“The NFL is the richest sports franchise, full of billionaire capitalists demanding socialist handouts so they can make even more profits.”
– Ralph Nader
The billionaire owners of the National Football League’s Buffalo Bills, Terry and Kim Pegula, have landed US$850 million in taxpayer dollars for the construction of a new stadium.
The deal was approved and touted by New York Gov. Kathy Hochul and other local and state politicians. It will be the largest taxpayer contribution ever for an NFL facility. Once long-term maintenance costs are factored in, the public’s share of the cost of building and operating the new stadium will be more than US$1.1 billion.
According to Forbes, the Pegulas have a net worth of US$5.8 billion. Nevertheless, they’ve spent months begging local and state politicians for public money to build a new sports castle in which they can become even wealthier.
The NFL is a government-sanctioned, unregulated monopoly. As such, it can limit competition and league franchise owners can threaten to move to other cities if their current host cities don’t build them plush new stadiums.
Politicians are crafty in how they go about making handouts to wealthy franchise owners. It’s not just direct payments for building the stadium facility. Cities are forgoing real estate taxes, spending money on land and infrastructure improvements and absorbing interest costs on public bonds, among other methods.
Team owners and politicians typically tout regional economic benefits – i.e. a boost in the number of local jobs – in justifying public subsidies for pro sports stadiums and arenas.
Perhaps the most well-known sports economist is longtime Stanford economics professor Roger Noll. Noll strongly believes the estimated jobs effect of a subsidized sports facility is actually negative because spending at the subsidized stadium substitutes for spending elsewhere, where a greater number of people are employed per dollar spent. Noll emphatically states that publicly-financed stadiums aren’t a net local economic benefit.
I asked Noll how pro sports leagues continue to get away with these stadium heists.
“There’s a socio-cultural impact of sports that enables the industry to do things that other industries can’t do,” according to Noll. “That’s the answer to the substance of your question. We don’t really regulate it, and the reason that we don’t is that it’s hard for us as a society to think straight about the operation of the industry and to strip away the underbrush surrounding it and say, look, these are just extremely lucrative monopolies that have gone well beyond any reasonable co-ordination mechanism that would be necessary to have a league.
“And the costs are partly borne by consumers in terms of high prices and lack of availability of games on television, etc., and also via taxpayers paying subsidies.
“So we’re left with an extremely profitable industry, measured by return on investment, which nonetheless gets subsidized. Instead of getting regulated, it gets subsidized! Which is purely a reflection of the fact that we don’t know how to think straight as a society about the economics and business side of sports.”
We don’t know how to think straight is right. Sports economist Robert Baade calls it the reverse Robin Hood effect, “taking from the poor, the near poor, the working class, and the middle classes and giving to the rich.”
Dave Zirin, a sports journalist and activist, put it very succinctly – and accurately: “In the United States, we socialize the debt of sports and privatize the profits.”
The NFL’s sports welfare scam continues. It’s now moving from New York to Tennessee. Tennessee Gov. Bill Lee plans to propose US$500 million in bonds in the state budget to help fund a new covered Tennessee Titans stadium in Nashville.
It’s all simply abhorrent.
Ken Reed is sports policy director for League of Fans (leagueoffans.org), a sports reform project. He is the author of The Sports Reformers, Ego vs. Soul in Sports, and How We Can Save Sports. For interview requests, click here.
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