Did Mesa voters get the stop wasteful spending message on election day?
By Evan Weiner
November 3, 2010
http://www.examiner.com/business-of-sports-in-national/did-mesa-voters-get-the-shop-wasteful-spending-message-on-election-day
(New York, N. Y.) -- In the so-called Republican 2010 electoral wave that the cable TV news talking heads and the radio noisemakers spew out over sometimes static signals, the lathered up carnival barkers on both platforms are screaming that the voters have spoken and they want less government, particularly in places like Arizona where Republicans won. But something funny happened in Arizona, specifically Mesa that the carnival barkers are not talking about. Local voters decided they wanted bigger government and were pro-government spending as they approved a measure that allows the city to spend up to $99 million to help build a new spring training facility for Major League Baseball’s Chicago Cubs.
Try figuring out what voters really want is tough. They want lower taxes yet won’t give up services and programs and sports. Arizona voters, at least in Mesa, are hypocrites.
The Mesa government claims no taxpayers money will be used in building the stadium. Talk about voodoo economics, someone has to foot the bill for the stadium. Apparently Mesa plans to sell off some farmland that the city owns to Pinal County to provide land for the stadium to help pay for the stadium. Chicago ownership apparently will put up some money for the stadium thorough rent and pay for cost overruns if the price of the stadium exceeds $84 million. Mesa will put up $15 million for infrastructure. The team ownership plans to build a “stadium-village” complete with retail space surrounding the new stadium.
The “stadium-village” concept has not really worked in St. Louis even before the 2008 economic crash. Will it work in the Valley of the Sun? It hasn’t in nearby Glendale with a new football stadium and arena.
Arizona is selling off state buildings yet there seems to be money available for a stadium in Mesa and Glendale is putting up about $25 million to keep the National Hockey League’s Phoenix Coyotes solvent in 2010-11
When it comes to sports, Arizona features the dumbest politicians in the country when it comes to sports spending.
Mesa just keeps the tradition going. When in doubt, spend on sports.
Had the Phoenix city council been smart, which they were not, they would have approved a multi-purpose arena back in the late 1980s that would have accommodated the NBA's Phoenix Suns and an NHL team. Instead lawmakers approved a $90 million expenditure that was designed to appease Suns owner Jerry Colangelo. The arena was built in such a way that the building was only good for basketball and not hockey or Arena Football or indoor soccer and that severely limited the potential revenues that could be generated in the place. Making sure they further satisfied Colangelo, the terms of the lease between the city and the NBA team required that the franchise pay the bulk of lease payments in years 36-40 of the 40-year lease agreement. The real rent is supposed to kick in around 2028 but given the lifespan of facilities (the Miami Arena was viable for about 11 years, the Charlotte Coliseum for about 13), it is doubtful that the team will even be playing in the arena in 2028 or 2029.
The arena opened in 1992. In 2003, the city kicked in another $17 million to modernize the place when a second Valley of the Sun indoor athletic facility opened in Glendale, which is west of downtown Phoenix.
After taking care of Colangelo, Phoenix planners decided that a new downtown could be built with the arena and a baseball park as anchors so Phoenix politicians went about the task of getting a referendum in front of the public asking for support to build a ballpark for a Major League baseball team.
Over in Tempe, Phoenix/Arizona Cardinals owner Bill Bidwill, who came to the Valley of the Sun with his St. Louis Cardinals football team in 1988, wasn't too happy with his stadium in Tempe. Bidwill started to shop around looking for an Arizona community that wanted his team and was willing to build a stadium that the public would fund and put most of the stadium revenues in Bidwill's pocket. It took 12 years for Bidwill to find the right partner — Glendale — as votes in 2000 said yes to putting up $300 million of the estimated $465 million dollars needed to build a stadium. The money would come from a rise in the hotel/motel tax and car rentals (that is a mechanism designed to placate the locals, out of towners will pay, you won't, however most of the money on the car rental side comes from locals who rent cars more than visitors), Bidwill would recoup the $165 million through stadium naming rights and through a loophole in the 1986 Federal Tax Act which limits the money a municipality can take from stadium generator revenues to eight cents on a dollar.
Mesa said no to Bidwill in 1999.
Colangelo spearheaded the baseball stadium drive. He wanted a Major League Baseball team and went back to Phoenix-area politicians to make his pitch. They listened again.
In 1994, the Maricopa County Board of Supervisors (despite huge budget deficits and cutbacks in the funding of services) said yes to Colangelo and gave the go ahead for a quarter-cent increase in the county sales tax to pay for a part of the stadium's cost. There was a string attached, the approval had to come by March 31, 1995 which meant Major League Baseball had to either relocate a team to Phoenix (unlikely as there was nowhere to play in Phoenix) or expand. MLB awarded Phoenix and St. Petersburg teams beginning in 1998 when the Phoenix stadium would be completed.
The Maricopa sales tax hike was a problem. Maricopa County residents were not allowed to vote on the issue of funding a baseball stadium with general sales tax revenue. In August 1997, Maricopa County Supervisor Mary Rose Wilcox was shot by Larry Naman after leaving a county board meeting. The shooter testified in court that Wilcox's support for the tax justified the attack. In May 1998, Naman was found guilty of attempted first-degree murder.
