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The Vikings Stadium deal is a study in diminishing returns

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The more concessions that are given to the Vikings and the NFL, the ever so more ludicrous is the claim that the public subsidies to keep pro football in Minnesota are a good return on investment for Minnesota taxpayers.

First Zygi Wilf wanted the state of Minnesota to buy him a new stadium for the Vikings – and he got it. Now the NFL wants tax breaks from the state if it wants to host the Super Bowl in 2018. The NFL will probably get its way. One can only wonder what will be next.

schultz portrait
David Schultz

But one thing is certain – the more concessions that are given to the Vikings and the NFL, the ever so more ludicrous is the claim that the public subsidies to keep pro football in Minnesota are a good return on investment for Minnesota taxpayers.

The Vikings stadium deal has been folly from the beginning. The stated rationale for public investments in sports stadiums – including for the Vikings – has been economic development and jobs creation.

But, as has been pointed out scores of times, public subsidies for professional sports are one of the worst returns on investment a state can make. The evidence is overwhelming on this point. Whether it be from the standpoint of job creation, opportunity costs (could the same money be invested in a better way to produce jobs or stimulate the economy?), or of how significant sports are to local economies, the Vikings deal made no economic sense.

But then it got worse.

Plans A, B, C – and D?

The deal was not supposed to include general revenue dollars. Instead the state came up with the idea of electronic pull-tabs to finance its part, along with some other taxes on tickets and sports paraphernalia. Except no one really checked to see if the revenue projections were realistic.

And they were not, forcing the state into Plan B. Plan B was a new corporate tax to fund the state’s construction costs. But Plan B will maybe generate $20 million of the $34 million needed per year for the next several years.

Enter Plan C: tobacco taxes to fill in the remaining funding gap. But even Plan C may not be enough, requiring a future Plan D, yet to be determined.

Ultimately, Minnesota’s share of the stadium is guaranteed by general revenue dollars, and it may still come to that if the NFL gets its way.

Now Minnesota wants to host Super Bowl 2018. And as a condition of doing that, the NFL is demanding sales tax exemptions on ticket sales and other events. The state will probably oblige, already offering two arguments.

Bowl is not a boon

The first is that hosting a Super Bowl will be a huge economic benefit to the state. That argument is largely overblown.

Just as analysis of public subsidies for sports stadiums have shown little economic benefit to communities, there is similarly little evidence that hosting Super Bowls pays the returns on investment its supporters claim. For example, hotels and restaurants may be sold out for the Super Bowl, but it is unclear how much of this business is new or displacing existing business. By the time added security is factored in, the real returns on a community investment are often minimal at best.

The argument for the economic benefit of hosting the Super Bowl is just as illusionary as was the claim made for St. Paul in hosting the 2008 Republican National Convention. That event also failed to realize the benefits to local businesses that city officials promised.

The second argument for granting the tax breaks is the new claim that were Minnesota not hosting the Super Bowl, the state would not have received the sales tax from it. Thus, by giving the tax break, Minnesota is no worse off than before. This too is a bad argument.

Better spent on education

First, if there is any justification in financing the new stadium and in hosting the Super Bowl, it rests in the economic windfall the state supposedly gets from new tax revenues, especially on out-of-town guests. Few Minnesotans will be able to afford or attend the Super Bowl, thereby meaning that the state cannot recoup some of its investment by taxing those who do not attend.

Moreover, given the costs to the state in hosting the Super Bowl, the tax exemption is essentially asking Minnesotans to subsidize visitors to attend the game. If these individuals are rich enough to pay the thousands of dollars it costs to attend the Super Bowl, they are rich enough to pay the tax. 

Forgoing the taxes does cost Minnesota taxpayers money – money that could be spent to repair failed Plans A, B, and C. Or the taxes collected could be spent on education, potholes, or countless other priorities.

In short, the sales tax exemption on Super Bowl activities takes money away from taxpayers or from some other state program and gives it as a subsidy to the NFL, Zygi Wilf, and all the out-of-state visitors who will come to Minnesota to watch a football game.

David Schultz is a Hamline University professor of political science and author of the “Election Law and Democratic Theory” (Ashgate, 2014) and “American Politics in the Age of Ignorance” (Macmillan, 2013). 

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Comments (57)

Super bowl study

I am not necessarily a fan of the view that subsidizing football teams is good for the economy, but it does seem to me that you can't write this kind of article without noting the actual work on the subject, particularly the Indianapolis study. http://archive.indystar.com/assets/pdf/BG192278719.PDF

Mr. Schulz also makes the common error of thinking that the only justification for subsidizing NFL football is economic. The fact is, no one who has ever argued the economic benefits of the NFL has ever won the debate. Still, these football stadiums have been built so there must have been other forces at work. We subsidize these teams, not because they are good for us, but because we like NFL football. McDonald's operates on the same principle. It's a luxury that we choose to afford.

Flawed Study

Hiram, the "Indianapolis Study" is considered flawed. It paints a rosy picture and makes generous assumptions (including ignoring the "substitution effect" - it assumes that if the SuperBowl didn't come to town, that residents would have just stayed home and not spent entertainment dollars elsewhere). More rigorous studies, such as this one: http://web.williams.edu/Economics/wp/mathesonSuperbowl.pdf , show that generally one about 25% of what the NFL promises is actually made in economic gain. In fact 85% of economists surveyed in a study Greg Mankiw (Harvard Economist and former presidential advisor) helped with, think subsidizing sports is a terrible idea.

House of Worship

The last thing the citizen needs is a taxpayer funded cathedral for a rich man and his hobby. But he'll get it, as others have in the past. Working middle americans are coming to understand that they no longer live in a democracy of citizen equality. We have a pay to play nation now, so only those with an excess of capital they do not need can join the game. Gotta love the magic of the green grease.

