Bears, Chicago at Loggerheads Over Proposed Stadium

[Seahawks Guy]

The estimate is that the city, county, and state would net $64 million annually from the stadium. When hundreds or thousands of people come to Chicago for events, money pours into the local economy, which ultimately generates tax revenue to the city. That’s how it works.

Show me the numbers. Specifics. Imagine pitching this to a bank. They're not gonna buy this generalized BS.

 

[NoGain]

The new Las Vegas stadium had 65,000 seats, I believe. Maybe we should just erect stadiums with nothing but luxury boxes and one tier of high priced seats for the rest of the fans. I think we could shrink NFL stadium capacities down to about 40,000 seats and save money that way. It's pretty much a TV game now.

 

[Bear-Hawk]

I got the $64 million number from an article in the Chicago Tribune. They didn’t break the number down into infinite detail, but I can tell you from the proposal that a lot of the direct revenue would come from the hotel tax. Let’s put this in context. Hotel guests pay $2. Compare that to what they pay for a cup of coffee. Or a beer and hot dog at a Bears game.

 

[Bear-Hawk]

The new Las Vegas stadium had 65,000 seats, I believe. Maybe we should just erect stadiums with nothing but luxury boxes and one tier of high priced seats for the rest of the fans. I think we could shrink NFL stadium capacities down to about 40,000 seats and save money that way. It's pretty much a TV game now.

The reason 70,000 people pay $$$ to watch the game at the stadium is that it’s a qualitatively different experience than watching it on TV. You don’t shrink one revenue stream just because it’s smaller than another.

 

[NoGain]

The reason 70,000 people pay $$$ to watch the game at the stadium is that it’s a qualitatively different experience than watching it on TV. You don’t shrink one revenue stream just because it’s smaller than another.

Just me personally, but unless you have real good seats, it's better to watch the game on TV. Now, I'm obviously discounting the whole "fan experience", but football is one of the worst sports to watch live in a stadium in terms of actually seeing what's going on.

 

[Bear-Hawk]

Just me personally, but unless you have real good seats, it's better to watch the game on TV. Now, I'm obviously discounting the whole "fan experience", but football is one of the worst sports to watch live in a stadium in terms of actually seeing what's going on.

Do you watch all-22 game film? Compare that to what you see on TV. Sometimes, when I watch a game on TV and then later watch the all-22, I get a very different impression of what was going on in the game. This also comes out sometimes on the Bears forum in disagreements between fans who were at the game vs. watching on TV. Of course, you can get both experiences at the stadium as you watch replays on their giant screens.

 

[Lagartixa]

The Bears owner is not the only beneficiary of this $7 billion stadium and complex. It provides income to local businesses, tax revenue to the city, thousands of jobs, hosts other sporting events and entertainment, concerts, green spaces and recreational facilities for local residents, etc. It will be a major asset to Chicago.

The entire Bears franchise is worth only $6.5 billion. They cannot complete this project without some tax revenue. I will say again that the Bears are putting $2.3 billion into it. Warren is following the same private-public financing plan he used to build the Vikings stadium.

"if you want to inject money into the local economy, it would be better to drop it from a helicopter than invest it in a new ballpark." --Allen Sanderson (an economist at the University of Chicago who does research on sports economics)

If the owners can't get investors to put up the money for the stadium, it's because the investors do the due diligence and see that it's a terrible investment and then they won't put up the money. If it were a good investment, the billionaire con men wouldn't "need" to steal billions of dollars more from regular people to complete the project.

If they can't get funding for the whole project they want to do, then why not have a smaller project?

The idea that billionaires "need" public funding to make a stadium is absurd. It's horrifying to me how many people swallow this.

The pro-sports franchises always sell states and cities a bill of goods of supposedly bringing in lots of additional revenue for local businesses and creating additional jobs, but I've never seen a study that shows anything but possibly cannibalization of the markets of some businesses in the city by others. Find me a study that shows a net benefit from stadium construction, and you've found the Holy Grail the owners with all their billions haven't been able to falsify so far.

Every pre-construction study funded by the billionaires who want the multi-billion-dollar present from their slaves says the stadium will pump the city's economy. Every academic study (where the methods and results are subject to peer review by academic economists) and post-mortem shows that the giveaway always ends up being a net loss for the government and the people whose money it is using.

One interesting thing in the academic papers about this subject is how frequently they mention that the generally accepted conclusion among economists is that professional-sports stadia are terrible ways to use public money. I've linked a bunch of studies (and attached one I managed to find as a file, but not available via a web interface) below.

Regular people funding billionaires' stadia is nothing but "reverse Robin Hood."

