I don’t think you understood me - I would have no problem with building a stadium for a team that is a non-profit organization, with no owners to split up profits. And I would object to public funding for a opera house controlled by a profit making opera company whose owners divide up the profit.
I’m going to use an example - Citifield is owned by the NY Mets through a subsidiary. When there is a non-baseball event there , the owner of the Mets is ultimately getting paid. When a high school or college rents space at Lincoln Center for graduation, there are no “owners” of Lincoln Center to get the “profits”. That revenue will be spent on non-profit programming.
It just so happens that few or no professional sports teams are non-profit organizations - and few cultural institutions (libraries, museums, opera houses, orchestras) are set up to make a profit. But the difference in my view is profit-making vs. non-profit, not sports vs art.
Of course and that was obvious. I am certain that you wouldn’t have an objective to a park with baseball/softball diamonds for children and adults to have sports leagues.
That’s what I was trying to find out. I suspected that symphonies, opera companies, and the like were non-profit, but I didn’t know for sure.
That does make a difference. It would be interesting to see a breakdown of all the different sorts of cultural/recreational/business infrastructure; who pays for it, who operates it, does it break even, and who has input into creating it.
Another comparison would be convention centers. Boston built a huge one in the seaport district a while ago. I don’t know all the economics of it, but it seems to be pretty well used (probably not during COVID).
It’s absolutely not a matter of sports vs arts, you’ve definitely misunderstood my post at least if that’s what you’ve inferred.
I’d take a sports stadium over an opera hall for public funding, if the former has more free-entry activities, organizes adult and child education classes, general community events etc. And especially if the funding is not from general taxation but things like state lotteries, as in my description.
I’m trying to find out what the facts are so I know that I’m not the one being elitist.
A lot of these situations seem broadly similar to me. There’s some dedicated building or property that hosts certain kinds of events. I’m just trying to find out which are publicly vs. privately funded, which buildings cover their own costs and which ones don’t, etc. A convention center might host enough events that it covers its operating expenses. I don’t know if they’re privately funded, or if they pay off their consturction costs from revenue, what happens to the revenue from concessions, that sort of thing. Call me a policy wonk if you want. I’m trying to figure out the most repsonsible policies, and then see how closely sports stadiums follow them.
Sports stadiums host different sorts of events. Gillette Stadium is home to the Patriots, and Revolution (soccer team), it also hosted the Army/Navy game a few weeks ago. I think the state high school football championships were there. Taylor Swift played there last summer. There’s a big charity bike ride that uses the parking lot as one of the rest and water stops. There might be other events that I don’t know about. It’s not just for the benefit of a single team owner.
(I don’t know if Gillette Stadium was publicly funded or not. I just offer that as an example of the sorts of events that a big stadium can host.)
I don’t think it’s terribly relevant that a stadium is funded from a lottery rather than taxation. Someone upthread said that sports venues don’t really generate much economic activity; they just redirect it from other entertainment spending that would happen if the sports team wasn’t there. The funding seems similar to me. If there was no stadium, then the revenue from the lottery could go to schools and libraries, and then those things wouldn’t be consuming tax revenue.
As far as the money goes, it often is - when the team owns and/or operates the stadium , that’s who gets the venue’s revenue from the Taylor Swift concert. They might not charge the charity bike ride or for the Army Navy game but they are definitely getting rent for the Taylor concert. And that would ultimately go to whoever owns that team. That’s the real problem with publicly funded stadiums - it’s usually not the public entity that paid for the stadium getting the rental proceeds.
You can’t really , not without looking at each individual venue . Because while it’s possible to say that there are few if any non-profit professional sports teams and few if any profit-making opera companies , there are all different ways the venues can be owned. They can be owned by a profit-making entity ( like Citifield is owned by the Mets) , a non-profit organization, a government agency or a public benefit corporation. In theory , any type of venue can be owned by any sort of entity and any venue can be used for any suitable purpose - you couldn’t have a football game at a convention center but you could have a concert at either. There’s no reason the Metropolitan Opera or the NY Philharmonic couldn’t perform at Citifield except for the fact that the Mets subsidiary would most likely charge too much to rent the stadium. (sometimes smaller venues take a percentage of ticket sales, but they won’t do that if they’d be lucky to sell 15% of the tickets)
I guess that’s why I’m trying to cast such a wide net with my questions. It would be good to know which situations have worked out the best so we have a model for how to handle them.
I seem to remember reading years ago that most American football teams (or maybe it was all sports teams) didn’t operate at a profit, but the owners made small fortunes because they could sell the teams for so much more than they bought them for. I don’t know if it makes much business sense for a break-even business to go up in value so much.
Well in that case, I don’t find that a particularly interesting direction to take the thread.
