Your chance to buy the Vikings and keep them here?

State Rep. Phyllis Kahn (DFL-Minneapolis) this morning unveiled a new/old idea to solve the Vikings stadium issue by having the Vikings sell ownership shares to the public.

Under her idea, the Wilf family could sell up to 70 percent of the shares of the team and still retain a controlling interest to run the team without interference from the community owners on all matters other than the idea of moving the Vikings to another state. (That should be no big problem, says Kahn, since Zygi Wilf keeps saying that he doesn’t want to move the team.)

The funds raised by the sale of shares would apparently replace the state contribution money that Wilf claims to need to complete a deal for the construction of a new stadium.

The Green Bay Packers are owned by shareholders in the community (and, come to think of it, you never hear much talk of the Packers moving to another city). The NFL has a rule that bars any team other than the Packers from being owned by more than 30 people. The bill would require the state and the Vikings to work with the NFL to permit community ownership of the Vikings.

Kahn made a similar proposal regarding ownership of the Twins in 2005, when the team was seeking a subsidy to build a new stadium. The bill made it out of committees in both houses of the Legislature but never came to a floor vote and the Twins got their subsidy without a change in ownership structure.

Kahn put out a first draft of the bill this morning but it raises many questions that it doesn’t answer. Special rules would have to be written, perhaps to make sure that a controlling interest would be owned by Minnesotans or that the community owners would have the power to block a move but not to bench the quarterback.

“One of the things I like about the idea,” Kahn just told in a phone interview, “is that it gives all these a whiners who are saying how terrible it would be to lose the team a mechanism to put their money where their mouths are” by buying shares. “It’s a market test on the whole idea of keeping the Vikings here.”

Comments (31)

  1. Submitted by Peder DeFor on 11/07/2011 - 11:33 am.

    I’d love it if it were to happen but every time this type of proposal is put out there, the NFL shoots it down. They prefer to have a primary owner that they can work with over a corporate body. I wish they felt differently, but as they say, it’s their ball. Maybe if enough cities made this a prime point in stadium construction they’d change their mind.

  2. Submitted by Dimitri Drekonja on 11/07/2011 - 11:48 am.

    My computer seems to be distorting the formatting on the draft, so I couldn’t get the details, but overall, I like it. Would it cover both the state and local portion of the stadium, or does this still leave the local “partner” with a 300+ million dollar contribution?

  3. Submitted by Hiram Foster on 11/07/2011 - 12:10 pm.

    Without a new stadium, those shares would be a lousy investment. Kahn would really be well advised staying out of matters about which she has made the decision to know nothing about.

  4. Submitted by James Hamilton on 11/07/2011 - 12:41 pm.

    It would be interesting to read a legal analysis of the validity of the League rules on ownership, from a restraint of trade / antitrust perspective.

    Ironically, the League rules state that the League is “not organized nor to be operated for profit” yet no non-profit organization not currently an owner may become an owner. Constitution and By Laws of the NFL, Sections 2.2 and 3.2.a. (2006)

    http://static.nfl.com/static/content//public/static/html/careers/pdf/co_.pdf

  5. Submitted by James Hamilton on 11/07/2011 - 12:44 pm.

    There are forms of business entities that would allow the league to deal with one person, it just wouldn’t have the power to determine who that person would be. Broad ownership dilutes the value of the franchises, to some degree, by limiting their mobility.

  6. Submitted by Steve Titterud on 11/07/2011 - 12:53 pm.

    #3: If I understand your point correctly (no new stadium = lousy investment), then the real point of a new stadium is to improve the current owners’ investment potential.

    That is exactly what the public finds revolting about the idea of public funding of a new stadium.

    Phyllis Kahn, bless her, has proposed a cure. But some patients have become comfortable with the disease.

    The NFL owners are horrified by the idea of public ownership. It would ruin THEIR game (not the game of football) – the game where a small group of 1 percenters control the playing board and the pieces.

  7. Submitted by Ray Schoch on 11/07/2011 - 01:03 pm.

    An interesting idea, and for the reasons that Kahn cites, but my reluctant conclusion – as an observer who’s not an NFL fan – is that Mr. DeFor is probably correct. Perhaps a good idea, but not likely to happen.

    I can’t speak to Hiram Foster’s assumption about the value of the shares – a 20-something-year-old stadium with a new, $18 million roof falls somewhere between “worthless” and “all you should need” – but it does seem based on a belief that a new stadium is necessary.

