Teh One Who Knocks
02-12-2016, 05:42 PM
By Jason Notte - Market Watch
http://i.imgur.com/fhwu6tQ.jpg
We’re about a week removed from Super Bowl 50 and the big game’s future already looks bleak for the taxpayers that the NFL and its owners are preparing to steamroll.
As the confetti is swept up in Levi’s Stadium in Santa Clara, Calif., and the last of the Broncos fans nurse their hangovers back to Denver, Santa Clara is left with $114 million in stadium debt draining its tax pool and a Stadium Authority holding as much as $933 million more over its head. While it was nice of the Super Bowl committee to pick up Santa Clara’s $3.6 million Super Bowl hosting costs, the $104,000 it’s kicking toward San Francisco’s $4.8 million in city services spent on the Super Bowl leaves a noisy debate about who’s picking up the rest — especially with San Francisco already facing a $100 million budget deficit for the upcoming year.
But surely there won’t be any complaints when the Super Bowl shifts to Houston’s NRG Stadium and football-devout Texas next year, right? After all, Houston and NRG Stadium hosted back in 2004 and did well enough to warrant another stint. In fact, writing in the International Journal of Sports and Finance in 2006, University of Maryland professor Dennis Coates found that the Super Bowl increases tax revenues in Houston by roughly $5 million. Given a tax rate of 5%, that’s a $100 million boost in taxable sales. However, that’s only after spending $289 million in tax dollars to pay for 61% of the construction of what was known as Reliant Stadium when it opened in 2002. Also, that’s far less than the $330 million that Houston’s Super Bowl bid committee predicted the city would make.
Now, as Houston prepares to host its second Super Bowl in 13 years, there are questions about whether 14-year-old NRG Stadium will be able to host another without significant upgrades. Houston is already home to one giant vacant stadium in the Astrodome — which Moody’s Investors Services uses as an illustration of the credit risk behind stadium financing — and will likely have to dole out more money to keep its current facility relevant in the NFL’s eyes. Actually, it will have to dole out more money than the tax concessions and freebies that the NFL already asks of its Super Bowl hosts.
Minneapolis and the state of Minnesota put $500 million toward the more than $1 billion cost of U.S. Bank Stadium for the Vikings and received the 2018 Super Bowl. That prize came with the 153-page list of NFL demands, including free police escorts for team owners, 35,000 free parking spaces, sales tax rebates, residential suites at no cost in high-end hotels, free billboards and guarantees to receive all revenue from the game’s ticket sales. That puts Minneapolis and Minnesota well in the red before the 2017 season even begins, all just to get the city’s first Super Bowl since 1992.
Atlanta’s taxpayers, politicians and fans are watching all of this closely. The Georgia Dome hosted Super Bowl games in 1994 and 2000, but Atlanta Falcons owner Arthur Blank declared the building obsolete just 18 years after it was built. Atlanta is kicking $200 million in tax dollars toward the $1.2 billion Mercedes-Benz Stadium, while the state of Georgia is contributing another $40 million. However, by the time those stadium bonds are paid, the total public bill for the stadium will come out to more than $600 million.
Atlanta is angling for either the 2019 or 2020 Super Bowl, with the metro Atlanta Chamber of Commerce dangling a $10 million tax break for the NFL in return for hosting duties. Amazingly, that wouldn’t exactly be out of line with current precedent. New Jersey gave the NFL a $7.5 million sales tax rebate after hosting the 2014 Super Bowl in East Rutherford, N.J. With the state facing a $806 million deficit at the time and most of the host events (and Host Committee money) shuffling across the river to New York, the New Jersey Chamber of Commerce vowed never to woo the Super Bowl again. Politicians, meanwhile, called the refund “absurd.”