My opinion is simply that governments should lean towards no financial assistance to individual private, for-profit ventures. But for some ventures, where there is some direct community benefit, that is free, or largely not covered by ticket costs, then fair enough: proportional assistance can be given.
I don’t care what kind of business we’re talking about, whether it’s a football stadium, opera hall or disco brothel.
I think there’s an argument to be made that sports are just as culturally relevant as the opera or other forms of art and I wouldn’t automatically oppose public funds spent on it. And we do spend money on places for people to play soccer, baseball, etc., etc. When cities propose the construction of facilities for the arts, I don’t believe there’s a whole lot of discussion about the economic benefit to the city as a whole. Or at least not to the degree that there is with professional sports facilities. The Myerson Symphony Center in Dallas has been there since 1989, and I don’t think the Dallas Symphony Orchestra is going to hold the city hostage unless they build a new one.
For me at least, the problem isn’t that we’re talking about sports. It’s that cities are blackmailed and bamboozled into supporting stadiums for the benefit of for profit businesses.
Would love to read the Bond Issue prospectus document for the disco brothel…
Right. It’s a straight out privatize profit/socialize costs move, and the NFL/MLB/NBA owners know that they can make the mayors and county councils dance to their tune.
It’s essentially not publicly-known information; all but one NFL team is privately owned, and under no obligation to provide that information to the public. The exception is the Green Bay Packers, which are a public corporation; they do release their financial information every year, and they do make a profit in most (if not all) years.
For any other team, whether they make a profit or not is purely speculative.
On the surface of it, this makes little sense. If you can’t make a profit with a sports team, why would anyone value them so highly? Many team owners seem to be successful businessmen, and it’s tough for me to think people like Mark Cuban would intentionally spend that much money knowing he can’t profit until he sells it.
You might have heard that the National Football League is a trade association and is therefore a not-for-profit corporation. Individual teams in the NFL are most definitely in business for profit. Some teams, such as the Dallas Cowboys, are immensly successful franchises. According to this article here’s the operating profits of each NFL team from 2022.
I have no idea about the profit and loss of the Mavericks but I do know that owning a major professional sports franchise is a vanity thing for billionaires and less about making a profit.
I’ll just point out that lots of investments, especially those by rich people, don’t pay out until they sell. People line up to buy into Private Equity plays, and other than those who manage or otherwise “work” the entity, the investors not only don’t get paid until they sell, most investors can’t even get out of the investment until the manager decides it’s time to sell.
But yeah, count me among those who say not one dime to enrich profitable businesses, be they factories or stadia. And if a subsidy really is needed, and if the community thinks that it’s worth it, the community should share in the revenues.
Looking back, my statement was kind of silly. What I meant was that I don’t see how they could sell the franchise for a profit if it’s just a money loser. i.e. If all sports franchises were money losers, nobody would be spending this kind of money on them.
No major league level sports franchises are money losers in the long run.
It’s possible than individual teams may lose money in individual years. Small-city baseball teams especially suffer, and their payrolls can be as low as 20% of what other teams manage.
Here’s the big but. But when owners sell their franchises the return is always two to ten times what they paid, even after inflation. That’s why today’s owners are not just billionaires but people for whom a few billion is an affordable investment number. Forbes has a listing of the value of each NFL team, from the $9 billion of the Dallas Cowboys to the $3.5 billion of the Cincinnati Bengals. The Las Vegas Raiders - having just abandoned Oakland because they couldn’t make enough money there - has a value of $6.2 billion despite an operating income of just $72 million.
Owners have a variety of very good reasons not to sell their teams, also some not very good reasons like ego. At the end of the day, though, they all know they can make a reasonably-sized fortune if they do sell.
And at the end of that same day, that is the reason why they should be required to finance their own stadiums and not take any money from the public.
That’s not true at all. Classic cars lose money for their owners; fuel, maintenance, insurance. And yet, you can often sell them for more than you bought them for.
It’s not solely a matter of numbers. If you have something, and someone wants it badly enough, they will pay you handsomely for it. Sports teams are one of those things.
Owning a major sports franchise is a business…but it’s also a status symbol. “I’m so wealthy and successful that I can buy an NFL team!”
One may recall that a certain New Yorker, who prides himself on how much money he’s made in real estate, wanted to buy an NFL team in the 1980s, but was rebuffed, and has apparently held a grudge ever since.
Playing devil’s advocate for a second, not everything the government spends money on should suffer a cost-benefit analysis. If it did, we would not have public education, roads, sanitation and snow removal, etc. What these cities need to do is ask themselves explicitly, “Are we willing to lose money because having Team X is a civic benefit.”
That being said, I don’t think owners are entitled to any sweetheart deals. The stadiums are paid for by the city for the benefit of the city.