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Handouts to NFL owners have been an absolute failure

cuomoMario062811_optBY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS

Cory Booker wants a National Basketball Association team in Newark. Tim Leiweke is working the room in Los Angeles trying to get government money to help his company, the Anschutz Entertainment Group, to build a football stadium in downtown Los Angeles. While Leiweke works the room and tries to entice the owners of various football teams—the Jacksonville Jaguars, the St. Louis Rams, the Minnesota Vikings, the Oakland Raiders and the San Diego Chargers—to move to the planned stadium.

Leiweke is going after a football team despite the fact that the National Football League owners have locked out their employees – the players.

Booker wants a new franchise even though the NBA plans to shut down on Thursday night if there is no new collective bargaining agreement between owners and players.

The National Football League business goes on despite the fact that the main product is not available—football games—and could conceivable not be available to consumers this fall. That doesn’t seem to bother Los Angeles politicians who are talking to Leiweke about funding a downtown facility or Minnesota politicians who are trying to figure out a way to spend hundreds of millions of dollars to satisfy New Jersey’s Zygi Wilf and his want for a new stadium for his Minnesota Vikings franchise.

Sports fans probably don’t want to read this, but the team you love or hate doesn’t belong to you. The team belongs to an owner and that owner is looking for government handouts and if he or she doesn’t get a handout from the local government, he or she will look elsewhere and probably find it.

It is about time that people understand that government support of big time sports has been an absolute failure since the 1986 tax reform that changed the way stadium and arena debt were paid. In 1986, President Ronald Reagan signed the tax reform that created a new formula for paying off municipally funded stadiums and arenas and placed the onus on local taxpayers to pay down the debt and gave the owners as much as 92 cents on every dollar generated within a stadium or arena and left just as little as eight cents on every dollar to pay off hundreds of millions of dollars worth of debt.

Despite sweetheart deals, the National Football League owners shutdown the business in March.

What is the real reason for labor strife?

Owners with older stadium such as Wilf’s Vikings and Al Davis’s Oakland Raiders have to invest more and more money into player’s salaries to meet the salary cap and salary floor NFL rules with the proliferation of municipally built facilities since 1986. Since the last National Football League owners and players collective bargaining agreement in 2006, new stadiums came online at the Meadowlands in East Rutherford, New Jersey, Arlington, Texas and Indianapolis and that forced up the salary cap and floor as more revenues flowed into the league.

Apparently the alleged new agreement that is being breathlessly reported by football insiders at a worldwide cable TV sports leader indicates that the very reason that triggered the lockout is not being addressed.

But life goes on in Los Angeles and in the legislative chambers in St. Paul, Minnesota and in Santa Clara, California where local officials are trying to cobble together a money deal to get the Santa Clara football stadium off the ground for the York family’s San Francisco 49ers.

The Santa Clara stadium is also a sore point for the owners. The Yorks have to throw money into the place and the NFL owners want the players to assume some of the costs for the Santa Clara building. The NFL owners basically have told the Yorks don’t seek any funding from the banks to cover their costs and they would try to extract that money from the players.

Meanwhile Booker wants a replacement for the departing Nets in Newark even though the NBA owners are on the verge of closing down the National Basketball Association business.

If the owners and players don’t come up with an agreement by Thursday night, the NBA owners will lockout the players.

Just how important is government as a sports partner? That is easy to answer. NBA Commissioner David Stern will tell you there are three major aspects in running a successful franchise. You need government to supply funding for arenas, you need government to continue the current cable TV rules which forces all consumers to pay for channels they don’t want in a basic expanded tier – where ESPN, TNT and regional sports channels reside because multiple cable systems operators place them there not consumers- and give corporations favorable tax breaks in buying tickets or club seats or luxury boxes.

If you don’t believe David Stern, perhaps Mario Cuomo’s words from 1991 will back up Stern. Cuomo, at that time, was the governor of New York and was lobbying the National League of Major League Baseball for an expansion team for Buffalo.

Cuomo was hardly a reluctant lobbyist as he told this reporter when he was asked if the Cuomo name—Mario Cuomo was considered a favorite for the 1992 Democratic Presidential nomination—would help get Buffalo a franchise.

“When you say enormous, you mean length?” joked Cuomo in response to the question. “Ah like Willie Sutton (the legendary bank robber). That’s an excellent question and it is a question I thought of before you did frankly.

“From the beginning I have said to (Buffalo mayor at the time) Jimmy Griffin, you know we have been very supportive from the beginning and it is not because I am a baseball fan. It is because this is a terrific investment for a strong part of the state.



 
Comments (2)
2 Thursday, 30 June 2011 01:31
Taxes are too high
Marxist, it is you who is a blind bat.

Here is a refutation of all your half-baked ideas:

http://bastiat.org/en/twisatwins.html

The money government spends does not come out of thin air. It is taxed from people. So while you see benevolent government helping people, what you don't see is the money that was forcibly taken which could have been spent on other productive things.
1 Wednesday, 29 June 2011 19:05
Groucho Marxist
Concrete contractors depend on governments to build roads. Are roads an "absolute failure" merely because the people selling the concrete are getting rich off of them? Defense contractors would not be building fighter jets, cruise missiles, and high tech warships and making money hand over fist if the government were not picking up the tab. If it weren't for sports, in their spare time, many people would have to just sit around watching their lawmakers not solving problems, and on their dime. Then (I suppose) those people who sell ropes for lynchings would profit wildly.

Absolute failure my fanny! All lawmakers with any sense will privately tell you that stadia are highly beneficial public investments. Do some reading, please. The pursuit if happiness goes back to 1776. Get a clue.

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