Who Hijacked Our Country

Sunday, April 15, 2007

Government Funding For Millionaires

Seattle is undergoing the same dilemma right now that’s already taken place (or will soon be taking place) in most large American cities. These cities all have at least one large stadium for their home team(s).

The owners of this athletic franchise are incredibly wealthy. “Not that there's anything wrong with that.” But in spite of their wealth, their business ventures were probably financed with taxpayers’ money. A millionaire was able to siphon off millions of tax dollars to pay for his latest business venture — the stadium — which in turn made him even more wealthy.

Then at some point, more often than not, these team owners will decide that their taxpayer-financed stadium isn't big enough. Or it’s not flashy enough. Or the location is too windy, too cold, too rainy; or it’s in a bad neighborhood.

The owner wants a newer/bigger/better stadium. The taxpayers are expected to cough up even more money for the proper care and feeding of their spoiled club owner. If they don’t, the owner will take his ball (the home team) and go someplace else.

And on top of that, other cities are clamoring and groveling for this team to come to their city. “We’ll build you a stadium! How much do you want? Pleeease??”

Is this right?

Here's Seattle’s version of the story: the Seattle Sonics are leaving Seattle because Key Arena is “inadequate.” Nearby Renton is begging the Sonics to relocate there. They're scrambling to arrange taxpayer funding for a new arena for the Sonics. Right now it’s uncertain whether government funding will go through or not. If Renton doesn’t build a new arena, the Sonics’ owners are threatening to take their team out of state. (The Sonics’ owners are based in Oklahoma City.)

A state senator said “This is so insane. I cannot see how we in the Legislature can subsidize (star player) Ray Allen for $16 million a year when we cannot pay a starting wage for a teacher of $34,000. ... We talk about state-of-the-art facilities, but when it comes to education, we have 2,000 portables in this state. We have schools where you can't drink the water.”

It’s true that these stadiums and arenas are beneficial. Ball games, concerts and other events bring in thousands of customers and pump lots of money back into the community. But the financial benefits might be exaggerated; there are conflicting reports. Some people think the benefits are outweighed by the expenses and the strain on the infrastructure — traffic jams, huge overtime for the police and fire departments, etc.

But any way you look at it, should a wealthy businessperson be able to force taxpayers to underwrite his/her latest venture? I think this issue cuts across party lines. Some liberals are probably anxious to pay for these stadiums just because they bring money into the community. And some conservatives — if they're consistent with their endless slogans against “government giveaways” — might oppose public funding for stadiums.

What do you think?

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14 Comments:

Blogger J. Marquis said...

I feel very conflicted about the Sonics situation. I'm a fan so I'd hate to see them leave, but I know that this endless cycle of stadium building needs to come to an end.

I will give credit to the new owners. I feel like they've made an honest effort to keep the team here (much to my surprise).

April 15, 2007 at 5:08 PM  
Blogger Tom Harper said...

J. Marquis: I don't follow sports that much, so I don't know the specifics about the Sonics. But the exact same thing was happening in San Francisco a few years ago, and I've read about the same drame unfolding in city after city. I'm glad the Sonics' owners are showing good faith, but ball club owners in general just seem like another example of the same thing. The public underwrites the costs of somebody's business venture, the business owner reaps all the profits, and if the business fails or leaves, the public is left holding the bag.

April 15, 2007 at 5:25 PM  
Blogger LET'S TALK said...

I dont follow sports that much, but I do notice when we are asked to support a new stadium or arena.

We pour all this money into these places and are charged outrageous prices just to see an event there, be it sports or some other type of entertainment.

I'm with you about the wealthy owners of the athletic franchise business ventures probably being financed by taxpayers.

I have asked the question about our old stadium, which is now a parking lot for the new one we have in Atlanta...where does that money go?

Public funding should cease, because I cant see any type of money being brought into the community where our stadiums are located.

Most neighborhoods near said venues are run down and what ever money that is generated are on the other side of the track in the downtown areas.

April 16, 2007 at 12:08 PM  
Blogger Tom Harper said...