Colangelo had his stadium whether Maricopa County residents liked it or not. Colangelo's stadium was supposed to have cost $279 million but the ballpark actually price tag was over $350 million and Colangelo's group had to make up the difference. Colangelo's group paid $130 million for the expansion team, there was the cost overruns and a high payroll and throw in the fact that Major League Baseball didn't give Arizona and Tampa Bay full revenue sharing between 1998 and 2002, and that nearly caused the team to declare bankruptcy by 2004.
While Colangelo was looking for a baseball team, he also wanted a National Hockey League team to take up dates in the city's new arena. In 1994, Colangelo told this reporter that Phoenix was a perfect spot for the NHL. The NHL needed to fill the Mountain Time zone for TV purposes and Phoenix and Denver were in the mix for NHL franchises.
Colangelo, who was not a hockey guy, was spot on. Denver investors bought the Quebec Nordiques in 1995 and moved the team to the Colorado city and Richard Burke put together a group that included Steven Gluckstern and bought the Winnipeg Jets. Burke and Gluckstern moved the team to Colangelo's building in 1996 and that is when trouble started.
The building approved by Phoenix politicians in 1988 had more than 3,000 view-obstructed seats or about 25 percent of the house. No NHL team can survive in a flawed arena even if the building was just four years old. Burke bought out Gluckstern in 1998 after Gluckstern teamed up with Howard Milstein to buy the New York islanders (in a real estate deal).
In 1999, Burke was hoping to move the team to Scottsdale. Bidwill had struck out in his bid to win voter approval for a $1.8 billion football stadium-village on May 18 of that year but Burke had won a preliminary vote on that date for a new arena with the help of Steve Ellman.
Burke got his arena project approved by Scottsdale voters in November 1999 but the arena was never built. Ellman bought the Coyotes in 2001 after the Scottsdale deal fell through. Ellman worked out an arena-land developing deal with Glendale officials in 2001 and moved his Coyotes to a new arena in 2003. Glendale paid $180 million for the building, Ellman did some developing but the real estate deal turned bad and the NHL now owns the team. Glendale could be kicking in as much as $25 million to keep the team going in 2010-11
Glendale is working with a group called Ice Edge Holdings to keep the team in the arena and create a tax district around the building to help stabilize the Coyotes bleak financial picture. The entertainment district might be opposed by Bidwill whose business is across the street from the rink. If the team is not sold by the end of the year to a local group who plans to stay in Glendale, the NHL will allow the franchise to relocate.
Meanwhile Glendale has another problem. The Arizona Stadium and Tourism Authority (AZSTA) is broke. That is the group that has raised funds for the Cardinals Glendale stadium and various Major League Spring Training ballparks that ring the Valley of the Sun. Hotel/motel and car rental taxes (which is 3.25 percent) from tourists that fund the authority are flat.
Arizona public officials decided in the 1990s to become a sports destination. Spring Training would be a big money maker for Arizona as baseball fans would flock to see their favorite teams in March of every year. The authority took in $34 million last year and has $37 million in expenses, $16 million of which goes to the Cardinals football stadium. Surprise (Kansas City and Texas), Scottsdale (San Francisco) and Tempe (Los Angeles Angels of Anaheim) will be getting less money to pay the bills at three spring training facilities. Youth sports will take a million dollar or so hit.
All of this is a product of Proposition 302 that was approved by Maricopa County residents 10 years ago.
The Maricopa County Stadium District and the Arizona Stadium and Tourism Authority are responsible for stadiums around Phoenix. The stadium district was formed in 1991 to make sure Phoenix area-based spring training teams were not lured by Las Vegas.
How expensive is spring training?
The Los Angeles Dodgers now share a new $110 million stadium in Glendale with the Chicago White Sox, who moved from Tucson. Glendale is providing $54 million in financing for the stadium.
Scottsdale and the stadium authorities put together a $23 million package to refurbish Scottsdale Stadium to make the San Francisco Giants ownership happy. About $13.3 million is from the AZSTA funds, $6.67 million from the Maricopa Stadium District, and $3.1 million from the city.
Arizona officials contend that the 2010 spring training slate had an economic impact of $348 million yet there is a deficit.
All of the maneuvering has left an impression. The baseball landscape has changed with all 15 Major League Baseball teams that train in Arizona are located around Phoenix. Tucson has lost three teams (the White Sox, Colorado Rockies and the Diamondbacks). The arena in Phoenix has to fight Glendale for non basketball events. Glendale, not Phoenix or Tempe has the Super Bowl and while Phoenix gets a piece of the event buck, it is Glendale that gets sports spending money from those crown jewel events. The downtown envisioned with the arena and stadium as the pillars of a new downtown Phoenix has not materialized.
The question of whether it was worth spending billions in a state that is broke is never addressed by politicians. Arizona is selling off state buildings to plug a financial gap which in part was caused by poor sports decisions on every level.
