Commentary
Why public funding for a Vikings stadium doesn't make sense
By John Marty
Sen. John Marty, DFL-Roseville, is serving his eighth term in the Minnesota Legislature. This commentary is adapted from an open letter he sent to his colleagues late last week.
I recognize that many legislators have strong positions on the Vikings stadium issue and many have been tracking the issue closely. However, there are a number of misconceptions about parts of the issue, and many unexamined assumptions that deserve an airing. Before we give $700 million to Zygi Wilf for a new stadium, here is some information that I hope you will consider.
Size of the subsidy
To put this proposal into terms to which we can relate, as it passed out of the Senate Finance Committee this week, the legislation would provide public money in an amount equivalent to a $77.30 per ticket subsidy for each of the 65,000 seats at every Vikings home game. That's $77 in taxpayer funds for each ticket, at every game, including preseason ones, for the next 30 years.
That's a lot of money. Especially when many Minnesotans are struggling to make ends meet. This calculation is based on 65,000 seats in the new stadium, with 10 games per season (if you don't count preseason games, the subsidy is more than $96 in taxpayer funds per ticket), for 30 years. It counts the payments for the state and city share of debt service on the bonds, and the state payments for operating expense and for the capital reserve. The real number would actually be significantly higher, because this calculation does not include the value of the property tax exemption on the stadium and the parking ramps (this subsidy is worth at least $15 million to $20 million per year more, year after year) or the value of the sales tax exemption on stadium construction materials (if it is included in the final legislation).
Putting unemployed construction workers back to work
Minnesota has a high unemployment rate, particularly among construction workers. At the same time, investments in Minnesota's public infrastructure have been falling behind the need, and the state has a large backlog of unmet maintenance and repair of existing facilities, including public housing for seniors and low income Minnesotans, and at our schools and public higher education institutions.
Public funds can create construction jobs, but those projects should serve a public purpose, constructing public facilities, not subsidizing private business investors. The need to employ construction workers is not an excuse to subsidize wealthy business owners, especially when there is such great need for public infrastructure work.
While the Vikings stadium would create construction jobs, the stadium proponents significantly overstate the number. Tom Goldstein points out that the number of construction-work hours for the stadium provided by Mortenson is equivalent to about 700 full-time jobs over the three-year construction period. Because the Mortenson numbers estimate that 7,500 workers would be at work at various times on the project, some proponents have translated that to be 7,500 full-time jobs over the three-year period. Seven hundred jobs are significant, but far short of 7,500.
Minnesota would create far more building-trades jobs by using public dollars to fix our public infrastructure.
Threat of moving
Several years ago, Federal Reserve Bank economist Art Rolnick said: "The leagues of all major sports blatantly aid and abet team owners in extorting public funds for new facilities under the threat of moving...." The Vikings stadium issue is illustrating once again the truth of that statement.
To Zygi Wilf's credit, back in 2006, he promised to keep the team in Minnesota forever: "From Day One... I have promised that I would keep the team here in Minnesota forever..." When asked whether he planned to keep the team in Minnesota , whether we had a new stadium or not, he replied, "Yes, I've stated that from Day One.... all I can tell you is this, that I live by my commitment."
The only reason for this debate over a public subsidy is that many politicians think that Wilf will break his promise and move the team, or sell it.
Both of the stadium financing proposals in Los Angeles are privately funded, without taxpayer money. Under one proposal, the investors would give the land to the team and the team owner would build a stadium without public money. Under the other, investors would build the stadium for the owner. Both L.A. proposals use revenues generated by the stadium to pay for the stadium, and the team owner gets the left-over revenue after paying for the stadium.
In other words, if the L.A. threat were serious, Wilf would have to break his promise, the league a relocation fee and still pay for his own stadium, in a community without a loyal fan base. If Minnesota refuses to force taxpayers to subsidize a new stadium, he would be better off keeping his fan base and privately financing a new stadium here.
