Bad news and more bad news. Which do you want to hear first?
Okay, let’s start with the bad news. Publicly financed stadiums are eating the taxpayer alive and transferring more money from the middle class into the pockets of the wealthy. According to an article in Bloomberg:
“Over the life of the $17 billion of exempt debt issued to build stadiums since 1986, the last of which matures in 2047, taxpayer subsidies to bondholders will total $4 billion, the data show.”
If you are interested in finding out whose pockets are getting filled by taxpayer money for publicly financed stadiums, I suggest you have a close look at the Bloomberg story for some rather sobering information.
Now for the more bad news. The same publicly financed venues are also creating havoc in the sports world. A prime example is Miami Marlins owner, Jeffrey Loria, who has decided to gut the fish, after his team landed a sweetheart stadium deal, courtesy of the City of Miami taxpayers.
By building Marlins Park through the use of public financing, Loria was interested in one and only one thing: to increase the value of his assets (in this case, the Marlins). Yeah, you got that right. Loria is taking money from the taxpayers and using it to pump up the value of HIS holdings.
The Bloomberg article also states:
“Surging revenue from the new stadium cemented the Cowboys and Jones in the NFL’s financial elite. In 2009, the franchise was worth $1.7 billion, according to Forbes magazine. By 2011, the venue helped boost the team’s value 12 percent to $1.85 billion, Forbes said, calling the building a “gold mine.”
Can you dig it? In two years, the value of the Dallas Cowboys increased by 12 percent after the building of the publicly financed new Cowboys Stadium in Arlington, TX. Cowboys owner Jerry Jones is pocketing the increase in team value, thanks to the “investment” from American taxpayers.
Sweet deal, right? This is okay, as I am sure Jerry will throw the taxpayers a big old fashioned Texas fan appreciation day for all their hard work. Yum, yum…I can smell that bbq beef right now.
So you see where Loria is going with this move? For the long term, Loria does not care if there are 3,000 or 30,000 per game at Marlins Park. Financially, he is much more interested in the value of the franchise ballooning, while keeping his expenses skinny.
The money Loria makes on per game attendance is peanuts compared to the potential capital gains return he can get for the value of the franchise. And hence, the salary dump, which does little to devalue the team, since Loria now has a brand new stadium to peddle to a potential buyer.
With the advent of free agency and through manipulative trades, which are always rubber stamped by complicit MLB Commissioner Bud Selig, baseball teams can be built and dismantled literally overnight. But $650 million stadiums, they take many years to plan and build and even more years to pay off. Cowboys owner Jerry Jones started shopping around in early 2000 for his new $1 billion stadium.
Miami, Arlington and a host of other cities will find out down the road how painful the repayment plan will be. Money, which should be going into vital city services, end up in the off shore accounts of people like Loria. Montreal already knows this, as they found it out the hard way with the “Big O”.
The Olympic Stadium, which is affectionately known as the “Big Owe” to Montrealers, took thirty painful years to pay off after it opened in 1976. When Loria owned the Montreal Expos, he did not care one iota about how much the taxpayers had already been fleeced by the building of this stadium. He requested taxpayers foot the bill for another stadium for the Expos.
Ultimately, Quebec Premier Lucien Bouchard told Loria that he cannot build a new stadium at the same time he was closing down hospitals. Obviously, Loria’s priority was a new stadium (to increase the value of the Expos), and could not care less about the hospital situation in Quebec. Swell guy this Loria person, huh?
And speaking of hospitals, Montrealers should give a big thank you to Mr. Bouchard for ridding the city and province of that cancer, by just saying NO. After his failed efforts in Montreal, Lauria was permitted admittance into another city, where he succeeded at selling his con job.
Ultimately, the best solution is to do away with publicly financed stadiums and have them privately financed. Not only does this eliminate potential corruption by political officials (see Montreal again), it gives sports team owners genuine incentive to attempt to field the best team year after year. Doing a salary dump when somebody else is paying your stadium bills is not only easy, it becomes a temptation that no owner with the values of a Loria will ever refuse.
So no publicly funded stadiums. What is the alternative then?
The only alternative is privately owned stadiums for privately owned sports teams, such as MetLife Stadium in East Rutherford, NJ. The New York Jets and New York Giants split the financing on the extremely expensive $1.6 billion stadium. Do you think the Jets or the Giants can even contemplate a salary dump with that kind of note to pay on MetLife? No chance Charlie.
The investment of public tax funds for private sector benefit has become a toxic combination. More problems for the taxpayer, the sports leagues and society in general. Montreal should know, as they got rid of a guy who ten years ago who would have made the “Big Owe’s” problems look like chump change.
Unfortunately for Miami taxpayers, they are the ones looking like chumps now, which is something that will not soon change.