Nonprofit, independent journalism. Supported by readers.


By national standards, this stadium deal is better than most

Under the House version, taxpayers would do remarkably well. Even the original bill is an above-average deal.

Vikings stadium design

Not so fast.

Just as the big green and yellow bus was pulling up to the State Capital inviting Minnesota’s football fans to hop aboard and get fitted for their cheese-wedge hats; just as Vikings players were dreaming about palm trees, glamour and the rich endorsement deals awaiting them in sunny California; and just as Zygi Wilf was drooling over the mega-sized check he’d pocket for selling his team to the LA fat cats (the Dodgers just sold for $2.15 billion), the Minnesota House threw a wet blanket over the party by passing a stadium bill.

Now, after Monday night’s surprise, the state Senate is plotting its strategy. It’s hard not to conclude that a new stadium has surprising momentum after a near-death experience a few weeks back.

For added drama, the House bill trims $105 million off the state’s cost for a projected $975 million project and adds it to the Vikings’ tab.

Article continues after advertisement

That was a deft maneuver. It pushes the Wilfs’ share of stadium construction costs to above the 50 percent threshold, a magic number in the public’s mind; and it makes the Vikings a clear villain if they decide to reject the offer and depart.

Until Monday night, Zygi was holding all the cards. If a new stadium were to pass, he’d win. If a new stadium were to fail, he’d still win if he sold the team for big bucks – and a lot of people wouldn’t have blamed him for selling after so many years of stadium battles. But now it’s more complicated for him.

Public-private costs

The central issue in the stadium wars has always been public-private cost share. In a perfect world, the teams would pay all stadium costs. Unfortunately we don’t live in that world. The national market for NFL stadiums has determined that, on average, the public pays about 65 percent, although the share varies widely from city to city.

In general, team owners in larger, wealthier markets (New York, Boston, Miami, Washington, D.C., Dallas-Fort Worth) tend to pick up most – sometimes all – of a stadium’s construction cost. In smaller, poorer markets (New Orleans, St. Louis, Buffalo, Jacksonville), the public gets stuck with the larger share, probably because marginal markets need the NFL more.

What the public pays for NFL stadiums
Source: New York Times Survey, 2011What the public pays for NFL stadiums

Minneapolis-St. Paul is a mid-sized market. The House version shows that, by national standards, Minnesota taxpayers (paying 45 percent of the cost) would do remarkably well if the stadium passes. Even if the original bill is restored, with the Minnesota public paying 56 percent of the cost, it would still be an above-average deal.

Moreover, the Twin Cities could use the visibility that the NFL brings. Like it or not, having a team on the NFL map probably does more to put a city on the national consciousness than most other factors.

Public’s naming right

Corporations pay hundreds of millions of dollars for stadium naming rights because they believe in the value that the NFL can provide. The same holds true for cities, especially in an era in which they compete for attention, investment and talent. The public share of a stadium is, in a sense, a naming right.

Personally, I’m not a big football fan, but that’s irrelevant. I am a Twin Cities fan and a Minnesota fan. For us, having a place on the NFL map matters. It’s crazy because that’s not the way the world should be, but it is.

The NFL generates close to $15 billion per year in direct revenue, according to estimates. If you add the externalities: time spent watching games, beer and chips consumed, flat screen TVs purchased, etc., the impact goes much higher. Then, if you add the intangible benefits of identity, community, visibility, etc., you begin to grasp why this issue gets so much attention – and you begin to long for an end to the tiresome debate.