reform Act of 1986 required municipal bonds to become taxable if more than 10 percent of the debt for a facility built mainly for non-government use (read: stadiums) was to be repaid with revenue from a private business. The idea? Cities that were using rent, game ticket surcharges and other sports-related fees to repay stadium bonds would stop gaming the tax code, because really, no municipality in its right and responsible mind would shift 90 percent of stadium debt onto the general public. The unintended outcome? Municipalities started doing just that.

In the eyes of the IRS, the National Football League is considered a nonprofit outfit. Just like the United Way. Read that again. The NFL -- a league that makes roughly $9 billion in revenue per season and will collected a guaranteed $27 billion in television money over the next decade -- enjoys the same tax breaks as, say, your local chamber of commerce, because both are classified as 501(c)6 organizations.

Me: The NFL generates cash and then gives it to NFL teams,  who then pay tax-deductible dues back to the league.

Again, remember those rental car fees? Remember those hotel and restaurant taxes that paid for Lucas Oil Stadium? Turns out state and local governments typically exempt nonprofits from sales taxes -- which means that when the Super Bowl was held in Indianapolis last February, NFL employees didn’t have to ante up

 

NFL executive vice president of media Steve Bornstein earned $12.2 million in 2010, while former commissioner Paul Tagliabue made $8.5 million. Goodell’s salary reportedly will reach $20 million in 2019. In comparison, the next highest salary of a traditional nonprofit CEO in 2008 was $3.4 million.

The article keeps going and going.

[Flannel Boy]

The Olympic Stadium in Montreal, which houses like one or two CFL games a year, ended up costing taxpayers $1.61 billion in construction and repairs. The Sky Dome--I mean Rogers Centre--cost somewhere between $500-$900 million. 

[Mr. Gundam]

The Olympic Stadium in Montreal, which houses like one or two CFL games a year, ended up costing taxpayers $1.61 billion in construction and repairs. The Sky Dome--I mean Rogers Centre--cost somewhere between $500-$900 million. 

Your government also funded Dyack.

[ToxicAdam]

It's a pretty complicated issue. I think this fellow was a bit disingenous with some of his points (especially blaming sports stadiums on the high tax burden in Minneapolis), but also makes some very good points as well.

Basically, sports holds a disproportionate spell over our country and outfits like the NCAA and the NFL make out like bandits because of it.

[Flannel Boy]

The Olympic Stadium in Montreal, which houses like one or two CFL games a year, ended up costing taxpayers $1.61 billion in construction and repairs. The Sky Dome--I mean Rogers Centre--cost somewhere between $500-$900 million. 

Your government also funded Dyack.

You mean Epic Games? Ubisoft Toronto got a $263 million subsidy, which translates to over $320,000 per job. I don't see how a cost-benefit analysis could ever support that, especially when corp profits do not remain in Canada.

At least Toronto, unlike Seattle, has both a professional basketball and hockey team. Wait, nevermind.

Not much you can do as long as the owners can pack up a team and move it to whichever city is willing to offer up the sweetest incentive bundle. No city wants to see a repeat of the Seattle Sonics.

The article doesn't just discuss stadium financing. As for that, I don't know what can be done. Create or expand  laws forbidding coercion in certain settings to other businesses under Unfair Trade Practices? Create laws within states that explicitly forbid public funding of professional sports or professional stadiums(assuming enough states adopt such legislation, owners would have to threaten to move to Winnipeg or Mexico city)? Give Triumph with a wall, unlimited power, and unlimited ammunition?

[Flannel Boy]

It's a pretty complicated issue. I think this fellow was a bit disingenous with some of his points (especially blaming sports stadiums on the high tax burden in Minneapolis), but also makes some very good points as well.

Basically, sports holds a disproportionate spell over our country and outfits like the NCAA and the NFL make out like bandits because of it.

It's not a complicated issue--your second paragraph explains exactly why it's not. Emotion > reason

He didn't explicitly do that, but I guess that is his implication. The new taxes will, however, increase downtown taxes by 3 percentage points or nearly 30%.

[MyNameIsMethodis]

American sports are a joke. All the teams are 100% safe and they have way too much power. The teams should be treated like they are in Europe where if you suck you get fucking relegated to some lower league and replaced with good teams. Oh and teams actually go out of business if they are run incompetantly and aren't just bailed out.

