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Stopping Stadium Subsidies

New group wants NFL, MLB to pay their own way

By Dave Malaska · June 1st, 2011 · News
Citing a long-festering frustration with the “the lack of any progress or any meaningful discussion” with the Reds and Bengals on their spiraling demands for Hamilton County stadium subsidies, County Commissioner Todd Portune gathered a unique group of allies for a May 20 press conference outside a Court Street barbershop downtown.

The group — including self-admitted lifelong Reds and Bengals fan Russ Hurley, Jeff Capell of the Coalition Opposed to Additional Spending and Taxes (COAST), former Xavier basketball standout Conny Warren and Kathy Binns, Portune’s chief of staff, among others — announced plans it hopes could restore the proper balance of power when it comes to professional sports and the cities they call home. The group, christened the Citizens’ League Against Subsidized Sports (CLASS), is calling for those pro franchises and their governing league bodies to stop draining taxpayer coffers.

“The final straw, actually, was reading about the NFL lockout and how the owners and players are fighting over how to divide the $9 billion in profit the league makes annually,” says Portune, a three-term county commissioner. “They’re making $9 billion in profit while expecting taxpayers and their communities, which are struggling, to pay for their day-to-day operations. It’s unconscionable.”

Although only a few weeks old, CLASS is thinking both “big picture,” pressing pro sports executives to rethink their teams’ dependence on public money, while also taking action locally. As the county has struggled to continue to meet demands from both the Reds and Bengals to cover their day-to-day operating costs — totaling nearly $9.5 million annually — CLASS is working toward getting a ticket-tax initiative on the November ballot to offset those costs.

While the county continues to collect a half-cent sales tax passed by voters in 1996 to build Paul Brown Stadium and Great American Ball Park to pay for their construction, it’s the incidentals of the separate deals with the clubs that the group is targeting. The Reds’ lease calls for the county to pay more than $900,000 in operating costs for the eight-year-old Great American Ball Park, while Hamilton County is on the hook for virtually all of the Bengals’ operating costs at Paul Brown Stadium. In fact, that bill totals almost $8.5 million a year.

(A 2009 analysis of NFL teams by Forbes magazine placed the Bengals’ value at $953 million. Of that amount, $110 million — or 12 percent — was directly attributable to its stadium, it reported.)

The continuing strain on county coffers had led to cutting more than $70 million in services to residents since 2007, CLASS says, and the loss of more than 1,500 jobs to try to offset the shortfall. With an expected $33 million deficit in the stadium fund within two years, Portune adds, the county has come to a watershed moment with its sports teams.

“We’re out of money, out of time and almost out of ideas,” he says.

“Something has to be done. It has to be done now. Voters agreed to pay for the construction of the stadiums in 1996. They didn’t agree to continue to pay the teams’ cost of doing business.”

Hurley, who owns the barbershop on Court Street where CLASS’s launch was held, says the group’s efforts are a matter of fairness.

“I don’t know of any other private business that expects the county to pay its bills, especially when it’s rolling in profits,” Hurley says. “I’d love the county to pay my rent and give me a monopoly, too. That would be great for me, but it doesn’t make sense for the county. It’s the same with the Reds and Bengals.”

The May 20 launch — a bit rushed once The Enquirer reported rumblings on May 18 that an effort was afoot — was earlier than CLASS had planned. While it is still fomenting its battle plan, the group will take its first steps this week toward one of its goals as language is finalized on a petition to bring a ticket tax to the November ballot.

Although there is already a 3-percent tax levied by the city on game tickets, CLASS is calling for a new tax to help cover the operational costs that the teams or the leagues refuse to cover themselves. The petition move is calculated to bypass provisions in the teams’ deals that bar county commissioners from enacting such a tax, according to Portune.

“We, as commissioners can’t approve the tax, but the voters can,” he adds. “This is a case where the solution isn’t going to come from government. It hasn’t yet. The solution has to come from the people.”

When the petition language is finalized, CLASS will have until mid-August to collect the more than 8,500 signatures of Cincinnati residents in order to have the issue on the November ballot.

Meanwhile, the group plans to press the major leagues’ executives for action forcing teams to pay their own bills.

CLASS sent a letter to the offices of the NBA, NFL, Major League Baseball and the National Hockey League on May 21 asking its commissioners to meet and discuss the problem. Only the NBA has responded to date, Portune says, and only to say it has received the letter. Neither the NFL nor MLB commissioners’ offices in New York responded to calls from CityBeat to verify they had received the letter or to offer comment.

Also, CLASS has begun reaching out to other “major league cities,” aiming for taxpayer solidarity in dealing with the powerful pro leagues. They likely won’t have trouble finding allies in the effort. Several cities that also host pro teams currently are dealing with similar issues as Cincinnati.

Just up Interstate-74 in Indianapolis, the NBA’s Pacers are asking city officials for $15 million annually over the final 10 years of their lease with Conseco Fieldhouse to cover their operating costs, while the Colts say they require more than $20 million to cover its football expenses in the three-year-old Lucas Oil Stadium. Having already seriously depleted public coffers for construction and other costs, debate rages on how — or if — the city can afford to pay the teams.

In Minneapolis, taxpayers are being asked to shoulder a lion’s share of the burden for a new $895 million stadium to replace the venerable Metrodome, home to the NFL’s Vikings. Different plans being discussed have taxpayers paying between 55-60 percent of the construction cost. Opponents of the plans are collecting signatures for a ballot initiative of their own on public financing of the stadium. Complicating matters is the fact that the state legislature is facing a shutdown, not having passed a budget for this year.

Chris David, an opponent of public stadium financing, runs a popular website in the Twin Cities, NoVikingsTax.com. He is among many people who say that, in a time of economic hardship, when public services are being cut to the bone, using public money for a private enterprise is foolish.

“What irritates me the most is that local governments are already missing out on massive revenue streams with these kind of deals,” David says, such as property taxes. In most cases, the teams are only tenants of the stadiums but have significant control over the facilities’ use.

“It’s the team’s stadium,” David says. “I mean, it’s where they do business. But they don’t pay a cent in property taxes. It’s ridiculous.”

Even though CLASS has barely gotten off the ground, still little more than a curiosity here in Cincinnati, response has started trickling in from around the country, Hurley says.

“I’ve never seen such overwhelming response from such diverse groups,” he says. “People from the left, from the right, from the Tea Party — everyone seems to agree with us that forcing teams to pay their own bills is fair. I’ve already heard from people in Philadelphia, from Washington and Florida. And we haven’t even started rolling yet.”



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