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A new Vikings stadium? L.A. shows us how

The Vikings are off to a great start in what could be one of their best seasons ever. It is exciting to see Brett Favre lead a talented team with great potential.

Meanwhile, in Los Angeles, investors are building a new stadium, hoping to attract an NFL team. The lobbyists for Vikings owner Zygi Wilf are hoping to use L.A. to pressure Minnesota politicians into using taxpayer funds for a new Vikings stadium. They know most Minnesotans love the Vikings and are excited about the team’s prospects. And, by holding open the possibility that the team will leave for Los Angeles, they hope to pressure the state into providing a massive taxpayer subsidy for the team.

Los Angeles can and should be very helpful to the Vikings, but as an example, not a threat.

Minnesota is in tough financial shape. Schools are laying off teachers. Our courts are being cut to a point that threatens the integrity of our justice system. 31,000 of the sickest people in our state are losing their health care. Minnesota has aging infrastructure, including schools and bridges, which needs attention. And, on top of that, we are facing a multibillion-dollar budget deficit.

$50 million a year, 10 games
It is in that context that Zygi Wilf and the team’s lobbyists are asking for public money. Lester Bagley, their chief lobbyist, recently stated that the cost to taxpayers to retire the debt for a new stadium could be $50 million annually. For this price, Wilf would build a 65,000-seat stadium. Every year, the Vikings would play eight home games there, plus two preseason ones.

To put this into terms to which we can relate, Bagley wants taxpayers to subsidize each of the 65,000 seats at every Vikings home game to the tune of $77 per ticket. That is $77 in taxpayer money for each ticket, at every game, including preseason ones, for decades to come!

That’s a lot of money. Especially when many Minnesotans are struggling to make ends meet and to pay for health care, and government is slowly shutting down core services.

What about the supposed economic benefits of keeping the Vikings? Businesses seeking public money hire consulting firms to produce studies showing “new” tax revenues generated by the business, revenues they claim would not exist without that business.

But neutral economic studies show the opposite. The difference is easy to explain. Studies produced by the team imply that revenue for salaries and profits that generate those taxes comes out of thin air. In fact, those revenues are paid by spectators, fans and advertisers — who, if they didn’t spend it on the Vikings, would spend it on other things, enabling other businesses to hire people and make money, all of which also generates tax money, perhaps more money than would be generated by the team. The economic reality is that these subsidies do not pay for themselves.

Value has increased
What about the financial needs for the Vikings to survive? Forbes magazine says the net value of the Vikings has increased by $235 million since Zygi Wilf bought the team in 2005. And the team has had millions of dollars in operating profits for all but one of the years he has owned it. Despite the recession, the Vikings have been very, very profitable for Wilf, even in the Metrodome.

Finally, it is important to address the implied threat to move the team. Art Rolnick of the Minneapolis Federal Reserve explained what occurs: “The leagues of all major sports blatantly aid and abet team owners in extorting public funds for new facilities under the threat of moving.” That’s strong language, but it is beginning to be heard here, and in most of the other six NFL communities from which Los Angeles is looking to recruit a team.

To his credit, Zygi Wilf testified before a legislative committee that he plans to have the Vikings stay in Minnesota, whether he gets a new stadium or not. He followed that up with a clear promise: “All that I can tell you is that I live by my commitment … If I don’t play in a new stadium, if I don’t play in the Metrodome, I’ll play on the Pop Warner fields … and it will be in Minnesota.”

Wilf is a smart businessman. Obviously, if he can get a massive taxpayer subsidy to enhance his profits, he will take it. But if there is no subsidy coming, he can learn from Los Angeles that it’s possible to build a privately financed NFL stadium. Businessman Ed Roski and his partners plan to build their new stadium near L.A. without help from taxpayers.

Help them find a way
This is a perfect opportunity for the governor and state leaders to sit down with Wilf and other investors to help them find a way to privately finance a new, state-of-the-art NFL stadium.

In California, Gov. Arnold Schwarzenegger laid out one clear rule for their new facility: “It won’t cost the taxpayers a dime. … In California, we don’t build stadiums with public money.”

A $77 taxpayer subsidy for each of the 65,000 seats, at every Vikings game, year after year? No. Here in Minnesota, we can build one without public money as well.

John Marty, DFL-Roseville, is a state senator and a candidate for governor. He first published this article in his newsletter, “To the Point!”

Comments (13)

  1. Submitted by Hiram Foster on 10/29/2009 - 07:04 am.

    Just once, I would like to see John Marty take something other than the wimp position on a public issue. Maybe then, people would stop rolling their eyes when he enters the room.