Yet, that’s the cost of bringing the NFL’s biggest event into town. The NFL proves repeatedly that it wants nothing more than public money for its facilities and events. However, when even a football-mad city like Houston starts questioning what it’s getting in return for playing Super Bowl host, the NFL might have to find itself some more willing, docile cattle to milk.
http://i.imgur.com/fhwu6tQ.jpg
We’re about a week removed from Super Bowl 50 and the big game’s future already looks bleak for the taxpayers that the NFL and its owners are preparing to steamroll.
As the confetti is swept up in Levi’s Stadium in Santa Clara, Calif., and the last of the Broncos fans nurse their hangovers back to Denver, Santa Clara is left with $114 million in stadium debt draining its tax pool and a Stadium Authority holding as much as $933 million more over its head. While it was nice of the Super Bowl committee to pick up Santa Clara’s $3.6 million Super Bowl hosting costs, the $104,000 it’s kicking toward San Francisco’s $4.8 million in city services spent on the Super Bowl leaves a noisy debate about who’s picking up the rest — especially with San Francisco already facing a $100 million budget deficit for the upcoming year.
But surely there won’t be any complaints when the Super Bowl shifts to Houston’s NRG Stadium and football-devout Texas next year, right? After all, Houston and NRG Stadium hosted back in 2004 and did well enough to warrant another stint. In fact, writing in the International Journal of Sports and Finance in 2006, University of Maryland professor Dennis Coates found that the Super Bowl increases tax revenues in Houston by roughly $5 million. Given a tax rate of 5%, that’s a $100 million boost in taxable sales. However, that’s only after spending $289 million in tax dollars to pay for 61% of the construction of what was known as Reliant Stadium when it opened in 2002. Also, that’s far less than the $330 million that Houston’s Super Bowl bid committee predicted the city would make.
Now, as Houston prepares to host its second Super Bowl in 13 years, there are questions about whether 14-year-old NRG Stadium will be able to host another without significant upgrades. Houston is already home to one giant vacant stadium in the Astrodome — which Moody’s Investors Services uses as an illustration of the credit risk behind stadium financing — and will likely have to dole out more money to keep its current facility relevant in the NFL’s eyes. Actually, it will have to dole out more money than the tax concessions and freebies that the NFL already asks of its Super Bowl hosts.
Minneapolis and the state of Minnesota put $500 million toward the more than $1 billion cost of U.S. Bank Stadium for the Vikings and received the 2018 Super Bowl. That prize came with the 153-page list of NFL demands, including free police escorts for team owners, 35,000 free parking spaces, sales tax rebates, residential suites at no cost in high-end hotels, free billboards and guarantees to receive all revenue from the game’s ticket sales. That puts Minneapolis and Minnesota well in the red before the 2017 season even begins, all just to get the city’s first Super Bowl since 1992.
Atlanta’s taxpayers, politicians and fans are watching all of this closely. The Georgia Dome hosted Super Bowl games in 1994 and 2000, but Atlanta Falcons owner Arthur Blank declared the building obsolete just 18 years after it was built. Atlanta is kicking $200 million in tax dollars toward the $1.2 billion Mercedes-Benz Stadium, while the state of Georgia is contributing another $40 million. However, by the time those stadium bonds are paid, the total public bill for the stadium will come out to more than $600 million.
Atlanta is angling for either the 2019 or 2020 Super Bowl, with the metro Atlanta Chamber of Commerce dangling a $10 million tax break for the NFL in return for hosting duties. Amazingly, that wouldn’t exactly be out of line with current precedent. New Jersey gave the NFL a $7.5 million sales tax rebate after hosting the 2014 Super Bowl in East Rutherford, N.J. With the state facing a $806 million deficit at the time and most of the host events (and Host Committee money) shuffling across the river to New York, the New Jersey Chamber of Commerce vowed never to woo the Super Bowl again. Politicians, meanwhile, called the refund “absurd.”
Yet, that’s the cost of bringing the NFL’s biggest event into town. The NFL proves repeatedly that it wants nothing more than public money for its facilities and events. However, when even a football-mad city like Houston starts questioning what it’s getting in return for playing Super Bowl host, the NFL might have to find itself some more willing, docile cattle to milk.