=========================

The Impact of Professional Sports Franchises and Venues on Local Economies: A Comprehensive Survey

Local governments routinely subsidize sports stadiums and arenas using the justification that hosting professional franchises produces economic development and

papers.ssrn.com

=========================

Here's a summary of that article for non-academics. If you're only going to look at one of the articles linked here, look at this one. It's pretty good at dismantling one-by-one every aspect of the owners' lies being forced down your throat by their buddies in the media:

So, Your City Wants to Build a Sports Stadium? - Global Sport Matters

Here's what anyone debating public financing for a sports stadium needs to know to combat half truths and exaggerations.

globalsportmatters.com

=========================

https://journals.sagepub.com/doi/10.1177/1527002520917197

=========================

I couldn't find one article available via web free, but I found a PDF reprint
I'm attaching a PDF of a study showing that any positive effect on employment and earnings is cannibalization. It will probably show up at the bottom of this comment. Its title is "The effect of professional sports on earnings and employment in the services and retail sectors in US cities."

=========================

Here's an article for laypersons written by one of the pioneers in solid economic analysis of professional sports teams and stadia:

Stadiums as Public Investments | Econofact

Local governments have spent hundreds of millions of dollars in public subsidies for professional sports facilities over the past 70 years. What explains this?

econofact.org

Zimbalist makes an interesting point in that one that I've been failing to mention: the opportunity cost. If the local governments invested those billions in infrastructure projects like roads, public transport, airports, education and job training, even child-care programs, the expected return on investment could be positive, unlike the virtually guaranteed negative return on giving people's money to a billionaire.

=========================

Here's an academic article by Zimbalist from the aughts:

The Economics of Sports Facilities and Their Communities - American Economic Association

The Economics of Sports Facilities and Their Communities by John J. Siegfried and Andrew Zimbalist. Published in volume 14, issue 3, pages 95-114 of Journal of Economic Perspectives, Summer 2000, Abstract: Since the 1950s, taxpayers have been the primary investors in stadia built for the use of...

www.aeaweb.org

=========================

The Impact of Professional Sports Franchises and Venues on Local Economies: A Comprehensive Survey

Local governments routinely subsidize sports stadiums and arenas using the justification that hosting professional franchises produces economic development and

papers.ssrn.com

 

[Lagartixa]

If it's a good for local business owners, then let them help pay for it too. Should be an easy sell, based on what you're saying.

If it hosts other events, then somebody is making money off that, so let them chip in too.

If it will provide additional tax revenue for the city, then they should put a provision in the bill that all the tax dollars will be reimbursed back. Or they should take out a loan based on the projected additional tax revenue.

They won't do any of these things, though, because nothing is as rosy as you say it is.

Yes, yes, yes, yes!

Has anyone put together a massive projection of financial and economic benefits for the city, based on what you're saying? Something that will specifically describe how say an average hourly worker for these business will benefit? I doubt it, because there's nothing.

Well, the owners trying to hoodwink municipal and state governments into giving them more money always get optimistic projections that say the stadium is going to generate massive economic benefits.

When academics go and study the actual economics, the conclusion is always the same, and it's pretty much the opposite of the owners' ridiculously rosy and not-founded-in-reality projections. There may be minor positive changes in one indicator or another, but those usually result from some kind of cannibalization, whether it's cannibalization of people's entertainment and dining expenditures (little to no net new revenue) or cannibalization of nearby job markets. And even to the extent there are positive effects, they never come within orders of magnitude of justifying the kinds of public spending sports-team owners have been demanding lately.

Another thing relevant to this discussion is that while a few big stadium projects have been shown to have generated net positive effect, it was never anywhere close (like "off by a factor of hundreds") to the public money spent (i.e., the return on investment ends up being negative), and those projects were for baseball parks. Football-stadium projects much more clearly generate white elephants.

EDITED to add: I put some relevant articles, mostly academic, in my previous comment, right above this one, plus a great summary for laypersons of a recent comprehensive study of sports-stadium economics.

 

[Seahawks Guy]

I got the $64 million number from an article in the Chicago Tribune. They didn’t break the number down into infinite detail, but I can tell you from the proposal that a lot of the direct revenue would come from the hotel tax. Let’s put this in context. Hotel guests pay $2. Compare that to what they pay for a cup of coffee. Or a beer and hot dog at a Bears game.

And why should they pay that tax? What benefit are they getting in return? Are they going to be reimbursed for their investment?

 

[chris98251]

And why should they pay that tax? What benefit are they getting in return? Are they going to be reimbursed for their investment?

Chicago is a big business City, where the general public will pay some taxes most will be collected from people who do business there. Locals will pay a fraction, out of town companies will pay the bulk and tourists etc.