  2. Submitted by Hiram Foster on 10/29/2009 - 07:44 am.

    “To put this into terms to which we can relate, Bagley wants taxpayers to subsidize each of the 65,000 seats at every Vikings home game to the tune of $77 per ticket. That is $77 in taxpayer money for each ticket, at every game, including preseason ones, for decades to come!”

    Let’s really do what Sen. Marty asks us to do in term with which we can relate. The senator says we will pay fifty million dollars a year in interest. Five million people live in Minnesota so that amounts to ten bucks a year to keep the Vikings here in a beautiful facility that everyone will love the moment it opens. Ten bucks. Would you write that check?

  3. Submitted by Justin Heideman on 10/29/2009 - 08:48 am.

    @Hiram: I wouldn’t write a check for ten cents a year. Private entertainment enterprise does not need to have its practically guaranteed profits subsidized by public tax dollars.

    Put it another way, how about we cut YOUR kid’s art and music classes, put another 10 kids in his classroom, and don’t fix the leaky roof on the building, just so a bunch of millionaires can play on real grass instead of fake 8 days a year. That sound like a good use of taxpayer dollars?

    This isn’t rocket surgery. The vikings have plenty of money. If they want a new stadium, no one is going to stop them from building their own. Minnesota already has two perfectly adequate and paid for football stadiums.

  4. Submitted by Hiram Foster on 10/29/2009 - 09:42 am.

    “Private entertainment enterprise does not need to have its practically guaranteed profits subsidized by public tax dollars.”

    You are quite simply wrong. And there is nothing in the least private about professional sports franchises.

    “how about we cut YOUR kid’s art and music classes, put another 10 kids in his classroom, and don’t fix the leaky roof on the building, just so a bunch of millionaires can play on real grass instead of fake 8 days a year.

    That’s a choice that’s not on the table. But now that you mention it, Sen. Marty was a part of the DFL senate leadership that so catastrophically failed our schools, and our state during the last legislative session, a whole other issue Sen. Marty has to deal with.

  5. Submitted by myles spicer on 10/29/2009 - 11:32 am.

    Another facet of this debate is that IF Wilf did get his (primarily public financed) stadium, the value of his team and investment would rise exponentially. Thus, in effect, the taxpayers would be contributing hundreds of millions dollars of profit to an individual, without any return on investment.

    Additionally, the history of such endeavors is that once the glitzy new stadium is built — ticket prices rise accordingly (I guess because the entertainment experience is enhanced?) Note the Twins new pricing. Already, the Vikings have reached a price point that strains average incomes.

    I too like the Vikings (had season tix for decades) — but as noted above, there is a price point for everything, and that point has been reached by the Vikings for both taxpayer dollars, and probably for ticket prices as well.

  6. Submitted by Hiram Foster on 10/29/2009 - 01:46 pm.

    “Another facet of this debate is that IF Wilf did get his (primarily public financed) stadium, the value of his team and investment would rise exponentially.”

    Not necessarily, and certainly not exponentially. While the Vikings are more valuable with a new stadium than without one, the prospect of a stadium is enough in itself to jack up the value. And that new stadium doesn’t need to be here.

    “Thus, in effect, the taxpayers would be contributing hundreds of millions dollars of profit to an individual, without any return on investment.”

    What the taxpayers and the people of Minnesota would get is the long term presence of a financially stable NFL franchise. I assure you Wilf or his successors will do just fine whether we buy what he is selling or not.

    “the history of such endeavors is that once the glitzy new stadium is built — ticket prices rise accordingly (I guess because the entertainment experience is enhanced?”

    What does that matter? The vast majority of Vikings fans don’t even go to the games, indeed have never attended one in person.

    “I too like the Vikings (had season tix for decades) — but as noted above, there is a price point for everything, and that point has been reached by the Vikings for both taxpayer dollars, and probably for ticket prices as well.”

    What did you pay for your season tickets? A thousand bucks per season? Marty is offering you the chance to keep the Vikings here for ten bucks a year. Isn’t that deal just way to good to pass up?

  7. Submitted by Paul Udstrand on 10/29/2009 - 08:33 pm.

    If these teams can’t build stadiums, existentially necessary structures without public money, then pro sports is a failed business model. If Target, or Best Buy, or McDonalds showed and asked for massive public subsidies just to build their business location we would recognize this immediately. We need to stop pouring hundred of millions of dollars into failed business models that provide so little bang for the public dollar. The good governor of California may have many shortcomings, but at least can tell the difference between a legitimate public policy priority and a shakedown.

  8. Submitted by Richard Schulze on 10/29/2009 - 09:21 pm.

    Socialism for the rich is traditional,when applied to the middle class it is treasonous.

