Oakland, California is in the midst of a crime wave and remains the fifth-most crime ridden city in America. Nevertheless, the city fired one-fourth of its police department — over 200 officers. However, in the latest example of the lunacy of public subsidies for professional football and baseball teams, the city is forking over $17.3 million for the National Football League’s Oakland Raiders and Major League Baseball’s Athletics. These owners are racking in huge profits but Oakland and other cities continue to subsidize the teams despite studies (here and here) showing that these teams do not bring in enough revenue to pay for the huge debt associated with new stadiums. However, the teams grab of millions from an economically crippled city explains why the team is called “the Raiders.”
To make matters even more bizarre, the Raiders are pressuring the city to replace the 46-year-old stadium or possibly lose the Raiders. The team’s owners are looking at nearby Santa Clara. In the meantime, financially strapped Los Angeles has backed a $1.5 billion stadium hoping to lure the NFL to the city. If the Raiders leave Oakland, it will leave the city with about $145 million in debt. It is astonishing that cities continue to yield to this legal form of extortion by NFL owners who use local fans to raid the coffers of cities and states. Of course, that loyalty is entirely one-sided. They make it clear that they will leave cities without hesitation is there is more money elsewhere. Art Modell showed how the bottom-line and not tradition guides owners in his decision to suddenly move the Cleveland Browns to Baltimore, Maryland during the 1996 NFL season.
Now politicians are shutting down educational and social welfare programs in order to fork over millions to NFL owners. Oakland even places football above public safety — the ultimate let them eat Football moment.
Source: Bloomberg
The only way I’d support giving money to the Raiders is if it meant fewer Oakland PD officers on the streets. If $17 million buys fewer OPD officers on the streets, then it’s a good buy.
Nick, I surmise that some day fans will simply stop going, either because that really can’t afford it or because they wil smarten up (or both). I still can’t believe the personal seat license concept caught on, which I think is another sham concept to get more money out of the blue collar fans.
Juris, You’re correct, the compliant taxpayers of Chicago paid for new skyboxes for corporations and feed off the trough pols. During the renovation the Bears played @ another losing Stadium, The U. of Illinois. Let the blue collar fans eat cake.
Juris, raff, Thanks for the responses. At least in some cases the taxpayers get something back. But I don’t see it as enough (cynicism kicking in). I doubt that the teams or the league have any skin in what to do with the monolith once it decays and the team moves on. New stadiums tend to displace low income housing and the families that live there.
Just a thought that goes no where but what if, when the teams move on, the stadium parts get turned into mixed income housing and the field gets turned into a park?
rafflaw, if not mistaken, didn’t Soldier Field recently get revamped? Your not a Cubs fan I hope :-p
Juris and Bettykath,
In Chicago, the City owns Soldiers Field and leases it to the Bears. There is a sharing of profits from tickets and sky boxes and concessions, but I don’t know the percentages. At least in Chicago, the NFL team has to share the venue with college football games and high school city championship games and some concerts.
Bettykath, in the Rams case, the St. Louis Regional Convention and Sports Complex Authority owns it, which is a state crature. They lease it to the St. Louis Convention and Visitors Commission (City creature), who subleases to Rams. It was a complex deal among the State of Missouri, STL County, STL City and the Rams.
I don’t know about Oakland’s arrangement or other football cities. I know the St. Louis Cardinals own the Busch, their stadium. It all depends on how the deal goes down.
As to your answer to my question, I think you are right. For some reason, I thought the leaders were supposed to have the taxpayers interests in mind.
Juris,
Who owns the stadiums, the municipality or the team? Seems to me the teams should be paying taxes of sort after they build their own stadiums. A good stadium increases the value of the team. Seems like a reasonable business expense.
Why do city leaders agree? I suspect they all get a access to a vip box and all that implies. Maybe a kickback or two or contracts to friends or family to build. Follow the money. Taxpayers pay and the connected collect.
rafflaw, why do you need financing when you are a billionaire. Some city’s taxpayers always put up the bucks.
http://articles.mcall.com/2012-12-20/sports/mc-stadium-subsidies-20121220_1_stadiums-budget-cuts-major-league-sports-facilities:
“Taxpayers have committed $18.6 billion since 1992 to subsidies for the NFL’s 32 teams, counting the expense of building stadiums, forgone real estate taxes, land and infrastructure improvements, and interest costs on public bonds, according to data compiled by Bloomberg. Eighteen of the teams are owned by billionaires.