Zygi Wilf and his partners bought the Vikings in 2005 for $600 million. They have seen the value of their investment climb to $796 million, according to Forbes magazine — a capital gain of almost $200 million, despite the recession. In addition, they have had significant operating profits in all but one of the years they have owned the team.
Many Minnesotans have seen their homes and other investments lose value in recent years. Our constituents would love to have the kind of earnings that the Vikings have had.
Why are we doing this?
Back in January, Ted Mondale said: "The whole reason we're doing this is so the team can make money. What we want is a financially viable franchise for the next 30 or 40 years."
Yes, that's the reason we are doing this: so Wilf and his business partners can make boatloads of money. Their investment in the Vikings has only made $200 million in capital gains for the team, plus operating profits in all but one year they have owned it, plus a forthcoming increase in NFL national media revenue that is worth an average of more than $80 million per year per team. That is not enough. Mondale knows that.
It's nice that he was bluntly honest about it.
Comments (33)
I agree with using public money for public projects and not to build a stadium to make a rich man richer.
I oppose the stadium bill. Well said, Senator Marty!
I just wish we had more politicians like John Marty who is looking out for the people instead of greedy corporations. What he says makes so much sense, but you know in the end the Vikings will get what they want because most politicians care more about the super-rich team owners and rich corporate box holders than the needs of the state. Are some of these politicians being offered nice luxury boxes too in exchange for their support?
User fees are the only way to go. Sure the Vike's share would be reduced from 427 million, as per Lester Bagley, but so what? Just adjust the fee rate to compensate. User fees are not a deal killer. Use them!
Mr Marty's shortsightedness amazes me. We put legislators in office for the long term overall good of the state, not to put blinders on and not see the billions of dollars that will be brought in to this state over the length of the loan, that will help keep your future tax rates in check. Wake up people--this "public" facility will benefit all of us.
User fees are the only way to go. Sure the Vike's share would be reduced from 427 million, as per Lester Bagley, but so what? Just adjust the fee rate to compensate. User fees are not a deal killer. Use them!
Come on! We subsidize the Guthrie Theater with our tax dollars,yet, Senator Marty says nothing about that! He whined about the construction of Target Field and it draws people from the upper Midwest every summer since 2010. Minnesota has been toward the top in attendance at the HHH Metrodome. They are however, towards the bottom of the league in revenue. Majority of new stadiums in the NFL have been financed by taxpayers in the cities where franchises are. We must get the new Minnesota Vikings stadium built!
thank you senator Marty, im hoping this bill will die and we can start over next year
It wasn't that long ago I saw a report put out by the MSFC detailing all the ways the stadium produces income. If John Marty wants to make a legitimate point he needs to consider all of those income sources .... not just ticket sales. Also .. how much of the price of the existing tickets go back into the economy? The full price paid for those tickets now, without the user fees, does not go directly to Wilf's pocket. If Marty wants to make a point he should put out a full analysis report. Then if it's a money loser, fine. But right now it looks like he is only dealing with partial information.
We dump billions into light rail. People like Marty are okay with that spending. But it does nothing to reduce car traffic, nothing to increase jobs, and nothing for the "public good."
My biggest issue with all of this is that he doesn't fricking realize that your are building this damn thing for the FANS!!!!!!!!!!!!! HELLO!!!!!!!!!!!!!!! The majority of MN wants this done!!!!!!!
If the fans and the players want a new stadium, then they should put up the money themselves, not saddle the entire state with more debt when we're trying to pay off existing debt. There are 87 counties in this state that deserve attention, and it's unbelievably irresponsible to talk about putting up public funds like this when there are more pressing statewide issues, like unemployment and transportation projects. As Marty put it, we need to be focusing on revitalizing public infrastructure, not helping an NFL team make more money. There's no reasonable justification for this kind of extravagant spending when many Minnesotans are struggling to cover basic living expenses. Shame on these guys, and kudos to John Marty for speaking so frankly.
