The National Football League playoffs begin this weekend, and everyone in America should watch—not simply because football is America’s most popular sport and a host of teams have solid chances to win Super Bowl 50. People should watch because most of them are paying for the league.
Some may ask, “How? Didn’t the NFL give up its tax-exempt status this year?”
While the league headquarters did choose not to file as tax exempt in April, this decision only saves taxpayers about $10 million annually (less than one tenth of 1 percent of the NFL’s revenue for the 2013-14 season). The NFL was right to call the controversy over the league’s tax-exempt status a “distraction.” It was a distraction from the real way the NFL fleeces taxpayers: costly stadium subsidies.
NFL owners are professionals at extracting taxpayer money from local fans to fund generous subsidies for their lavish stadiums. Here are examples from four teams that are playing this weekend: the Minnesota Vikings, Seattle Seahawks, Pittsburgh Steelers, and Cincinnati Bengals……….
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Some—mostly team owners—argue that these massive subsidies pay for themselves. Economists disagree. Studies have consistently shown that public financing for sports stadiums does not pay off. Proponents of these taxpayer subsidies fail to realize that people will spend their money on other things besides $86 tickets (average price in 2014) and $7.42 beers (also the average price).
The small bump in tourism and economic activity does not come close to covering the millions in associated costs the public pays. Promises of neighborhood revitalizations rarely pan out. Subsidizing a stadium either means that taxes have to increase or public services must be cut. There is no way to wave a magic wand and avoid this reality.
The average NFL franchise is worth $1.97 billion, higher than the average for any other professional sports league in the world. Taxpayers should not subsidize large, successful businesses such as the NFL. Cities and states need to resist the urge to shower NFL owners with public subsidies and, if necessary, call their beloved teams’ bluffs on moving to Los Angeles. Regardless of who wins this weekend, taxpayers are the losers.