[…]
The $18.6 billion of taxpayer subsidies to the NFL reflect costs and investments since 1986, when a new era of publicly funded stadium construction began in response to new laws on the use of municipal bonds for professional sports.”
Hmmm. I wonder how that law got passed?
And there’s more:
“Publicly financed stadiums for all U.S. major-league sports, including soccer, cost taxpayers about $10 billion more than forecast when accounting for the costs of land, infrastructure, operations and lost property taxes, according to a study of all 121 facilities in use during 2010 by Judith Grant Long, who teaches urban planning at Harvard University. The NFL has the highest public price tag, with taxpayers putting up about 87 percent of the expenses for NFL stadiums, she writes in her 2012 book, “Public/Private Partnerships for Major League Sports Facilities.”
Competition among cities for a limited supply of teams will probably mean even more sacrifice by taxpayers, she writes. Cities including Atlanta, San Diego and St. Louis — in addition to Oakland — are considering replacing their football stadiums.”
This data begs the question, why in the hell would any City’s leaders agree to public financing?
What Gene said. If a pro team wants a new stadium, they can get their own financing.
Nick – good point. Then you have an owner like Arte Moreno of baseball’s Angels who changed their name to LA even though they’re some 30 miles from LA. And they are not even playing in LA county?
Caterbo, I agree. I have long said the Jets and Giants should be Jersey as are the Devils and as were the Nets..now Brooklyn.
I posted this earlier but had too many links and said was “awaiting moderation.”
RWL, I too live in the STL Metro. JT’s article could apply to St. Louis, albeit on a smaller scale.
“The $280 million stadium was financed with bonds issued by the city, St. Louis County and the state, which will cost $720 million over 30 years to pay off. […]The Rams lease the Dome for $500,000 a year and get most ticket, concession and advertising revenue, including $42.3 million over 11 years for naming rights from Edward Jones. The Rams also use an authority-owned practice facility in Earth City. They are the only team that still pays amusement tax to the city, about $1.5 million last year”
http://www.stltoday.com/three-stadiums-three-deals/article_a74d64c2-09c9-11e2-b5b0-001a4bcf6878.html
“Every year, Missouri spends $12 million to pay off the debt, and St. Louis and St. Louis County each pay $6 million.”
http://www.stltoday.com/sports/football/professional/st-louis-cvc-made-earlier-dome-offer-to-rams/article_77287b38-7339-51c8-95e7-01d848dcb29e.html
Astonishingly, despite extensive negotiations with the Rams, the City has not done any research on the Rams’ economic impact.
“Measuring the team’s impact on the region is elusive. Neither the Regional Chamber and Growth Association nor the St. Louis Sports Commission has conducted an economic impact study on football in St. Louis. The CVC, which operates the Dome, said it had no data on the topic. And the Rams, citing their ongoing arbitration with the CVC, didn’t want to talk much about it.”
Yet firefighter pensions are being slashed and as much as 80 police officers were laid off this year.
I say St. Louis cannot afford to keep them.
Good question. San Francisco has a high average income, so the tax rate is kinda low — but they do tax large soft drinks. They can probably afford a few new stadiums.
San Francisco can’t wait to lease waterfront property to the Warriors to entice them to leave the Oakland Coliseum, where they have a perfectly good setup located within 5 minutes of the airport, just off a freeway with a huge parking lot and a BART station. How much taxpayer money can San Francisco sink into that deal?
Nick – A good portion of the attendance use the SF transit system to attend games weekly. That option is not available with the home games being practically in San Jose. SF should be dropped from their team name.
Considering the quality of the Oakland cops, I hope those were the worst 200.
Don’t ya just love it when the wealthiest get their “entitlements” that rest of us have to pay for? At the same time the rest of us get our “entitlements” cut b/c they scream at having to pay their fair share for the communal, and, of course, their wars.
Holiday spirit is everywhere. Hopefully this doesn’t mean the Mayans were correct! I’ll go w/ the former, being a glass half full person.