Let's Talk: Yeah, I just don't think there's any reason for taxpayers to subsidize these stadiums and arenas. Whatever value they have for the local economy (and that's debatable), the owners can pay their own way.

And it's true that most stadiums are located in the ass end of town. I'm sure people are thrilled to learn that a new stadium is gonna be built in their neighborhood.

April 16, 2007 at 12:40 PM  
Blogger BaxterWatch said...

I used to live in Renton. And let me tell you, even though it is a less costly suburb of Seattle, it still costs ALOT of money to live there. To raise local taxes to subsidize the professional team is ridiculous. The local teachers (my aunt is one) can barely eek out a living. And in order to do so, they have to live an hour or more from their school just to find real estate that is affordable on a their salaries.

Local sales tax is almost 10%. There is no state income tax, yet, but.... more taxes?

IF the sonics were the lakers, and had full attendance at home games, I'd say "maybe" provided the ticket revenue was taxed - heavily.

But unfortunately, Renton doesn't have either the road or the public transport infrastructure to take this on without SERIOUSLY compromising the residents - especially on night games at rush hour. Dear god, the thought makes me ill just thinking about the traffic (which is already bad)

I laugh and laugh at the idea of the Sonics in Renton. That's just so WRONG.

IT was bad enough that the Seahawks got their new stadium. This is just stupid.

my recommendation to Seattle-ites? Become Portland Trailblazer fans. They have returned the favor for the Seahawks and Mariners.

April 16, 2007 at 3:09 PM  
Blogger Tom Harper said...

BaxterWatch: Yeah, it's absurd that teachers (people whose jobs actually serve a purpose) can barely pay the rent, while taxpayers are supposed to subsidize ball players and club owners who have 7-figure salaries.

And like you said, the traffic jams and the general strain on the infrastructure -- let the millionaires pay for it themselves.

April 16, 2007 at 3:34 PM  
Blogger Snave said...

I do o.k. on a teachers' salary, but if my wife wasn't working as a registered nurse and making about 30% more than I make, we wouldn't be able to afford both our automobiles or the house in which we live. We would get by, but it just wouldn't be as easy, not by any means.

For single-wage earning families, raising local taxes to build playgrounds for rich athletes doesn't seem right at all. For those people who are willing to pay for it, there ought to be some way they can contribute willlingly. But I really think if the rich want new stadiums, they can get together in groups and pay for the new stadiums with their own monies.

I'm like J. Marquis, in that I'm definitely a sports fan. I am also conflicted about the Sonics because I'm a fan. I am mostly a baseball fan, and when Seattle and King County were going through the uproar over building a new stadium for the Mariners, I was fervently hoping the Mariners would stay. At the same time I felt guilty about it because I didn't like the way the building of the new stadium was being handled and due to the number of societal needs that half a billion dollars could help. I think the new Seahawks stadium is beautiful from what I've seen of it on television... but I know virtually nothing about how that was funded. Was it another "let the taxpayers pay more" thing?

For a while, the NBA's Portland Trailblazers' owner Paul Allen, one of the richest men in the world, was whining and complaining about wanting a new stadium in Portland and saying taxpayers needed to help pay for it; I thought I had heard everything at that point! I for one did not get out my crying towel, and I sent the Blazers a message saying that Allen needed to put away his... But I think he was urged by his management group to drop the Blazers (they are basically his hobby, and because of mismanagement re. player personnel the Blazers have become a non-profitable NBA franchise... I am hoping that will gradually change with the addition of some new community-minded likeable players, so that the team is once again something of which Portland and the state of Oregon can be proud.) Maybe Allen decided it didn't matter what his management group said and that what they were telling him to do was poisonous for public relations, I don't know, but he he decided to buy the Blazers' arena and just keep the team in Portland. Heaven knows he can afford it!

April 16, 2007 at 10:47 PM  
Anonymous Anonymous said...

On a larger scale this is classic corporate welfare.

But it hasn't always been that way. It used to be teams stayed put and had to make better deals with their host cities.

On the other hand a lot of teams were playing with poor facilities
(anybody been to Candlestick Park?)

