PoliGraph: Marty stadium claim true in recent history

Posted at 2:00 PM on October 26, 2011 by Catharine Richert (2 Comments)
Filed under: PoliGraph

After a drawn-out debate over the budget, lawmakers have turned their attention to another delayed decision: whether to green-light a new stadium for the Minnesota Vikings.

Sen. John Marty, DFL-Roseville, is ranking member of the state Senate's tax committee, and he opposes the effort because it is too expensive for taxpayers.

"Zygi Wilf and the Vikings are attempting to make their Ramsey County stadium deal sound like a run-of-the-mill, routine proposal. It is not," Marty wrote in an Oct. 23 opinion piece in the Twin Cities Daily Planet. "The Vikings are asking for the #1, all-time, biggest taxpayer subsidy of any sports franchise anywhere in American history!"

Marty wrote a commentary on the subject for Minnesota Public Radio News Oct. 21.

For the first time, PoliGraph tackles sports, and finds Marty's claim mostly accurate.

The Evidence

The proposed Arden Hills Vikings stadium is expected to exceed $1 billion. The current plan would require the state to chip in $300 million, Ramsey County to pay for $350 million of the project's cost by raising the sales tax, and the Vikings to contribute $407 million.

That doesn't include losses in tax revenue that Marty argues would effectively increase the public's contribution further, nor does it factor in a Metropolitan Council report that predicts the project will exceed cost projections.

To support his claim, Marty relied on research conducted earlier this year by two economists associated with the College of the Holy Cross in Massachusetts. The report looked back at the costs of all sports arenas in the United States going back as far as 1990.

The most expensive buildings on the list include the Indianapolis Colts stadium, which cost taxpayers roughly $620 million (the Holy Cross report incorrectly states the cost as $720 million), the Washington Nationals field, which cost the public $611 million, and the Orlando Magic arena, which cost the public $430 million.

PoliGraph looked back even further using research by the National Sports Law Institute at Marquette University, and found only one facility more costly to the public than the Vikings stadium is expected to be: Madison Square Garden in New York City.

The Garden's most recent construction occurred in 1968 and cost $123 million in taxpayer dollars. Accounting for inflation, the stadium would have cost roughly $762 million today.

The Verdict

Madison Square Garden beats the Vikings' proposal when adjusted for inflation, but the building is more than 40 years old. When it comes to stadiums built in the last 20 years, the planned Vikings stadium comes out on top.

For getting his facts nearly correct, Marty's claim leans toward accurate.

SOURCES

The Twin Cities Daily Planet, Let's inject fiscal sanity into stadium debate, by John Marty, Oct. 23, 2011

The Minnesota Vikings, the New Minnesota Stadium: FAQ, accessed Oct. 24, 2011

National Public Radio, The Nation: Stop The Subsidy-Sucking Sports Stadiums, by Neil Demause, August 5, 2011

Metropolitan Council, Stadium Proposal Risk Analysis, Oct. 2011

Financing Professional Sports Facilities, By Robert A. Baade and Victor A. Matheson, January 2011

Marquette University Law School, National Sports Law Institute, Sports Facility Reports Volume 12, Summer 2011

Interview, Heidi Mallin, spokeswoman, Lucas Oil Field

Email exchange, Victor Matheson, economist, College of the Holy Cross, Oct. 26, 2011

Comments (2)

Below are comments emailed to me from Sen. Marty:

You did good research in the fact checking, but you misunderstood what my claim was. Your conclusion might be the correct answer to a different claim than I made.

If the question is "which sports facility required the most public money ever?" Inflation adjusted, the answer wouldn't be Madison Square Gardens. It would probably be some ancient facility like the Roman Coliseum or in modern times, probably some stadium for the Olympics in China or elsewhere.

My objection is not to putting taxpayer money into public venues for public benefit. My objection is to putting taxpayer money into huge subsidies for private investors who own sports teams or other private businesses.

I stand by my claim that "The Vikings are asking for the #1, all-time, biggest taxpayer subsidy of any sports franchise anywhere in American history!"

A couple of points to explain why Madison Square Gardens is not number one:

1. Back when the facility was built, it was for two major league teams, the Knicks and the Rangers (and still is home to both), so if it was effectively a subsidy for the teams, you'd be cutting it in about half, so it would not be the largest taxpayer subsidy of any sports franchise in history.

2. More importantly, given the economics of sports then, it wasn't so much a subsidy of a team as a true community facility, rented by teams, musical performers and other entertainers. It has since become a truly private facility, with the renovation (early nineties) done with mainly? exclusively? private funds. Since about the mid-1990s stadiums have been built and designed not as public facilities, but as revenue generators for the teams. Until that time, sports economics were different. I could be wrong, but I believe that the teams do not hold "naming rights" that they can sell at Madison Square Garden -- they keep their historic name.

More on the point that sports facilities are no longer designed primarily for public benefit but as revenue generators for the teams:

When the Vikings are saying the Metrodome is 40% "too small" for NFL football, one might think they are talking about insufficient seating for all of the loyal fans. But they are not. The Metrodome seats 64,111 for football. The Arden Hills proposal would seat 64,000.

They mean it is too small for all of the suites, and restaurants and clubs, and other "amenities" that enable them to make more $$$$. They might put in 80,000 seats if they were trying to serve the fans (but then ticket prices would fall), and the 64,000 seats is the number that their financial experts believe will maximize profits.

While modern facilities are called "public", that is largely so that they can be property tax-exempt, providing yet another subsidy to the franchises. Perhaps the best example of this pseudo-public ownership is at the Xcel Center in St Paul:

Who owns it? The City of St Paul
Who gets the money for naming it (Xcel)? The Wild Franchise -- We build it, why do they get the money from naming "our" arena?
Can the city use its facility on nights when the Wild is not playing? The city of St. Paul, “owner” of the arena, gets to use it only 10 days a year, paying for event costs -- utilities, staffing, and other costs. If they want to use it more, the city pays rent to the Wild. As do other users of the facility. In other words, the landlord is paying rent to the tenant! That is not a public facility.

Again, you did great research on public investment in stadiums, but it doesn't change the fact that the Vikings are asking for the #1, all-time, biggest taxpayer subsidy of any sports franchise anywhere in American history!".

Posted by Catharine Richert | October 26, 2011 6:28 PM

Way to go, Senator Marty! I applaud your rational presentation in contrast to the drumbeats of war for a new stadium. This thing is so over-hyped that it reminds me of the build up to the Iraq war in 2002-2003. And look where that got us!

I found some data that was done about Portland that did not justify the cost to taxpayers. "The spectator sport industry would account for just slightly more than 1% of the county’s total private sector payroll and less than 1% at the metropolitan area level. http://www.humankinetics.com/excerpts/excerpts/economic-impact-of-sport-stadiums-teams-events

Posted by Barbara | October 27, 2011 3:03 AM

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