Marty is a complete tool and if the Vikings leave next season he can kiss any chance of getting re-elected goodbye. He did nothing but present amend-om after amend-om in an attempt to kill the bill and his amend-oms didn't even have numbers or studies to go with them. He just kept throwing crap out there hoping it would stick. Pass this bill now and we have 30-40 years before we have to cross this bridge again or vote it down and end up paying more to build it anyways for another team your trying to attract... Remember the Lakers & North Stars? Ya they left too... and we still built a new stadium
If the fans and the players want a new stadium, then they should put up the money themselves, not saddle the entire state with more debt when we're trying to pay off existing debt. There are 87 counties in this state that deserve attention, and it's unbelievably irresponsible to talk about putting up public funds like this when there are more pressing statewide issues, like unemployment and transportation projects. As Marty put it, we need to be focusing on revitalizing public infrastructure, not helping an NFL team make more money. There's no reasonable justification for this kind of extravagant spending when many Minnesotans are struggling to cover basic living expenses. Shame on these guys, and kudos to John Marty for speaking so frankly.
If the fans and the players want a new stadium, then they should put up the money themselves, not saddle the entire state with more debt when we're trying to pay off existing debt. There are 87 counties in this state that deserve attention, and it's unbelievably irresponsible to talk about putting up public funds like this when there are more pressing statewide issues, like unemployment and transportation projects. As Marty put it, we need to be focusing on revitalizing public infrastructure, not helping an NFL team make more money. There's no reasonable justification for this kind of extravagant spending when many Minnesotans are struggling to cover basic living expenses. Shame on these guys, and kudos to John Marty for speaking so frankly.
Marty is a complete tool and if the Vikings leave next season he can kiss any chance of getting re-elected goodbye. He did nothing but present amend-om after amend-om in an attempt to kill the bill and his amend-oms didn't even have numbers or studies to go with them. He just kept throwing crap out there hoping it would stick. Pass this bill now and we have 30-40 years before we have to cross this bridge again or vote it down and end up paying more to build it anyways for another team your trying to attract... Remember the Lakers & North Stars? Ya they left too... and we still built a new stadium
I did the math for the subsidy per Minnesotan, and it adds up to less than 5 bucks a years per Minnesotan. So if 19 Minnesotans can't afford 5 bucks a year, I'll fork over 5 buck to them in order to pay for the stadium. The rest of this article is strictly opinionated, not fact.
Not a full argument. Completely left out the income tax and other taxes paid by the Vikings and supporting commercial businesses. This is a rare infrastructure project that you can actually calculate a return with relative ease. For all those congratulating you on your courageous stand, many of us are smart enough to know that you are leaving a lot of information out of your argument, making you an average politician - which is not a compliment.
Its been fun Marty.
It's not just a Vikings stadium. 8 home games genius. Do you think it will sit empty the rest of the time? Will it be named 'Ha Ha Suckers Memorial Vikings Stadium'? Wake up boss.
Just because you went to a Twins v Royals game at the Dome in 1993 doesn't mean you know squat about stadiums or what they're used for.
We live in the Midwest not LA. Whether moving's a bluff or not you, nor we, can afford to call it. We don't have the chips. If you think you'll come off as a lone wolf hero of sorts by doing so...you won't.
Good luck
It's too much for the public to pay. Besides, if a new stadium IS, indeed, built for the Vikings, 10 years from now they'll be wanting ANOTHER one.
I get a big laught out of Minnesota's multi-millionaire Democratic governor who portays himself as a champion for the working middle class and will make the "rich" pay more in taxes, yet he wants everyone to pay for helping out another multi-millionaire like Zigi Wilf. He brought in the NFL commissioner recently to "warn" Minnesota that the Vikings will leave if there's no new stadium. FIRST of all, MINNESOTANS decide what is and isn't a priority. SECONDLY, the governor has NO leadership skills if he has to bring outsiders in to do the job he wants done. FINALLY, I'll help the VIkings pack!
I think Governor Dayton HIMSELF should pay for a new stadium for the Vikings. Hey, it would be a better use of his money than the millions he spent in his failed attempt at the United States Senate in 1982. Also, he would be doing something productive as opposed to when he shut down his Senate office in 2004 or when he shut down the state government last summer. Most importantly, the rich (that's Governor Dayton) will be paying more.