Then the Raider case came along and other owners who denounced Al Davis for not being loyal to his City picked up their teams for cities with better deals (remember the Irwindale fiasco?.

Or moved from the City to the Suburbs for better traffic, better grade of fan (ie higher ticket prices and parking concession revenues)

The Irony is this all came when the TV contracts got huge and ticket sales were no longer the bread and butter they used to be.

As you may have noticed Stadiums are not getting larger just newer with such luxuries as sky boxes which earn more then a whole block of seats. Jumbo TV screens, better parking, and concession prices through the roof.

Professional Sports do not like to slice up the pie and new franchises only comes once or twice every 50 years so the only way to get one is to out bargain the host city.

Don't blame the players in spite of what you read with the huge contracts their slice is low compared to the owners who get to depreciate them on their taxes like Office Equipment.

Guess where the money comes from?

Erik

April 16, 2007 at 11:06 PM  
Blogger Praguetwin said...

Like you say, it is a tough issue. I think a community should pay for it if it wants to. Run an initiative and decide.

One improvement in the NFL is that you can't take the colors and name from the city (thanks Cleveland).

In the end, if the people are willing to pay for it, that is their choice. I just wish I had invested in sports teams back in the 70s. What a business!

Finally though, sports teams are not the only business subsidized in one way or another by the public. State built infrastructure that is used by businesses to turn a profit is certainly nothing new.

April 17, 2007 at 12:26 AM  
Blogger Tom Harper said...

Snave: It’s just unconscionable for working people to pay taxes to subsidize millionaires. Most business people have to invest their own money (or the money of willing investors) into their enterprise, and then charge a price that’s high enough to make a profit but not so high that it drives away customers. Why should ball club owners be any different?

Some of these owners are wealthy enough, they could buy the entire city, let alone a stadium or two.

Erik: Corporate welfare is exactly what this is. And on top of that, after taxpayers have given these owners millions of dollars for their stadium, the owners might skip on over to another city who offers them an even more expensive stadium. I think you're right, the reason they like to build stadiums in the suburbs is so they can have more luxury items and charge higher prices.

Prague Twin: Ordinarily I’d be in favor of putting this to a vote and letting the public decide on it. But this particular issue just seems too lopsided and unfair. When I wrote this post I saw at as more of a 2-sided issue. But after some of the comments at Bring It On! where I cross-posted this, I started seeing it as a much more blatant case of class warfare and corporate welfare.

In yesterday’s paper there was an article about the taxes and fees paid by airline passengers. Millions of dollars of this tax money are funneled to tiny airports and air strips that only serve private planes and corporate jets. I would’ve done a post on it, but I didn’t want to do 2 posts in a row on the same theme (public tax money subsidizing the wealthy).

You're right, sports teams would’ve been an excellent investment.

April 17, 2007 at 9:10 AM  
Blogger Praguetwin said...

Please do a post on the airport taxes!!!!!

April 18, 2007 at 4:24 AM  
Blogger Tom Harper said...

Prague Twin: Here's the link. Feel free to do a post about it, or forward it to friends, etc.

April 18, 2007 at 8:41 AM  
Blogger Mike V. said...

I don't agree on putting to a vote the public funding of a stadium. Unless it's to gauge the public opinion overall.
Because a stadium is not like taxes or bonds and what have you that go towards community service.
And I love the argument from some people that these teams bring "jobs". Yea, great, just what my city needs, more hotdog sellers..
It's a little weird when every single house of sports winds up being called "Jimmy Dean Sausage Field" or whatever, but if it keeps my tax dollars out of it, that's fine with me.
And as a San Diegan, I say: Screw the Chargers. If you want to leave, then don't let the door hit your collective asses..

April 21, 2007 at 11:40 AM  
Blogger Tom Harper said...

Mike: Yeah, that's my take too -- if they're using their own money, go for it. Otherwise forget it.

Right now the Seattle papers are raging over the Sonics. I can't believe how many liberals are anxious to pay them more of their tax money just to keep them from leaving. I don't know if they think these teams are bringing in more jobs, or if it's just the status of having a major league sports team.

April 21, 2007 at 12:43 PM  

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