Original concept design by Ellerbe Becket
"[H]aving an NFL team in Minnesota requires a stadium solution. This solution must be finalized in the 2011 [legislative] Session."
—From a statement Tuesday by the Minnesota Vikings
It was a dark and stormy morning at the state Capitol two Wednesdays ago when a deftly timed bombshell dropped: the Minnesota Supreme Court ruling on Gov. Tim Pawlenty's unallotments was released just as a Minnesota Vikings' stadium bill, already wobbling under the weight of widespread opposition and inadequate funding mechanisms, was being heard by a Senate committee.
If the Vikings effort wasn't already low on the governor and Legislature's list of end-of-session priorities, it plunked off the table like a squished purple grape and dribbled below the radar, never to be heard from again in the final days.
What now?
As the session's dust settles — and even as the state budget deficit is presumed to reach $5 billion heading into 2011 — what now? Where does the $800 million-and-increasing Vikings stadium effort stand after this session? In their corporate statement Tuesday, the Vikings declared this a "watershed moment for the future of the franchise in Minnesota."
But how, as the Vikings also declared, can a stadium deal be "finalized" in 2011?
REUTERS/Jim Bourg
Gov. Tim Pawlenty
Pawlenty, freed now from making a tough decision on the matter, told reporters on Monday, "We cannot and should not lose the Vikings … but the details of how you put that together are important." He argued, as he long has, that any Vikings stadium deal needs "a local partner," meaning a city or county to foot the bill. He declared the team is "not going to stay in the Metrodome." And he said the Vikings' matter would have to "wait until next year" because he wasn't about to call a special session for a stadium bill.
In that one passage, the governor was half-right.
Losing the Vikings wouldn't be a good thing for the culture of the state, and, depending on how you balance the taxes the team contributes and the subsidy that would be created, it probably would not be a good thing for state coffers, either.
As for a "local partner," exactly which city or county can afford to finance a stadium without state funds remains a financial and political mystery, even though Minneapolis city officials are eager to keep the franchise downtown on the current Metrodome site.
Yes, long term, the team is not going to stay in the Dome, but just because its lease expires after the 2011 season doesn't mean the team can't play there beyond that; the Twins did so on a year-to-year basis for six years after their Dome lease officially expired. And there is some case law — born from the Twin ballpark debate — that could provide hurdles for any Vikings' attempted exit after 2011.
Still, the leverage, it would seem, tips toward the team once the lease officially expires and the Vikings are relatively footloose.
Wait until next year? Yes, Senate Majority Leader Larry Pogemiller told MinnPost Tuesday. He's figuring the matter could wind up as part of a larger infrastructure package in the Legislature. (Mayor R.T. Rybak thinks a Vikings plan must also be linked to other issues.) If it's not addressed in the 2011 session, the "franchise could be at risk," Pogemiller said.
Council President Barb Johnson
Minneapolis City Council President Barbara Johnson and City Chief Finance Officer Patrick Born met last week with Vikings' president Mark Wilf, brother to primary owner Zygi Wilf, and other team officials and laid out to them the real problems the city faces in funding any new sports facility by itself. Any existing citywide tax simply couldn't fund the debt for such a large project, Johnson and Born told the team. Plus, there is debt on — and improvements needed at — city-owned Target Center and anticipated financial demands long term for the Minneapolis Convention Center.
"I think they were sobered by that," Johnson said of Wilf and his aides.
Still, Johnson told MinnPost Tuesday that she is hoping that a "working group" of legislative and, perhaps, regional leaders will get together this summer to begin exploring ideas to resolve the Vikings stadium dilemma in time for the 2011 legislative session.
Any successful group will thoughtfully analyze the value in keeping the team, the cost of doing so and, on the other hand, the real risk of losing a franchise in the nation's most popular professional sport.
The Los Angeles threat
Without making threats, the Vikings' lobbyists — led by Lester Bagley — have done a nifty job in cementing a clear-cut message and perception: If a Vikings' deal isn't done in 2011, the team will play out the final year of its 30-year-lease and, presumably, pack up and move to, let's say, Los Angeles for the 2012 NFL season, just as surely as a free agent player might select his favorite venue to bring his talents.
As Bagley has said many times — again, without any threats — "It's now down to 20 games left at the Metrodome."
That may not be necessarily so. As one sports economist told me last week, "If L.A. were simple to move to, it would have been done by now."
No one doubts that the possibility is real that an NFL team could move to Los Angeles in, say, the next five years. After all, that glamorous market, with its vast TV territory and outrageous community of bling, has been without an NFL franchise since 1995. It's the only existing rational open market for an NFL franchise.
But there are daunting economics there. First, as here in Minnesota, a stadium needs to be built. Various plans are being kicked around, but the cost is a factor when a new edifice is discussed in Los Angeles. (The new Dallas Cowboys stadium cost $1.3 billion and the new New York Giants/Jets stadium is tagged at $1.6 billion. So, L.A. would want to be in that realm.)
Because of the size of the market, and the amount of private money that could be raised there — from potential owners, corporate backers, private seat licenses and luxury suites — a $1 billion-plus stadium could, eventually, be built without public dollars in Los Angeles. Gov. Arnold Schwarzenegger has said, "In California, we don't build stadiums with public money."
But, whenever and wherever that stadium is built, it still needs a team, and the Vikings aren't the only NFL franchise in play. Buffalo, Jacksonville and even the St. Louis Rams, which moved from L.A. 15 years ago, could be candidates. A more natural, potentially mobile franchise is the San Diego Chargers. The Charger ownership, too, has been in a lengthy battle for a new stadium. Wouldn't it make sense to simply have a team that's already geographically adjacent to the Los Angeles metro area slide into a new Los Angeles stadium?
Assuming any franchise will move to Los Angeles also assumes two whopping price tags in addition to the stadium costs. The private builders of the stadium will want to own the team or be partners in the team. Vikings lobbyists have said that the Wilf family would never move the team, but, more likely, sell the Vikings and that a new ownership group would move the team.
What would it cost to buy the Vikings to move them to Los Angeles? $800 million or $1 billion?
REUTERS/Eric Miller
Zygi Wilf
Beyond that, what will the NFL's other owners charge Zygi Wilf or any new owner to move to and gain control of that Los Angeles market? The number for such a transfer fee is uncertain. Could it be $500 million? More? If you are the owner of the New Orleans Saints, wouldn't you want to pocket as much dough as possible from the guy who will gain control of the L.A. franchise and all of its revenues?
So, $1 billion for the stadium, and, let's say, $800 million for the franchise. Add on a substantial transfer fee, and this looks like a $2 billion deal to get an NFL franchise — to get the Vikings — to L.A.
Can it happen? Sure. Will it happen? Not this week. Not this month. Not this year. Why?
Labor unrest and other things
The collective bargaining agreement, or CBA, between the NFL Players Association and the league's owners expires after this season. Already, the 2010 season is affected by the removal of the players' salary cap. Whether revenue-sharing among owners will continue and just what the economics of the league will look like as the new union deal is struck remain murky.