They could have said no to Colangelo. They could have said no to Bidwill. They could have said no to the NHL. They could have said no to Major League Baseball. Don't blame the owners for asking for money, they could have asked for whatever they wanted.
There was an awful lot of economic miscalculation when it came to sports planning in Arizona and the battle is far from over. Mesa will more than likely hold onto the Chicago Cubs, the franchise that allegedly is the economic engine of the Cactus League. The next team that needs a spring training stadium upgrade is Milwaukee. The Milwaukee Brewers ownership could be looking to exit Maryvale.
Americans want politicians to cut government spending but not sports spending. It is clear that government has overspent on building sports facilities which has raised taxes in subtle ways – a rise in hotel, motel, car rental, sewer and water taxes along with programs such as payment in lieu of taxes and tax increment funding and just straight cash payments (such as in Louisiana) to a team owner (Tom Benson of the New Orleans Saints). All Americans are paying substantially for sports but there is no move to cut sports programs. Just look at Mesa. All Americans are paying substantially for sports but they is no move to cut sports programs. Just look at Mesa.
Evan Weiner is the winner of the United States Sports Academy’s 2010 Ronald Reagan Media Award, an author, radio-TV commentator and speaker on "The Politics of Sports Business." He can be reached at evanjweiner@yahoo.com.
Showing posts with label Mesa. Show all posts
Showing posts with label Mesa. Show all posts
Wednesday, November 3, 2010
Thursday, April 15, 2010
Sports and taxes, a perfect marriage
Sports and taxes, a perfect marriage
By Evan Weiner - The Daily Caller 04/15/10 at 1:21 PM
http://dailycaller.com/2010/04/15/sports-and-taxes-a-perfect-marriage/
Today is T-Day — as in Federal Income Tax Day. The 1040s and their tax relatives have to be finished and sent to the Internal Revenue Service. But those aren’t exactly the only taxes that individuals will have to pay.
In the United States, there are all sorts of taxes that people pay that end up going to sports, and all of these “hidden” sports taxes are rarely noticed. The United States government has created tax breaks for corporations that buy big-ticket sports items, like club seats and luxury boxes, that allow a fifty percent write-off of the cost of the ticket.
The higher the cost of the ticket, the more corporate can write off, and that has a trickle-down effect on people who cannot write tickets off as a business expense. (Minnesota Twins fans have found out just what a new stadium means, as ticket prices are more than thirty percent more on average.)
The government has given big-time colleges and university sports programs a tax-exempt status, which means that college football factory schools that play, say, in the Rose Bowl do not have to pay taxes on their share of the revenue generated. Owners can depreciate players’ contracts like an individual taxpayer can depreciate a car.
Every day, it’s tax day for sports.
Some athletes even have to pay “the Michael Jordan tax.” In the 1990s, California lawmakers passed a bill that taxed athlete’s earnings for the days they spent playing in the state. There are similar taxes in New York and Philadelphia. Conversely, a good many athletes have moved to Florida or Nevada because they don’t have to pay state income tax there.
A myriad of taxes go to pay municipally built sports facilities. Every day, it is tax day as people pay restaurant, motel, hotel, car rental, sewer and water and other taxes to assist sports owners, whether it is in Florida, Arizona, Texas, Washington or Ohio.
In Pittsburgh, proceeds from slot machines help to pay for the new Penguins arena. In Minnesota, “racinos” slot machines at race tracks could end up financing a new Vikings football stadium. “Racinos” have saved the standard bred racing industry in Delaware, West Virginia and New York. The racetracks would be malls today without the casinos, but the casinos would not exist without the standard bred racing.
Americans love sports, even if they cannot any longer afford to pay high prices for games. But why aren’t sports teams held accountable for raising taxes to pay off the debt at municipally owned venues which, in many cases, has forced municipalities to cut services for the elderly, for education, and even for snow removal?
As Jim Bouton, the former Major League Baseball pitcher and author of the greatest book ever written about sports, Ball Four, once said, “Hey it’s our guys.” Americans love sports and their teams, and sports can do no wrong — even if the evidence suggests otherwise.
Politicians go after sports teams because they figure if their city is big league, then businesses that create good jobs will locate in their burg. The stadium and arena will be economic engines (that’s actually not quite true, since most stadium/arena jobs are not exactly permanent). Of course, there is no evidence that any of their assumptions true, but why let facts get in the way of a good yarn?
In 2003, financially strapped Pittsburgh elected officials, who had just opened a new baseball park and imploded the old Three Rivers Stadium even though there was still debt on the extinct building, were breathing a sigh of relief that an expected heavy snowfall fizzled out, and with good reason. They saved a million dollars for every inch of snow that did not fall. That was the cost of cleanup in 2003. They could not afford big snows because of cost.
In New York City, Mayor Michael Bloomberg plans to cut a large number of city workers because of a gaping budget deficit, yet Knicks fans, some of whom are facing the Bloomberg chopping block, are hoping that the Jim Dolan family-owned Madison Square Garden business can lure Lebron James with a contact offer of, say, $14 million a year. That would roughly be equal to the Garden’s property tax value, if the Dolan’s were paying property tax on the building.
