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Financing Sports Arenas By Megan A. Weiner
N othing compares to the thrill of hearing skates grinding into the ice before the puck is shot into the net, the crack of the ball against the bat before it soars over the fence, the crunch of helmets before the pigskin is triumphantly thrown fifty yards for an incredible touchdown, right? But have you ever considered the additional costs, besides ticket prices, that are required to house any major league sports team? Cleaning up neighborhoods around the stadium, financing the arena, and keeping the teams and owners happy are just a few of the problems. Is the price really worth the promised revenue a city will rake in if it supports a major league team?If sports teams are such a promising investment, why did North Carolina residents vote not to build a stadium to induce the Minnesota Twins to move to Greensboro last spring? Part of the reason is the hefty price tag residents and even tourists have to pay for a new local sports team. Many people do not even realize that part of their sales tax, rent-a-car tax, cigarette tax, beer tax, hotel lodging tax, and restaurant tax bills go to funding their sporting teams. How else could the city buying the rights to the team afford to build them a new $200 million dollar stadium? In America, private team owners contribute little to the large bills the cities need to pay to build the arenas and stadiums that house the games. A city really makes little if any money by having a sports team. The teams find ways to get out of paying property tax, which would be the main source of income for the city. The city needs to borrow in order to afford the building and maintenance costs. As the years go by, the city needs to pay interest on those loans annually. The most a city can really make on a sports team is 8% of the team's profit. Teams beg for special privileges which allow them to get out of paying certain bills. For example, in 1982 Mario Cuomo convinced the New York legislature to cut a deal with Madison Square Garden which relieved the arena of its Con Edison utilities bill. Even now, New York City and Westchester residents are continuing to pay the New York Knicks and New York Rangers' bills out of their tax money. Sports teams cannot be all bad, of course, or no place would want them. They have value in keeping residents who watch the games and support the team happy. Is that worth the financial problems to follow, though? Next time a city rejects buying a sports team and moving it to a local area, that is your answer. |