No one is going to buy an NFL team while the CBA is open and the future financial structure of the very prosperous league is subject to tinkering. This gives Minnesota some time to ponder its stadium move. It also means that local officials need to closely monitor the labor talks; the terms of any new collective bargaining agreement could affect the economics of any stadium deal here.
There are also league rules about relocation that must be followed, six pages worth (PDF).
Among them: Any franchise relocation requires a three-fourths vote of approval from other owners, and NFL "traditions disfavor relocations if a club has been well-supported and financially successful and is expected to remain so."
But a key threshold for a franchise to walk through in advance of relocation is the stepped-up involvement of the league itself in attempting to resolve any stadium stalemate. While the NFL has been closely monitoring the Vikings' situation, the team has not yet declared that it "cannot obtain a satisfactory resolution of its stadium needs." Tuesday's statement crept into that zone, but the NFL has not arrived on the scene … yet.
Indeed, for now, no local political leader has developed a strong relationship with NFL Commissioner Roger Goodell. It may be time to begin developing one.
There is one other Machiavellian matter to consider. In sports league economics, there is an advantage to the NFL to keep the Los Angeles market open. Keeping L.A. available to move a team — but never used — allows owners in Minnesota or Buffalo or Jacksonville with a hammer to threaten their communities with a place to go.
On the other hand, moving San Diego to Los Angeles wouldn't allow for the revival of an aggrieved market. That is, should the Vikings move one day, you could be certain that Minneapolis-St. Paul would be viewed as a perfect site for another NFL team to move, if and when it wanted to and if and when Minnesota built a new stadium. (This is how the NHL got St. Paul and the state to build a new arena after the North Stars left for Dallas.)
If San Diego's team simply moved to L.A., that wouldn't really "open up" another option market for NFL owners to point to. It would be relocating a team within that greater Southern California sprawl.
Another exercise for any "working group" to perform is to begin thinking like an NFL owner: What are the benefits and drawbacks to losing the Minnesota market?
Back to Minnesota
However many hoops there are to navigate, it is crunch time here for a Vikings stadium. With the march toward the Dome's lease expiration and the noisemaking by the Wilfs intensifying, it's clear that various political forces in Minnesota will try to develop a rational, understandable Vikings' stadium plan. (Rational to some people, that is.)
The team itself needs to come to the table with some ideas, too, and, undoubtedly, more private money than the Wilfs have mentioned so far. In the halls of the Capitol, an owners' contribution of $250 million isn't nearly enough for an $800 million stadium that will increase the value of the franchise substantially.
Rep. Tom Emmer
The gubernatorial election will be extremely pivotal. As one DFL lawmaker told me last week, "Tom Emmer is the Vikings' worst nightmare."
If the Republican candidate for governor wins, his no-new-taxes, reduce-government penchant — like that of Gov. Pawlenty — could stall any effort to finance a stadium with any sort of public participation.
House Speaker Margaret Anderson Kelliher, the DFL-endorsed candidate, has been more open to a Vikings' discussion. She is based in Minneapolis. She voted to approve the Twins ballpark and Gophers football stadium in 2006. And imagine the optics: the state's first woman governor "saving" the football team for all those purple-and-gold face-painted yahoos. It would be Nixon-going-to-China, Minnesota style. (But then, if Mark Dayton were to beat Kelliher in the DFL primary, the Vikings could also be in a world of hurt.)
Meanwhile, Independence Party candidate Tom Horner has said he's willing to use state funds to help build a Vikings stadium. (Horner's public affairs firm, Himle Horner, is currently consulting on strategy with the Vikings.)
What could be in any governor's tool box?
A collection of user fees, such as hotel taxes, rental car taxes and sports apparel taxes that were shot down by Pawlenty, but could be revived.
Dick Day
There's always former Sen. Dick Day's racino plan, which never gets any traction from the DFL or some anti-gambling foes but seems to have citizen support. Whether the NFL or bond counsel would rely on gambling money exclusively for stadium debt is worth exploring.
Talk of using a Minneapolis Convention Center tax seems, for now, to be dead; As city officials did at the Capitol earlier this month, Rybak, Pogemiller and Johnson all rejected it in interviews Tuesday.
There could be a regional approach with state involvement. Johnson hinted at that, with some idea to bring all of the public assembly facilities — such as Target Center, Xcel Energy Center and the St. Paul and Minneapolis convention centers — under one umbrella with a new Vikings stadium. How to fund that? Could there be an economy of scale in such a plan?
The sale of private seat licenses to Vikings fans and corporate sponsors was the core of the final bill passed by a committee this month. How much can the team and community raise privately to minimize any public subsidies?
Mayor Rybak has talked of the public capturing the increased value of real estate adjacent to any new stadium. How would that work?
And, then, of course, there is some sort of naked state funding for a statewide asset that pours about $20 million annually into the state treasury via income and sales taxes.
Other ideas will have to flow as the 2010 legislative session fades away, the 2011 session approaches and the Vikings are set to begin their 29th season of a 30-year-lease.
Jay Weiner has reported on Minnesota's stadium debates since their earliest days.
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Comments (79)
Jay, is this a reporting piece or an editorial? When you make statements like "Losing the Vikings wouldn't be a good thing for the culture of the state" and "a stadium needs to be built," it leads me to believe this is an editorial rather than an "analysis." Sports helps sell newspapers, so I would expect this kind of shill behavior from the StarTribune, but I expect better from a MinnPost writer.
Why not call this issue what it is -- an emotional issue. Losing a hometown team has emotional consequences and fans will grab on to whatever life ring they can to keep from losing their team -- economic, cultural, etc. The economic justifications for publicly financing a stadium are spurious at best. Money not spent on the Vikings will be spent at other entertainment venues and taxes will still be paid -- who says the State of Minnesota should favor one for-profit entertainment venue over another with public subsidies?
There are many, many metropolitan areas in the US without professional sports teams that offer vibrant cultural opportunities, attract talent for a strong workforce and have strong economies with good tax revenue. To suggest that an NFL team is necessary for one or all of those things is ridiculous and plays to the base emotions of the fans and taxpayers.
Let's not forget that football is a for-profit enterprise, run by millionaires and billionaires, that seeks to maximize profits on the backs of taxpayers and fans.
We're exploited enough in this world. Why would we BEG to be exploited further?
I actually think losing the Vikings would be a good thing for the culture of the state. I think our culture's obsession with sports has very nearly rendered us a monocultural wasteland.
As amenities stadiums are huge public burdens, we'll end up with a $60 million dollar a year tax burden of some kind if the Vikings get a stadium. That completely dwarfs any other spending on all other public amenities combined. For instance, the annual budget for all of our state parks is $23 million a year. And the stadiums aren't even really "public" amenities or infrastructure. Think about this, British Petroleum's liability for the Gulf Oil spill is limited to $75 million dollars, that's less than half Mauer's salary for five years. It's simply insane that we pay people millions, and hundreds of millions of dollars to play games. I've always thought just about anyone can get by on a couple million dollars a year.
Leaving the stadium debate itself aside, I really do think that this culture has an unhealthy and damaging obsession with sports. It distorts public policy, misdirects public resources, and promotes unhealthy consumerism, egotism, and perverse competitiveness. Entertainment is supposed to be distracting, but sports is distracting not just individuals seeking entertainment but also policy makers and elected officials.