Because one of the Garden’s previous owners, Sumner Redstone and Gulf and Western, somehow convinced New York politicians that the Knicks and the National Hockey League Rangers were no longer financially viable in Manhattan and had to move, New York City and New York State waived collecting property taxes on a piece of valuable Manhattan real estate between Seventh and Eighth Avenue and 31st and 33rd Streets.
Most major markets, mid-size markets and a good number of smaller markets around the country are subsidizing sports enterprises. Louisiana politicians in 2002 decided to hand New Orleans Saints owner Tom Benson some $186 million over a nine year period as thanks for not moving his football from the Crescent City. Benson will get two more stipends, each for about $23 million, in July 2010 and in July 2011. Louisiana Governor Bobby Jindal and Benson recently renegotiated a new deal that cuts the amount of the stipend and caps the handout at $6 million a year under a new lease arrangement, but Benson gets a building near the stadium which he will renovate and then rent out to the state, which will move offices into that building. Benson will also build an entertainment center around the Superdome, which officials think will be an economic engine.
The state will continue paying Benson, but the rules have changed a bit. Benson will become a major real estate developer, thanks to the new deal, and he stands to make a great deal of money. If the money does not materialize, he will get a state handout.
In Glendale, local officials are trying to keep the Phoenix (soon to be called the Glendale or Arizona) Coyotes in the city-built arena. Glendale has approved a lease agreement with a potential Coyotes owner, Chicago White Sox and Bulls front man Jerry Reinsdorf. Reinsdorf’s group is expecting vast subsidies from a financially challenged Glendale, and Glendale seems to be willing to work out deals that would make sure that the National Hockey League team would get generous revenue streams to keep the team in the arena. The Goldwater Institute is looking into blocking the Glendale-Reinsdorf deal.
In nearby Mesa, officials are trying to reach a deal that would keep the Chicago Cubs in the city for spring training after the team’s lease expires in a couple of years. A proposal to charge an additional tax on the sale of tickets at “Cactus League” or spring training games in Arizona was met with stiff resistance from the other teams that train in the Phoenix area. But Arizona politicians are looking for other tax schemes to keep the Cubs in Mesa, including tax increment financing.
In Maryvale, Arizona, local elected officials know the Milwaukee Brewers deal with the city to use the city’s facility for spring training is done in two years, and city officials know that they will have to come up with a financial plan to keep the team in Maryvale or the franchise will be gone, possibly to Phoenix, where the Oakland A’s facility needs an upgrade. Phoenix is broke, though, and the Arizona Sports and Tourism Authority is facing an economic shortfall of $10 million.
The federal government is the backbone of sports in the United States. Because of a loophole in the Tax Act of 1986, municipalities can only use eight percent of the revenues generated inside of a publicly funded facility to pay down the hundreds of millions of dollars worth of debt. Other deals that have been cut with sports owners include hikes in water taxes, sewer taxes, car rental taxes, hotel and motel taxes and restaurant taxes to build new or renovate old facilities. There was even a “sin tax” in Cleveland to build a new baseball park, with some of the funding coming from a sales tax hike on cigarettes and alcohol.
You name it; politicians will tax it for sports facilities.
Cable television provides yet another revenue stream. Because of the Cable Television Act of 1984, many people are totally unaware that they are supporting sports through cable fees. The legislation signed by President Ronald Reagan created something of a socialist cable television apparatus, in which everyone who buys into the basic expanded tier of television also pays for all the channels on the tier and supplements sports networks like ESPN – whether they watch the channel or not.
That legislation has enabled ESPN (and others) to become financially successful without worrying about advertising support. In turn, ESPN, TNT, Versus and regional sports cable networks are paying billions of dollars in sports fees to various leagues and teams, with just a fraction of their 95 million subscribers actually watching the product.
It’s one of many ways that the government is aiding sports. It is not quite taxation without representation — in fact, it’s not even quite taxation — but the mechanisms allow sports owners to generate revenues that go to pay athletes, managers, and coaches and allow college programs to pay millions of dollars for football and basketball coaches.
This week is tax week, but it is always tax day in the United States for sports. Without taxes, big time sports in the America would have been downsized a long, long time ago.
Evan Weiner is an author, columnist, lecturer and radio/TV commentator on the “Politics of Sports Business.”
Read more: http://dailycaller.com/2010/04/15/sports-and-taxes-a-perfect-marriage/print/#ixzz0lC5JHOMO
By Evan Weiner - The Daily Caller 04/15/10 at 1:21 PM
http://dailycaller.com/2010/04/15/sports-and-taxes-a-perfect-marriage/
Today is T-Day — as in Federal Income Tax Day. The 1040s and their tax relatives have to be finished and sent to the Internal Revenue Service. But those aren’t exactly the only taxes that individuals will have to pay.
In the United States, there are all sorts of taxes that people pay that end up going to sports, and all of these “hidden” sports taxes are rarely noticed. The United States government has created tax breaks for corporations that buy big-ticket sports items, like club seats and luxury boxes, that allow a fifty percent write-off of the cost of the ticket.
