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After a crazy NFL Wild Card weekend, in which the Cincinnati Bengals managed to snatch a loss from the jaws of victory and the Minnesota Vikings kicker blew a chance at an easy game-winning field goal, Americans are ready for another round of playoff football. Fans should tune in this weekend, as they are paying for the NFL whether they watch the games or not.
NFL owners are professionals at convincing politicians to fund their stadiums with taxpayer dollars through the use of tax-free municipal bonds. Though these financing tools were originally created by Congress to help fund roads and schools, they are now used to support a league that is worth $45 billion.
To show the varying ways that NFL owners shift the costs of new stadiums to local taxpayers, here are four examples from teams that will play in this weekend's divisional round: the Denver Broncos, Arizona Cardinals, New England Patriots, and Carolina Panthers.
$300 million share of the $400 million cost of the stadium when construction began in 2002. One of the ways this public financing was paid for was through a 0.1 percent sales tax that was applied to taxpayers in six Colorado counties until 2012.
Taxpayers funded the majority of the stadium, but they are forced to split the $6 millionannual profits from naming rights 50-50 with the Broncos. This is still better than the situation faced by Pittsburgh residents. The Broncos are playing the Steelers this weekend. The Steelers keep all of their $2.9 million a year in naming rights for Heinz Field, even though the public covered 61 percent of the cost.
Ken Lund/flickrArizona Cardinals
Since 2006, the Cardinals have played at the University of Phoenix Stadium in Glendale, Arizona. Though Glendale only has 240,000 residents, state and local taxpayers picked up $312 million of the stadium's $455 million cost. More than 40 percent of the city's debt comes from its sports complexes.
One of the ways the public bonds were paid back was through a 3.25 percent tax on rental cars. This is no longer an option because an Arizona judge struck down the tax in June 2014 (the state's constitution requires vehicle taxes to be used on highway-related purposes).
This annual loss of $12 million equals about a third of the yearly revenue used to cover stadium-related debt and costs. Due to another ruling in September 2015, the state also has to refund about $160 million in rental car taxes that it wrongfully collected.
It looks like local taxpayers will be paying off their team's current stadium for many more seasons, possibly even after the Cardinals move to a new venue. This problem is not limited to Glendale. On Saturday the Panthers play the Seahawks, and Seattle taxpayers just paid off the public debt from their team's previous stadium—15 years after it was demolished.
Keith Allison/flickrNew England Patriots
The hated New England Patriots treat local taxpayers surprisingly well. Patriots owner Robert Kraft arranged 100 percent private funding for the construction and maintenance of Gillette Stadium, which is located outside Boston.
Gillette Stadium and MetLife Stadium (shared by the New York Jets and Giants) are the only two NFL stadiums that were built and renovated without public funds. But even here there are still hidden costs for taxpayers.
Most public stadium cost figures are underestimated since other costs, such as maintenance expenses, capital improvements, municipal services, and the abatement of local property taxes, are not taken into account. Massachusetts agreed to spend $72 million on updating the infrastructure surrounding Gillette Stadium, and property taxes are not levied on the stadium.
Taking all these kinds of added expenses into account, the Kansas City Chiefs, the Patriots' opposition this weekend, actually received more in public funds for Arrowhead Stadium than it cost to build.
Link:
http://reason.com/archives/2016/01/14/you-might-as-well-watch-the-nfl-playoffs
And check this out:
If you're a U.S. taxpayer then you're subsidizing the wildly profitable National Football League, regardless of whether you're a fan.
The NFL is the most profitable pro sports league in the U.S., raking in an estimated $1 billion in profits on $10.5 billion in revenue last season, figures that are sure to increase this year.
Those massive profits are made possible in part by the billions of taxpayer dollars that local governments spend on teams, coupled with tax breaks worth hundreds of millions for the teams, the league, their sponsors and fans.
"I've been studying this for 15 years, and I still can not believe cities and states are lined up begging to give money to these very profitable [teams]," said Villanova professor Rick Eckstein, an expert on stadium finance.
Here's a rundown:
Stadium construction: Twenty new NFL stadiums have opened since 1997 with the help of $4.7 billion in taxpayer funds, according to an analysis by the advisory firm Conventions, Sports and Leisure. Local governments pony up to build these venues to attract or keep teams in their towns.
Two more stadiums now under construction in Minneapolis and Atlanta are being built with $700 million in government funds.