Professional sports has also become a cultural drain because it distorts the economy. Pro sports siphons huge amounts of money and public resources into a disproportionately small number of bank accounts. This mean less money is available for other forms of entertainment and other cultural activities. I think we're very nearly reaching the point where we're devoting so many resources to sports that we're creating a cultural dead zone rather than a rich cultural environment.
Let me clear, I'm not saying we should put $60 million a year into theaters, museums, or water fountains instead of stadiums. Frankly, it's probably impossible to put $60 million a year into other amenities because nothing else even come close to the cost of stadiums and arenas. The point is we can have a very rich, I think richer cultural environment for a fraction of the pubic expense. We could free the remaining resources for actual public infrastructure which promotes far more economic activity, prosperity, and cultural diversity. For the cost of the Twins stadium we could have completed the 35W Crosstown interchange. For the proposed cost of the the Viking stadium we could build another light rail line. Again, I'm not just arguing about the stadium, believe it or not the ability to get around easily and cheaply has a lot to with a communities cultural vitality.
O.K. I know I'm in the minority. But someone has to say it. I know people love their sports. I'm just saying this out of control. You can have sports, but you can also have a lot of other things. We live in a beautiful state with a ton of things to see and do, trust me, there would be life after the Vikings, I think maybe a better life.
As for the stadium, as frustrating and maddening as it is, especially for people like me, who here really doesn't know what's going to happen? We have a corrupt political system where the legislators have to beg for a meeting with the governor to discuss budget deficits, but Ziggy Wolf can make a phone call and get meeting- with coffee. Don't worry, Ziggy will get his welfare program one way or another. The only bipartisan activity your going to see in the next 4 years will be some kind of stadium deal. After all the Twin stadium is really the only major accomplishment of the Pawlenty era. But seriously, don't ya think that's kinda sad? And if by some miracle of public responsibility the nation finally pulls out of this sports hysteria and calls the bluff, and makes these billionaires build their own stadiums; well that will be a good thing, even if we lose a team in process.
"No one is going to buy an NFL team while the CBA is open and the future financial structure of the very prosperous league is subject to tinkering."
I would avoid making such a categorical statement myself. While the fact that the CBA is being renegotiated adds uncertainty to the deal, there will always be things that are uncertain about buying an NFL franchise. For someone willing to assume the risk that the deal will be disadvantageous to the owners, this may be an opportunity to buy a team at a discount should one come on the market. Given the historic weakness of the players' union, that may be a risk well worth assuming.
In any event, there will always be an important negotiation and the value of a franchise will always been in part a speculation on the outcome of such negotiations. If somehow, teams were only brought to market when no one was thinking of the next labor negotiation, or the next tv negotiation, or stadium deal renegotiation, they would never come to market at all.
"I actually think losing the Vikings would be a good thing for the culture of the state. I think our culture's obsession with sports has very nearly rendered us a monocultural wasteland."
I think this is objectively untrue. Culturally, if one wants to attribute such a thing as culture to a football team, as much as anything the Vikings unify us as a state. On Monday morning, does anyone you know, football fan or not, not know how the Vikings did on Sunday?
But it's also true that Minnesota has an extraordinarily broad and varied culture. The Guthrie, two significant orchestras, leading regional art museums, a vibrant rock scene. Looking around the country, I don't believe there is any urban area of the size of the Twin Cities that offers so much or is so diverse culturally.
The NFL is 7 billion dollar a year business and growing. That's an average of $218,750,000 per team. I know this is just simple math but I would think that Wilf could find a way to finance a new Viking stadium. Maybe he'd be willing to open the books and show that he's a hardship case and deserves public money but I doubt it.
My nine-year old son has a business renting time on his old Nintendo to younger neighborhood kids for 50 cents an hour. He has been demanding that I upgrade his system to an X Box because his profit margin is too low. He tells me that with summer coming it is harder to keep kids indoors in front of the tv so that now is a watershed moment and that funding must be finalized for the new gaming system. He has declared that I am his local partner and if I don't cave in he will move to his grandmother's house, a place where he is more likely to get his way. I tell him I can't afford it and he says put it on my card. He will raise his fees to 1 dollar an hour because with the new system the kids will pay more to play the same game with better graphics. Of that one dollar an hour I will get a "tax" of 5 cents per hour. He expects to have my card paid off in about 8 years.
What should I do? My son is a valued member of the family. Who else will make his bed and clean up his room if he isn't here to do it? He currently funds all his nonbirthday/Christmas toy purchases with the Nintendo. At this watershed moment he is about to lose all his customers to the nice weather unless we upgrade the gaming experience. If, before the 8 years is up and the card is repaid, he should decide to sell the X box, he wants it understood that the profits will go to him and none of that will be applied to the credit card.
I don't want to lose my son. He says that sure he loves the family, but business is business. He knows of a high school kid that gets $1.25 an hour to rent out a new Play Station. He's a community asset here in our house. He points out, rightly, that I did subsidize his sister's kool aid stand by providing several packs of kool aid and some sugar. So fair is fair; his business just has a little more overhead, so pay up, Dad!
Bye, Son......
Let them eat cake. I'm so tired of the infants that run the Vikings through tantrums and cry. LA doesn't want a team. Their governor says the public doesn't pay for stadiums.
The Vikings had a deal with Anoka county and blew it.
I'm already paying for two stadiums now without much of a voice in it and we have much better places to put our money.
These sports teams and the players treat it like a business and expect the tax payers to think of it as an emotional treasure.
The Wilfs can sell their team to local owners and make money like Red Vikings Nation Guy.
//I think this is objectively untrue. Culturally, if one wants to attribute such a thing as culture to a football team, as much as anything the Vikings unify us as a state. On Monday morning, does anyone you know, football fan or not, not know how the Vikings did on Sunday?
Culture is not an objectively measured metric Hiram, you can't argue taste. There's no objective reason for liking country music instead of alt rock. Sports is entertainment, nothing else. I know you guys like to attribute all kinds of other qualities to sports but there's nothing objective about those claims. Just because a focus group was steered into identifying the Vikings with being a Minnesotan doesn't make it an objective fact.
One can imagine all kinds of other things that unite us, we are after all the land of 10,000 lakes, not the land of of Vikings fans. On any given weekend I think more people are fishing around the state as are going to Twins games. The idea that we will somehow lose our cultural identity become unhinged at a state if we lose the Vikings is very nearly an insane proposition.
By the way, to answer your question, half the people I know, including myself and my wife will have no idea who won a lost any given football game, on Monday or any other day. There is such a thing as life without sports Hiram. I can currently name only one athlete that plays for a MN team, Mauer- and I don't know his first name. I have no idea whether the Twins, the Wild, or the Wolves even played a game last night let alone who won.
I'm not saying my interests are better than yours, but here's the thing, I'm also not asking you to subsidize my interests to the tune of $60 million dollars a year.
