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Not to rain on Hawks’ parade ... NFL’s economic hype falls short
A raft of economic studies has shown that pro-sports stadiums don’t provide the wider benefits promised when taxpayers are tapped to help build them.
Special to The Seattle Times
Columnists, the old saying has it, come down after the battle and shoot the wounded.
Or the victors.
So I come not to praise the Seahawks, but to unbury the outrageous anti-taxpayer dealings of the National Football League.
Some readers won’t allow me to do otherwise.
As George Hickey of West Seattle wrote, “The Times is not giving its readers the full story here. It’s all rah-rah the Seahawks and Paul Allen without addressing the many issues, and opposition, that surround public funding of Seattle sports stadiums and specifically how the Seahawks stadium came to be publicly funded.”
To be fair, we have written plenty on the funding of CenturyLink Field, with taxpayers shelling out $300 million of the $430 million construction cost. We’re still paying off bonds for the imploded Kingdome.
All for one of the richest people in the world, Seahawks owner Paul Allen (worth $15.8 billion as of last September and No. 26 on the Forbes 400).
And how he’s even richer now. The team is worth $1.25 billion, according to a Bloomberg analysis, more than six times what Allen initially paid. (“They should be giving the taxpayers a parade,” Hickey dryly commented.)
But I take the larger point.
A raft of economic studies has shown that pro-sports stadiums don’t provide the wider benefits promised. The leader in this research is Harvard’s Judith Grant Long, who compiled her work in the book “Public/Private Partnerships for Major League Sports Facilities.”
For example, as of 2010, about $10 billion in public debt supported stadiums and arenas. The cost of infrastructure, land, operations and lost property taxes added 25 percent to the taxpayer cost of 121 venues. The average cost to the public was between $89 million and $259 million.
As for the promise of public/private partnerships, Long found that it translated on average to cost cities and counties 78 percent and the teams 22 percent.
Most of the jobs created by these massive public investments are low wage. The entertainment and tourism boosts are questionable as pro sports crowd out other options.
Meanwhile, teams and owners in the NFL, NBA, NHL and Major League Baseball have garnered about $20 billion in taxpayer subsidies for new venues since 1990.
They don’t call economics the dismal science for nothing, sports fans. The NFL, which generated an estimated $9 billion in revenue this season, is a particularly bad actor, exposed in devastating detail by journalist Gregg Easterbrook last year in an Atlantic magazine article.
For example, when the Minnesota Vikings demanded a new stadium, the Legislature turned over $506 million — this despite facing a $1.1 billion deficit.
The new $1.3 billion home for the San Francisco 49ers in Santa Clara, Calif., is said to cost the public $116 million. In fact, the city created a stadium authority to borrow another $950 million, which is called “private financing,” but the board is composed of city council members. “If something goes wrong,” Easterbrook writes, “taxpayers take the hit.”
Other examples abound. One of the worst is the $720 million Lucas Oil Stadium where the Indianapolis Colts play eight regular-season games a year. Interest rates rose on some bonds, adding $43 million in surprise costs. The Colts paid only $100 million for their new palace.
Compared to these, the CLink is a model of civic probity.
The NFL also benefits from special congressional provisions that give it nonprofit status, and antitrust laws don’t apply to its lucrative broadcast deals, adding to its wealth and creating legalized monopoly status.
So why do cities keep pulling out their checkbooks?
One big reason is the fear a team will leave if it doesn’t get what it wants (See Oklahoma City Thunder, formerly Seattle’s Sonics).
Such moves are rare, but leaders, whether liberal or conservative, feel they can’t take the chance. Thirty metro areas pay what is demanded to keep their NFL teams.
The deck is stacked after decades of giveaways to pro teams. Seattle said no to the Sonics and was not joined in a groundswell of solidarity by other cities. It just lost its beloved NBA team.
Another reason is the difficulty to quantify value and prestige of having pro teams, especially winners.
Eric Schinfeld, chief of staff of the Seattle Metropolitan Chamber of Commerce, told me the other day that the Seahawks have created a “halo effect” in “global brand recognition,” increasing the chances people will want to “move to, visit and invest in Seattle.”
“The 12th Man is an incredible ambassador for the city,” he said. “You can’t buy that kind of advertising.” Indeed, the Super Bowl pulled in 115.5 million viewers, a record.
A final caution about the studies on pro teams is that the money a stadium can attract would not necessarily be there for schools, libraries and mass transit. I wish it were so, but Americans love sports and these are the cathedrals our civilization has built.
As for Allen, he is a model steward. He does well but he also does good, and far beyond this winning football team. He has invested in the city when he could have put his money anywhere from sprawl subdivisions to derivative hustles. Without him, for example, it is doubtful Seattle would have the urban campus of Amazon.
So, yes, I was amid the 700,000 last week in the largest outpouring of civic joy I’ve ever witnessed. One is tempted to end by saying, you can’t put a price tag on that.
But, no. The NFL especially needs reform, from its monopoly status to its concussion problem and the sword it holds over cities.
Which political leader will be the first to tackle this?
You may reach Jon Talton at email@example.com
About Jon Talton
Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest