Money for nothing: How taxpayers foot the bill for pro sports stadiums

Over $6 billion in state and local tax revenue has been spent on the construction of pro sports stadiums since 1995

It’s a pattern that has been repeating itself over the last 20 years among the nation’s professional sports leagues: Demolish an old sports stadium and then build a glitzier one. Some say these new stadiums particularly reflect the success of the National Football League, whose total revenue since 1995 is $99.4 billion. But a large part of the funding for most of these stadiums comes not from the pro leagues but from taxpayers.

Some critics see it as a form of corporate welfare, and what few people realize is that even after a stadium is torn down, taxpayer dollars can still go to paying off its debt.

For example, at the time it was demolished in 2000, the Seattle Kingdome, home to the Mariners and the Seahawks, had an outstanding government debt of $83 million, and when Giants Stadium was demolished in 2010, it had a government debt of $266 million, which isn’t scheduled to be paid back until 2025.

When it comes to football stadiums, cities keep building giant facilities, with state and local governments paying, on average, for 57 percent of construction costs. That translates to over $6 billion taxpayer dollars to build fancy football stadiums since 1995.

Take the Minnesota Vikings’ new U.S. Bank Stadium in Minneapolis. The total cost is slated to be $1.1 billion, with state and local taxpayers shouldering $498 million of that.

Proponents like Michele Kelm-Helgen, the chairwoman of the Minnesota Stadium Authority, say the new stadium will bring a much needed economic boost to Minneapolis, adding that there’s “already a billion dollars being constructed around the stadium, bringing all these major events, and the people and the economic people to stay in our hotels, eat in our restaurants, shop in our stores. That never would happen if you don’t have this kind of facility available.”

But many sports economists, like Craig Depken of the University of North Carolina at Charlotte, who have studied the issue come to a different conclusion. He says sports economists “have thought about this, whether or not the subsidies to publicly funded stadiums are worth it or the benefits outweigh the costs. And generally speaking, we think that they’re not. They’re big, discrete projects. They’re very obvious. Politicians can point to them. Team owners can point to them. Even fans can look at the stadiums and enjoy them. But in the end, the broader benefits seem to be outweighed by the costs.”

You’re telling me you can’t charge your fans but you can go to these people and reach in their wallet and make them pay so you get a new stadium?’

Jesse Ventura

former Gov. Minnesota

That cost-versus-benefits debate about whether to build a stadium dates to 1999 for the Minnesota Vikings. At the time, then-Gov. Jesse Ventura had a meeting with the Vikings’ then-owner, Billy Joe “Red” McCombs. Ventura says, “Red McCombs came in with nothing. Plopped down in the chair, looked at me with his old Texas drawl and said, ‘Governor, I need a new stadium.’ And I thought to myself, ‘I’m going to have fun with this.’ So I looked at Red and said, ‘Well, Red, what do you need to see me for? I’m sure there’s a landowner out there. You can buy some land and build a stadium. Go ahead. You don’t need my approval.’”

McCombs, now 88 and living in San Antonio, Texas, recalls his argument to Ventura in favor of spending government money to build the stadium. “Well, the public relations value and the day-to-day plugging of your city you can’t put a value on because there’s no other model or any other product where you can get that. But on sports, you get it every day the year round,” he says. “So of course it’s worth it. It’s more than worth it. It is the best value in the world.”

Ventura says he told McCombs that if he wanted a new stadium, he could raise ticket prices to help pay for it. “You know what his [McCombs] response back to me on raising the ticket prices was? He said, ‘Well, I can’t put this on the backs of our most loyal fans,’” says Ventura. “I got angry then. And I looked at him and said, ‘Well, Red, let me tell you something. My wife, the first lady of Minnesota, she doesn’t give a rat’s ass about Viking football. And there’s a lot of other people that [couldn’t] care less about it. You’re telling me you can’t charge your fans but you can go to these people and reach in their wallet and make them pay so you get a new stadium?’ I said, ‘Don’t let the door hit you in the ass on the way out.’”

It would take two more governors, a new team owner and nearly a decade and a half before the Vikings would get their new stadium, with taxpayers footing almost half the bill.

“Unfortunately,” says Depken, “the team owners often times have a much longer horizon, have much more patience than an individual politician or an individual taxpayer. So the team just kept waiting and kept offering and redemanding and requesting and then eventually did get their stadium subsidy through.”

Venture recalls the pressure he felt to build the new stadium and says, “The real pressure comes from yourself, because it’s your legacy. And any governor or high-ranking elected official — if a team does leave, well, that’ll be your legacy. The only good thing for Jesse Ventura was I didn’t give a damn. Because I’m not a career politician. I went there to serve and do the best job I could do for the people who elected me. And the NFL didn’t elect me.”

The Minnesota Vikings’ billion-dollar U.S. Bank Stadium is scheduled to open in July 2016. And given that the average life span of a new football stadium has dropped to just 30 years, the Vikings’ stadium will likely be demolished around the time the last of the public bonds financing its construction are paid off.

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