I don't want to take your professional football away, although I don't think that would be a bad outcome. I just want to you sport guys to play by the same rules the rest of us do. You can get $20 million or less for projects in Henn Co. If that's not enough, you can ask for more, you can have a referendum. This is why the public portion of the $130 million Guthrie was $19 million. This is why the old Shubert is stilling there like a giant paper weight. Sometimes the answer is no. But you guys won't take "no" for an answer, you seem to think your entitled to make the rest of us pay, and pay a lot, for your sports. I think this distorts our culture, and our relationships to each other. Someone here described it as exploitation, well that's exactly right. I'm saying this exploitation distorts and damages our culture, it doesn't bind us together.
"an average of $218,750,000 per team. I know this is just simple math but I would think that Wilf could find a way to finance a new Viking stadium.""
Wilf is leveraged up to his eyeballs, which means his profits get eaten up by interest payments. Zygi bought an old stadium team for a new stadium price, and that did not create a status quo that can continue indefinitely.
Wilf has made his business decisions, he locked them in when he bought the team. There just is no point in trying to change his mind. The basic issue remains. Do we want what Zygi has to sell, the continued presence of the Vikings in Minnesota. And if so, at what price?
I would like one of the stadium lovers to do a survey of how much twins ticket price jumped in the move to the new stadium. I heard tickets behind home plate are a couple hundred dollars or something crazy like that and you can only get those if you buy the whole season. Vikings tickets were already way more expensive than twins tickets so what would happen to those prices in a billion dollar stadium? Most of the fans who advocate this new stadium will maybe go once every 10 years or so when someone they know gives them a pair of tickets. These "fan" want to buy a stadium so they can watch the team on tv and root for the "home" team. I'm willing to bet that the cheapest seat in a new Vikings stadium would be over 100 dollars.
Just like they cheated on the referendum for the Twins stadium, they'll do the same here. There will never be a referendum because those politicians want good seats and Zigi will make sure they get them and the public demonstrated their short memories by reelecting all the Hennepin County commissioners who voted for the Twins stadium. Stadiums are a scam that even Ponzi couldn't dream up.
//Do we want what Zygi has to sell, the continued presence of the Vikings in Minnesota. And if so, at what price?
What do you mean we? We know the answer is "no" if you're talking to the suckers who actually live the state of Minnesota, Henn-Ramsey Co. etc., that's why you can't have a referendum. We all know right now that when/if you get your stadium it's NOT going to be by popular demand. There's no grass roots campaign for a stadium here, no demonstrations at the capital. The only reason we're talking about this is because Ziggy called the Governor, and when Ziggy calls, Pawlenty answers.
On another note, I must say I feel kinda sorry for Poor Jay. I don't these conversations ever go the way he would like them to.
Paul Udstrand says " We could free the remaining resources for actual public infrastructure which promotes far more economic activity, prosperity, and cultural diversity." That is the arguement....or in other words "what is the role of public money?" I agree Paul....this is not a proper role for public money. But this has been decided long ago and we can do nothing about it. I don't care who becomes Guv....this will be built. Do you really think the MetroDome train station is going to go to waste? Look at how nicely the light rail came together at the Twins Stadium...and now it will extend to TCF stadium. THE DEBATE IS OVER AND HAS BEEN FOR SOME TIME!!!
I will have to argue your statement concerning the promotion of cultural diversity in sports. Sports does not care about cultural diversity....all sports-lovers are welcome. Sports creates very strange bedfellows......that is why we love to watch sports and play sports.
Ftritz,
I never said anything about cultural diversity in sports, and who you go bed with, strange or otherwise, is none of my business ;)
Fritz, watching sports and playing sports probably don't belong together. If you eliminate bowling I doubt many serious watchers of TV sports participate in any way in sporting activities. You don't see commercials for the Twin Cities Marathon during a Twins game but you do see lots of beer commercials. How many of those guys dressed up in vikings costumes and war paint do you think actually have played sports since they were in school. They are wrestling with their pillows, running their mouths and hitting the bars; those are the sports for couch potato sports fans.
"I would like one of the stadium lovers to do a survey of how much twins ticket price jumped in the move to the new stadium."
Let's keep in mind that most Vikings fans will never see a game at the new Vikings Stadium. I am a fair to middling fan, and I have never attended an NFL football game at the Metrodome, and that's absolutely typical. I have had Gopher tickets thrust on me occasionally when I haven't been careful. So quite frankly, I couldn't care less what they charge for tickets, since I never by them their price is irrelevant.
As a long time Vikings fan, I think I have gotten a pretty good deal over the years. I get to watch the locals from an armchair which is far more comfortable than any seat in the stadium, and during the commercial breaks, I am not forced to watch a bunch of players standing around, I can channel surf to another game.
Given the fact that the vast majority of Vikings fans, in the 49 seasons the team has played here, have paid literally nothing to watch them, I would say on the whole we have gotten a pretty good deal. I for one, would be willing to chip in a few bucks to keep the team here.
"Culture is not an objectively measured metric Hiram, you can't argue taste."
I don't know about taste, but I think there are lots of ways to measure culture. How many theater companies do we have in town? How many orchestras? How many concert series like the Schubert Club or the Chopin Society? Who is playing at First Avenue? Tastes differ, of course, but if you want you can count them, and in monocultural terms, I think the number you come up with will be more than one.
Personally, I don't like the operas of Alban Berg, Wozzeck is not to my taste. But I have no problem at all in acknowledging that such a performance is a cultural event.
I'm not sure I see your point Hiram, but one doesn't measure culture, one examines it. It's a qualitative not a quantitative phenomena. Yes, you can always count stuff, but that doesn't tell you how much culture you have. A culture dominated by sports doesn't have more or less culture, it has a less diverse culture. I'm not pretending to make an objective claim when I say I think a culture that has more diverse entertainment options is better than one with restricted and narrowly focused entertainment options.
What I am very concerned about is the rampant spendthrift attitude on the part of some legislators. Looking at some facts;
This is a sports franchise. It is a private entity. It is a private business.
I don't care that it generates a lot of ancillary dollars and all, the fact remains that it still is a private business.
So why are the taxpayers being saddled with this??? They want to put a tax on something that I'll purchase or use to pay for this... and all the while, I would not patronize the games because the ticket prices are so out of line that it just isn't funny anymore.
I suppose if your a solidly minded sports Dad taking your kids to this; and you *live* for football, then you won't mind paying the tax along with the inflated ticket prices.
I like football but the economy is crunching folks... but liberals don't see it that way. So someone needs to explain it. How does this tie in to supporting a tax for something I won't use???
Just to reiterate, something like one million (would I lie?) economic analysis have repeatedly demonstrated that the ancillary economics of stadiums are a wash. They're entertainment dollars that would get spent anyways. It's hard to imagine public spending that gets less bang for the buck than stadiums. 98% of all the economic benefit goes to the teams not the public who puts pays 30%-50% of the bill.
And there are economic fairness issues, you picking winners in a huge way. Instead of spending hundreds of millions on general infrastructure or more basic amenities that benefit a large segment of the community and enhance the business environment in general, you're concentrating huge public sums in a small number of pockets. And because it's tax revenue of some kind you basically making other entertainment venues finance their competition. All the restaurants on the wrong side of town for instance are collecting and paying the taxes to send people somewhere else. This is why these claims that those who benefit the most pay the most are so bogus.