 

[Seahawks Guy]

Chicago is a big business City, where the general public will pay some taxes most will be collected from people who do business there. Locals will pay a fraction, out of town companies will pay the bulk and tourists etc.

I guess more specifically, why should people staying at motels in Chicago be responsible for paying for their stadium? They're already spending money there...

 

[chris98251]

Because it sells the tax to local voters, they really are not paying much of it.

 

[Bear-Hawk]

And why should they pay that tax? What benefit are they getting in return? Are they going to be reimbursed for their investment?

They don’t get a benefit. I guess this gets into what power the state or federal government can have to restrict the taxing authority of a municipal government. In Washington state lodging tax is capped at 2% (see RCW 67.28.180).

 

[RiverDog]

As I said earlier in the thread, the problem is the inequity between the big and small market teams. Stan Kroenke had no problem raising $5B in LA as there are more resources to draw from in the nation's 2nd largest market, but the City of Jacksonville had to fork out $1.4B for their new digs as if they didn't, there's little doubt that they would have moved the team to somewhere like London.

I don't like the idea of the federal government telling state and local governments how they tax their citizens, but in this case, IMO a law prohibiting them from funding these multi-billion-dollar palaces (except for related infrastructure improvements) might be in order. That or threaten the league with an anti-trust lawsuit if they continue to build increasingly expensive stadiums that they can obviously afford themselves.

 

[Bear-Hawk]

As I said earlier in the thread, the problem is the inequity between the big and small market teams. Stan Kroenke had no problem raising $5B in LA as there are more resources to draw from in the nation's 2nd largest market, but the City of Jacksonville had to fork out $1.4B for their new digs as if they didn't, there's little doubt that they would have moved the team to somewhere like London.

I don't like the idea of the federal government telling state and local governments how they tax their citizens, but in this case, IMO a law prohibiting them from funding these multi-billion-dollar palaces (except for related infrastructure improvements) might be in order. That or threaten the league with an anti-trust lawsuit if they continue to build increasingly expensive stadiums that they can obviously afford themselves.

Actually, the Jaguars and city are sharing the cost 50/50.

Nashville and Charlotte are small markets. The Rams went to St. Louis, and LA had no NFL team for about 20 years.

 

[Glasgow Seahawk]

I always find it a little odd when mutli-billionaires plead poverty. It's an exclusive club to be an owner, surely you'd want it to be the best possible.

There's also the civic pride aspect. If your a local owner surely you want the team/stadium to be the best possible for city/state/regional pride? I'd far rather be a Paul Allen than a John Stanton and if I couldn't hang with the rest financially, sell the team for a profit to someone that can.

 

[Seahawks Guy]

They don’t get a benefit.

Which is exactly where I'm going with this. I like taxes to be principled in nature. I like things to be paid for by the people who are getting the benefit of them. I shouldn't have to pay for my neighbor to buy a new boat, so why should people who aren't Bears fans and don't live in Chicago or Illinois pay for their stadium?

 

[NoGain]

Do you watch all-22 game film? Compare that to what you see on TV. Sometimes, when I watch a game on TV and then later watch the all-22, I get a very different impression of what was going on in the game. This also comes out sometimes on the Bears forum in disagreements between fans who were at the game vs. watching on TV. Of course, you can get both experiences at the stadium as you watch replays on their giant screens.

Like I said, it's just a personal thing. I've been to plenty of live football games. When I've had good seats, it's been a decent experience for me in terms of following the action. When I've had less good seats, not so much.

I totally get that when you watch on TV it's very ball-centric, and that you miss a lot of action in that way. I wonder how sophisticated it will become to improve this experience for the fan on the couch in this way? Like being able to look at two or three different camera angles live if you choose. Or be able to pick what replays from what camera angles you desire in real time.

 

[Bear-Hawk]

Which is exactly where I'm going with this. I like taxes to be principled in nature. I like things to be paid for by the people who are getting the benefit of them. I shouldn't have to pay for my neighbor to buy a new boat, so why should people who aren't Bears fans and don't live in Chicago or Illinois pay for their stadium?

Should, should, should. There are many things in this world that I think “should” be different, and this would be far down on my list.

As far as lodging tax, it favors large cities over smaller cities, since they have far more hotel rooms. A big city like Chicago can spread out the cost to a large number of people. An infrequent visitor paying $2 is not a monumental deal. And a frequent visitor to Chicago may benefit from local services (public transportation, police, parks, library, museums, etc.). Chicago has a lot to offer besides Bears games.

 

[Seahawks Guy]

Should, should, should. There are many things in this world that I think “should” be different, and this would be far down on my list.

"Hey mom, I got an F on my report card."

"You should have gotten a better grade, but there's so many things in this world that should be different, so this is far down my list and I'm not going to worry or do anything about it"