NFL Raiders Moving; Taxpayer Gravy Train Keeps Rolling Along

Parent Cafe
1

The Oakland Raiders are about to officially become the Las Vegas Raiders. Fine, it’s a private business and they are free to operate as they choose. But why in God’s name are municipalities and states still taking the sucker’s bet by providing hundred-million dollar subsidies to the NFL when the league grosses $15 Billion yearly? And the Raider’s owner is getting low-cost or no-cost loans which will account for his contribution towards new stadium construction. What?

ESPN reported: “Davis has been adamant he didn’t want to dilute his stake throughout the process. That’s why the financing fell apart with original lenders, casino billionaire Sheldon Adelson and Goldman Sachs. But Bank of America swooped in with no-strings-attached financing, plus Davis gets a $200 million loan from the NFL. No catches are important to NFL owners, who don’t want to have to deal with outside interests. It’s why the city of Oakland’s last-ditch effort wasn’t good enough, because venture capital firm Fortress was going to put up money to build the stadium, and they wanted involvement in team ownership.”

2

This burns me up!!

3

At least Seattle visitors finally stopped paying for the Kingdome that was imploded in the year 2000…

4

Because on every one of those tickets there is a $XX tax that goes to the city. Game days bring in hundreds of thousands of dollars to the cities and states. There are jobs created building the stadiums, the parking lots, working the games, hosting other events in the space (high school games, professional soccer and lacrosse, band competitions).

5

My city just said NO and the Chargers went to Los Angeles.

6

It is not worth subsidizing NFL teams. If cities lowered their taxes by $100 million instead of raising them, more businesses would move into urban areas.

7

And a lot of people who made money from the Chargers will no longer have that revenue - bars, stadium workers, program printers, gift shops, food trucks. The city will even lose money from parking tickets on game day.

It’s just a decision the city has to make, but most cities find the sports teams very profitable and good for the cities. Can’t imagine Boston without the Red Sox or Chicago without the Cubs, even in losing years. When they are winning…lots of profit.

8

those poor folks in Oakland. again.

9

Bob Kraft built Gillette Stadium himself. Built an retail/entertainment development (Patriot Place) around it in order to pay for it. State did pay for road improvements as the stadium is on Rt.1, which was overwhelmed on game days. End of story. He know a free stadium wasn’t going to happen, and wasn’t willing to move the team to get a freebie.

10

Awful. I hope Oakland sports fans turn their backs on the Raiders (and the Warriors, who are moving to SF in '18).

11

I normally wouldn’t vote for a stadium to have public funds but why didn’t San Diego? Due to their location, they could get 1-2 bowl games each December, a Super Bowl every few years and do a joint venture to have North/South American soccer games.

12

@twoinanddone:
There have been numerous studies done on the economics of sports stadiums and public funding, and across the board they found out that the benefits generated (at least economically) did not pay back the cost to the cities that built them. There is value to when cities make improvements around the stadium, as they did at Fenway with the way they made the area around it…but as far as I know when they have expanded Fenway seating and the like,the team paid for it, likewise with the Cubs and Bears the team paid for upgrades to the stadiums (and with Fenway, they aren’t likely to build a new stadium, the fans would kill them).

With the Jets and Giants the teams paid for them (and stiffed the season ticket holders with PSL’s that have turned into the equivalent of owning a time share), the state still had more than a bit in the game, they spent about 250 million in improvements to roads and such, and they also let the teams use state bonding authority through the meadowlands authority to finance the stadium using state bonding authority (which gives a very, very cheap interest rate because it is backed by the state, said debt theoretically doesn’t cost the state anything, but by adding to the debt on the states books can cause the ratings to drop).

Cities pay the blackmail because they don’t want fans mad at them, basically, plus they want the prestige of having a team, so they fork over the money when they threaten to leave, or face what Oakland and San Diego are. The NFL is kind of encouraging this, one of the things they are doing is encouraging teams to share the same stadium, for example the Rams in LA and San Diego, so the stadium is being used by both and the costs shared, or what the giants and jets did, this could encourage teams to move out of crappy markets like Jacksonville and into potentially more lucrative ones (it remains to be seen if LA can support two teams, LA had a very, very troubled relationship with football teams in the past).

The real problem with these stadiums IMO is the cost of them is not really for the teams or the ordinary fans, the real cost and reason for building them is for the luxury suites that corporations and well off individuals go for, so what you end up with is a city spending money it might not have to allow team owners to build mega stadiums that primarily benefit the very few. The cost of going to the games for ordinary fans has the NFL worried, while teams get a lot of money from TV and merchandise, having an empty stadium would make the tv experience a lot poorer, and a lot of fans given how good tv’s are now and the comfort of being home with the expense of going to a game, they are worried. Not to mention that in the near future the revenue from TV may decline, there is getting to be the point of diminishing return, especially with the revenue from cable outlets as people cut the chord and so forth, ESPN is having problems, and I wonder if the networks won’t face the same thing.