"Just to reiterate, something like one million (would I lie?) economic analysis have repeatedly demonstrated that the ancillary economics of stadiums are a wash."
Sure, no one advocating stadiums on economic grounds has ever won the debate. But then the economics of buying a television set aren't even a wash, yet there one sits in my living room.
As for fairness, I have watched Vikings football for 49 seasons, some of them quite enjoyable. I have never bought a ticket, the succession of Vikings owners who have given me hours of pleasure, have not received dime one for me. I don't even watch the commercials.
Where is the fairness in that?
"you [are] basically making other entertainment venues finance their competition."
Cultural mecca though Minnesota may be, there isn't a lot of competition for the entertainment dollar on Sunday afternoons.
Pro football is a scare commodity. They only play 8 games a year. I don't count exhibition games because exhibition games don't count. The Guthrie does 7 shows a week throughout the year. I think they can stand the competition.
Jay, when you wrote that book on stadium games you seemed to have the logic of public stadium subsidies well in hand. What happened? Nothing has changed. The same arguments you made then apply now. The biggest reason the Vikings won't move to LA is that they can make more money in the dome than paying the price of playing in a private stadium owned by somebody else. There is also a growing awareness that public subsidy of sports franchises has been the driving force behind obscene and escalating player salaries. None of this makes sense for the public to get into this game. It costs too much, the players and owners make way too much money to justify public investment. Nothing has changed. Bad public investment then and and even badder public investment now.
Hiram,
You're funny. When you put it that way, football's kinda like gold, so rare it's worth a billion dollars more than all other forms of entertainment! $40 million a year for 8 games, is a bargain! I'm sure the Guthrie wouldn't mind paying extra for that kind of competition! Of course the irony of a the NFL, which limits it's franchises in order to control competition, getting it's competition to build it's stadiums may not be lost on everyone.
By the way, it makes me very very sad to know that you have absolutely nothing to do on 44 of your 52 Sundays during the year.
First to Hiram: You don't need a local team or a public stadium to sit in front of your tv and watch football. You will get at least 2 pro games every Sunday even if you living in North Dakota. Why build a billion dollar stadium so that you can have the knowledge that 8 times a year the game is happening in the same state you live in? I think we could find a higher priority for tax dollars than that.
And to Jay: There is a puzzle here only to people like you who puzzle over how to ram this boondoggle past the generally-opposed public who will have to pay for it. For most of us the puzzle is how to prevent people like you and Hiram from stealing a billion dollars from our taxes at a time when better programs are being gutted and cancelled.
"When you put it that way, football's kinda like gold, so rare it's worth a billion dollars more than all other forms of entertainment! $40 million a year for 8 games, is a bargain!"
In financial terms, things are worth what the market says they are worth. As it happens, I am pretty sure we can get the Vikings to stay here for less than someone else is willing to pay, and for a lot less than it would take to replace them.
"Of course the irony of a the NFL, which limits it's franchises in order to control competition, getting it's competition to build it's stadiums may not be lost on everyone."
The NFL is a very well run business, and that's a good argument for going into partnership with them. I always thought a strong argument against building the Twins Stadium is the Major League Baseball, is a very badly run business, and not a reliable partner.
"By the way, it makes me very very sad to know that you have absolutely nothing to do on 44 of your 52 Sundays during the year."
Well, they do have reruns of games on the NFL Network. But it's true, mostly on Sunday on Sunday afternoons, I sit in front of the blank TV screen, suck my thumb, and long pathetically for fall.
"Why build a billion dollar stadium so that you can have the knowledge that 8 times a year the game is happening in the same state you live in?"
Because the Vikings are my team.
"I think we could find a higher priority for tax dollars than that."
Sure, if you want to put it that way. There are more important things than football, and in fact I will readily concede that in the grand scheme of things, football isn't very important. But the fact is, we have made the decision not to spend money on more important things, like hospitals and schools. I refer you to the article on the front page of the Wall Street Journal this morning on cutbacks in Medicaid. So now the question is do we want a football stadium, do we want the Vikings to stay here. And if so, how much are we willing to pay?
//Sure, no one advocating stadiums on economic grounds has ever won the debate. But then the economics of buying a television set aren't even a wash, yet there one sits in my living room.
Yes Hiram but the Best Buy you bought your TV at wasn't built with public money, you see the difference right? Sure, we toss in some infrastructure once and while, and do some TIFF deals for other private businesses but there's no comparison to these stadium deals.
These teams are franchises, that's the business model. Imagine a guy showing up and demanding public money to build two thirds his new Wendy's building- in addition to some road improvement and signage. And then imagine the owner of the White Castle across the street saying- as you have- "Sure, I'll pay for my competition, I can afford it, just like the Guthrie pays for the Twins stadium".
I get it, you guys like your professional football. But why do you think the government and the taxpayers have an obligation to provide it?
I see no practical reason why the public should be asked to pledge its diminishing treasure to fund ANY commercial enterprise that does not directly service its entire population.
If those who enjoy the entertainment are not willing to pay the price needed to keep the teams at their local locations, along with the other commercial business' who directly benefit from the activity offered, the teams should find a new home for their enterprise.
In this day of electronic sports entertainment of every kind available via satellite or cable, the need for in-your-face sports convenience is still available. If not in the dedicated fan's homes, the cheering crowd atmosphere is eagerly waiting at their neighborhood adult refreshment location.
Even continuing the discussion is a clear insult to those of us living on fixed incomes who simply can't afford to be made to support the cost of providing any new play lots for commercial enterprise that wish to enjoy a fatter bottom line.
Those who want to attract our vote during the next election to every public office that will decide this issue had best expect an increased negative reaction to those candidates who even promise a strong look at considering such a public expenditure.
This issue demands that we take a fresh look at the adage, "Fool me once, shame on you, but fool me twice, then double shame on me."
Its time for this rape of commonsense to end here and now!
"I see no practical reason why the public should be asked to pledge its diminishing treasure to fund ANY commercial enterprise that does not directly service its entire population."
The reason is that we will lose the Vikings. The Vikings are as widely followed by the entire population as any entity I can think of. As I said earlier, everyone in the state knows how the Vikings did by Monday morning.
"If those who enjoy the entertainment are not willing to pay the price needed to keep the teams at their local locations, along with the other commercial business' who directly benefit from the activity offered, the teams should find a new home for their enterprise."
They aren't able to pay for it, because the Vikings give away their product for free.
"This issue demands that we take a fresh look at the adage, "Fool me once, shame on you, but fool me twice, then double shame on me."
Over the years, the Vikings have been good corporate citizens. They have delivered value and pleasure to millions of Minnesotans who have never paid a dime to see them. If you asked me to pay ten bucks a year, to keep the Vikings here, I would say yes. If you asked me to pay a thousand, I would probably say no. I think an offer should be made between those two numbers and that Minnesotans should be given a chance to decide.
One other thing. Demagoguing this issue hurts a lot more than it helps. We did that year after year with the Twins Stadium, and the result was a backroom deal that could hardly have been worse for Hennepin County taxpayers. If we are more upfront about the real costs of a Vikings Stadium and it's nature as a state asset, I think we can reach a deal that doesn't hurt a local economy, and will at the end of the day, people will be pleased with.
"Yes Hiram but the Best Buy you bought your TV at wasn't built with public money, you see the difference right?"
Public money is my money. I don't see the difference.
The Wendy's argument is actually much stronger when you are talking about extending tax breaks to the Mall of America, that sort of thing.
The Vikings are one of a kind. It's one of the many strengths of their business model. I just don't think that a dollar not spent on the Vikings because they moved to LA would get spent at the Guthrie. NFL football just doesn't compete with anyone else.
//I just don't think that a dollar not spent on the Vikings because they moved to LA would get spent at the Guthrie. NFL football just doesn't compete with anyone else.
Hiram, what are you saying? Are saying that without the Vikings people will just sit home and do nothing? Is that what they do on the other 44 Sundays of the year? They can't spend it in the Guthrie, for one thing the Guthrie not as big a stadium, that's not the point. The point is people seek entertainment one way or another, whether it's bowling, skiing, kite flying, movies, bike riding, whatever. I mean god forbid anyone actually go out and play football instead of just watching it on a Sunday afternoon. These are entertainment dollars, they don't evaporate without the Vikings they just go elsewhere. Dude you got like a 150 channels on your tv, if there's no football on you can find something else to watch.
Again, fairness becomes an issue when you publicly subsidize one entertainment venue over another with such huge sums of money. These are taxes, their not voluntary, you're making bike shop owners, restaurant owners, bowling alleys, movie theaters etc. subsidize someone else's business, and send potential customers somewhere else, to the tune of $20-$40 million dollars a year. There's no reciprocity whatsoever. And we're not talking about tax breaks, we're talking about hundred of millions of free public dollars.
The fact that the Vikings are the only pro football team in town doesn't make them invaluable, or priceless. It doesn't we ought to do whatever it takes or spend whatever they want to keep them here.
Kudos to Jay Wiener for his analysis and to Bill Schletzer for putting this mess in perspective.
Even I, as asportual as a human being could possibly be, acknowledge that the Vikings are a cultural benefit, albeit one which I am essentially incapable of appreciating. The question is and will always be whether "spare" tax capacity (in whatever form) should be used to subsidize their operations.
If it can be demonstrated that an approach is an economic wash, fine. Advance the funds. But if the mechanism that will used to recapture those funds will simply divert existing tax revenues, then we will have to either make up those revenues or reduce our expenditures elsewhere. If that mechanism will simply diverty non-tax expenditures (e.g. the use of discretionary spending) from one venue to another (e.g., from existing casinos to state-operated gambling) then what's the point?
"I just don't think that a dollar not spent on the Vikings because they moved to LA would get spent at the Guthrie. NFL football just doesn't compete with anyone else."
A dollar not spent on the Vikings also does not require a dollar needed for increased taxes.
NFL football does compete with a lot of other things, some of which offer far more value than the box score, which will still be available for those who can't live without knowing what yesterday's effort provided.
That is about the poorest excuse for raising taxes I have ever heard of.
Do something positive about keeping the team here if you like. Start a private fund to collect enough to build them a stadium that will satisfy the NFL owners.
The citizens of Minnesota who are not in love with the need to fund more than one team of football players. Probably then to better appreciate and follow the Gophers do their thing and perhaps with some encouragement, help them perform well enough to emulate the popularity of the Nebraska Corn Huskers.
We have already made an investment for a new stadium, which might also be rented to the Vikings, if that would satisfy their hunger for greater profit.
Sorry about the jumbled wording of that last comment.
That should read:
The citizens of Minnesota who are not in love with the need to fund more than one team of football players would probably better appreciate and follow the Gophers ...
Hiram says: "Because the Vikings are my team."
I think technically they are Zygi's team, poor leveraged Zygi.
My work place here in Plymouth is full of people who would say that the Packers are their team. They don't have to live in the same state or buy them a stadium, they just simply embrace them. You, Hiram, can always love the Vikings even when they are in LA. They haven't been owned by people from Minnesota for a long time. Zygi and his team will go where the money is, always. Your loyalty is a one way street and I don't think the rest of us should support the delusion that "the Vikings are my team."
"Are saying that without the Vikings people will just sit home and do nothing?"
They might mow the lawn, or watch the Green Bay, but yes, apart from Vikings games, early Sunday afternoons are not one of the busy times of the week. That's another advantage of NFL football, by the way. It doesn't have much competition on Sunday afternoons.
"fairness becomes an issue when you publicly subsidize one entertainment venue over another with such huge sums of money."
Fairness is both arbitrary and overrated. As a Vikings fan, who has never paid to see a game, I have been leeching off those who pay to see the team, for years. There isn't anything particularly fair about that.
"The fact that the Vikings are the only pro football team in town doesn't make them invaluable, or priceless."
I am not saying they are either invaluable or priceless. I am saying they have a value that can be priced. If the price is too high, let them go, I say. But if the price isn't too high, I think we should pay it, and keep the team here.
Bill Schetzler is handling this far more eloquently than I hope to but I wanted to chime in.
Whether the Vikings play 8 games a year in LA or San Antonio or Paducah KY doesn't preclude anyone from adopting them as "your team". I grew up in Western Wisconsin and was a Milwaukee Braves fan (Aaron, Matthews, Spahn) and I still consider myself a Braves fan despite the fact they are now in Atlanta and I am in Minnesota. Feel free to send the Wilfs money to help them buy a new stadium. I don't want to spend one dime to do so. It is not a public good.
Just because someone mows the lawn instead of going to a Vikings game does not mean those dollars never get spent. They may get spent Tuesday night at a movie theatre or at Home Depot for a new lawn mower. If I buy tickets for a Vikings game that means I have less money to do other things. So the Vikings compete in the marketplace like everybody else. To say they don't compete with anything else exposes one's biases more than reality. The Guthrie is one of a kind. The Twins are one of a kind, the Gophers' football team is one of a kind (the only D1 football program in the state), etc.
Demagoguing the issue by imputing value to the Vikings where none exists only further clouds the issue. There is no puzzle here, there is no problem here. Simply no money for the Wilfs. Let the Wilfs do what they want to do. If they move I don't view this as any loss whatsoever.
I guess I run in strange circles because few people I know have any idea what the Vikings did the day before or even care. Those that do know only do so because the media crams it down our throats (15 minutes of the "news" devoted to the Vikings.
Let them go.
Why have the taxpayers pay for a stadium for a billionaire, so that millionaires can play a game. Makes no sense at all.
Update on my son:
Dan talked to his Grandma about moving in and setting up his video game business. She said she would welcome him there if he and I aren't getting along and I'm really being as unreasonable as he asserts. She did however tell him he would have to earn the money for the new X Box and pay for it himself. That didn't sit too well. He decided against moving to Grandma's.
He is currently grounded for being mean to his sister and he's threatening to boycott 4th grade if we don't vacation in the Dells this year. I confiscated the Nintendo for the duration of the grounding.