[TakingBackSunday]

American sports are a joke. All the teams are 100% safe and they have way too much power. The teams should be treated like they are in Europe where if you suck you get fucking relegated to some lower league and replaced with good teams. Oh and teams actually go out of business if they are run incompetantly and aren't just bailed out.

Someone isn't familiar with shitty NFL teams, it seems.  Or in a greater sense, teams that get the shit-end of the stick in the recent reorganization of NCAA conferences.

[Flannel Boy]

American sports are a joke. All the teams are 100% safe and they have way too much power. The teams should be treated like they are in Europe where if you suck you get fucking relegated to some lower league and replaced with good teams. Oh and teams actually go out of business if they are run incompetantly and aren't just bailed out.

Someone isn't familiar with shitty NFL teams, it seems.  Or in a greater sense, teams that get the shit-end of the stick in the recent reorganization of NCAA conferences.

They're very safe financially because of massive revenue sharing.

[TakingBackSunday]

Eh, true.  This topic is beyond me so I'ma just observe.

[MyNameIsMethodis]

the NFL is the worst brandnew, as you could ltierally spend 16 weeks not winning any games yet still get a huge parachute payment from TV deals that the owners can pocket because they have no fear of ever being relegated and replaced with a different team. It's why American sports are so bad in this regard. Every team is safe and they don't have to care about their team unless they want to. in Europa you have to care about your team and improve your squad if you want to remain in the top flight and get the parrachute payments.

[Flannel Boy]

In NA, relegation would never work because of how the leagues are constructed.  The gap between level-one teams and level-two teams is massive in terms of infrastructure and talent. It would neither make sense for a team to be relegated or promoted. How would a Triple A team with a 10k stadium, Triple A talent in a tiny media market compete? What would be the benefit to the Astros moving to Triple A? It would just greatly reduce the team's revenue. Since the level-two leagues--Triple A, NBA-D, and AH--are developmental leagues owned by level-one teams, a level-one team could be relegated while its minor league affiliate, full of its very own prospects, would be promoted.

[Bebpo]

Eh, people in America would go to war over sports.  Nothings going to change.

[Mr. Gundam]

Eh, people in America would go to war over sports.  Nothings going to change.

It's not like Europe is innocent in regard to futbol.

[Flannel Boy]

Eh, people in America would go to war over sports.  Nothings going to change.

Americans have gone to war for far less, but the end of sports welfare is not the end of sports.

[MyNameIsMethodis]

The idea behind relegation is that if you want to be a top tier team you put money into your team  and the loss of fans and revenue from going into the lower leagues is motivation to spend and stay up, and you don't get by on incompetance like in America.

[Flannel Boy]

Relegation was created because of a historical quirk at a time when the business of sports wasn't insane. No owner of a franchise in a "premier" league in the 21st century would voluntarily create an open, multi-tiered system that would force him to both open up his market (to support such a system) and accept the chance that his team could be relegated, costing him not only tens of millions of dollars in revenue, but hundreds of million in franchise value.

[Himu]

mls has relegation, methodis.

[Flannel Boy]

mls has relegation, methodis.

It does (I don't follow soccer)? How the hell does a team get relegated from such a shitty league? Teams and players in the MLS have already been relegated.

[Mandark]

mls has relegation, methodis.

does not

[Flannel Boy]

mls has relegation, methodis.

does not

I didn't think so--Toronto FC has never be relegated.

[MyNameIsMethodis]

lol

[MyNameIsMethodis]

Relegation was created because of a historical quirk at a time when the business of sports wasn't insane. No owner of a franchise in a "premier" league in the 21st century would voluntarily create an open, multi-tiered system that would force him to both open up his market (to support such a system) and accept the chance that his team could be relegated, costing him not only tens of millions of dollars in revenue, but hundreds of million in franchise value.

yeah duh, but thats what makes the sport alot more interesting and fun and you don't see clubs sititng there purposely sucking for years until they win the lottery with a draft player

[CajoleJuice]

lol @ himu saying mls has relegation. probably the only person who gives a shit about it and still doesn't know it.

[Flannel Boy]

yeah duh, but thats what makes the sport alot more interesting and fun and you don't see clubs sititng there purposely sucking for years until they win the lottery with a draft player

That's not an argument for relegation but an argument for removing the draft-system.

[Himu]

Wait, you're right.