    As an old, broken-down history teacher, I can’t help but be reminded that, if current attitudes were extant then, the Roman Coliseum would have been torn down quite a few centuries ago. If humans are still around in 5,000 years, it’d be fascinating to listen to the anthropologists talk about this culture’s fetish for astonishingly expensive new athletic venues for the same sport, played by the same people, watched by the same people. The phrase “bread and circuses” comes readily to mind, especially when more than a hundred local school districts are struggling to make ends meet because the state keeps giving them less money than the law supposedly requires.

  8. Submitted by Paul Brandon on 11/07/2011 - 01:13 pm.

    Ownership is ownership.
    If you control 70% of the shares of a corporation you control it.
    Otherwise, this is just another name for public support; not public ownership.

  9. Submitted by D Lam on 11/07/2011 - 01:14 pm.

    Unfortunately this would violate ownership rules within the NFL. Green Bay has community ownership but it is grandfathered in because they established it before the rule was adopted. My guess is that we could not modify this to sell shares of the stadium. The stadium will need an operating subsidy in addition to the construction costs so all community investment will be lost over time.

  10. Submitted by Dimitri Drekonja on 11/07/2011 - 01:44 pm.

    “Unfortunately this would violate ownership rules within the NFL”

    I’m stunned at how people (here and on the strib site) cite this as exhibit A as to why this idea is a non-starter. Apparently a rule arbitratily made by a league should not be challenged, but when a state law says you need to have a referendum for a stadium, there is no shortage of people who will find a way around it.

    Also, isn’t this new posh place supposed to generate so much new revenue that it wouldn’t need an “operating subsidy”? I thought that was the whole point- the dome still holds the right number of people (heck, they often run into trouble filling it), it’s structurally sound, it’s sometimes touted as among the league’s loudest stadiums- the only problem is it only makes a little money, and that’s not acceptable to the current owner.

  11. Submitted by Paul Brandon on 11/07/2011 - 01:49 pm.

    The NFL rules are at most contractual agreements.
    They are NOT laws.

  12. Submitted by geoff brunkhorst on 11/07/2011 - 02:01 pm.

    If the NFL balks, you just have our fine U.S. Senators Franken and Klobuchar submit a bill that the billion dollar NFL would be subject to anti-trust/collusion laws regarding labor (why can’t an 18 year old play NFL football without attending college?). Consider it a ‘right to work jobs bill’ [no GOP senator could argue with that];-)

    I don’t like gov’t to get into the business of sports at any level, from owning stadiums, to steroids (other than a safe workplace), to gambling, to defining special rules for this form of ‘entertainment’ to exist. But if we are in for a dime at the state level, we may as well argue to be in for a dollar at the national level. It’s corporate ownership, not public (although why can’t the city of Mpls, buy a few shares for a seat at the table… if a city is ‘encorporated’ can’t it be a ‘person’ and own shares too?), and that seems to align with the current powers that be.

  13. Submitted by Richard Shelby on 11/07/2011 - 02:31 pm.

    @ #4, #6 and #10. Phyllis Kahn is apparantly wasting time/agenda attempting to make a point by drafting a bill she knows will be a non-starter. The Wilf family isnt going to concede/sell ownership to the public. We understand this, the state legislature knows this and I’d venture to guess Phyllis knows this. Point made Miss Kahn, you’ll draft the bill and both the Wilfs and the NFL will dismiss it. To the casual observer you’ll appear to have been trying to find a solution without the use of any State funding, when in fact, you know your offering up a red herring. Either the State is going to help fund a new stadium or the Vikings will move to a State that will build them a stadium. Lets move on to relevant topics like searching for a source of new funding (i.e. Racino). Or…..decide not to fund and part ways with the Vikings. I’d be willing to hear either argument as long as it’s honest/relevant. Now…….on to round 10 of whack-a-mole.

  14. Submitted by David Lane on 11/07/2011 - 03:07 pm.

    Really Eric Black,
    Stadium suppporters are whiners? If that’s the case you are a clown. You are a clown who has no clue as to the benefits of a professional football team brings to the state of Minnesota. How about the income taxes the players and all employees of the team pay to the state of Minnesota (somewhere around 20 million a year x 30 years). Do some simple math and you will find the initial investment mostly covered. All the additional sales taxes players are going to pay keeping a household up and running in Minnesota is also a huge benefit. Think big screen TVs, furnature, lawn mowwing services, property taxes etc. You can argue the rest of the monetary benefits, but you are going to have to be very creative to say that the state and or county won’t make good on this investment. With all the money the government spends on things that have no return at all, saying this doesn’t make sense doesn’t make sense itself. Lets also mention the state has a world class facility to hold all sorts of highschool tournaments and possibly draw more money with proffesional events also. Would I like to be a shareholder? You bet I would! First cough up all that money the government will receive and make it payable quarterly in the form of a dividend and you won’t here me whining at all clown!

