RealGM

There are a lot of smart people on this board, and I'd like to get their opinion on how to solve sports welfare. How can we get cities to stop competing for pro franchises with taxpayer money when every league has non-competes and the # of teams are scarce?

It's a huge problem in my opinion and one that both democrats and republicans would both seem motivated to solve together.

http://www.sportsonearth.com/article/40595178

Still, at least the county gets to enjoy the job-creating, local business-boosting gold mine of 10 NFL games a year, right? Wrong. Numerous studies have shown that the local economic impact of stadium construction is nil. Dennis Coates, an economics professor at the University of Maryland, Baltimore County, calculates that “the professional sports environment” -- that is, having stadiums and teams in a particular area -- may actually reduce local incomes. “Our model shows that average income is a little bit lower, about 40 dollars a year for a family of four,” Coates says. “Now, why might that be? There are a number of possible explanations. One of them -- and I think this is the most plausible -- is that a large amount of the money spent inside a stadium simply leaves the community. Think about the revenues generated. Fifty percent is player salaries. In most leagues, players don’t live where they play. So they take an enormous amount of money generated in the community and take it to south Florida or southern California and spend it. If that same money was spent on a movie, dinner, bowling, the theater, a locally owned bar, tips for bartenders and waitresses, all of that money predominantly stays within that community.”

Worse still, Coates notes that stadiums typically are paid for in regressive ways, via lotteries and sales taxes -- Minneapolis, for example, is set to boast the highest downtown sales taxes in the nation -- that disproportionately burden the poor, while the benefits of the stadium go mostly to relatively wealthy sports fans. Basically, it’s trickle-down economics in reverse. That, or an unwitting nod to the socioeconomic milieu of pretty much every Charles Dickens novel. “Lower income people spend virtually all of their income,” Coates says. “Higher income people save more. It’s clear that sales taxes are regressive. And we haven’t even talked about people who may not have interest in sports. Suppose I’m a big fan of the opera but hate football -- with a sales tax, you’re asking me to pay for a team that makes me upset. But that never gets factored in to these projects. It’s only the people who are going to be happy about having the team that we think about.”

How is that different than any corporate welfare? How is it different than states/cities giving money to any corporation for relocating to their jurisdiction?

fdr2012 wrote:How is that different than any corporate welfare? How is it different than states/cities giving money to any corporation for relocating to their jurisdiction?

It is different in a way because for example Illinois/Hoffman Estates gave money/benefits for Sears to stay back. Most people who work in Sears live around that area.

Mech Engineer wrote:

fdr2012 wrote:How is that different than any corporate welfare? How is it different than states/cities giving money to any corporation for relocating to their jurisdiction?

It is different in a way because for example Illinois/Hoffman Estates gave money/benefits for Sears to stay back. Most people who work in Sears live around that area.

Most people who work for a sports team live near the stadium/arena. I'd suspect outside of players, managers, scouts and owners, everyone else lives near where the sports team resides.

AirP. wrote:

Mech Engineer wrote:

fdr2012 wrote:How is that different than any corporate welfare? How is it different than states/cities giving money to any corporation for relocating to their jurisdiction?

It is different in a way because for example Illinois/Hoffman Estates gave money/benefits for Sears to stay back. Most people who work in Sears live around that area.

Most people who work for a sports team live near the stadium/arena. I'd suspect outside of players, managers, scouts and owners, everyone else lives near where the sports team resides.

The article says that it is the players who are taking most of the revenue and spending it outside the area. Plus, people who work for sports teams are not really full time employees and the number of them is so negligible for that community compared to a big corporation. Even if the players stayed around the area, I think it is a very losing idea for the most part. And, most corporations get tax breaks but not tax-payer funded buildings and facilities.

The problem is the politicians/negotiators are giving in easily to these teams. People are already heavily taxed and this kind of taxes are just "vulture" tactics. If I rent a car at O'Hare, it feels like the taxes per day is the same as the rental fee of the car. Those taxes are going to all kinds of payments to the Bears and other teams. There needs to some kind of return from these teams to the community and also repaying back the loans.

Sacramento Kings are another example of this public money sucking idea.

The state of Illinois will make about $3 million dollars in revenue from the players playing in Chicago as opposed to another state.

Add to it the tax on products bought at the stadium that are taxed, I have a hard time imaging the city or state losing a lot of money on these games. THEN add in the people who have jobs at the stadium or the surrounding area (this is much bigger in the Wrigley area) and it's a lot of money.

if you want to argue that NFL teams aren't worth it, I could buy that. But MLB, NBA and NHL teams have too many games that make me question how one could argue against this.

I like the OP's question, but regarding the quote...

honestly, I think the professor what's his name is a bit of an idiot.

I'm quite convinced the surrounding area makes money, and I couldn't care less how sales tax dis proportionately affects the poor or $40 lower annual income per household.

now the topic itself of bidding wars and how and why the cities want franchises, i'd love to discuss that.

And you do have a point, we have taxpayers bidding against taxpayers for sports franchises, even for minor league baseball teams, my city just built a new stadium for the red sox, and the old one was not old !