  9. Submitted by Mike Beard on 10/30/2009 - 01:20 am.

    Build it now or build it later. If Vikings leave I guarantee you in 10 years we’ll be approached again about how can Mpls/St.Paul be without an NFL team and we’ll build a new stadium for twice the price now. History is our teacher with the North Stars/Met Sports Center and the Wild/Xcel Center. Tear down the dome (as apparently it cannot be rennovated) and give them $300 million and say get it done. And let’s get on with life.

  10. Submitted by Hiram Foster on 10/30/2009 - 05:52 am.

    “Socialism for the rich is traditional,when applied to the middle class it is treasonous.”

    Possibly, but that’s neither here nor there.

    Sen. Marty wants to throw away an important asset to this community on the basis of reasoning where it exacts it all?

    Putting aside for the moment that rather obvious observation that the way California does things really shouldn’t serve as a model for anyone else these days, how could someone sit in the senate for as many decade as Sen. Marty without figuring out somewhere along the line that Los Angeles is different in a number of important ways from the Twin Cities?

    When I read the piece above, I said to myself, this is why Democrats lose elections in Minnesota and why John Marty has always played such a critical role in losing them.

  11. Submitted by Paul Udstrand on 10/30/2009 - 09:12 am.

    //When I read the piece above, I said to myself, this is why Democrats lose elections in Minnesota and why John Marty has always played such a critical role in losing them.

    Stadiums have nothing to do with Democratic electoral failure or success. Democrats lose elections in this state because they’re afraid to run anything other than mediocre candidates. Middlism (the invisible ideology that extols the virtue of the middle ground) frequently sabotages the democratic candidate selection process. The Pohlad’s never would’ve got their stadium without Democratic collusion.

    Again with this “if don’t build it now we’ll have to build it later for more money” canard. You can say whatever you want about California but one way or the other L.A. illustrates some very important realities. First, it’s not the end of the world for a city to lose a football team, they’ve done just fine; no cold Omaha there. Second, if they ever do actually build their stadium without public funding, and frankly I think that’s a big “if”, they will demonstrate that public funding is unnecessary thus negating the theory that stadiums always cost the public more later. At any rate, this pay for it now or later theory is always based on the false premise that pro sport is a necessity rather than a luxury, it’s not.

    Any prediction about future costs of stadiums and teams should take into account the fact that the pro sports model is a failed business model. It has created a bubble, a pro sport bubble. These teams are overvalued, the players are overpaid, and owners over compensated, and it all depends on massive public subsidies. How much stadiums cost the public ten years from now? Who knows, it depends on the bubble. I don’t know when or how, but one fact about any and all economic bubbles is that they all eventually burst. We may be reaching that point at long last. The subsidies these billionaires are demanding are so huge and so onerous that they’re just unsupportable. Politicians are forced to create incredibly complex and corrupt schemes (witness the Twins deal) in order to produce stadium deals, and that’s not sustainable either.

    The fact is if public subsidies end, or are even reduced by half, these leagues will begin to implode. Like any other industry they’d be forced to restructure in order to stay in business. That would mean finding new revenue streams (other than pumping up team values with subsidized stadiums), and cutting worker salaries. It’s not going to be pretty but we never should’ve socialized the sports economy in the first place. Welfare programs for these billionaires were never good public policy and such things are bound to not end well.

    By the way Jay Weiner provoked a really huge stadium debate/comment thread over in the sports section, almost 200 posts if anyone’s interested.

  12. Submitted by Hiram Foster on 10/30/2009 - 10:56 am.

    “Stadiums have nothing to do with Democratic electoral failure or success.”

    No but shallowness of thinking, and the elitist dismissal of the serious concerns of others does. This is a serious issue to be discussed seriously. All Senator Marty is doing here is playing his quiche eating base which will elect him to the senate forever, and will never get him elected to anything else.

  13. Submitted by Hiram Foster on 10/31/2009 - 04:50 pm.

    “The subsidies these billionaires are demanding are so huge and so onerous that they’re just unsupportable.”‘

    It seems to me that when you price them out, they are surprising supportable. How much does the Twins tax cost any of us a year? Five, maybe ten bucks? Less, if we are careful to buy big ticket items outside of Hennepin County. Sen. Marty says we can get a Vikings Stadium for another ten bucks a year. Whether or not that’s good public policy is debatable, but paying ten bucks a year, a sum which will in fact decline over time as the debt gets paid off, is something I think most of us could afford.

    Sen. Marty is a card carrying member of that part of the DFL that believes that people should not be allowed to have fun until all of the world’s problems are solved. I burned my membership card in that particular DFL faction long ago.

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