By Ken Reed
Guest Opinion
The Post Gazette
Originally published by Syracuse.com
Only in America can multi-billionaire capitalists like Terry and Kim Pegula, owners of the NFL’s Buffalo Bills, demand socialist handouts from taxpayers for a new publicly financed sports palace so the value of their franchise — along with the team’s annual profits — can skyrocket.
The Pegulas have landed $850 million in state and local taxpayer dollars for the construction of a new stadium, the largest public contribution ever for an NFL facility. The deal was approved and touted by New York Gov. Kathy Hochul and other local and state politicians without a public referendum or any time for the public to deliberate. Once long-term maintenance costs are factored in, the public’s share of the cost of building and operating the new stadium will be more than $1.1 billion. A sweetheart lease is sure to follow.
According to Forbes, the Pegulas have a net worth of $5.8 billion. Nevertheless, they have spent months begging local and state politicians for public money to build a new stadium. Subtle threats have been dropped about moving the Bills to Austin, Texas, or elsewhere, if their demands aren’t met.
The NFL is a government-sanctioned, unregulated monopoly. As such, the NFL can limit competition, and league franchise owners can threaten to move to other cities if their current host cities don’t build them plush new stadiums. It’s a tried-and-true extortion scheme.
Team owners like the Pegulas, and local and state politicians like Hochul, typically tout regional economic benefits in justifying public subsidies for pro sports stadiums and arenas.
Roger Noll disputes that claim. Noll, perhaps the country’s most well-known sports economist and professor of economics emeritus at Stanford University, emphatically believes that publicly financed stadiums are not a net local economic benefit.
In an interview, I asked Noll how pro sports leagues continue to get away with these stadium heists.
“There’s a socio-cultural impact of sports that enables the industry to do things that other industries can’t do,” according to Noll.
“We don’t really regulate it and the reason that we don’t is that it’s hard for us as a society to think straight about the operation of the industry and to strip away the underbrush surrounding it …. And the costs are partly borne by consumers in terms of high prices, etc., and also via taxpayers paying subsidies.
“So, we’re left with an extremely profitable industry, measured by return on investment, which nonetheless gets subsidized. Instead of getting regulated, it gets subsidized! Which is purely a reflection of the fact that we don’t know how to think straight as a society about the economics and business side of sports.”
We don’t know how to think straight, is right. Sports economist Robert Baade calls it the Reverse Robin Hood Effect, “taking from the poor, the near poor, the working class and the middle classes and giving to the rich.”
The Pegulas will undoubtedly thank fans for the $1.1 billion public handout by raising ticket prices for Bills games. Moreover, they plan to sell fans 50,000 personal seat licenses (PSLs), starting at a one-time fee of $1,000 each. These PSL’s aren’t season tickets but simply the right to buy season tickets. PSLs are truly perverse.
Let’s be clear, a new football stadium for the local pro football team is not a public works project. Public works projects are bridges, roads, sewers, drinking water systems, public transit, etc., the basic infrastructure of a community. In addition to these types of projects, public dollars should be utilized for boosting up our schools, providing necessary services like police and fire protection, and building neighborhood recreational facilities to provide young and old alike with participatory sports experiences for their physical and mental well-being.
Transferring dollars from taxpayers to pro sports franchise owners certainly doesn’t qualify as a project that addresses the public necessities of the community.
Even though the state budget is agreed to, there’s still time to stop this egregious public handout to the billionaire owners of the Bills. But it’s the 11th hour, so it will take a group of strong citizen activists and some socially conscious legislators to forcefully fight this unethical scheme.
There is a precedent. In 1997, the state of Connecticut agreed to build a stadium for the New England Patriots. However, when taxpayers found out the details, including the funding of a practice field for the team, the strong protests sent Patriots owner Robert Kraft back to the Boston suburbs where he eventually raised private funding for a new stadium.
The Pegulas obviously have the means to fund a new football stadium for their team. The fact they are asking for 61% of the costs to be funded by the public certainly takes a lot of chutzpah, given that any real attempt to justify need on their part is simply impossible.
Ken Reed is sports policy director for League of Fans, a sports reform project founded by Ralph Nader. It is based in Washington, D.C.
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