Well Hiram,
As far as Sunday afternoon are concerned I suspect your preoccupation with the Vikings may be a tad on the extreme side. But take heart, if I had my way our public dollars would be going towards health care instead of billionaire welfare programs. If by some miracle my side happens to prevail, and we lose the Vikings, rest assured that folks like myself will fight passionately to make sure free counseling services are available for people like yourself trying cope with the loss of the Vikings. ;)
//They aren't able to pay for it, because the Vikings give away their product for free.
The Vikings aren't doing anything for free, they're making money off those broadcasts, it's part of the revenue sharing deal.
//Demagoguing this issue hurts a lot more than it helps. We did that year after year with the Twins Stadium, and the result was a backroom deal that could hardly have been worse for Hennepin County taxpayers.
The only demagoguery taking place here is on behalf of the stadiums. We didn't end up with a bad result in Hennepin County because we argued about building the stadium, we ended up a bad deal because we built the stadium. We didn't have to build the stadium. The Pohlad's could have built the stadium. Losing the Twins is an option, one that most people were actually willing to live with rather than being taxed. The demagoguery is that the stadium had to built.
//Fairness is both arbitrary and overrated.
Interesting moral imperative. Well at least your admitting that pro sports subsidies are unfair. I doubt however that one can turn unfairness into an affirmative argument. I also doubt that your notion that fairness is arbitrary or irrelevant is universally held. But hey, good luck with that.
//I am not saying they are either invaluable or priceless...
Actually you are. You keep saying that we can determine the price and decide whether or not to pay, but you well know we've already done that. This why we have the referendum law. Any price above $10-$20 million dollars is too high. Any price that requires additional taxes or diversion of existing tax revenue is too high, we know this. This is why you have to do end runs around referendums in order to get stadiums built. I know you want to pretend we don't know this, but the reason the Twins stadium in MPLS instead of St. Paul is the St. Paul referendum failed, and the Henn. Co. referendum was bypassed. Meanwhile you clearly think that $40 million a year for 6-8 football games would be a good deal. I think when your talking about plopping over a billion dollars into pro-sports you in the realm of "priceless".
At the end of the day the thing about these fans that want a stadium is that they just "want" it, and short of actually hurting anyone they really care how they get it.
This brings me back to my original comment about the negative cultural impact of the Vikings. This is a sports mentality, winning is all that matters. No matter how unfair, inappropriate, costly, or irresponsible this public subsidy is, they want it. It's a distortion of our priorities, a distraction of our policy attention, and drain of our public resources. It promotes selfishness, exploitation, cynicism, and apathy. It degrades integrity, maturity, rationality, and public responsibility. We'd be better off without it.
Something that hasn't really been talked about is the fact that for 95-98% of Vikings fans, where the game is physically played is a moot point. Whether they're on the road or at 'home', for the vast majority of us, it's the perfect TV sport. Having to go somewhere to watch the game live is expensive, a hassle, and time consuming. Not to mention that if you're at the stadium and want to see what actually happened on any given play, you end up watching it on the big screen anyway. That versus the NFL package on an HD TV, food, refreshments, and friends, in the compfort of yours or someones home. And, say what, the new stadium won't have a dome and will be for only 10 events a year? See yah!
To answer Jays question, and echo the thoughts of others here, there are only Three publicly responsible solutions to this puzzle (to the extent there is actually a puzzle). 1) The Vikings don't get a stadium here and they leave. 2) The Viking build their own stadium, with modest public support i.e. roads, parking facilities, infrastructure, all told probably less $40 million worth of public support. These owners can afford to build these stadiums. The Pohlads could be making their own stadium payments of $20 million a year if they paid just one player (Mauer) $10 instead of $30 million a year. Every other industry in the world has to adjust labor costs in order to manage costs and revenue, why should pro sports be exempt from these basic economic principles? 3) The Vikings and their supporters take their case to the public, make their argument, and either succeed or fail to get the money they want in a properly worded and correctly designed referendum. We have a mechanism in place for this.
The thing is, we have to acknowledge that losing the Vikings, or any other pro sport, forever, is an acceptable outcome. In fact, I would argue that until the pro-sports economy becomes self sustaining, something they could easily do if they restructured their labor expenses, losing teams is actually a good thing for the culture and the community. Like Mr. Schletzer has already pointed out his son, there are times when we really should act like adults, and that's not a bad thing.
"The thing is, we have to acknowledge that losing the Vikings, or any other pro sport, forever, is an acceptable outcome."
There it is in a nutshell.
And let's pause for a minute, and reflect on the huge concession already implicit in a reference to $40 million in city infrastructure expenditures as "modest publc support".
One last thing about this stadium deal.
I don't know much about any particular stadiums around the country but I have noticed a couple things about the economy. People seem to be referring to some privately financed stadium in LA that Wilf may move to. You'll notice no one is building that stadium yet. We're in a very severe recession here, there are a lot of structural problems with the economy, credit is still tight, the financial sector isn't paying off like it used. Frankly I find it very hard to believe that someone's going to come with a billion dollars to build a stadium for someone else.
You have to remember, the whole point of these stadiums is to grow the value of the team and create better revenue streams. One thing it is for an owner to invest in his own stadium, but if he rents a stadium that someone else builds or owns the profit margin disappears, what's the point? And if the team isn't gonna pay rent, or share revenue, how are the investors gonna get their money back with interest?
Now I know there are some privately funded stadiums going up here and there, but the economics are questionable. The t-wolves arena may be a template. You'll recall that was originally built with private money, but after a year or two the owners started whining about revenue and costs and blah blah blah. MLPS ended up buying the stadium and has been stuck with it ever since. I think that's most likely the plan with these other privately built stadiums. They cobble together the money to build them and then try to dump them off on the public after a few years.
Thing is, as time goes by one way or another public funding for stadiums is getting hard to come by, and the strategies for squeezing the public are diminishing. At first no one paid attention, then they were forced to have referendums. When they lost control of the wording on the referendums they tried the economic arguments, which worked for while, but is now a tough sell. I think this latest strategy, I'll call it the private finance bait and switch may be the end of the road. These bailouts can't go on forever, eventually the sports economy bubble has to burst. Every time the public catches on to the strategy they come with something new, but there's a limit. The reason it took long to get the Twin stadium built was they ran out of winning strategies. I don't think they'll be able to pull of that last Henn. Co. board plan off again.
What I'm saying is that I think it may actually be possible that the time is now. If no one can get a stadium built, Ziggy simply has no where to go. There isn't a lot of time left, it takes a couple years to build a stadium, and they haven't broken ground yet. Meanwhile the other privately financed stadiums will come online and we'll find out how that really works. I don't know what a collapsing sports economy bubble looks like, but it maybe it starts with an owner who's stuck in a city with a crappy stadium. What does he do? Live with it? Shut it down? Sell it at a loss? Stay tuned. It's kind of interesting to imagine a situation where the lease runs out and Ziggy's got nowhere to go, and no prospects. He may be left with no choice but to build his own stadium or shut down the team.
Sorry, in #41 I meant to say fans really don't care how they get the stadium.