[MyNameIsMethodis]

yeah duh, but thats what makes the sport alot more interesting and fun and you don't see clubs sititng there purposely sucking for years until they win the lottery with a draft player

That's not an argument for relegation but an argument for removing the draft-system.

I think the draft system is the best thing to happen to sports in America, but not the way it's implemented now where if you finish dead last you can make more money getting draft picks and reselling them years later than if you win anything

[Flannel Boy]

Citation needed.

[Himu]

lol @ himu saying mls has relegation. probably the only person who gives a shit about it and still doesn't know it.

Yeah. The other day I was arguing about it and a MLS Cup final having a second leg. He was adamant the Cup having one leg is too little, but I said stuff like CL and WC have one leg, and it's common in the sport. Then we talked about relegation, and we were both supportive of it. I don't know why I had that brain fart.  But Toronto should definitely be relegated.

[Mandark]

You can look at the draft/salary cap regime vs. relegation as two ways of encouraging competition.  It's really interesting just how different the system is for Euro soccer than for pretty much all American pro sports: relegation/promotion, no draft, no playoffs, no salary cap, player sales rather than trades, no transferring of contracts (a player negotiates a new contract for a transfer), hardly any relocation of franchises, youth systems rather than college sports, etc.

All sorts of historical/geographical reasons for that, which probably also explain why Euro soccer teams can't blackmail their home cities with the threat of moving (way more densely populated with teams than US sports; there aren't any big unserved population centers like there are in the states).  And yeah, stadium subsidies are BS.

[Mandark]

Relegation's even more unlikely for the MLS than you'd normally expect, since the teams are all owned by the league.

[MyNameIsMethodis]

whhich is dumb cuz the NASL could easily act as a league two for the mls

[Mandark]

Relegation wouldn't really be compatible with MLS's goals, though.  They want to gradually build the brand of the league and of the individual teams, expand but not overstretch, get teams their own soccer-first stadiums, and provide a professional base for the US national team and former NCAA college players.  All that only really works if you can manage which cities are represented in the league, guarantee their long-term involvement, and distribute players through a draft or similarly league-managed system.

It'd be fun to see a Euro style league in the US, but there's a lot of sports infrastructure that comes with it that we just don't have.

[MyNameIsMethodis]

Yeah. I think College sports are fucking stupid and wish we'd do away with it in favor of farm systems and such but thats never going to happen

[etiolate]

The Maloofs are testing the limits of how far you can go with fucking up a situation and making nobody want you and still get a stadium built for you with no cost to yourself.

[ToxicAdam]

It's not a complicated issue--your second paragraph explains exactly why it's not. Emotion > reason

The core of the reasons are simple, but the solutions are complicated. You would be dealing with many different governments at many different levels. That seems complicated to me. A 'top-down' solution would not be as cut and dry as you would think (as was evident with that clause passed in 1986).

The situation is kind of like the NBA and bad max contracts. You are always going to have one or two bad GM's willing to hand them out to placate their people. The same is true with stadiums and politicians/voter bases.

[Flannel Boy]

Relegation's even more unlikely for the MLS than you'd normally expect, since the teams are all owned by the league.

How does the corporate structure work? For instance, Maple Leafs Sports and Entertainment, the worst multi-sports organization in sports (Fuck citations), is always referred to as the owner of Toronto FC, which, as an aside, plays in a stadium (or do you wankers call it a pitch) paid for by the city of Toronto.

[Flannel Boy]

It's not a complicated issue--your second paragraph explains exactly why it's not. Emotion > reason

The core of the reasons are simple, but the solutions are complicated. You would be dealing with many different governments at many different levels. That seems complicated to me.

Right, I thought you were talking about the cause.

[Mandark]

Relegation's even more unlikely for the MLS than you'd normally expect, since the teams are all owned by the league.

How does the corporate structure work? For instance, Maple Leafs Sports and Entertainment, the worst multi-sports organization in sports (Fuck citations), is always referred to as the owner of Toronto FC, which, as an aside, plays in a stadium (or do you wankers call it a pitch) paid for by the city of Toronto.

I'm fuzzy on the details, but basically team owners are investors in the league itself, and are given the rights to operate a franchise.  So you'll see terms like managing partner and owner-operator.  There was a company that owned five or six teams at one point.

Also, players negotiate contracts with the league, rather than with teams.  Though I think the players won some expanded rights through a court challenge, but the details are fuzzy.