If you build it they might come
If you don't build it they'll never come.

should it be done with taxpayer money, yes, under the right circumstances, long term leases, and shared revenue. But I guess that's where the bidding wars come in right ? the next city will offer more than the last.

Well I think there are a few problems with the thesis

1. I don't know if sports welfare is a BIG problem. Rather, my argument would be, if your town doesn't want to pay for a team - don't pay for it. LA didn't implode when football left. Seattle is still there. My attitude would be is if you want a stadium - pay for it yourself or give up some control to the public. But the best remedy for sports welfare is to go to the ballot box and vote out people who give these ridiculous tax breaks to league team owners. The best remedy is to simply say - No (or to make better deals). Until we learn to say no, there will be no remedy.

2.

Numerous studies have shown that the local economic impact of stadium construction is nil. Dennis Coates, an economics professor at the University of Maryland, Baltimore County, calculates that “the professional sports environment” -- that is, having stadiums and teams in a particular area -- may actually reduce local incomes. “Our model shows that average income is a little bit lower, about 40 dollars a year for a family of four,” Coates says. “Now, why might that be? There are a number of possible explanations. One of them -- and I think this is the most plausible -- is that a large amount of the money spent inside a stadium simply leaves the community. Think about the revenues generated. Fifty percent is player salaries. In most leagues, players don’t live where they play. So they take an enormous amount of money generated in the community and take it to south Florida or southern California and spend it. If that same money was spent on a movie, dinner, bowling, the theater, a locally owned bar, tips for bartenders and waitresses, all of that money predominantly stays within that community.

I think there is some flawed correlation vs. causation analysis going on here. First off, the benefit of the sports stadium is that it brings people into the area, not that the people who work for the team, are going to spend their money in the area. Its reported that the West Phoenix area raked in $300 million on the Fiesta Bowl - that has nothing to do with coaches salaries or anything else. That is about people coming in to the area, buying beer and food, renting hotel rooms, etc.

Secondly, any of the jobs that spring up around a stadium are going lower the average incomes in the area, because they are much more likely to be service jobs - waiting tables, bartending, ticket selling, security. So while their is job creation, we are talking about seasonal, low paying jobs. The question isn't whether or not the average salary of workers in the area is lower with the stadium. The question is: Is the benefit to the entire local economy (not just the immediate area) greater with the stadium than without? If the economy is even .01% yes, than we are talking a favorable analysis. Would not having these jobs be better than giving these tax breaks?

3. The arguments against regressive taxation have are only tangentally related to stadiums. You can make that argument about any sales tax that pays for anything. An increase in sales tax that pays for roads or schools or medicaid or any state service is going to be regressive. I'll give some added weight to his argument, in that poor people don't enjoy the benefit of the stadium as much as a rich person. But that doesn't mean they don't enjoy the benefit of the TEAM. Sports is a favorite pastime for many poor and middle class people, precisely because viewing it is free. The added enjoyment of rooting for your team can't be underestimated (its also why these measures continually pass).

Besides people pay taxes for all types of things where they see no personal benefit. Married people get tax credits that single people don't get - just because. I don't find this line of argument persuasive in light of the nation's overall tax policy.

Mech Engineer wrote:The article says that it is the players who are taking most of the revenue and spending it outside the area. Plus, people who work for sports teams are not really full time employees and the number of them is so negligible for that community compared to a big corporation. Even if the players stayed around the area, I think it is a very losing idea for the most part. And, most corporations get tax breaks but not tax-payer funded buildings and facilities.

The problem is the politicians/negotiators are giving in easily to these teams. People are already heavily taxed and this kind of taxes are just "vulture" tactics. If I rent a car at O'Hare, it feels like the taxes per day is the same as the rental fee of the car. Those taxes are going to all kinds of payments to the Bears and other teams. There needs to some kind of return from these teams to the community and also repaying back the loans.

Sacramento Kings are another example of this public money sucking idea.

You're wrong on that one - corporations get actual tax payer dollars (not just tax breaks).

All these economic impact studies are extremely difficult to do and they have little credibility in my book. Isolating the effect of a single part of an economy is virtually impossible to do.

Corporate welfare is stupid and should be banned. I really can't see why sports is so different and the "taking the revenue out of the state" argument is very weak. You could make the argument that most corporations take the vast majority of their revenues out of the state.

^Exactamundo.

Unfettered capitalism and corporate greed are killing us.

fdr2012 wrote:

Mech Engineer wrote:The article says that it is the players who are taking most of the revenue and spending it outside the area. Plus, people who work for sports teams are not really full time employees and the number of them is so negligible for that community compared to a big corporation. Even if the players stayed around the area, I think it is a very losing idea for the most part. And, most corporations get tax breaks but not tax-payer funded buildings and facilities.

The problem is the politicians/negotiators are giving in easily to these teams. People are already heavily taxed and this kind of taxes are just "vulture" tactics. If I rent a car at O'Hare, it feels like the taxes per day is the same as the rental fee of the car. Those taxes are going to all kinds of payments to the Bears and other teams. There needs to some kind of return from these teams to the community and also repaying back the loans.

