Stop Letting Billionaire Owners Play Poker with Public Money
Written by Cleophus Washington
In recent years, it has become all too common for professional sporting franchises to play a high-stakes game of poker. Billionaire owners push massive demands toward the center of the table – newer stadiums and facilities, tax breaks, public funding via bonds – complete with a threat to relocate to another city if their requests aren’t met. Cities, fearing the prospect of losing their beloved teams, often fold and surrender to these moneybags.
Team owners further strengthen their hand by convincing supporters of the supposed benefits of stadiums, appealing to the most zealous impulses of their fanbases, and reducing political pushback. Therefore, I believe Congress should pass the No Tax Subsidies for Stadiums Act, which, according to the Congressional website, is a bipartisan bill introduced earlier this year by Glenn Grothman (R-WI) and Don Beyer (D-VA) in the House and introduced by James Lankford (R-OK) and Cory Booker (D-NJ) in the Senate. Currently, professional sports teams are permitted to finance stadium construction and renovations with tax-exempt municipal bonds, a loophole that has enabled franchises to benefit from taxpayer dollars. This bill would amend the Internal Revenue Code of 1986 to ensure that bonds used to finance professional stadiums are not treated as tax-exempt.
According to a press release from Congressman Grotham’s office, 43 professional stadiums have been financed with tax-exempt municipal bonds since 2000, and more teams are considering new projects. This legislation is long overdue, as these wealthy owners’ greed should not be bolstered by tax mechanisms intended to help local governments fund public infrastructure and services. In fact, 22zin.com, a blog focused on the intersection of politics and sports, estimated that governments spent $10.6 billion on NFL stadiums, $6.3 billion on NBA arenas, and about $8 billion on MLB ballparks. To put this into perspective, Steve Ballmer, the owner of the NBA’s Los Angeles Clippers, is worth $145 billion alone, according to Forbes. Owners of this financial stature are extremely capable of funding these projects without public support. In fact, the estate of Microsoft co-founder Paul Allen, who passed away in 2018, has recently begun the process of selling the NFL’s Seattle Seahawks. The Super Bowl champions are reportedly valued in excess of $7 billion, with some estimates even projecting a $10 billion asking price. If a billionaire can afford to pay this sum to own a sports team, I don’t think they would have to reach too far into their pockets to fund a facility.
The primary argument these oligarchs use to justify public subsidies is that these stadiums stimulate economic development and benefit everyone in the community. This argument is misleading, as the costs of these efforts fail to outweigh the minor benefits. According to commentary from Brookings, sports facilities “attract neither tourists nor new industry,” generating no real net economic gain. In practice, the “economic benefits” are restricted to the immediate vicinity of the stadium, leaving no tangible benefits for the rest of the city or state, even though both are responsible for its subsidization. Proponents also tout job creation, but stadiums usually create low-wage, part-time jobs, competing with more stable, higher-paying entertainment-sector jobs. This arrangement is unfair, as the costs of construction and renovation are distributed across the population, while only select groups will receive the limited benefits. Congress is responsible for ensuring a just distribution of burdens and benefits, and passing the No Tax Subsidies for Stadiums Act will uphold this.
Proponents of public funding love to invoke “civic pride,” arguing that refurbished arenas boost local morale. However, I would argue that focusing on essential projects – like roads, schools, and hospitals – is a better use of funding that would lift constituents' spirits. Michigan’s own Journal of Economics highlights the multiplier effect of infrastructure investment, as it maximizes its impact on city residents rather than on affluent owners.
The billionaire class can afford to miss out on one loophole and solely fund these stadium undertakings themselves. The American taxpayer, including many who will never watch or attend a sporting event, should be shielded from the owners’ avarice. The bi-partisan nature of this legislation should be noted as well, as it unites James Lankford, who, according to his own website, received the American Conservative Union’s 2019 Award for Conservative Excellence, and Cory Booker, who spoke for 25 consecutive hours earlier this year to combat many of these values. If these two ideological rivals can agree on the necessity of this policy, then there should be little hesitation for Congress to secure its passage.
The No Tax Subsidies for Stadiums Act will force the ultra-wealthy to reach into their coffers and sponsor their lavish spending, freeing money that can be used to improve the lives of everyday Americans. Congress ending federal stadium subsidies would take taxpayers’ money off the table and force billionaires to pay with their own chips, ending this rigged poker game once and for all.