  15. Submitted by Hiram Foster on 11/07/2011 - 03:23 pm.

    the real point of a new stadium is to improve the current owners’ investment potential.

    Sure, the Wilfs would make more money from a new stadium. The problem is that while the Vikings are profitable now, they won’t continue to be unless a new stadium is built. Down the road, Vikings owners, no matter who they are will face a choice of either moving the team or watching their investment become worthless.

  16. Submitted by Dimitri Drekonja on 11/07/2011 - 05:01 pm.

    “Without a new stadium, those shares would be a lousy investment”

    These proposed shares would be a lousy investment, period, if one were to think of them as a typical investment- money in now, get more money out later.

    The point is, they’re not typical investments. They’re basically a way for fans that care (I’m not one) to gaurantee that the intangible quality-of-life brought by having a pro sports team in the area doesn’t leave. If this is important to your identity (and based on the car stickers/flags/strib comment section, for a lot of people it’s VERY important), then this buys you relief from the apocalyptic scenario that a team would play a game in a different state. The horror.

    Would people do this? According to wikipedia, 4,750,934 shares of the Packers exist, with 120,010 shares being sold at 200 dollars apiece in the latest offering. The shares bring nothing financially, so apparently people are indeed willing to shell out money as a “lousy investment”.

    Frankly, I think it’s worth looking into. The league may not have liked it in the past, but in the past, stadiums were not 1 billion dollar projects, and there wasn’t the recent great recession. They may find that more and more cities/states will be demanding a change from the current model of how most stadiums are publically financed.

  17. Submitted by Paul Brandon on 11/07/2011 - 05:44 pm.

    Mr. Lane (#14)–

    Please reread the column.
    Eric was quoting Phyllis Kahn when he used the term ‘whiners’.

    And studies have shown that when you factor in all costs (such as increased law enforcement costs, lost work time due to drinking, etc) professional sports teams are at best an economic wash.
    Entertainment money is fungible; if people don’t spend it on the Vikings they will spend it on something else.

    And if you look at how professional athletes’ contracts are structured, you’ll see that they’re heavy on tax avoidance strategies.

  18. Submitted by Dennis Wagner on 11/07/2011 - 09:49 pm.

    You got to love it when all those brainiacs out there “Argue against” one of the most, if not the most, successful franchises in the NFL! Who is wearing all those championship rings? Not the Vikes, get real bozos, If it is your team make it “Your Team” What is it you don’t get about this?
    Why do those Packer fans have Green and Gold Blood? “Its “THEIR TEAM”, not some rich boys toy! Get-it-yet?
    Raised in Lombardi land 1950-1983, “I get it” and still run the Green and Gold Blood!

  19. Submitted by Hiram Foster on 11/08/2011 - 06:09 am.

    To be more specific, Vikings shares would be a lousy investment because without a new stadium, eventually Vikings shares would be worthless because there would be no Vikings. Consider the Green Bay model. The shares are publicly owned, no one apart from management and the players are making any money yet still the Packers were forced to invest a ton of money upgrading their stadium.

  20. Submitted by Paul Brandon on 11/08/2011 - 09:07 am.

    When the Vikings hire only Minnesota natives or graduates (with degrees!) of Minnesota institutions of higher learning they will be ‘our’ team.
    As it is, they are a collection of hired guns who deserve no more loyalty than their entertainment value merits.

  21. Submitted by Dimitri Drekonja on 11/08/2011 - 09:17 am.

    Hiram- the point is that the green bay fans don’t see these shares as “worthless”, because even though no one makes money, they buy themselves security that their team will never leave. As to a team being “forced to invest a ton of money upgrading their stadium”- is that bad? Next year I’m going to be forced to invest a ton of money upgrading my roof and front walk. I’m planning on paying it, although I guess that makes me more of a sucker than Mr Wilf.

    After all, the neighborhood does see a benefit from my better looking house and the higher potential resale, and if I don’t get a new roof eventually my house will become worthless. Plus, I’ll become a job creator. Should I get everyone within a 3 block radius to chip in?

  22. Submitted by Connie Sullivan on 11/08/2011 - 11:42 am.

    What is refreshing about Rep. Kahn’s proposal is that it brings something honestly new to all the tiresome replays of how to get the public to pay for a new Vikings’stadium. It changes the dialog, which now includes a private option, beyond the Wilfs, to fund the stadium and its upkeep.

    There’s a difference between public funding and just folks out there, members of the great unwashed, buying shares in a corporation that happens to be a football team. The just folks could own (but not control the management of) the team and have its own stadium.