Sacramento Kings are another example of this public money sucking idea.

You're wrong on that one - corporations get actual tax payer dollars (not just tax breaks).


All these economic impact studies are extremely difficult to do and they have little credibility in my book. Isolating the effect of a single part of an economy is virtually impossible to do.

Corporate welfare is stupid and should be banned. I really can't see why sports is so different and the "taking the revenue out of the state" argument is very weak. You could make the argument that most corporations take the vast majority of their revenues out of the state.

I don't know where you got your information. But, the usual deals are corporations like Sears in Illinois got tax breaks for property and other things. There might be a few instances where they get tax payer money. The bigger point is many sports arenas are getting built by public money plus these teams are getting tax benefits on top of it.

I agree that the economic studies are hard to do and corporate welfare is bad. But, it is very difficult to do all that however much people disagree. The Sports arena funding is something that can be stopped. Eventually, these teams have to be in a big city anyhow. The Bears can't say they will relocate to Peoria. I would say it is first stopping the excess and obvious stuff like this.

Read my sig.

We can't think about ending sports welfare until we end corporate welfare, and none of this can happen with the system continuing to operate as it does currently we need to end crony capitalism first, to fix all our problems.

Spimothy Leary wrote:I like the OP's question, but regarding the quote...

honestly, I think the professor what's his name is a bit of an idiot.

I'm quite convinced the surrounding area makes money, and I couldn't care less how sales tax dis proportionately affects the poor or $40 lower annual income per household.

Yeah regressive taxes!

Mech Engineer wrote:I don't know where you got your information. But, the usual deals are corporations like Sears in Illinois got tax breaks for property and other things. There might be a few instances where they get tax payer money. The bigger point is many sports arenas are getting built by public money plus these teams are getting tax benefits on top of it.

I agree that the economic studies are hard to do and corporate welfare is bad. But, it is very difficult to do all that however much people disagree. The Sports arena funding is something that can be stopped. Eventually, these teams have to be in a big city anyhow. The Bears can't say they will relocate to Peoria. I would say it is first stopping the excess and obvious stuff like this.

All those deals include something called "tax credits", but "tax credits" have nothing to do with taxes. They are simply a manner to transfer money from the government to the corporation corporation. Sports is no different than any corporate deal.

chitownsalesmen wrote:

Spimothy Leary wrote:I like the OP's question, but regarding the quote...

honestly, I think the professor what's his name is a bit of an idiot.

I'm quite convinced the surrounding area makes money, and I couldn't care less how sales tax dis proportionately affects the poor or $40 lower annual income per household.

Yeah regressive taxes!

can I get a woot woot ?

Mr Funk wrote:^Exactamundo.

Unfettered capitalism and corporate greed are killing us.

Umm, do you know what capitalism means?

Wow, could you be anymore condescending?

fdr2012 wrote:

Mech Engineer wrote:I don't know where you got your information. But, the usual deals are corporations like Sears in Illinois got tax breaks for property and other things. There might be a few instances where they get tax payer money. The bigger point is many sports arenas are getting built by public money plus these teams are getting tax benefits on top of it.

I agree that the economic studies are hard to do and corporate welfare is bad. But, it is very difficult to do all that however much people disagree. The Sports arena funding is something that can be stopped. Eventually, these teams have to be in a big city anyhow. The Bears can't say they will relocate to Peoria. I would say it is first stopping the excess and obvious stuff like this.

All those deals include something called "tax credits", but "tax credits" have nothing to do with taxes. They are simply a manner to transfer money from the government to the corporation corporation. Sports is no different than any corporate deal.

QFT

As far as Chicago is concerned, my concerns about the city's contributions to pro sports vary, depending on the sport.

The abominable agreement with the Bears irritates me every time I drive by the atrocious stadium on Lake shore drive on museum campus. It cost a fortune to build and is used by the Bears 10 times a year. The fans cook their own meals in parking lots instead of patronizing local restaurants. Concession revenues are shared with the Bears. The location itself is prime lakeshore property that would be better utilized for any 12 month, 360 day recreation instead. Forget about the financial details, which are terrible, the sacrifice in land site alone makes this a very bad deal for the city.

On top of this, and the Bears had no serious bidders for their franchise at the time of the deal. No suburb or city bid for them. Even if they had, do you seriously think the NFL would have prevented the Raiders or the Cardinals from taking their lucrative place? No, the city's first offer was a stadium site next to the White Sox on the South side. Cheap parking, freeway access, mass transit access already built. Bad, expensive subsidy for a third rate tourist attraction.

On the other hand, I have no complaints about the United Center, which was privately financed and built on land that was underutilized in a neighborhood that benefitted directly from the stadium's proximity. It serves two sports teams and other attractions at least a hundred days each year, I feel good about professional sports and their contribution to our community every time I see or visit it.

Mr Funk wrote:Wow, could you be anymore condescending?

Well you blamed government subsidies on "unfettered capitalism." That makes no sense. Blaming a lack of government subsidies on "unfettered capitalism" would make sense. But you said the exact opposite.