Taxpayers paid for most of the University of Phoenix Stadium, which opened in 2006 andishome to this Sunday's Super Bowl -- to the tune of about $300 million.
Teams even get tax breaks on the money they actually do spend on construction. Most of that spending is financed withtax free municipal bonds, which were originally created by Congress to help fund roads and schools.
Related: The high cost of being a football fan
A 2012 analysis by Bloomberg showed that U.S. sports teams will save $4 billion over the life of those bonds, with the NFL being the largest beneficiary. The owners of the Arizona Cardinals saved an estimated $125 million on the bonds issued to build the University of Phoenix Stadium.
Hidden help: The league also gets a financial boost in a less obvious ways, said Eckstein. Elected officials vying for a team to come to their town often serve up discounted city services, such as utilities or police patrolling a stadium on game day.
Teams also often get big breaks on their property taxes.
"There is a shift going on from obvious brick and mortar subsidy to more hidden, subtle form of subsidy," he said.
Related: NFL earns record profits despite ugly image
Tax breaks for the NFL's biggest customer: Corporate America: NFL teams sell between $1.5 billion to $2 billion worth of luxury and high-end club seats a year, according to Bill Dorsey, the chairman of the Association of Luxury Suite Directors. A single suite can cost as much as $750,000 a season. Almost all suites and club tickets are bought by corporate clients, which write the cost off as a business entertainment expense.
Related: This year's Super Bowl ads
Sponsors also spend about $190 million a year for the right to plaster a local venue with their logo, according to research firm IEG. Even when corporate names are hung on city-owned stadiums, the teams keep all those profits, not the cities. And companies can deduct all of those expenditures as marketing expenses.
Not for profit: The NFL's not for profit status strikes critics as particularly unseemly, given its financial might. But it's categorized that way because the league's profits are distributed to each of the teams, rather than kept by the league itself.
The league probably only saves about $10 million a year as a non-profit, according to Richard Phillips, research analyst with Citizens for Tax Justice, which is arounding error for a league as profitable as the NFL.
Link: http://money.cnn.com/2015/01/30/news/companies/nfl-taxpayers/
THE ABOVE STATE JUST A FEW METHODS OF PUBLIC FUNDING; I KNOW OF OTHERS; CARE TO ADD WHAT YOU KNOW?
After a crazy NFL Wild Card weekend, in which the Cincinnati Bengals managed to snatch a loss from the jaws of victory and the Minnesota Vikings kicker blew a chance at an easy game-winning field goal, Americans are ready for another round of playoff football. Fans should tune in this weekend, as they are paying for the NFL whether they watch the games or not.
NFL owners are professionals at convincing politicians to fund their stadiums with taxpayer dollars through the use of tax-free municipal bonds. Though these financing tools were originally created by Congress to help fund roads and schools, they are now used to support a league that is worth $45 billion.
To show the varying ways that NFL owners shift the costs of new stadiums to local taxpayers, here are four examples from teams that will play in this weekend's divisional round: the Denver Broncos, Arizona Cardinals, New England Patriots, and Carolina Panthers.
$300 million share of the $400 million cost of the stadium when construction began in 2002. One of the ways this public financing was paid for was through a 0.1 percent sales tax that was applied to taxpayers in six Colorado counties until 2012.
Taxpayers funded the majority of the stadium, but they are forced to split the $6 millionannual profits from naming rights 50-50 with the Broncos. This is still better than the situation faced by Pittsburgh residents. The Broncos are playing the Steelers this weekend. The Steelers keep all of their $2.9 million a year in naming rights for Heinz Field, even though the public covered 61 percent of the cost.
Since 2006, the Cardinals have played at the University of Phoenix Stadium in Glendale, Arizona. Though Glendale only has 240,000 residents, state and local taxpayers picked up $312 million of the stadium's $455 million cost. More than 40 percent of the city's debt comes from its sports complexes.
One of the ways the public bonds were paid back was through a 3.25 percent tax on rental cars. This is no longer an option because an Arizona judge struck down the tax in June 2014 (the state's constitution requires vehicle taxes to be used on highway-related purposes).
This annual loss of $12 million equals about a third of the yearly revenue used to cover stadium-related debt and costs. Due to another ruling in September 2015, the state also has to refund about $160 million in rental car taxes that it wrongfully collected.