Racino should not be ignored as a means to get a stadium for the Vikings. Polls show that at least 68% of the people in Minnesota are in favor of the proposal ( the number is really closer to 80%) and yet it is totally ignored by the press and the DFL. A racino would be a no tax solution and if you don't want to go there to gamble, don't. Presently, the Indian gaming in Minnesota is a $2 billion industry that pays no taxes. Last week, Randy Sampson. of Canterbury Park, offered to pay the state $100,000,000 towards, a one time up front, licensing fee for a license this year. The legislature turned the payment down, with Margaret Kelliher saying on channel 5 news that they didn't need the money. Meanwhile, education funds repayment was delayed and health care is a mess. The Racino bill would put money- 40% towards a sports facility in the state ( not necessarily the Vikings) 20% towards education, 20% towards biosciences, and 20% agriculture research ( I think that's what it's called) The amount guaranteed to the state every tax cycle would be $200,000,000. There would be 2500 slot machines at Canterbury Park. Presently, Mystic Lake has more slot machines than any other casino in the United States! And this would not be an expansion because we already have a card room and parimutuel wagering. It is tied to horseracing so you won't see many gas stations, bars, restaurants willing to hold a live race meet.
I would also like to point out that the Indian Gaming Council has upwards of 50 lobbyists at our capitol and gives the DFL party over $2,000,000 towards their election campaigns. Why us it that the DFL works so hard to keep Racinos from happening in Minnesota ( the only state in the union with casinos that gets no indian gambling tax dollars) while accepting large amounts of money to keep them in office? Hmmmmm. And ironically, Emmer chose Annette Meeks as his running mate. Ms. Meeks testified for the Indians at the senate committee hearing that tabled Racino.
I think it's time for the legislature to vote in favor of the 80% that want that racino income to fund some issues for the state. As I recall, the state is not in the business of protecting any industry to the detriment of another. The horseracing industry ( also a $2 billion industry in the state) is in trouble because of lack of parity with other state's tracks that have casinos. We should look at Churchill Downs that can not compete with Indiana tracks and has shortened the meet and cut purses. Also Pimlico, and Balmoral! Horse racing can be killed and it is growing only in the 11 states that have casinos and racinos. The Dakotas have closed their tracks. While one track in Oklahome just wrote a quarterly check to Oklahoma for education funding in the amount of $40,000,000!
A racino at Canterbury can save the racing industry in Minnesota and keep the Vikings here while still providing much needed creative funding for the state. What's not to like?
If Ziggy wants to build a casino/racino somewhere to generate the money to build a stadium he's free to do so. If a casino or racino is such easy money why do you think no one is doing this? Look at the economies of Vegas and Reno, and Atlantic City, they've crashed because nation wide gambling revenue is down. The problem with the racino is that the state would be on the hook if it failed to generate the $40 million a year required to pay off the bonds.
Consider this: 18 casinos state wide generate $2 billion in revenue, and spend $1.4 billion on expenses. That leaves about $500 million for tribal disbursements. Now how do they generate that much revenue? They attract 25 million visitors a year. Casino revenue isn't uniform, some casinos are bigger than others and make more money. For the sake of argument lets calculate an average- it comes to about $28 million per casino. If we assume that racino would make as much, that would be $28 million a year- Ziggy needs $40 million. It looks like the racino would have to outperform the other casinos in the state, why would it do that?
Furthermore, the offer on the table isn't clear. I'm looking at Dick Day's (one of those lobbyists Claire complains about) Racino Now! website and it's not clear. I can't tell if the offer is $40 million of a projected $100 million in revenue, forever, or up to $100 million. At any rate how is this revenue projected? Is that gross revenue or net revenue? $100 million doesn't build the stadium, Ziggy's asking for what $700 million and change. Unless that $40 million is guaranteed regardless of revenue, and unless it's in perpetuity, it's no way to build a stadium, or generate a steady revenue stream for the state. Guess what, you're gambling on a racino. Remember, we'd need that $40 million for the next thirty years, what if the race track fails? We could end up bailing the racino with public money.
I know republicans like the idea of funding government with ponzi schemes instead of taxes, but a few thousand years of human experience have left us with taxes for a reason.
At any rate, don't count your money before it's in the bank, and read the fine print, especially when dealing with casinos. My guess is that the offer is for a total of $100 million, and here's the catch, they're calling that a licensing fee, and they're making it a specific amount. Looks to me like they want to pay that, and then never pay another dime, ever. So basically after three or four years of payments, the payments end, forever. This is not how you generate a steady revenue stream for the state. And it won't pay for the stadium, we'd still have to come up the $600 million.
First off, I need to point out that the State of Minnesota has NEVER received any state money or subsidies. It is a publicly held corporation. It is only asking for a license to have slots along with their card club and parimutuel wagering so as to be on equal footing with other racetracks that are successful. WIthout parity, purses at Canterbury and race dates will decline to the point that the facility will be forced to close. A $2 billion Minnesota industry will fail and the thousands of jobs statewide will go with it along with that tax base.
Mystic Lake Casino is paying each of its members $60,000 per month tax free so I'm assuming that is out of net profits. The only market that would be affected by a Racino at Canterbury would be Mystic Lake. The northern tribes do not make anywhere near that kind of money and averaging their income with Mystic is misleading. Running Aces was taken out of the equation with Canterbury because of its proximity to the highway leading to the northern markets. The $100,000,000 offered by Canterbury for a license fee was a one time offer. The annual license would be set by the state and paid every year, as is the racing license. Life has no guarantees but the $200,000,000 number was projected by the Minnesota State Lottery based on their most conservative estimates. If the state can't work with numbers that they produce themselves, then what numbers can be trusted? The $40,000,000 annually to the Vikes would cover the cost of financing until the amount spent is repaid. The money spent would come from profits made by the stadium itself and that facility would not belong to the Vikings but to the state to use as it sees fit. A proper indoor stadium is valuable all year and can be home to conventions, trade shows, special sports events, concerts,etc. It would be a valuable asset to the state. Judging by the performance of Racinos in the 11 states that have them, large amounts of money go to those states and their equine industry has been saved as well. Las Vegas is not connected to the racing industry and draws a different type of fan. Racino is not going to be a destination business needing to support hotels, restaurants, other types of entertainment etc. Racinos attract gamblers ( and there are plenty locally that currently drop their money in a venue that does nothing for the state) but also horsemen and that is the attraction. They come to play the horses with a 10% chance of winning. They would also play the slots because gambling is gambling. Its a game of chance. A state regulated casino at Canterbury would actually give the players a better chance of winning because payouts could be regulated.
Any measure used to build a stadium or anything else is a gamble. Judging by the Viking fan base and the fact that the games sell out and attract a lot of people ( becoming a destination and thereby supporting restaurants, hotels and other forms of entertainment) I would say it is likely that they will not default on the loan. It might be a good gamble!
I need to correct myself on #47 I meant to say that Canterbury Park has never received any money from the state. And Canterbury pays taxes.
Another thought that bears mentioning. Zygy has committed to over $200,000,000 to the project and he will only use the facility 8-10 times a year.
"I know republicans like the idea of funding government with ponzi schemes instead of taxes..."
LOL
I'm confused - is gambling now a "family value"?