PROBLEM SOLVED!! :)
Let's say the new stadium IS built. 10 years from now the Vikings will be wanting another one. It's not worth it. They might leave? I'll help them pack.
10 years from now, the Vikings will want another stadium. They should leave.
Sounds like ole' Marty here has some priority issues.
Start making a list Viking fans of those that opposed the new stadium and vote them out in the next elections.
The State of Minnesota will MAKE MONEY if the stadium is built, they will LOSE money if it is not. Period. Who currently pays all operating costs for The Metrodome? The Vikings do. Who will pay if they leave? MN taxpayers. 5-6 million per year. PLUS, 25-30 million in lost income tax from the players and coaching staff. PLUS, an untold amout of money from ND,SD, IA, WI, and Canadian residents that come to the Minneapolis area for the games. Hotels, Shopping centers, bars, restaurants, gas stations, fast food restaurants, etc...I could go on but hopefully you get the picture. The economic impact of the Vikings for the state of MN is HUGE. Whether you are a fan or not, whether you attend games or not. I find it more than a little disturbing that Senator Marty had to put the word public in italics when referring to other projects unrelated to the stadium. Senator, This Stadium is being built for the PUBLIC. Their are 32 cites in the country that are fortunate enough to have and NFL team in their backyard. I see people commenting on this post villifying those nasty 1% 'ers for having the audacity to ask for public money to build a new stadium, how dare they? Right? Well, here it is in a nutshell. I would not blame Zygi Wilf one bit if he moved HIS franchise from the State without a stadium deal. Talk with leaders from Baltimore, Houston, Cleveland, and St. Louis and see how much more it cost them to get the NFL back after it left thier cities. And ask why they wanted it back?
Why is MPR hosting comments from people who're calling a state senator a "complete tool"? You don't need to provide a platform for that kind of crap, MPR. That's what Twincities.com is for.
Yes, having many a time walked the Minnesota state fairgrounds myself in Senator Marty's neck of the woods, speeches about the evil NFL destroying the state economy are hardly a new tale to my ears. But as Oscar Wilde once said, the cynic knows the price of everything and the value of nothing. If you want your state not to be known weekly on television every winter, it is entirely your decision--for the people of California will certainly oblige you. Your state debt looks like peanuts out here. Wake up Charlie Brown, Lucy will snatch your football.
I want the tax payers of MN to own the same percentage of the team and stadium that we are being asked? To pay for.
Actually your arguement in terms of relocation are not exactly correct. Relocation is against league rules. The team must be sold to relocate. So Wilf wouldnt pay any relocation fees the new owners would. And Roger Goodell and Rooney were just there and expressed the threat of relocation is real. And Jerry Jones has been on the record saying NFL owners are tired of bad stadiums like the Metrodome pulling down there revenue sharing amounts. And tell the construction worker that has been out of work for three years that those jobs don't count. Better yet tell his kids.
Read the polls the Public is against the stadium. We have a referendum and it must be used or there will be lawsuits. Do the rich always win?
It is absolutely ludicrous to spend almost one billion dollars in downtown Minneapolis, it makes no sense! That same amount could have been spent in Arden Hills, but not only for a stadium, but for an infrastructure that is absolutely going to be needed at some point (and soon), anyway! Plus provide more jobs for just a stadium, kill two birds with one stone makes more sense to me. Make any sense to you, Mayor Rybak?
Every business needs to make it on their own or go out of business. If I want to have a auto repair shop, would you be willing to buy a building for me? Think about it!
The State just went through a $5 billion budget shortage, it is projected the next budget will be short by $1.1 billion, and the schools are owed $2.4 billion. If the State can not pay its bills I don't know how anyone can justify subsidizing a stadium. I appreciate Senator Marty's informative letter!
It is not always what you know, but who you know. If they are serious and would like to build this stadium, with out using any of their money or tax payers money, then contact me, as I know the right person that can help them build this stadium, with out any tax money or the selling of bonds. please, this is not a joke, I just want to help.
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