It looks like local taxpayers will be paying off their team's current stadium for many more seasons, possibly even after the Cardinals move to a new venue. This problem is not limited to Glendale. On Saturday the Panthers play the Seahawks, and Seattle taxpayers just paid off the public debt from their team's previous stadium—15 years after it was demolished.
The hated New England Patriots treat local taxpayers surprisingly well. Patriots owner Robert Kraft arranged 100 percent private funding for the construction and maintenance of Gillette Stadium, which is located outside Boston.
Gillette Stadium and MetLife Stadium (shared by the New York Jets and Giants) are the only two NFL stadiums that were built and renovated without public funds. But even here there are still hidden costs for taxpayers.
Most public stadium cost figures are underestimated since other costs, such as maintenance expenses, capital improvements, municipal services, and the abatement of local property taxes, are not taken into account. Massachusetts agreed to spend $72 million on updating the infrastructure surrounding Gillette Stadium, and property taxes are not levied on the stadium.
Taking all these kinds of added expenses into account, the Kansas City Chiefs, the Patriots' opposition this weekend, actually received more in public funds for Arrowhead Stadium than it cost to build.
Link:
http://reason.com/archives/2016/01/14/you-might-as-well-watch-the-nfl-playoffs
And check this out:
If you're a U.S. taxpayer then you're subsidizing the wildly profitable National Football League, regardless of whether you're a fan.
The NFL is the most profitable pro sports league in the U.S., raking in an estimated $1 billion in profits on $10.5 billion in revenue last season, figures that are sure to increase this year.
Those massive profits are made possible in part by the billions of taxpayer dollars that local governments spend on teams, coupled with tax breaks worth hundreds of millions for the teams, the league, their sponsors and fans.
"I've been studying this for 15 years, and I still can not believe cities and states are lined up begging to give money to these very profitable [teams]," said Villanova professor Rick Eckstein, an expert on stadium finance.
Here's a rundown:
Stadium construction: Twenty new NFL stadiums have opened since 1997 with the help of $4.7 billion in taxpayer funds, according to an analysis by the advisory firm Conventions, Sports and Leisure. Local governments pony up to build these venues to attract or keep teams in their towns.
Two more stadiums now under construction in Minneapolis and Atlanta are being built with $700 million in government funds.
Taxpayers paid for most of the University of Phoenix Stadium, which opened in 2006 andishome to this Sunday's Super Bowl -- to the tune of about $300 million.
Teams even get tax breaks on the money they actually do spend on construction. Most of that spending is financed withtax free municipal bonds, which were originally created by Congress to help fund roads and schools.
Related: The high cost of being a football fan
A 2012 analysis by Bloomberg showed that U.S. sports teams will save $4 billion over the life of those bonds, with the NFL being the largest beneficiary. The owners of the Arizona Cardinals saved an estimated $125 million on the bonds issued to build the University of Phoenix Stadium.
Hidden help: The league also gets a financial boost in a less obvious ways, said Eckstein. Elected officials vying for a team to come to their town often serve up discounted city services, such as utilities or police patrolling a stadium on game day.
Teams also often get big breaks on their property taxes.
"There is a shift going on from obvious brick and mortar subsidy to more hidden, subtle form of subsidy," he said.
Related: NFL earns record profits despite ugly image
Tax breaks for the NFL's biggest customer: Corporate America: NFL teams sell between $1.5 billion to $2 billion worth of luxury and high-end club seats a year, according to Bill Dorsey, the chairman of the Association of Luxury Suite Directors. A single suite can cost as much as $750,000 a season. Almost all suites and club tickets are bought by corporate clients, which write the cost off as a business entertainment expense.
Related: This year's Super Bowl ads
Sponsors also spend about $190 million a year for the right to plaster a local venue with their logo, according to research firm IEG. Even when corporate names are hung on city-owned stadiums, the teams keep all those profits, not the cities. And companies can deduct all of those expenditures as marketing expenses.
Not for profit: The NFL's not for profit status strikes critics as particularly unseemly, given its financial might. But it's categorized that way because the league's profits are distributed to each of the teams, rather than kept by the league itself.
The league probably only saves about $10 million a year as a non-profit, according to Richard Phillips, research analyst with Citizens for Tax Justice, which is arounding error for a league as profitable as the NFL.
Link: http://money.cnn.com/2015/01/30/news/companies/nfl-taxpayers/
THE ABOVE STATE JUST A FEW METHODS OF PUBLIC FUNDING; I KNOW OF OTHERS; CARE TO ADD WHAT YOU KNOW?