Using Mr. Foster's argument

that NFL football is a "luxury we choose to afford", like McDonalds, if I choose not to eat at McDonalds may I also opt out of paying my portion of state and local taxes that will subsidize Wilf and the NFL?

Vikings stadium

Mr. Foonimin, you can opt out of local Wilf taxes by eating (at McDonald's and otherwise) and shopping outside of Minneapolis, as I now do as much as possible. To opt out of the local Pohlad taxes you have to go outside Hennepin County, which is more of a nuisance but doable if you want to when you're spending enough money. The state taxes, of course, are more difficult unless you're so fed up with the crap that you want to move somewhere else, which is a point I haven't reached -- yet.

Needs

Well to quote Bob Dylan, "Your debutante knows what you need, I know what you want." We don't need the Vikings. We don't need the Twins. We don't need the Guthrie, or cream in our coffee. But these are all things we want. And just because others benefit from providing them to us, that doesn't make us want them any less.

I do agree there is a certain bread and circus aspect to all the stadiums we have been building lately. Unable to provide bread, our politicians have been giving us circus after circus. But we do seem to want them.

"that NFL football is a

"that NFL football is a "luxury we choose to afford", like McDonalds, if I choose not to eat at McDonalds may I also opt out of paying my portion of state and local taxes that will subsidize Wilf and the NFL?"

The nature of the choices is different. Sorry, you are stuck with the decisions your elected officials were elected to make on your behalf. That's the way the cookie crumbles.

Cream in my Coffee

Regarding what we do and don't want: I don't recall ever being allowed to vote, specifically, on whether or not I wanted to fund the stadium.

For the record: I'd also vote against cream in my coffee.

Strange timing

It's a strange day to be arguing that we're seeing diminishing returns. Just today, the city sold the air rights over it's stadium-mandated new parking ramp for a new hotel and apartment complex just across the street from the new stadium. In addition to the up-front payment, that's new property tax revenue, new lodging tax revenue and new entertainment tax revenue.

And that's in addition to the Ryan development and park, all of which likely would not have happened without the stadium. That sure sounds like increasing returns, not decreasing returns.

As for the notion that the downtown hospitality industry would be at capacity or near on the first weekend of February with or with out the Super Bowl, that's just laughable.

The city should negotiate as best it can with the NFL to resist the requested tax breaks. Those tax revenues were part of what was promised in exchange for building the stadium. But we can at least acknowledge that unlike the last time around, we are at least getting the redevelopment we hoped for in downtown east.

Merely chipping away at enormous stadium cost

From now until 2046, the stadium deal will cost the city $678 million, according to former Minneapolis Council Member Paul Ostrow:
http://www.startribune.com/politics/statelocal/232209781.html

How much of that $678 million will be made up by the development deal announced today? If you total up the reported upfront fees, air rights and 25-year tax revenues, it comes to about $26 million. (I don't know how much to add to bring us to 2046...maybe another $14 million, charitably.)

Ryan's other Downtown East developments will bring in some large amount of tax revenue, too, of course. But its Wells Fargo development reportedly was contingent on the demolition of the Strib building, which would make way for the park. Land for the park will be removed from the tax rolls, and it will cost up to $2 million each year just to provide basic park services, according to Park Board officials. Capital improvements to the park might cost an additional $25 million to $40 million in total, they say. In addition, there are the costs, monetary and otherwise, of the city-funded destruction of the historic Star and Tribune Building.

You can do the math. I can't see how new development will ever be enough to cover that $678 million.

Hiram's gambit

"The fact is, no one who has ever argued the economic benefits of the NFL has ever won the debate. Still, these football stadiums have been built so there must have been other forces at work. We subsidize these teams, not because they are good for us, but because we like NFL football. "

Actually, no one who's argued any benefits of publicly financed stadiums for pro sports franchises for any reason has ever "won" the argument. They have however won the votes. The truth is "we" aren't given a chance to decide whether or not to subsidize, one or another the public is always frozen out of the decision because everyone knows the public would turn them down. The notion that "we" must have decided the subsidy is "worth" it, simply ignores the political realities of stadium deals. The only thing that "we" ever said consistently was that we would rather see the team move out than build them a stadium. The fact that some politicians survive re-election despite betraying their constituents doesn't "prove" that we secretly wanted the stadium, it just proves that we have more than stadiums on our minds.

One correction for Mr. Shulz's

It's not true that "no one" thought to look into the viability of the e-tab funding scheme. Several opponents of the stadium deal did in fact look into, and warned everyone that it wasn't going to work. Lawmakers were just to busy betraying their constituents to notice. I know I told my lawmakers in person at town meetings and election debates. Guess how they voted?

Needs

We all probably subsidized the McDonald's also. What isn't developed without a subsidy from the wallets of the middle class for our own goo.?

Losing elections

I think in the history of stadiums, only one legislator has lost an election because of a pro stadium vote, some poor unfortunate soul in Wisconsin. People don't want to pay the cost of having pro sports here but they do want pro sports. I don't like to pay bills either and surely given a chance I would vote against it, but that doesn't prevent me from buying stuff.

There is a lot wrong with how we manage our sports business. But I also think failing to grasp what's really at issue, and Professor Schultz's piece above suffers from that defect makes things worse, not better. By not having a clear understanding of what the public's interest is in investing in pro sports franchises, we leave those interests unprotected, and that is inevitably to our detriment.

Downtown East

As an aside, let's not confuse the redevelopment of downtown east with the stadium. The development near the stadium for now is all occurring on the five blocks owned by the Star Tribune, which could have chosen to sell even with the Metrodome staying in place - a new stadium was not required. Without a new stadium, would there be demand for several hundred apartment units? Yes. Demand for office space for 5,000 Wells Fargo employees? Yes, Wells Fargo was already shopping for office space somewhere - the city could have still provided the 1,600 parking spaces to help that deal happen. A new hotel? why not - the stadium was already there anyway, generating room nights. Wells Fargo will generate more. Lastly, is there demand for a park in downtown east even without a stadium? Sure, but The Yard only got proposed because of the stadium - it wasn't part of any plan by the city prior. In other words, we could have gotten most or all of the proposed downtown east project without spending all we did on the new stadium.

All of those things could have happened

But would they have, Sam? The city certainly would not have built that parking ramp (and it certainly should not have), so no, it would not have. And the new hotel and apartments are out too.

And as you say, the park wasn't happening without the stadium.

Might Ryan still have built a new building for Wells Fargo? Certainly could have, but the stadium was definitely a catalyst for it to go forward.

I don't think there is any question that if nothing else, the stadium has advanced the pace of redevelopment of the area.

It's about priorities

A fascinating and welcome batch of comments to my piece I welcome them all. Let me offer some clarifications.

I am the first to concede that economics is not the only issue when it comes to subsidizing a sports stadium. I have written extensively and in Minnpost that if one wants to make a quality of life argument for why to subsidize then do so. My focus was on the economic argument here. But in terms of quality of life one has to ask whose quality of life and at what cost? It seems selfish to say that the public should be asked to spend a half a billion dollars to enrich the lives of a wealthy billionaire and professional athletes. Or it seems selfish to say that I want taxpayers to spend money so that I can enjoy watching football. Conversely, I argue in one of my books, quality of life is dictated by many factors and we know more people visit museums, parks, or theaters than do sports events, yet we seldom see anyone demanding that we spend millions of dollars to a profitable for profit business to do all this. Moreover, the quality of life in Minnesota did not deteriorate when the Lakers or the North Stars left, at least not for the vast majority of people who could not afford to attend a professional sporting event.

In terms of economic benefits I never said there were none. Instead I said that compared to other uses for the money, spending it on public subsidies for a sports stadium is highly inefficient compared to other uses. This is an opportunity costs argument. Yet there is investment going on near the stadium site but why not directly take the same public money and directly invest it there-the return and multipler effects will be greater. Or take the same money and spend it on education to narrow the achievement gap. Or spend it on high speed internet for the state, or any of a score of other things that could yield even greater payoffs for the state.

Third, I have not studied the report on Indianapolis and what it reaped from hosting a Super Bowl. However, most studies of major events like this question the short and long term public payoff. Additionally, take all the public investments into the stadium in Indianapolis and then look at the returns and I would still argue that the public return is minimal compared to what it advocates have asserted. The returns on that particular day or event may be in the black but overall returns still are minimal.

So in the end let’s be honest–if you are going to argue that giving hundreds of millions of public dollars to a for-profit private corporation to enhance your life is more important than putting the same money to use to enhance the life of the poor or least advantaged in our society just say so. The issue in part is about priorities–it is about who we value in society and what we consider to be important. The subsidy (and the proposed NFL tax break) says we value sports, wealthy out-of-town visitors, and those who want to watch football to enhance their quality of life more than we value education, the poor, and those who would like better neighborhoods, parks, and other services to improve the quality of their lives.

I don't have any data

But I suspect that the majority of Minnesotan would disagree that our quality of life was not diminished by the departure of the Lakers and Stars. Indeed, the pretty wide-spread support (if memory serves) for subsidizing a new NHL franchise is suggestive in that regard.

Also, one need not regularly attend sporting events to enjoy and care about them.

As for why not to do other things, there is no answer to that question aside from the realities of politics. The votes are not there to fund those other things, even if they should be.

I was there...

Neither or the loss nor the return of hockey and basket ball affected my quality of life. The rest of the state seemed to get along just fine.

What people want?

"People don't want to pay the cost of having pro sports here but they do want pro sports. I don't like to pay bills either and surely given a chance I would vote against it, but that doesn't prevent me from buying stuff."

Poll after poll has shown that while people may "want" pro sports, they don't want it enough to pay billions of dollars in subsidies for it. Again, the fact that politicians don't usually lose elections over stadium deals just tells us that elections are complex and voters are thinking about other things besides stadiums. In no way you claim that reelections constitute an enthusiastic endorsement of stadium deals.

Hiram, why do you assume that the public doesn't have a clear understanding? It's seems that so long as the public doesn't endorse stadium deal you seem to think they must confused. You're assuming that a "clear" understanding will always yield a public stadium subsidies. It's entirely possible that a clear understanding would yield a public investment... in many other things other than stadiums.

Quality and cost

"My focus was on the economic argument here. But in terms of quality of life one has to ask whose quality of life and at what cost?"

That's a good question. To whose life does the presence of the Vikings in Minnesota? Because that is, after all, what we bought. The answer is, pretty much everyone in the state who follows the Vikings. And while that doesn't include every person in Minnesota, the market share of the Vikings is huge. There is simply nothing in the sports or the media world that compares to it, not the T-Wolves, not the Wild, not even the Twins or the series finale of "Breaking Bad". True, not everyone is a Vikings fan, but then not everyone drives on the road to Warroad, yet we have no problem in paying for that. NFL football is unique, and once you lose it, borders on the irreplaceable.

As for cost, one of the frustrating things about the stadium debate was that no one could tell us what it would cost each of us, in individually. A dollar a year? A thousand dollars a year? can you do a cost benefit analysis when you don't know the cost? Stadium supporters put a great deal of effort in hiding the costs from the public, and stadium opponents so wrapped up in their own talking points never seemed it necessary to hold stadium proponents to account.

Self interest

"It seems selfish to say that the public should be asked to spend a half a billion dollars to enrich the lives of a wealthy billionaire and professional athletes. Or it seems selfish to say that I want taxpayers to spend money so that I can enjoy watching football."

I have no problem in being selfish. You can go down to the state capitol just about any day the legislature and find people all over the place advocating things that are in their self interest, and I say more power to them. I have been one of those folks myself, on a number of occasions, and I apologize to no for that. The thing about the millionaires benefiting, I think as peculiarly Minnesotan. If something is a good deal for me, I don't care if it's a good deal for someone else.

"Conversely, I argue in one of my books, quality of life is dictated by many factors and we know more people visit museums, parks, or theaters than do sports events, yet we seldom see anyone demanding that we spend millions of dollars to a profitable for profit business to do all this."

Indeed, and having an NFL team is one of those factors. And I think this is an example of not choosing the most effective way at looking at these things. In subsidizing the building, we weren't buying a stadium, we were buying the continued presence of the Vikings in our community. For the purposes of the vast majority of Minnesotans, the Vikings Stadium is a TV studio where they watch the games for free. Now I realize the truth is a little more complicated, and by building the stadium the cost for many of us is going up a little bit in certain indirect ways, but the fact is, lots more people watch the Vikings than go to plays at the Guthrie where the tickets are a lot more expensive than many Viking fans would choose to pay.

Yes, the stadium is driven by self interest. But the self interest that drives stadium deals, that at the end, always makes them virtually unstoppable is that comes from the combination of business and labor that profits from these deals so enormously. My problem isn't that the fans weren't self interested, so much as they weren't self interested enough. Because they didn't have the lobbyists, because they didn't have the strategic guidance, because no one helped clarify what was going on to them, they didn't get as much out of the deal as they should have.

False choices

"if you are going to argue that giving hundreds of millions of public dollars to a for-profit private corporation to enhance your life is more important than putting the same money to use to enhance the life of the poor or least advantaged in our society just say so."

I don't actually argue that. I think this is a bit of what my Republican friends call a straw man. I don't think building stadiums is more important than helping the poor, or supporting education, or curing cancer or whatever. Indeed, all those things are more important than football. But the either/or choice that would allow money to give to those worthier causes was never on the table. I am a DFL guy, and the choice my legislators were faced with was getting a pretty significant number of workers, during a time of severe recession when many of those guys and gals were suffering, off the bench and back to work, and for them, once they pierced through the heated rhetoric, the choice was pretty clear and not that difficult to make.

Indianapolis

I think the response here confuses two different issues. The academic research is pretty clear, in terms of economic benefits to the population, building stadiums isn't that advantageous. What they say is that there are better uses for the money. But what they don't quite say is that doing nothing at all is better than building stadiums. Paul Krugman gets in trouble for saying this, but in times of recession, it's probably economically advantageous to hire one set of workers and pay them to dig holes, and then hire a different set of workers to fill the holes in. There are better uses for that money, but at least that money is doing something. For Minnesotans, at this juncture, the choice is pretty much whether we use resources or not, get construction workers off the bench or not. As much as we would like a different choice, one that would result in the creation of more beneficial assets to the community, those choices just aren't available,particularly in a timetable of recession where it's necessary to get projects started now.

The other issue has to do with maximization of the value of the choices we do make, and that's where the Indianapolis study, whether you agree with it or not, comes in. Once we make the commitment of resources to build these stadiums, such as they are, we better make darn sure we get the all the value out of them we can, guided always by the rule that something is just about always better than nothing. Bringing the Super Bowl to Minnesota has economic advantages. The downtown hotels will be full. Cuzzy's waitresses will have a good weekend in tips. Lots of money from outside the community will come into the community, which is to our benefit and to their loss. Now it may be in the nature of the deal that we won't be able to get all we want. We just have to settle for the big weekend at the bars, and not get a share of the players' income from the game. But isn't that better than getting nothing at all? We have constructed this stadium at pretty significant expense to the community. Does it really make sense not to use it because the money spent in building it might have been better used in building a school in Eveleth?

why do you assume that the

why do you assume that the public doesn't have a clear understanding?

Because it's in the interest of a lot of people with access to a lot of money, who are very good at this sort of thing, to confuse them and to obscure the relevant issues.

I am not a big fan of polling or government by polling. My experience is with DFL legislators. And opinions which move them, for a number of reasons, are those of construction who are currently on the bench. It's the support of those folks, those legislators are absolutely dependent on, and if you would poll those guys, just about all of them would say they prefer working to not working. I don't have any experience on the Republican side of things, but I would guess that if you polled the owners of construction companies, who are a constituency they depend on, they would say they want to build stuff and make money rather than stand idle. I just don't know where the constituency is for doing nothing and so they aren't available to be polled.

Soooo democracy is an illusion?

OK, so you're basically describing a system where the will of the people is irrelevant and only those with access and influence determine policy. I wouldn't necessarily disagree.

However, while that may mean that the general population, i.e. the will of the people is irrelevant, it doesn't mean that public is stupid or incapable of making valid judgements. It just means that public intelligence and the will of the people are inconsequential.

Now I won't deny the reality you describe, but I say to the extent that our system runs that way its a corrupt system. Its a bait and switch where we all vote but the people we vote for then ignore our interests in favor of those with "access" and power. That's why I refer to these stadium subsidies as "betrayals".

At any rate Hiram, you can't have it both ways, you can't describe a system controlled by a small number of influential people and then make grand statements about the "public" interest in sports and stadiums i.e. what "we" want as in: "we want sports but we don't want subsidies". You can't ignore "we" (which is what you're doing when you choose to ignore the polls that reveal what "we" actually want) and then go on to speak for us. You making "we" "we" as we used to say.

Furthermore I actually have to disagree. Your claim used to be true, 15-20 years people were much more naive about sports economics and the actual value of these stadiums. However we had a long and detailed debate this time, and the actual economic data has filtered through the media over the years. It looks to me like the majority of public was actually much more informed about the economics and the value of this subsidy, and people certainly know how much they value sports themselves. The only people who tended to support this study were die-hard fans relying on outdated and misinformed economic arguments and the imagined catastrophe of "loosing" the team. I think we won the argument but lost the vote.

Illusory democracy

OK, so you're basically describing a system where the will of the people is irrelevant and only those with access and influence determine policy. I wouldn't necessarily disagree.

Lots of people have lots of wills. I don't such a thing as a collective will exists. And as so many of my Republicans have been at such pains to point out to me, we have a republic, not a democracy.

Just as squeaky wheels get greased, so do passion and aggressiveness get rewarded. Again, from a lot of personal experience, our legislators are very accessible, and not just to people with money, and not just to the politically sophisticated. Sure a lot of big players wanted the stadium. But so did a lot of construction workers who have time to go down to the state capitol to sit in legislators' offices and talk because they are not otherwise employed. Those people have votes, and in the little calculating machines all legislators have in their minds, someone who makes the effort to visit the capital not only stands for a lot of people who don't but who vote on that issue, they also know such people are opinion leaders in their community. They aren't just talking to legislators, they are talking to their neighbors, the folks at the VFW, and in churches. Legislators who choose not to take those folks seriously, do so at their peril, and they know it.

"At any rate Hiram, you can't have it both ways, you can't describe a system controlled by a small number of influential people and then make grand statements about the "public" interest in sports and stadiums i.e. what "we" want as in: "we want sports but we don't want subsidies"."

Why not? I am a political sort of person, and like many of my ilk, it is both my dream to have my cake while also eating it. And while you may perceive a conflict, I don't. The fact is there is huge public interest in the Vikings, especially when they are playing well. And what I would also say, is that influential people don't so much control legislators, as they have a commonality of interest with them. No DFL legislator has to be told in so many words by some union boss to vote for the stadium. Each and every one of them knows they got elected because they had the support of people of people who need projects like that to put food on the table. You may see that as a corrupt bargain. Those are wonderful people, quite literally the people who make this nation great. To the extent that, as a DFL activist, I am proud to work on their behalf in the small way that I do, and for that I apologize to no one.

As for polls, I make it my business to ignore them. When they are in my favor, they encourage complacency. When they are not, they only depress me. In any event, for a lot of Nate Silver ish kinds of reasons, what polls actually mean is a lot more difficult to discern than people commonly assume. The fact that the way polls work is so widely misunderstood is one of the things that negatively distort how we understand political issues.

And it's different time post subsidy

People seem to hanging on to the resentment much longer, and it looks like some MPLS council people were hurt by their stadium votes.

You're a Republican?

Hiram, thanks for the surprise of the week: You're a "DFL guy."

I've been reading your comments for months and, honestly, had no idea. You always sounded to me like a Republican.

Evidently, the DFL tent is much larger than I had thought.

DFL

And a fairly far to the left one too. My theory is that everyone sounds like a Republican, these days, because so many of their talking points have been so severely focus grouped for wide acceptance, it's almost impossible to disagree with them. Where the disagreement comes is in a willingness to actually do something about them.

Sunken costs

There is an economic concept known as "sunken costs", which roughly translates into the notion that it's not a good idea to throw good money after bad. With regard to the stadium, the bad money has already been committed, the Metrodome is in ruins. There is no going back. What we have in exchange for our money is a building which is good only for a highly specific use; the holding of NFL football games. Whatever the merits of the deal might be, whatever superior alternative uses there might have been for that money, we are now stock with the deal we made, and what makes sense now is to make the most of it. And one way of doing that, one way that enhances rather than diminishes the return on our possibly improvident investment, is to hold more, rather than fewer, NFL football games in the facility. To use it nine times a year, instead of eight.

I would be more critical of the campaign to bring the Super Bowl here if further out of pocket funds were needed to make it happen, if more good money needed to be thrown at the bad. But that largely is not the case. We are asked for a tax break on income that would otherwise not be generated a all. Other people will make money, some of which will be taxed. There will be a perceivable upward blip in the local economy caused by money coming in from outside our community. No doubt the benefits of bringing a Super Bowl here will be exaggerated, particularly by people whose interest it is, to convince us that the deal to build the Vikings Stadium was a good one.

So it comes down to this. We are going to have the stadium. Why not use it?

Hiram's gambit and the quality of life

Hiram's an old school party machine Democrat. I'm not complaining but someone said they were confused by his politics, that's probably why.

Look, these stadium debates have been going on for decades and the reason you don't hear the economic and quality of life arguments anymore is they both eventually failed. The politicians that create these welfare programs for billionaires have nearly exhausted every trick they can come up with. It took both the Twins and the Vikings over a decade to extract a new stadium from lawmakers because the old arguments simply fail, and the simple bait and switch triggers too much resistance.

The quality of life argument is actually much weaker than the economic argument. Basically guys like Hiram argue that "we" just don't realize how important pro football is to our quality of life. The problem is that the claim has no supporting evidence. On the contrary, stadium proponents have long since adopted a strategy of avoiding referendums at all costs. Lawmakers had to end run legally required referendums in order to get both the Twins and the Vikings stadiums built.

So when it comes to quality of life arguments, we can make the assertion but any attempt to actually measure or let people make a decision about how valuable pro sports actually is to our quality of life, is ignored (as in the case of the polls that Hiram puts no stock in) or denied when referendums are circumvented. In other word: "Just shut up and build the stadium because you don't know what's important to you and you'll be sorry if you don't".

And actually, regarding the per person costs of such programs, those costs have been calculated but that information always backfires. So you say: "Look, we raised $40 million for the Twins stadium and it only cost you $1.50 a week and you don't even miss it!". Great. Then someone else says: "Sure, but that just means we could've raised $40 million for education, or health care, or transportation, etc, things that actually benefit the community and taxpayers instead of billionaire millionaire sports guys... and we wouldn't have missed it."

The thing with the quality of life argument is, we end up deciding that the fair deal is that people who place such a high value on the "quality" that sports brings them... should pay for that quality. And everyone says "great, sign me up!". Then when they find out that means their tickets will cost $400 a piece they say: "not so great, I'm out." And we go back to trying to pretend that the pro football is essential for "everyone".

Intangibles are fine until you put a value on them. Then stadium people say you can't put a value on intangibles? Then someone points out that they HAVE put a value on their intangibles- $300 million for the Twins and a billion for the Vikings. And then we stop talking about intangibles.

As for the super bowl

"Losing" the super bowl is even more inconsequential than losing the team.

This is piling one subsidy on top of another, pure and simple. Like an other subsidy the questions are: how much and who benefits most? As a general rule public subsidies should not have narrow targets, they should benefit as many people as possible.

As a general rule these event specific subsidies deliver very little benefits to the host communities, so any subsidies should be minimal. The Olympics are huge fail for instance as far as the host communities are concerned.

There's also a principle worth considering here, why would we let a private organization like the NFL dictate government revenue? Recall one of the arguments (although seriously flawed) for building the new stadium was that it would increase tax revenue by bringing in more spending. Now we're saying that in addition to dumping a billion public dollars into the stadium we're going to take a hit on tax revenue?

And why didn't we get a guaranteed superbowl when agreed to build this thing for the NFL in the firs place?

And why didn't we get a

And why didn't we get a guaranteed superbowl when agreed to build this thing for the NFL in the firs place?

Because we didn't negotiate very well. The NFL wanted a new stadium here very badly, and we could have used that leverage to secure a favorable Super Bowl deal. But the people who negotiate these deals don't think that way.

"The thing with the quality of life argument is, we end up deciding that the fair deal is that people who place such a high value on the "quality" that sports brings them... should pay for that quality."

That just doesn't happen. I know of plenty of folks who are big fans of the Vikings, but none of them can afford to buy a stadium. Stadiums are very expensive.

Yes it happens....

Relying completely on "user fees" was a prominent funding strategy until they figured out how much it would actually cost the "users", then they decided to go out and grab the money from people who have nothing to do with "using" the stadium, i.e. e-tabs etc. This is documented history.

The MN Jobs Program

Since this group usually supports large bonding bills to increase employment, I always am amazed when the comments go the way these have.

MN is building a "public" building and they convinced "private" parties to put up half the money. On top of this it created many good paying jobs in in the short term, and will maintain a variety of jobs for the long term.

If the money was used to build bike paths, prison fences, etc this crowd would be excited... However since Ziggy and the NFL are in the mix, the usual public spending folks seem to become confused and conflicted.

Maybe I'm amazed....

John,

We're reasoning with evidence rather than ideology. I know, that's "amazing" and puzzling to some people... but it shouldn't be. I'm afraid the confusion does not belong to those who understand the true nature of this billion dollar welfare program for an out of state billionaire, rather those who seem to think there's a billion dollar bike path around here somewhere are confused.

By the way, you know how many jobs we're "preserving" for a billion dollars? There were 8 full time employees working at the Dome.

There's no reason to re-debate this now, but here's an analysis of the subsidy I wrote at the time:

http://www.minnpost.com/community-voices/2012/02/vikings-vs-nwa-does-nfl...

Ownership?

Who will OWN the stadium after it is built?

How much is the NFL and Ziggy putting into that public building?

Only 8 full time jobs seems suspect. I suppose all of the Viking's employees that work in MN don't count... Or the business owners nearby... Or the advertising companies... Others???

Remember: showing both sides of the data is the key to true analysis.

"Who will OWN the stadium

"Who will OWN the stadium after it is built?"

I suppose the people of Minneapolis or Minnesota. It's not really a good thing to own these facilities, because all ownership really tends to mean is that the owner is liable for the costs of upkeep. See T;Wolves arena.

How much is the NFL and Ziggy putting into that public building?

About a half billion dollars, I think. I am often accused of being obtuse and otherwise being insensitive to nuances. One of the nuances I am insensitive to, is the concept of ownerships with respect to public buildings. Basically, we gave the Wilfs a half billion dollars to stay here. It just took the form of a building because that made the deal easier to sell. People thought they were getting something tangible for their money.

The problem with investing in NFL football franchises is that the businesses themselves are sort of underpowered. Apart from the players, who mostly take their paychecks elsewhere, they don't employ very many people and the people they do employ aren't very well paid, and their employment isn't very stable. In economic terms, other investments have the potential for much more bang for the buck. One of the things that is said is that the football stadium will lead to a lot of economic development, but that doesn't seem to work out in practice. It never happened with the Metrodome despite the fact that the Metrodome had 89 games, where the vikings stadium will have only 8. Putting aside the glamor, there just isn't a lot of value I can see for locating a business in close proximity to a stadium. Better to move to the suburbs where there's parking.

Both sides?

John, You know what I have to say? Again, debate is not intellectual work, it's a game, sport, it's literally a Monty Python skectch. Evidence and reliable observations don't have "sides".

http://www.youtube.com/watch?v=kQFKtI6gn9Y

Reasons v. Rationalizations

One of the things the Vikings Stadium teaches us is the difference between how we rationalize things, and what actually drives our decisions. The economic argument for stadiums has always been notoriously weak, but it's never had to be very strong. It's a placeholder argument, something we say because we need to say something, and we don't want to say something else. We say the Vikings are good for the economy, that the stadium will generate economic activity in the neighborhood, but that has little to do with why we are actually building a stadium. If it it did, we would have put the Twins Stadium there which, with it's 81 games played throughout the week, as opposed to the Vikings who will use the stadium only about 8 times a year during low traffic times, Instead, we put the Twins Stadium in a location where it would be very difficult to generate the kind of economic benefits, supporters of the Vikings claim will follow from the Vikings Stadium. Those supporters, by the way, seem undeterred by the fact that while the Metrodome had 89 major league dates a year with little economic activity generated, things will suddenly turn around for the Vikings which will have only 8 such dates, 9 in the Super Bowl year.

Currupton vs. good public policy

Hiram says:

"One of the things the Vikings Stadium teaches us is the difference between how we rationalize things, and what actually drives our decisions...."

Again, the problem with this entire line of reasoning is that it assume "we" made some kind of decision here. The fact is "we" did not say the Vikings are good for the economy etc. Nor did "we" claim that the Vikings are an essential component to our quality of life. Hiram may have said these things, but "we" said: "No more than $10-$15 million dollars goes to a stadium without a referendum." "We" said repeatedly whenever asked that we'd rather lose the team than spend $500+ million building them a new stadium. These stadiums deal don't teach us any lessons about "us". What they teach us is that we have a political system that delivers to billionaires despite "us".

This stadium deal thus far has been one fiasco after another, and guess what? "We" predicted that.

"We"

We elected the folks who made that choice. That's how "we" make choices in a republic.

Yes and no

We also live according to the laws that our elected legislators pass. The laws requiring referendums were clearly a response to electorate demand. The laws that set those referendums aside were violations of electorate demand, there was never any groundswell of demand to scrap the referendums. When you see that, you're either looking at a courageous legislative body acting on the public's behalf despite opinion, or you looking a legislative body that representing a constituency other than the one that elected them.

Power politics

I am a bit cynical about that, by the way. Let's just say the city attorney who gave an opinion that a referendum was not required, left herself open to a considerable amount of justifiable criticism. But contrary to popular wisdom, we don't have a government of laws, we have a government of men, and yes, even women. The anti stadium folks made a tactical mistake in thinking that it was enough to pass a law.

I note by the way, that the attorney who gave the city that opinion was recently retained in her job. I thought that was a very interesting development. People want attorneys who display a willingness to tell them what they want to hear.

The People's Stadium

A friend of mine often observes that those who aren't at the table frequently find themselves on the menu. There are few better examples of this then in the decision to build the so-called "People's Stadium". We are building a Vikings Stadium, not because it's good for the economy, but because building stadiums is very lucrative for business, and when business and labor join forces, on something they really, want, they are very hard to stop. The remarkable thing about the stadium not that it was built, in defiance of the polls, and possibly in defiance of common sense and least within the terms in which it was discussed. Rather, the surprising thing was that the anti stadium forces were able to put off the building as long as they did.

The problem I had was with the way the forces were arrayed. On the one side you had the powerful forces who wanted a stadium whose triumph always inevitable. On the other had we had the forces who were against the stadium. But no one in this conflict was representing the interests of the taxpayers, and the fans. And they were the folks who ended up on the menu. Why didn't we lock up a Super Bowl while we were negotiating in a position of the power with the NFL? Why were the Vikings given total autonomy inf setting ticket prices? Why were no assurances required that the Vikings would make a reasonable effort to maintain at least a competitive team? The simple answer to all of these questions is that nobody at the table with the power to negotiate these issues cared about these things and therefore the interests of fans and taxpayers who do care about these things were left totally unprotected. So we have the stadium we have, not a people's stadium, but rather a luxury box stadium in which the role of the people is to provide a sort of stage dressing for the TV cameras roaming the stands during slow moments in the games.

Here's the way real world politics work. The final stadium deal was done in the legislative equivalent of the dark of night, a time when the power of logic and reason gives way to panic and fear. It had to be done that way because logic and reason are never the friends of stadium construction. But the sun always rises and when it did, the politicians were left with a pretty bad deal for taxpayers and fans, who, while they didn't count for much at the negotiating table, count a lot when it's time to go into the voting booth. So some damage control needed to be done. The politicians needed to convince some voters that the deal was better than it was. The naivete they displayed in trying do this was almost amusing. We have the governor assuring us that this was a people's stadium, the one thing it assuredly was not. We had the Casablanca moments, where the governor told us he was shocked, shocked, to learn the Vikings owners would set ticket prices to their advantage. We have the effort to bring the Super Bowl here in the totally wrong headed belief that fans care about the location of a Super Bowl as opposed to caring about having a team in the Super Bowl.

So what's the moral? There are several. Posturing from a position of powerlessness is pointless. The object is to win, not to be on TV. And ultimately battles are won, by the people who can identify the battles they can win, and who are able to focus their forces appropriately. These are things the people who win stadium wars understand quite well.

Nice

I find very little do disagree with here Hiram. The only point I would add to your observation: "A friend of mine often observes that those who aren't at the table frequently find themselves on the menu. " is that the reason that the majority of us are not at the table, despite our votes, is we can't afford the table fee. When Ziggy calls the governor, he talks to the governor. When I call the governor, I get a secretary who offers to let me leave a message that will never be listened to. Sure, you can go down to the hearing and get 2 minutes to say something, but try calling the Governor.

Let's not pretend we all have a chance to sit at the table. The lesson here is that on a very basic level we still have a corrupt system that denies access and power to the people who actually elect the government as often as not, our votes don't get us a seat at the table.

It's not all doom and gloom, for two decades we did fight off several stadium drives, and it's getting more and more difficult to get these stadium deals past the public.