13

I think people in San Diego and Oakland will regret not funding new stadiums.

I’ve lived in cities that are sports crazy and in some that aren’t really interested in sports. I find sports cities more interesting even though I don’t go to many games. Just gives the city more options for entertainment.

LA is interesting because it is so spread out. I think cities where baseball and football are close are more vibrant because then the sports bars and restaurants can be active year round. Kansas City, Denver, Minneapolis all have good locations, I think.

One high school my kids went to had a $40m sports complex. It was across the street from the school and was run as a separate business. There were 3-4 baseball diamonds, several soccer fields, and a swimming pool that were in use every day of the year. The pool not only had the school’s teams practicing there by several youth and adult teams too. The school was definitely making back their investment. The facility that wasn’t used as often was the basketball court, but the school used it for Mass and for other meetings.

14

I personally don’t think San Diego or LA are good markets for big teams and big expensive stadiums. They are both markets where there are just too many other outdoor activities and things going on that the pool of available football fans who are going to shell out money to go to a game are diminished. San Diego is a huge college and ‘young’ town…they aren’t spending money going to expensive football games.

We all love our Chargers but they don’t make it to the playoffs often and we’ve got too many other fun things to do on the weekend.

Owners left because NFL refused to hold Super Bowl in our old stadium because we didn’t have the big corporate boxes. Really??? Owner refused to pay a dime towards the stadium. Instead he paid $$$$ million to NFL to move to LA where he has to share a market in another city where fans have way too many options on weekends and the city is spread out with no rapid transit.

All of us hope he fails miserably and has to keep moving. Most of the sports columnists in LA basically wrote articles stating “We don’t want you”. Owner took a huge gamble because they are playing in a small 20,000 seat soccer stadium until a mega stadium gets built.

Meanwhile we are one of the few cities where Super Bowl week averaged about 75 degrees in Feb and was a huge success. Over 100,000 local residents came out the last time the NFL lowered themselves to come to our City.

15

I agree with @coralbrook. We have so much more to offer in San Diego than just football. Having the Chargers wad not important to the majority of taxpayers here. I don’t San Diego will lose much without them.

16

Hmm. What do people do with their entertainment dollars if their sports team leaves town? Do they just set fire to stacks of twenty dollar bills, or do they spend the money on other forms of entertainment that would also benefit the local economy?

17

Some of those San Diego people will be taking their entertainment dollars to LA, but I was really talking about the stadium workers, the businesses that surround the stadium, the food trucks that make a killing on game day. Will other businesses get some of those dollars? Sure, but not necessarily on a Sunday. There will be other visitors to San Diego, but will they spend as much as a football fan on Sunday? I’m unlikely to buy a $10 beer at a restaurant (when I can get one for $3 across the street), but I might at the stadium. My nephew used to go to San Diego for a game when the Broncos played. He brought in ‘outside’ money for his tickets, hotel room, food, but now he’ll go to LA instead.

Most people who go to football games aren’t going on just one Sunday so aren’t thinking “How else can I spend my $500 now that football is gone?” They are season ticket holders who are shelling out $5000 for tickets and parking and hot dogs and beers all season. They aren’t going to think “Oh, now I have $500 because I’m not going to the game this weekend, I think I’ll go to the movies and spend $500.” They might take that $5000 and go on a vacation - outside of San Diego. Many of the tickets were corporate owned, and while they might spend money on other entertainment for their employees and clients, I doubt it will be in the same amount. I worked for a company that had North Star season tickets when the team left Minneapolis. We didn’t suddenly get concert tickets or symphony tickets. The company just kept the $10 grand or whatever they cost back in those days. Didn’t even buy more sports tickets, just kept the money.

I think the cities need to think outside the box and not have the stadiums sitting empty for all but 10 Sundays per year in order for it to be profitable. High school football, college bowl games, soccer or outdoor lacrosse. Sharing with a baseball team is no longer a good idea, but sharing parking and restaurants and employees can be profitable. Gillette Stadium is a ‘shopping experience’, the newer baseball parks have restaurants open all year long, sometimes even ice hockey or other fun events.

18

Could someone clarify how the income from sports are taxed at federal level? I vaguely remember it is somehow tax advantegous. If true, it’s not just state and city giving them money.

19

Charger Stadium did not have any surrounding businesses. One of the key things the owner was pushing for was a downtown location on extremely expensive land with a large surrounding complex.

There is a new proposal for existing stadium land that will be for a major league soccer stadium and surrounding complex. This makes much more sense for our demographics and can be shared by our many colleges

20

I think that the players will probably enjoy the move to Las Vegas. The state income tax in California is quite high, especially for high income workers. Nevada has no state income tax. They will have a pleasant surprise when receive their pay checks, if they already didn’t know.