NFL stadium subsidies are a giant turkey for taxpayers
On Thanksgiving Day, the National Football League (NFL) will continue its longstanding tradition of playing football on one of America’s oldest national holidays. While the practice of celebrating Thanksgiving Day with a battle on the gridiron extends back to 1920, the Detroit Lions have been featured in the annual game since 1934. In 1966, they were joined by the Dallas Cowboys. The third game this year will be hosted by the Minnesota Vikings. As families gather for turkey, stuffing, and pumpkin pies, they will have the opportunity to enjoy a slate of games that highlight a less noble tradition in American sports: taxpayer subsidization of professional sports stadiums.
The three hosts of the Thanksgiving games on Nov. 24, 2022, have all benefited from substantial taxpayer support to build their stadiums. Ford Field, home of the Lions and site of the first game, was constructed using $110 million in public funds. Dallas’ AT&T Stadium, the location of the second game, cost taxpayers $325 million when it opened in 2009. Minnesota’s U.S. Bank Stadium, the final Thanksgiving Day host stadium, was completed in 2016 using $498 million in public funds.
One of the three visiting teams, the Buffalo Bills, who play against the Lions, also received taxpayer support when they completed a deal in October 2022 with the state of New York and Erie County for $850 million from taxpayers to pay for stadium construction. The other two visiting teams, the New York Giants and New England Patriots, who will be playing the Cowboys and Vikings, respectively, completed their stadiums without any public assistance. The success of building the Giants’ MetLife Stadium and New England’s Gillette Stadium demonstrate that municipalities do not need to fork over hundreds of millions of dollars in taxpayer funds to retain a team within its boundaries. Team owners, worth billions of dollars, have the resources to finance their own upgrades to existing facilities or to build new stadiums.
Unfortunately, the Giants and Patriots are rare exceptions to the rule in stadium financing. Of the 30 stadiums housing the 32 NFL franchises, 27 were completed using taxpayer funds. Los Angeles’ SoFi Stadium, home of the Rams and Chargers, is the only other NFL stadium built exclusively using private money. As a result, future Thanksgiving games for years to come will be far more likely to be held in stadiums constructed at taxpayer expense.
An often-overlooked aspect of stadium financing is where the revenue goes. In many instances, the team owners, not the municipalities, own the stadiums and take home a large portion of the profits from tickets, concessions, and corporate sponsorships. Municipalities may get back some of the money spent on the stadium by taxing targeted industries or through rent paid by teams. However, despite claims to the contrary, stadiums rarely, if ever, generate enough new economic activity in a city or state to justify the public financing.
Even those who elect to enjoy a family dinner away from the excitement, disappointment, and arguments that accompany NFL games, particularly the bitter rivalry of the Giants and Cowboys, cannot escape the impact of the games on their finances. Thanks to the tax code, taxpayers who will never set foot in a stadium or watch a game will be subsidizing the contests. A provision in the Tax Reform Act of 1986 allows municipalities to receive a tax exemption for stadium subsidy bonds if 90 percent of those bonds are publicly funded. In practice, this means that stadium bonds are untaxed by the federal government, leaving all taxpayers, regardless of their interest in sports, on the hook for the bill.
Taxpayer subsidized stadiums have long been a scourge on taxpayers. Despite constant promises that a publicly funded stadium will generate jobs and economic growth, study afterstudy have proven otherwise. The limited economic gains and potential economic loss associated with publicly financed stadiums leave taxpayers a lot to be unthankful for this year.
Thanksgiving is supposed to be a day of reflection on the good things that have happened in the past year, and the billionaire owners of the Bills, Cowboys, Lions, and Vikings will all be grateful for the hundreds of millions of dollars they’ve received from taxpayers to fund the construction of their stadiums. Taxpayers, meanwhile, will surely not be grateful for the reminder of how much of their money has been spent on these projects when they sit down to watch the games.
Ryan Lanier is State Government Affairs Associate at Citizens Against Government Waste.