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Stadium postmortem: How a wealthy NFL owner got millions from taxpayers

Sen. John MartySen. John Marty

The Vikings stadium fight is over; team owner Zygi Wilf won.

Wilf got an astounding amount of money from taxpayers, while convincing politicians and some fans that he is doing them a favor.

Minnesota's new stadium will be nice for people attending the games. But more important, in the eyes of some, it will be what Pioneer Press sports columnist Charley Walters called a "cash cow" for the Vikings: It "could be worth an annual profit of at least $30 million to the team and perhaps as much as $40 million ... about triple the Vikings' estimated annual profit in the Metrodome."

Public wanted private funding

It's not that the public was clamoring for this. The last poll (KSTP - Survey USA poll) before the bill's passage showed, that by an overwhelming 58 percent to 36 percent margin, the public said that the stadium should be paid for "entirely with private funding," even though most respondents believed that the team would leave without a new stadium.

Vikings' owner Zygi Wilf spent several million dollars in lobbying and campaign contributions. So perhaps it was inevitable that he would win this huge taxpayer subsidy, despite strong opposition from the public.

Wilf's lobbying money talked. Shortly after passage of the legislation, top political leaders gathered for a news conference in which Wilf was described as "heroic" for agreeing to contribute $50 million more of the money he will gain from naming rights, suites and other profits from the new stadium. Taxpayers are giving a billionaire hundreds of millions of dollars, and he is "heroic" for keeping a little bit less of the money he will make from that stadium?

Bipartisan campaign contributions

Professor David Schultz from Hamline University reported that the Vikings spent over $5.5 million lobbying for the stadium, and the Wilf family and their lobbyists have donated tens of thousands of dollars to the Republican and the DFL legislative caucuses — plus they gave generously to all the candidates for governor in 2006 and 2010. Some have suggested that their bipartisan campaign contributions should be spelled buy-partisan, in that they were trying to buy favor with both parties.

Most politicians supporting the proposal called it the "People's Stadium" and claimed it was in the public interest. However, Ted Mondale, who was paid with public funds to lobby for the legislation, bluntly admitted, "The whole reason we're doing this is so the team can make money."

It's not that Wilf was losing money. Last fall, Forbes magazine estimated that since Wilf and his partners purchased the team for $600 million in 2005, he has made $196 million in capital gains, plus $46 million in operating profits from the team. Homeowners have seen the value of their homes drop by as much as a third from the recession, but Wilf's investment grew by a third.

How 'investment' breaks down

Data from the Senate Fiscal Analysis Office shows, under the final legislation, that the taxpayer "investment" in the Vikings stadium breaks down to a $72 public subsidy for every ticket, to every game — including preseason ones — for the next 30 years!

And this calculation doesn't include the granting of a property-tax exemption for the stadium. Counting that, the subsidy climbs to over $110 per ticket.

Some complain that this subsidy calculation should be divided over all users of the stadium, because the Vikings play only 10 games per year, and the stadium will be used for high-school sports and other events. But the reality is that you don't build a billion-dollar stadium for Monster Trucks or high-school sports. Ticket revenues for Vikings games are projected to be several dozen times greater than ticket revenues for all other stadium events combined. This stadium is happening only because the Vikings want it.

The jobs question

Wilf's heavily funded lobbying effort was also successful in convincing politicians that it was a good way to create construction jobs, twisting the numbers in a manner that convinced some public officials that it would create far more than the equivalent of 700 full-time jobs over the 3 years of construction. Yes, Minnesota has an urgent need to create more building-trades jobs, but we would create far more jobs using public dollars to fix our public infrastructure, such as the numerous public schools in Minneapolis that are several times as old as the Metrodome and in much worse shape.

The lobbying campaign was aided by heavy media coverage which frequently played the role of cheerleader, rather than asking tough questions. After the fact, sports writer Patrick Reusse wrote, "We in the Twin Cities sports media were so amped up over getting a new stadium ... that not much time was spent looking at the financial realities. We have allowed owner Zygi Wilf to be crowned as a patient, generous hero in the proceedings that led to the approval of the stadium ... " Reusse acknowledged the deal was a "bonanza" for Wilf.

Wilf's expensive lobbying effort and his generous campaign contributions won the day. Already making big profits from the Vikings, he will get over a billion more from taxpayers for stadium construction and operating costs.

Almost two of every three Minneapolis school students come from low income families struggling to pay for food and other necessities.

At the same time, numerous Republican and DFL politicians were determined to make the stadium deal the top priority, so, as Mondale said, "the team can make money."

It's time we rethink our priorities.

John Marty, DFL-Roseville, is a state senator. He first published this article in his newsletter, "To the Point!" which is published by the Apple Pie Alliance

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Comments (11)

Betrayed again

The same thing happened with the dome. And look at what we got. Now it's considered junk. Are we going to replace it with junk? Most likely. At least our august mayor got a bit of a boost along toward Washington and served the needs of business interests very well. Too bad humans lost out again.

Curruption, political strategy, or both

We have a corrupt political system that was hijacked by an out of state billionaire and associated interests, that pretty much sums up the situation. I don't believe guys like Steve Simon and Ryan Winkler are stupid enough to buy the jobs argument. The question is why would our representatives decide to champion Wilf at the expense of their own constituents?