The higher the cost of the ticket, the more corporate can write off, and that has a trickle-down effect on people who cannot write tickets off as a business expense. (Minnesota Twins fans have found out just what a new stadium means, as ticket prices are more than thirty percent more on average.)
The government has given big-time colleges and university sports programs a tax-exempt status, which means that college football factory schools that play, say, in the Rose Bowl do not have to pay taxes on their share of the revenue generated. Owners can depreciate players’ contracts like an individual taxpayer can depreciate a car.
Every day, it’s tax day for sports.
Some athletes even have to pay “the Michael Jordan tax.” In the 1990s, California lawmakers passed a bill that taxed athlete’s earnings for the days they spent playing in the state. There are similar taxes in New York and Philadelphia. Conversely, a good many athletes have moved to Florida or Nevada because they don’t have to pay state income tax there.
A myriad of taxes go to pay municipally built sports facilities. Every day, it is tax day as people pay restaurant, motel, hotel, car rental, sewer and water and other taxes to assist sports owners, whether it is in Florida, Arizona, Texas, Washington or Ohio.
In Pittsburgh, proceeds from slot machines help to pay for the new Penguins arena. In Minnesota, “racinos” slot machines at race tracks could end up financing a new Vikings football stadium. “Racinos” have saved the standard bred racing industry in Delaware, West Virginia and New York. The racetracks would be malls today without the casinos, but the casinos would not exist without the standard bred racing.
Americans love sports, even if they cannot any longer afford to pay high prices for games. But why aren’t sports teams held accountable for raising taxes to pay off the debt at municipally owned venues which, in many cases, has forced municipalities to cut services for the elderly, for education, and even for snow removal?
As Jim Bouton, the former Major League Baseball pitcher and author of the greatest book ever written about sports, Ball Four, once said, “Hey it’s our guys.” Americans love sports and their teams, and sports can do no wrong — even if the evidence suggests otherwise.
Politicians go after sports teams because they figure if their city is big league, then businesses that create good jobs will locate in their burg. The stadium and arena will be economic engines (that’s actually not quite true, since most stadium/arena jobs are not exactly permanent). Of course, there is no evidence that any of their assumptions true, but why let facts get in the way of a good yarn?
In 2003, financially strapped Pittsburgh elected officials, who had just opened a new baseball park and imploded the old Three Rivers Stadium even though there was still debt on the extinct building, were breathing a sigh of relief that an expected heavy snowfall fizzled out, and with good reason. They saved a million dollars for every inch of snow that did not fall. That was the cost of cleanup in 2003. They could not afford big snows because of cost.
In New York City, Mayor Michael Bloomberg plans to cut a large number of city workers because of a gaping budget deficit, yet Knicks fans, some of whom are facing the Bloomberg chopping block, are hoping that the Jim Dolan family-owned Madison Square Garden business can lure Lebron James with a contact offer of, say, $14 million a year. That would roughly be equal to the Garden’s property tax value, if the Dolan’s were paying property tax on the building.
Because one of the Garden’s previous owners, Sumner Redstone and Gulf and Western, somehow convinced New York politicians that the Knicks and the National Hockey League Rangers were no longer financially viable in Manhattan and had to move, New York City and New York State waived collecting property taxes on a piece of valuable Manhattan real estate between Seventh and Eighth Avenue and 31st and 33rd Streets.
Most major markets, mid-size markets and a good number of smaller markets around the country are subsidizing sports enterprises. Louisiana politicians in 2002 decided to hand New Orleans Saints owner Tom Benson some $186 million over a nine year period as thanks for not moving his football from the Crescent City. Benson will get two more stipends, each for about $23 million, in July 2010 and in July 2011. Louisiana Governor Bobby Jindal and Benson recently renegotiated a new deal that cuts the amount of the stipend and caps the handout at $6 million a year under a new lease arrangement, but Benson gets a building near the stadium which he will renovate and then rent out to the state, which will move offices into that building. Benson will also build an entertainment center around the Superdome, which officials think will be an economic engine.
The state will continue paying Benson, but the rules have changed a bit. Benson will become a major real estate developer, thanks to the new deal, and he stands to make a great deal of money. If the money does not materialize, he will get a state handout.
In Glendale, local officials are trying to keep the Phoenix (soon to be called the Glendale or Arizona) Coyotes in the city-built arena. Glendale has approved a lease agreement with a potential Coyotes owner, Chicago White Sox and Bulls front man Jerry Reinsdorf. Reinsdorf’s group is expecting vast subsidies from a financially challenged Glendale, and Glendale seems to be willing to work out deals that would make sure that the National Hockey League team would get generous revenue streams to keep the team in the arena. The Goldwater Institute is looking into blocking the Glendale-Reinsdorf deal.
