“The NFL is the richest sports franchise, full of billionaire capitalists demanding socialist handouts so they can make even more profits.”
— Ralph Nader

By Ken Reed

The billionaire owners of the Buffalo Bills, Terry and Kim Pegula, have landed $850 million in taxpayer dollars for a new stadium. The deal was approved and touted by New York Governor Kathy Hochuli and other local and state politicians. It will be the largest taxpayer contribution ever for an NFL facility.

According to Forbes, the Pegulas have a net worth of $5.8 billion USD. Nevertheless, they have spent months begging local and state politicians for public money to build a new sports castle, in which they can become even wealthier.

The NFL is a government-sanctioned unregulated monopoly. As such, the NFL can limit competition, and league franchise owners can threaten to move to other cities if their current host cities don’t build them plush new stadiums.

Team owners and politicians typically tout regional economic benefits, i.e., a boost in the number of local jobs, in justifying public subsidies for pro sports stadiums and arenas.

Politicians are crafty in how they go about making handouts to wealthy franchise owners. It’s not just direct payments for building the stadium facility, cities are forgoing real estate taxes, spending money on land and infrastructure improvements, and absorbing interest costs on public bonds, among other methods.

Perhaps the most well-known sports economist is Stanford’s long-time economics professor, Roger Noll. Noll strongly believes the estimated jobs effect of a subsidized sports facility is actually negative because spending at the subsidized stadium substitutes for spending elsewhere for which a greater number of people are employed per dollar spent. Noll emphatically states that publicly-financed stadiums are not a net local economic benefit.

In an interview, I asked Noll how pro sports leagues continue to get away with these stadium heists.

“There’s a socio-cultural impact of sports that enables the industry to do things that other industries can’t do,” according to Noll.

“That’s the answer to the substance of your question. We don’t really regulate it and the reason that we don’t is that it’s hard for us as a society to think straight about the operation of the industry and to strip away the underbrush surrounding it and say, look, these are just extremely lucrative monopolies that have gone well beyond any reasonable coordination mechanism that would be necessary to have a league. And the costs are partly borne by consumers in terms of high prices and lack of availability of games on television, etc., and also via taxpayers paying subsidies.

“So, we’re left with an extremely profitable industry, measured by return on investment, which nonetheless gets subsidized. Instead of getting regulated, it gets subsidized! Which is purely a reflection of the fact that we don’t know how to think straight as a society about the economics and business side of sports.”

The NFL’s sports welfare scam continues, and moves from New York to Tennessee. Tennessee Gov. Bill Lee plans to propose $500 million in bonds in the state budget to help fund a new covered Tennessee Titans stadium in Nashville.

It’s all simply abhorrent.

Ken Reed, Sports Policy Director, League of Fans


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