There are two plausible explanations: 1) simple corruption, maybe legal, but their support was basically bought with campaign contributions, promises for future funding and support, or other sundry favors and promises. 2) This entire thing was a Democratic political strategy that froze out the Republican agenda and demonstrated the Democratic ability to deliver on behalf of moneyed interests despite legislative minority status. Although Republicans managed to get two amendments on the ballot, their legislative season was pretty much a bust. Dayton vetoed one bill after another all season long and no was paying attention because of the stadium. The stadium was basically a hand grenade thrown into the session that dominated and distracted the entire session. The stadium effectively prevented any Republican attempts to dominate the session with their planned agenda. Furthermore, the stadium vote has cracked the Republican party, it was one of precious few non-party line votes of the session, and it split the Republicans creating a lot of animosity and disgust. It highlighted Republican indifference to business interests as the expense of ideology, and put a spotlight on Republican impotence. Between Republican obstruction of chamber supported public works and infrastructure projects, and they're weak performance on the stadium, perhaps Democrats hope to peal away some of that business support that's been anchored on the Republicans for over a decade now. Some democrats may have reasoned that despite the inherently corrupt nature of the stadium deal, it may have been worth it politically, if it contributes to a Democratic comeback in November.

Of course, there no law of the universe that there's no combination of corruption and strategy, and to some extent, the strategy exploits a corrupt system.

The stadium isn't a economic disaster for MN, but it's a dog that gonna come back and bite a lot of people one way or another.

You bet it's gonna bite them

No matter how much I agree with Steve Simon other issues, I will vote against him because he voted for the stadium. Not only because of the principle involved, but he took a public stance against the stadium while supporting it behind closed doors.

All votes should be roll call votes; he can't deny how he voted -- it's public record. As far as I'm concerned, Steve lied to his constituents. Congratulations, Steve, you are now a professional politician.

Political corruption pays incomparable ROI

"...Wilf spent several million dollars in lobbying and campaign contributions. So perhaps it was inevitable..."

Sad, but true, due to the political climate we have now, where the public interest is treated like a poor cousin in the Legislature. The public interest doesn't get people re-elected, and it doesn't get you a nice fat job after you retire from office (keep watching for this, folks).

Isn't it amazing what a few well-placed millions can get you when you ask venal legislators to give you other people's money ?? Much of our Legislature is for sale on the cheap - not all, but much of it.

The metro tribes are also a fine example of what flashing money around the Legislature can do, especially with the DFL. These two entities are responsible for the rejection of stadium proposals which were far superior - i.e., more beneficial to the taxpayer in all respects.

I appreciate the efforts Sen. Marty made to redirect the debate on this stadium to the facts, to our values, and to our common sense. Sometimes, it almost got some traction, such as that little clause in an amendment which would have preserved the integrity of the Mpls city charter, and which passed on the Senate floor.

But then, this same money we're talking about leaned hard on the weak few who had made the mistake of stepping out of line and voting for the amendment. POOF !! The short-lived amendment was gone.

I appreciate Sen. Marty's efforts, but in the Minnesota Legislature, very few are listening to appeals regarding the public interest.

Insight

Sen. Marty has missed his chance here to give us a real insight in how the stadium bill managed to get passed. He did note what was in fact a problem; the breakdown of news coverage particularly with the Star Tribune where anti-stadium articles were spiked. Only now are we seeing negative coverage of stadium issues from supposedly independent news side Strib reporters, now that the horse has definitively left the barn.

Sen. Marty

Let's not let Sen. Marty off the hook here. He was pretty much invisible during the last days. Vigorous leadership was desperately needed here and he did not provide it.

Corruption, political strategy, & public interest

In addition to what's been noted, public interest did play a role in this outcome. Just maybe it even ranked above corruption and politics in determining how legislators voted. Ok, thats probably a romantic idea. But lets not pretend that two people can't come to very different conclusions about whether or not its in the "public interest" to finance a Vikings stadium.

Lobbying does work

Lobbying in Washington, DC is a Billion dollar a year business (yes billion). It works and the lobbying business continues to grow with the churning of politicians and their aides becoming well connected lobbyists at every level.

The Public Interest

The public interest wasn't involved here. Already burdened with a Twins Stadium, out state politicians stuck Minneapolis residents with a Vikings Stadium, which provides them with no direct benefit, and pretty much creates a gaping economic black hole in downtown Minneapolis. No limits on ticket prices were negotiated. No guarantees of ticket availability were made to the taxpayers who are paying for the Vikings Stadium. A people's stadium is exactly what the new Vikings Stadium is not.

Billion dollars worth of public interest?

We can all assign some public interest to the Vikings, but I really don't think there's any reasonable way to conclude that franchise that employs a handful of people year-round is worth a billion dollars in public interest. Besides, we know for a fact that the vast majority of the public wasn't interested in financing this, which is why the referendums had to be bypassed at all cost.

I certainly appreciate Sen.

I certainly appreciate Sen. Marty's leadership here, and I'd disagree strongly with Hiram that he was "pretty much invisible". It may be fun to write, but it's inaccurate. He was active on the floor, on the airwaves, in print, and online. I'm normally a big supporter of his because of his championing single-payer legislation in the Senate-- that is where I believe he would rather be spending his energy, yet he also took on being the main voice of DFL opposition.

Ultimately, pro-stadium forces have one great advantage: they only need to win once, whereas opponents of publicly-financed stadiums have to keep winning year after year after year. A tough thing to do, the way our current system favors the well-connected and well-heeled.