In nearby Mesa, officials are trying to reach a deal that would keep the Chicago Cubs in the city for spring training after the team’s lease expires in a couple of years. A proposal to charge an additional tax on the sale of tickets at “Cactus League” or spring training games in Arizona was met with stiff resistance from the other teams that train in the Phoenix area. But Arizona politicians are looking for other tax schemes to keep the Cubs in Mesa, including tax increment financing.
In Maryvale, Arizona, local elected officials know the Milwaukee Brewers deal with the city to use the city’s facility for spring training is done in two years, and city officials know that they will have to come up with a financial plan to keep the team in Maryvale or the franchise will be gone, possibly to Phoenix, where the Oakland A’s facility needs an upgrade. Phoenix is broke, though, and the Arizona Sports and Tourism Authority is facing an economic shortfall of $10 million.
The federal government is the backbone of sports in the United States. Because of a loophole in the Tax Act of 1986, municipalities can only use eight percent of the revenues generated inside of a publicly funded facility to pay down the hundreds of millions of dollars worth of debt. Other deals that have been cut with sports owners include hikes in water taxes, sewer taxes, car rental taxes, hotel and motel taxes and restaurant taxes to build new or renovate old facilities. There was even a “sin tax” in Cleveland to build a new baseball park, with some of the funding coming from a sales tax hike on cigarettes and alcohol.
You name it; politicians will tax it for sports facilities.
Cable television provides yet another revenue stream. Because of the Cable Television Act of 1984, many people are totally unaware that they are supporting sports through cable fees. The legislation signed by President Ronald Reagan created something of a socialist cable television apparatus, in which everyone who buys into the basic expanded tier of television also pays for all the channels on the tier and supplements sports networks like ESPN – whether they watch the channel or not.
That legislation has enabled ESPN (and others) to become financially successful without worrying about advertising support. In turn, ESPN, TNT, Versus and regional sports cable networks are paying billions of dollars in sports fees to various leagues and teams, with just a fraction of their 95 million subscribers actually watching the product.
It’s one of many ways that the government is aiding sports. It is not quite taxation without representation — in fact, it’s not even quite taxation — but the mechanisms allow sports owners to generate revenues that go to pay athletes, managers, and coaches and allow college programs to pay millions of dollars for football and basketball coaches.
This week is tax week, but it is always tax day in the United States for sports. Without taxes, big time sports in the America would have been downsized a long, long time ago.
Evan Weiner is an author, columnist, lecturer and radio/TV commentator on the “Politics of Sports Business.”
Read more: http://dailycaller.com/2010/04/15/sports-and-taxes-a-perfect-marriage/print/#ixzz0lC5JHOMO
Sunday, February 21, 2010
The Chicago Cubs, Tiger Woods and a Senator Wannabee
The Chicago Cubs, Tiger Woods and a Senator Wannabee
By Evan Weiner
February 21, 2010
http://www.examiner.com/examiner/x-3926-Business-of-Sports-Examiner~y2010m2d21-The-Chicago-Cubs-Tiger-Woods-and-a-Senator-wannabe#
The American media never ceases to disappoint. Tiger Woods is forced by someone to make a statement about his private life and people like Mort Zuckerman are there ready to provide all the details and analysis of a manufactured for media consumption mea culpa. Zuckerman owns the New York Daily News and is rumored to be a candidate for the New York senate seat held by Kristen Gillibrand.
How can you actually take Zuckerman seriously when his newspaper puts out on the front page a headline concerning Tiger Woods and bimbos? In fact the exact New York Daily News headline on February 18 was Lock Up Your Bimbos. Now Zuckerman does not write headlines for the newspaper but if Zuckerman wants to really run, he needs to explain how the lack of serious news judgment, in that edition, on page 2 there was a poll about how Americans are fed up with elected officials, on page 3 there was something about a fortune teller or psychic and then the gold, pages 4 and 5 on Tiger Woods with Zuckerman’s lead columnist Mike Lupica, who also doubles as one of Zuckerman’s political commentators. That makes sense since Lupica can now apply his limited knowledge of facts in not only the sports section but on the political scene.
Zuckerman also needs to explain why he has taken away his contribution to the 401k plan at the Daily News. But that would require a dedicated section on the economic woes of the country. Zuckerman would also have to explain why he is spending millions of dollars in beefing up the look of the Daily News including more color in an age when newspaper readership is declining or simply dying off as young people do not flock to buy newspapers. He might also by asked why his newspaper is disrespectful which newspapers generally are with sarcastic headlines, half truths and malicious gossip.
Zuckerman’s people also might want to actually report on something that concerns people. Here’s a story that Mort has overlooked in his paper and if you are running for Senate Mort, this might be a good one for you.
The city of Mesa, Arizona has decided that it needs the Chicago Cubs baseball team needs to remain in the town to conduct spring training after the Cubs ownership lease with Mesa officials runs out at Hohokum Park after the 2012 spring training portion of the baseball calendar. Mesa officials reached a deal with the Cubs new ownership to build an $84 million stadium, which would be used by the baseball team for at the most 15 or 16 times a year, and the stadium would be funded by adding a seat tax on all spring training games played in the Mesa vicinity, places like Phoenix, Scottsdale, Goodyear, Glendale, Surprise, Maryvale, Peoria and Tempe. There would also be a rise in the Maricopa County car rental tax, which is sold to local residents as a tax on tourists, not them although a significant amount of car rentals are local.