    Without taxing the greater public.

    Los Angeles does this, folks: private funding of football and other stadia. Why can’t we?

  23. Submitted by Paul Brandon on 11/08/2011 - 12:48 pm.

    Connie–
    The population of the greater TC area is about a tenth that of the greater LA area.
    That’s why.

  24. Submitted by Rachel Kahler on 11/08/2011 - 02:03 pm.

    Go for it! If you’re a Vikings fan and you know it, pony up! If the NFL doesn’t like it, at least they should publicly say why after one of those meeting with Dayton. I suspect the reason why is that it would dilute profit from a single owner. Tough. If you want an investment, you should have to share any profit. That’s the way other honest private companies work.

    As for the argument of “without a new stadium, those shares are worthless.” Uh…isn’t the point of selling shares to finance the building of a new stadium?

    It baffles me how anyone could argue that a private enterprise owned by a billionaire needs to be publicly funded when, if they bothered to read all of the news, they’d find that cities are close to being forced to shut down (or at least stop maintenance on) various publicly owned “quality of life” items, such as parks, art centers, and ice rinks. If there is no money (or at least none anyone is willing to spend) to support quality of life at a local level and at a modest price, there certainly should be no money (at least none anyone is willing to spend) to support “quality of life” for a billionaire who can afford his own stinking stadium.

  25. Submitted by Hiram Foster on 11/08/2011 - 04:50 pm.

    the point is that the green bay fans don’t see these shares as “worthless”, because even though no one makes money, they buy themselves security that their team will never leave.

    From what I understand, objectively the Green Bay shares are worthless. But shares or not, had Green Bay not upgraded their stadium, there would be no NFL franchise in Green Bay.

  26. Submitted by Dimitri Drekonja on 11/08/2011 - 07:42 pm.

    Hiram- I think you need to read up on how GB financed their renovation- that’s when they had their last sale. Offer a sale of newly created shares, proceeds to renovation. Basically the shares funded the renovation. So yes -has they not upgraded the stadium, perhaps they would have lost their team. But the public ownership was the mechanism that funded their upgrade. Fans happy. Team happy. Public who doesn’t want to subsidize stadium happy. This is how my GB loving colleague explains it to me, and a quick google search shows nothing contradictory.

  27. Submitted by Hiram Foster on 11/09/2011 - 07:30 am.

    So what you are asking is that people buy “shares” that have no market value, don’t represent an investment of a kind, amount to nothing more than a contribution to a Vikings Stadium.

    Well, if that could work, I say go for it.

  28. Submitted by Dimitri Drekonja on 11/09/2011 - 08:05 am.

    “Kahn would really be well advised staying out of matters about which she has made the decision to know nothing about.”

    “Well, if that could work, I say go for it.”

    Not sure if you’re being tongue-in-cheek on the last comment, but you’ve come full circle from comment 3 to 27. And this isn’t some hypothetical- not only “could” it work (if the league were convinced to allow it), but it already DOES work.

  29. Submitted by Paul Brandon on 11/09/2011 - 09:47 am.

    Note–
    Construction of County Stadium was approved in 1992 and completed in 1996. This was not in the middle of a major recession.

  30. Submitted by Victoria Wilson on 11/09/2011 - 11:51 am.

    What is interesting about this discussion is that it shows how subgroups (Vikings fans) of a larger group (Minnesotans) work to make their public good (the stadium) a public good for the larger group. Clearly the fans, that buy tickets and enjoy tail gaiting, share the stadium venue and the NFL experience. Even fans who support the team from their family room sofas view the team as “theirs” and hence are willing to pay to keep the team in Minnesota. The Governor claims that all Minnesotans benefit through a the quality of life argument.

    How do Minnesotans measure this quality of life dividend?

    So far, there isn’t a way to devise such a number. We can, however, ask the question in shades of grey. For instance, is the value of an NFL team, more than public art-say the spoon and the cherry statue-? Is it more or less than k-12 public education? Is it more or less than research on wolves in Northern MN (not sure if there is such a thing-I just needed an example of publically funded research)? If we lay all these public expenses out, where do the Vikings fall? How much does that equate to?

  31. Submitted by Paul Brandon on 11/09/2011 - 09:44 pm.

    Yes, there is state money spent on research on wolves in Northern MN. And it’s a lot less than state funding of the Vikings (including the value of various tax breaks).
    I’m not sure about the funding for the statue in front of the Walker.
    In any such case, one has to do a cost/benefit analysis. In the case of k-12 education the benefits for the state come out ahead; most studies show that professional sports teams end up costing more than they’re worth unless you try to quantify psychic value.

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