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Publicly funding stadiums for billionaires is a scam

A new Panthers stadium is the latest chapter in sports’ most successful scam.

NFL International Series-Carolina Panthers at Tampa Bay Buccaneers Kirby Lee-USA TODAY Sports

Carolina Panthers owner David Tepper re-asserted his position on Tuesday that he would not build the team a new stadium without government assistance. It’s the latest example of a multi-billion dollar NFL owner expecting local citizens to foot the bill of pet projects under the guise of fandom.

Tepper’s proposition isn’t unique. Rather, it’s become part of the fabric of the NFL’s new-normal which treats its cities as expendable — unless they’re willing to pay. The ever-present subtext in these discussions is that if local government won’t foot the bill, a team will find a city that will, even if nobody is saying it.

“I’m not building a stadium alone,” Tepper told reporters on Tuesday. “The community is going to have to want it.” The Panthers owner added that he wasn’t going to force a new stadium on anyone, but once again, the devil is in the details. It’s bizarre of Tepper to say he won’t “force” a stadium on the people after years of publicly stating he wants a new stadium with a retractable roof to house the Panthers, his recently-purchased MLS team, and host larger events, potentially even a Super Bowl.

Outside of giving a billionaire a shiny new play thing, there’s little-to-no reason for the Panthers to need a new stadium. While Bank of America Stadium remains one of the oldest in the NFL, initially being built in 1994, the difference between a mid-90s constructed stadium in 2021 is far less pronounced than teams who were playing in buildings built in the 1970s in the early 2000s. In addition, Bank of America Stadium recently underwent numerous taxpayer funded renovations from 2014-2017, moves that cost the city of Charlotte $87.5 million.

One of Tepper’s arguments for building a new stadium comes from a spurious justification that the building might collapse. “At some point that building will fall down,” Tepper said, not explaining why a 27-year-old concrete building would actually fall down. The owner said he wants a “partnership,” but it’s unclear what that might actually look like. Historically owners have often talked about partnering with cities to build new stadiums, but what the city itself gets on the back end is murky. Numbers like “economic impact” get thrown about, but very rarely, if ever, are there profit-sharing agreements that would put money back into the city following large scale investment into stadiums.

Tepper’s comments have been met with widespread disdain, both from locals who don’t see a problem with the current stadium, and those who point out the Panthers’ owner is the richest in the NFL, worth $14.5B according to Forbes. It makes the concept of Tepper’s three way partnership even more ridiculous, which called Tuesday for his own funding, taxpayer money, and an investment by personal seat license (PSL) holders to fund a new stadium.

In short this means: Money would need to be routed from other areas of the budget, and season ticket prices would go up. Historically there has been little desire from local government to fund these kind of pet projects. When the city of Charlotte last funded the $83.5M renovations to Bank of America Stadium the team was asking for a total of $250M, which was ultimately shot down.

It remains to be seen whether Charlotte is willing to foot the bill for a third of Tepper’s project, but this is unquestionably the latest example of a wider problem in professional sports.

Locally-funded stadiums are a scam

Tepper is not the first, nor will he be the last owner to ask for public funding for private construction. The Panthers owner is simply following a blueprint laid out by billionaires before him, but that does not make this right.

There’s almost no justification for larger, more elaborate and expensive new stadiums outside of being a pissing contest between cities. As far back at ‘90s, there were economic studies being done on publicly funded stadiums, and time and time again the numbers came up wanting.

A 1997 study titled Sports, Jobs & Taxes: Are New Stadiums Worth the Cost? used the then-example of the Baltimore Orioles. A team which had received $200M is taxpayer funding, estimated at costing citizens $14M per year. In the first five years of its existence the actual economic impact of the stadium was valued at $3M a year from the construction — resulting in a net loss for the city.

A 2017 poll of economists by IGM showed an overwhelming majority, 83 percent, believed funding stadiums with tax revenue cost taxpayers more than the construction would generate.

While teams generate glowing economic impact statements that allege new construction will generate hundreds of millions of dollars in growth, they consistently present their argument in isolation. It pre-supposes that if a city didn’t spend hundreds of millions of dollars on a stadium that those funds would sit and do nothing. However, most economists agree that if the same money earmarked for stadium construction was put into other growth areas, the result would be equal, if not greater in other sectors.

Michael Leeds, a sports economist at Temple University, used Chicago as case study of how little teams actually contribute to the local economy. In 2017 his figures showed that if sports team disappeared from Chicago overnight, meaning the Bears, Bulls, Blackhawks, White Sox and Cubs all ceased to operate, the net loss to the city would be 1 percent. In addition his study showed that the actual economic impact of a full MLB season on the local Chicago economy equated to the same as a mid-size department store.

Yet, despite the overwhelming evidence showing new stadiums do nothing, and teams give far less to the community than they claim in economic impact statements, taxpayers are continually bamboozled by elected officials into giving their money to billionaires to fund pet projects. And it’s because owners know the most powerful bargaining chip they have, more influential than any balance sheet, is fear.

This fear operates on two levels: Firstly the fan level, which makes a citizen afraid their beloved team would leave. The second comes from elected officials, who feel pressured into championing stadium projects, because if a team leaves on their watch it would be a huge campaign point for their opponents.

Owners have tapped into the zeitgeist of knowing how much hurt it causes a city when a team leaves, how deep those wounds cut, leveraging this to their advantage when talking about their “needs.” Ask someone in Seattle how they feel about losing the Sonics, and you’ll hear about the pain it caused seeing their team move to Oklahoma City following disagreement over arena funding.

Unfortunately we’ll continue to see relocation threats become a bargaining tactic as long as there are other cities willing to stick their taxpayers with the bill. This new normal isn’t new, nor should it be normal, and the result is the same time, and time, and time again: Billionaires get richer at the expense of taxpayers. It has to stop.