The Cubs ownership would buy the land needed for the stadium and then swap the land back to Mesa in exchange for a stadium and the baseball team would also get the stadium naming rights and keep all of the signage revenues. Mesa voters would have to approve spending for bonds to fund the stadium in a referendum.
Needless to say, Major League Baseball Commissioner Bud Selig and the owners of the Dodgers and White Sox (Glendale), the Indians and Reds (Goodyear), the Giants (Scottsdale), the Angels (Tempe), the A’s (Phoenix), the Brewers (Maryvale), the Mariners and Padres (Peoria) and the Royals and Rangers (Surprise) who are presently in the Mesa area and the Tucson-based Diamondbacks and Rockies who will conduct spring training on an Indian reservation starting in 2011 are not to thrilled about the proposal.
The ticket tax means those teams’ owners will get less disposable income directed at them.
The Goldwater Institute, a conservative think tank type entity, is not on board either. They think that the deal is illegal because of Arizona’s ban on giving gifts to private concerns.
Arizona is also broke.
Zuckerman should understand that as he has a piece of the National Football League’s Washington Redskins and he put up money or the Daily News did to help New York land the 2012 Summer Olympics. This should be an easy article for the Daily News to get. Sports, politics, economics, a Senator wannabe should be rather familiar with the issues.
Mesa elected officials came up with all sorts of goodies to support the argument that baseball fanatics who travel to Mesa and the Valley of the Sun should help pay for the new Cubs park. The Cubs baseball team has an annual impact of $138 million on the Arizona economy (which if believable would be a huge haul for a state that is selling government buildings and closing state parks because the state is broke --- another Zuckerman political issue to report on perhaps he can get Lupica on that). Cactus League attendance would drop 22 percent without Chicago Cubs baseball (Cactus League attendance should increase in 2010 with the addition of Cincinnati in the Phoenix area as Reds ownership has moved the spring training headquarters from Sarasota, Florida to Goodyear) and the Cubs baseball is spring training’s biggest draw as more than 203,000 people paid to see the team last year in Mesa and other Phoenix/Tucson area stadiums.
Arizona, through the Arizona Sports and Tourism Authority (AZSTA), has been very aggressive in going after baseball teams and luring them from Florida. In recent years, the state has landed Cleveland and Cincinnati for Goodyear, the Chicago White Sox and the Los Angeles Dodgers in Glendale, Texas and Kansas City in Surprise and has fought off an attempt by Las Vegas Mayor Oscar Goodman to get team owners to move to the Nevada area. The AZSTA has a budget shortfall of $10 million and cannot help in the Cubs-Mesa stadium plan.
One of the teams opposing the seat tax is the Milwaukee Brewers. Milwaukee’s deal with Maryvale ends in 2012 and that could set up a battle between Arizona and Florida over building a spring training facility for the team.
Arizona and Florida are two of the hardest hit states in the economic downturn but somehow are trying to find millions of dollars to support stadium building despite being broke.
Naples and Collier County, Florida officials were ready to get on their collect hands and knees to build Wrigley Field South for Cubs owner Tom Ricketts with the hope of using a tourist tax, a hotel/motel tax to help fund the project. Perhaps they will turn to Brewers owner Mark Attanasio and give him the same offer if Mesa prevails and keeps the Cubs.
Perhaps Zuckerman, the New York Senatorial candidate, and his ace columnist Lupica, will follow the Cubs-Mesa story and all of the political elements that are involved. But then again, maybe not. There are still bimbos on the loose and fortune tellers’ stories to be told and they can play amateur psychiatrist and continue analyzing whether Tiger Woods apology was heart-felt enough for them.
evanjweiner@yahoo.com
By Evan Weiner
February 21, 2010
http://www.examiner.com/examiner/x-3926-Business-of-Sports-Examiner~y2010m2d21-The-Chicago-Cubs-Tiger-Woods-and-a-Senator-wannabe#
The American media never ceases to disappoint. Tiger Woods is forced by someone to make a statement about his private life and people like Mort Zuckerman are there ready to provide all the details and analysis of a manufactured for media consumption mea culpa. Zuckerman owns the New York Daily News and is rumored to be a candidate for the New York senate seat held by Kristen Gillibrand.
How can you actually take Zuckerman seriously when his newspaper puts out on the front page a headline concerning Tiger Woods and bimbos? In fact the exact New York Daily News headline on February 18 was Lock Up Your Bimbos. Now Zuckerman does not write headlines for the newspaper but if Zuckerman wants to really run, he needs to explain how the lack of serious news judgment, in that edition, on page 2 there was a poll about how Americans are fed up with elected officials, on page 3 there was something about a fortune teller or psychic and then the gold, pages 4 and 5 on Tiger Woods with Zuckerman’s lead columnist Mike Lupica, who also doubles as one of Zuckerman’s political commentators. That makes sense since Lupica can now apply his limited knowledge of facts in not only the sports section but on the political scene.
