NFL Hits the Taxpayer-Funding Jackpot in Vegas

By Curtis Kalin

Wastewatcher, April 2017

Las Vegas has long been known as “Sin City,” and it will soon be home to one of the worst fiscal sins of all time.  On October 14, 2016, the Nevada state legislature approved the largest taxpayer subsidy in American sports history.  As long as the NFL allowed the Oakland Raiders to move to Las Vegas, taxpayers would fork over $750 million to help fund a new $1.9 billion stadium adjacent to the Vegas strip.  On March 27, 2017, NFL owners did just that, approving the move by a vote of 31-1.

The Raiders’ move ends an 18-month process that saw NFL franchises relocate away from St. Louis, San Diego, and Oakland.  Relocations are more common in the NFL than any other American sport.  In the last 40 years, 10 NFL teams have fled their homes, compared to seven each in the NBA and NHL, and just one MLB franchise.   

A common cause of NFL relocations is the rise of billion-dollar stadiums.  Over the past two decades, “21 new stadiums were built and three others were heavily renovated,” at a total public cost of $6.7 billion.  NFL teams routinely demanded that local residents contribute public dollars to build a new palace.  Any objection by the city would lead to the threat of relocation and the loss of a civic icon.  That emotional carrot and financial stick method elicited an average public stadium contribution of $238.1 million over the past quarter century. 

What makes these sweetheart stadium deals especially foolish is the net worth of the NFL owners who make these demands of taxpayers.  The first billion-dollar NFL stadium was built for Dallas Cowboys owner Jerry Jones in 2009, who is worth $4.2 billion.  He received $444 million for AT&T Stadium in Arlington, Texas.  After threatening to move the Minnesota Vikings to Los Angeles, owner Zygi Wilf, whose net worth stands at $1.3 billion, received nearly $500 million from the city of Minneapolis and the state of Minnesota.  The Georgia Dome, home to the Atlanta Falcons for less than 25 years, was scrapped for a new $1.4 billion stadium which opens next season.  Local taxpayers are picking up close to $600 million of the tab for Falcons owner Arthur Blank, who is worth $3.1 billion.  The previous record holder for public funding was Colts owner Jim Irsay (net worth $1.7 billion), who received $619 million in public money to build Lucas Oil Stadium in 2008. 

Beyond the threat of relocation, the NFL and its owners consistently tout the supposed economic benefits of a new stadium on a city’s economy.  Unfortunately, there remains a mountain of evidence that proves the opposite.  Michael Leeds, a sports economist at Temple University, put it best when he said, “If you ever had a consensus in economics, this would be it.  There is no impact.”  This is primarily due to the failure to generate new spending in the area.  All a new stadium could conceivably accomplish is to entice someone to spend their entertainment dollars in a different way, which in no way grows the local economy.  An October 15, 2015 Mercatus Center study on the economic impacts of stadiums concluded that, “The presence of a professional sports team may affect the economy, but often in the opposite way from what proponents anticipate: sports teams may actually hurt economic growth.  Despite the many millions of dollars spent on professional sports, little or none of that money makes its way back to the taxpayers who subsidize professional sports teams by building new stadiums that cost hundreds of millions of dollars.”

On the bright side, public opinion on funding these architectural dreams of billionaires has shifted noticeably against such boondoggles.  On November 8, 2016, voters in San Diego soundly rejected a public funding proposal for a new stadium for the Chargers.  The team is moving to Los Angeles, but San Diegans can rest easy knowing that they avoided a massive financial boondoggle.  Other states and cities should take note and push back harder against the NFL’s pursuit of taxpayer funding for its billionaire brethren. 

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