Legislators

I suggest you call your legislator. They are very available. Money plays a role but in a number of different ways and not always in the most obvious ways. Consider the legislator sitting in his or her office. A construction worker stops by and says look, I have been out of work for months. I am drawing unemployment and maybe food stamps. I am not what the Republicans say I am. I want to work, to do a tough job that puts food on the table, that pays the mortgage, that helps me put the kids through college so they can get a better job than the one I always have. I like you, the guy says, I have voted for you in the past, and I want to vote for you in the future, but these issues are important to me, and I have got to vote my paycheck. Contrast this with another guy, one who might not show up, who doesn't have a compelling personal stake in the issue. Who grumbles we shouldn't support millionaires, but whose job isn't on the line. Someone who might complain about the stadium, but whose vote is determined by some entirely different issue. Which voter do you think is going to have the greatest impact on the legislator's decision making?

There are all kinds of power. What I saw during the stadium debate, very often was a lot of people complaining about the power they didn't have while failing to effectively use the power they did have.

Oh please Hiram...

Thousands of calls and e-mail and personal appeals were made, and ignored. I didn't call, I talked to my legislators personally... and they all lied to me. For years at every town hall meeting and debate every time the question of a stadium (first the Twins then the Vikings) my representatives (DFLers all) always said they couldn't see how they could vote for a stadium deal. One of them actually said that although he could see the rational for a stadium he absolutely would not ever vote for a deal that didn't involve the legally required referendum... guess what. Here's how my elected officials explained their votes when I confronted them about their duplicity: they said the problem was that their Governor made the stadium a priority and they decided they had to support it. Dayton in the mean time was absolutely intransigent on the matter and simply would not listen or look at any evidence, he made up his mind and would not be confused by any facts, political, economic, or otherwise. Now you agree or disagree with the decision to support the Governor, but this one of the top worst five ways to make big public policy decisions. Democracy has a certain script and when go this far off script you get bad results.

Hiram, you're admitting this when you talk about who is and isn't sitting at the table. Look, it's a democracy, the electorate and the elected are supposed to be the ONLY ones at the table... you're describing, as am I, situations where the electorate doesn't have, and cannot have a seat and too bad so sad.

This isn't a question of our democracy working but some are just unhappy with the results... this was a failure of the democratic process. The democratic process was deliberately circumvented in order to produce this result.

ignoring stuff

Thousands of calls and e-mail and personal appeals were made, and ignored.

No doubt because of sins committed in a prior life, I am more familiar than most with how legislative offices work than most. Legislators do not ignore calls, emails, or personal appeals. The fact that a legislator might not ultimately agree a constituent should never be taken to mean that a legislator ignored the constituent. We have a constitutional right to petition our legislators. Sadly, we have no constitutional right to have our petitions granted.

"For years at every town hall meeting and debate every time the question of a stadium (first the Twins then the Vikings) my representatives (DFLers all) always said they couldn't see how they could vote for a stadium deal."

A classic non position. In my personal experience, this issue didn't come up a lot during the last campaign, but when it did, what I heard legislators say was that voting for the stadium was just simply the right thing to do.

"Look, it's a democracy, the electorate and the elected are supposed to be the ONLY ones at the table."

Well as my Republican friends never tire of explaining to me at considerable length, it's a republic not a democracy. I don't know who is supposed to be anywhere. For that, I guess you have to consult the great supposer. What I do know is that lots of legislators had lots of conversations with lots of construction workers who would explain in very specific detail that they were voters, along with their family, their friends and their neighbors, and that their votes would turn on this issue. As much as it might be argued that the result was a failure of the democratic process, it could be equally argued that it represented a success of the republican process, the one Ben Franklin assured us that we have.

Uh huh...

"We have a constitutional right to petition our legislators. Sadly, we have no constitutional right to have our petitions granted."

Unless we're a billionaire NFL franchise owner.

I'm also quite familiar with the legislative process, and yes, legislators will ignore public input and cast votes that a contrary to the public's best interests. Many legislators do this on a regular basis.

By the way, your Republican friends are making classic error in thinking that there's a meaningful distinction between a "republic" and a "democracy". They make this false distinction because on a very basic level they don't believe or trust democracies. Of course your free to join them in that fallacy, but your argument that somehow someway the stadium deal was anything other than old fashioned power broking that set aside the public interest is doomed.

public input

I'm also quite familiar with the legislative process, and yes, legislators will ignore public input and cast votes that a contrary to the public's best interests.

I guess we have different views on this. In my experience, admittedly on the DFL side of things, I have never seen a legislator ignore public input. That certainly wasn't the case with respect to stadium issues, where it was simply physically impossible not to pay attention to the considerable input they got from the public.

This horse is well and truly dead but...

I just have to say:

"In my experience, admittedly on the DFL side of things, I have never seen a legislator ignore public input."

I think you've seen it, we've all seen it. There was never a strong public constituency for either the Twins or the Vikings stadium. By the way, understand the difference between being "unaware" of input, and "ignoring" it. I'm not saying they were unaware of the input...

Politicians cast these votes if they calculate that there will be no political downside. Obviously the question is why and when politicians choose to represent one group of constituents over another. It remains to be seen whether or not DFLers will pay a price for this stadium deal. So far this stadium deal has been one fiasco after another, and the DFL is NOT going into the next election strong. It looks like some of DFLers that supported the stadium paid a price in MPLS. Rybak barely got out in time.

Pay the price?

Who else would the far Left vote for?

Far left?

Well, I know I've voted everyone from Socalists to Republicans. Democrats cannot count on the progressive vote, ask Al Gore and John Kerry.

Clarification

I am often fascinated by the concept that Politicians need to be more extreme to get votes. (ie far left or far right) The assumption that Republicans or Democrats will not get to the polls to support that "moderate".

It must be an interesting thought process... "I am not going to vote for the candidate who is closest to my views because they are not close enough. Thereby I will support letting the person who I disagree with win. That will show my party..."

That cut of my nose to spite my face thing...

Reagan voters

We lose elections because we lose union voters.