Zuckerman also needs to explain why he has taken away his contribution to the 401k plan at the Daily News. But that would require a dedicated section on the economic woes of the country. Zuckerman would also have to explain why he is spending millions of dollars in beefing up the look of the Daily News including more color in an age when newspaper readership is declining or simply dying off as young people do not flock to buy newspapers. He might also by asked why his newspaper is disrespectful which newspapers generally are with sarcastic headlines, half truths and malicious gossip.
Zuckerman’s people also might want to actually report on something that concerns people. Here’s a story that Mort has overlooked in his paper and if you are running for Senate Mort, this might be a good one for you.
The city of Mesa, Arizona has decided that it needs the Chicago Cubs baseball team needs to remain in the town to conduct spring training after the Cubs ownership lease with Mesa officials runs out at Hohokum Park after the 2012 spring training portion of the baseball calendar. Mesa officials reached a deal with the Cubs new ownership to build an $84 million stadium, which would be used by the baseball team for at the most 15 or 16 times a year, and the stadium would be funded by adding a seat tax on all spring training games played in the Mesa vicinity, places like Phoenix, Scottsdale, Goodyear, Glendale, Surprise, Maryvale, Peoria and Tempe. There would also be a rise in the Maricopa County car rental tax, which is sold to local residents as a tax on tourists, not them although a significant amount of car rentals are local.
The Cubs ownership would buy the land needed for the stadium and then swap the land back to Mesa in exchange for a stadium and the baseball team would also get the stadium naming rights and keep all of the signage revenues. Mesa voters would have to approve spending for bonds to fund the stadium in a referendum.
Needless to say, Major League Baseball Commissioner Bud Selig and the owners of the Dodgers and White Sox (Glendale), the Indians and Reds (Goodyear), the Giants (Scottsdale), the Angels (Tempe), the A’s (Phoenix), the Brewers (Maryvale), the Mariners and Padres (Peoria) and the Royals and Rangers (Surprise) who are presently in the Mesa area and the Tucson-based Diamondbacks and Rockies who will conduct spring training on an Indian reservation starting in 2011 are not to thrilled about the proposal.
The ticket tax means those teams’ owners will get less disposable income directed at them.
The Goldwater Institute, a conservative think tank type entity, is not on board either. They think that the deal is illegal because of Arizona’s ban on giving gifts to private concerns.
Arizona is also broke.
Zuckerman should understand that as he has a piece of the National Football League’s Washington Redskins and he put up money or the Daily News did to help New York land the 2012 Summer Olympics. This should be an easy article for the Daily News to get. Sports, politics, economics, a Senator wannabe should be rather familiar with the issues.
Mesa elected officials came up with all sorts of goodies to support the argument that baseball fanatics who travel to Mesa and the Valley of the Sun should help pay for the new Cubs park. The Cubs baseball team has an annual impact of $138 million on the Arizona economy (which if believable would be a huge haul for a state that is selling government buildings and closing state parks because the state is broke --- another Zuckerman political issue to report on perhaps he can get Lupica on that). Cactus League attendance would drop 22 percent without Chicago Cubs baseball (Cactus League attendance should increase in 2010 with the addition of Cincinnati in the Phoenix area as Reds ownership has moved the spring training headquarters from Sarasota, Florida to Goodyear) and the Cubs baseball is spring training’s biggest draw as more than 203,000 people paid to see the team last year in Mesa and other Phoenix/Tucson area stadiums.
Arizona, through the Arizona Sports and Tourism Authority (AZSTA), has been very aggressive in going after baseball teams and luring them from Florida. In recent years, the state has landed Cleveland and Cincinnati for Goodyear, the Chicago White Sox and the Los Angeles Dodgers in Glendale, Texas and Kansas City in Surprise and has fought off an attempt by Las Vegas Mayor Oscar Goodman to get team owners to move to the Nevada area. The AZSTA has a budget shortfall of $10 million and cannot help in the Cubs-Mesa stadium plan.
One of the teams opposing the seat tax is the Milwaukee Brewers. Milwaukee’s deal with Maryvale ends in 2012 and that could set up a battle between Arizona and Florida over building a spring training facility for the team.
Arizona and Florida are two of the hardest hit states in the economic downturn but somehow are trying to find millions of dollars to support stadium building despite being broke.
Naples and Collier County, Florida officials were ready to get on their collect hands and knees to build Wrigley Field South for Cubs owner Tom Ricketts with the hope of using a tourist tax, a hotel/motel tax to help fund the project. Perhaps they will turn to Brewers owner Mark Attanasio and give him the same offer if Mesa prevails and keeps the Cubs.
Perhaps Zuckerman, the New York Senatorial candidate, and his ace columnist Lupica, will follow the Cubs-Mesa story and all of the political elements that are involved. But then again, maybe not. There are still bimbos on the loose and fortune tellers’ stories to be told and they can play amateur psychiatrist and continue analyzing whether Tiger Woods apology was heart-felt enough for them.
evanjweiner@yahoo.com
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