Deadspin: Bills Fleecing Taxpayers

[TheLynchTrain]

Is it 271 or 130? Barry is quoting a blog post from "Politics on the Hudson" with his 271 number while Harrington said yesterday "130 for renovations." In the "Politics on the Hudson" they even mention only 95 million from the State and county going to renovations, so where does the rest of the money go? I've read the MOU, and they only use the 130 number.

 

http://polhudson.lohudblogs.com/2012/12/21/buffalo-bills-lease-includes-226-million-in-public-money/

 

http://www.buffalonews.com/apps/pbcs.dll/article?AID=/20121228/CITYANDREGION/121229340/two-bills-drive-1004

 

[PromoTheRobot]

It's only $130M. $95M from the state and county and $35M from the Bills.

 

PTR

[l< j]

Has anyone seen an economic impact study on the impact of the Bills in Erie County? Why are we guessing at these numbers?

 

I agree with the criticisms above that these deals generally inflate players, coaches, Russ Brandon's salaries at taxpayer expense. There is no market for Mario's salary without taxpayer funded stadiums. Even more, the taxpayer assistance is capitalized in the value of these billion dollar franchises.

 

But I think we should also see a difference between the Bills situation and the Yankees or Cowboys. There was never a reason to put tax dollars into a new Yankee stadium. Or give Jones stadium access to tax exempt bonds. Those franchises have the wherewithal to fund more than they did, and the importance of location--the Yankees can't move without taking a serious hit to their value--gave govts more leverage than the final deals suggested. The Bills are a different animal of course. How different I'm not sure.

 

 

 

[aristocrat]

These NFL teams can be bought and sold for around a billion dollars but they can't afford rent...

[NoSaint]

HAVE A QUESTION , IS IT PLAGERISM WHEN A RADIO DJ BASICALLY QUOTES THIS BOARD FOR HIS SHOW? SCHOOP AND GR ARE DOING IT ALMOST DAILY NOW!

 

What now?

[bbb]

Actually, Schopp has been talking like this for quite some time, so I don't think he was copying things from this board.

 

He thinks that governments should never pay for stadiums, etc. He also thinks that no athlete should be paid more than $3.5M.

 

I'd like to see all that, too, but why waste time talking about things that never can happen.

[ExiledInIllinois]

These NFL teams can be bought and sold for around a billion dollars but they can't afford rent...

 

"The rent too damn high!"

 

Gotta hand it to old Krafty... He at least financed The Razor himself.

[uncle flap]

Has anyone seen an economic impact study on the impact of the Bills in Erie County? Why are we guessing at these numbers?

 

 

There isn't a definitive way to measure the TOTAL impact, but there are two main ideas associated with the the economic impact of the Bills.

 

There is $20-25 million generated annually through income tax (on players, coaches, and other NFL employees) and sales tax (on tickets only).*

 

That is not a lot in the grand scheme of things, but more than offsets the state and county's investment in the Bills.

 

The other side of the coin is that the amount of money that fans spend on the Bills (food/beer for tailgating, etc) would be spent on other things if the Bills were not here. For example, If there were no BIlls games to go to, you would spend that money on going out to dinner or the movies or whatever. Im not a big fan of Schopp but he made a good point regarding the NHL lockout: Are you a couple hundred dollars richer right now because you didnt go to a few Sabres game this fall? No, you probably spent that money on something else.

 

What that counterargument doesn't take into consideration is the out of state/county money that is brought in. There are often Canadians and fans from PA and OH at Bills games. Without the Bills, it is far less likely that money comes into WNY. This isn't enough money to make or break the economy here, but I think many would argue every little bit helps.

 

So basically when it comes down to the economic impact- strictly speaking, there is no significant impact locally. On the most micro level, yes there are bars and such that survive almost exclusively on Bills games, but while those fine proprietors would suffer economically w/o the Bills, the county would not, as the people who spent their money there would spend their money elsewhere and thus generate the same amount of tax revenue for the county.

 

On the state level, they basically even out. Purely numbers-wise, there is an argument that giving the Bills money is a good investment because the state would be spending that money on something anyway without nearly as good of a return.

 

None of this is to say I totally agree with public money going to support NFL teams when that money could be better used elsewhere. I'm just pointing out that 1. The economic impact is basically zero either way, and 2. Those that are upset about public money going to the Bills should realize that all things considered, its a GREAT deal for the state. In today's socio-economic climate, it's a given that public money is going to support pro sports. As someone else pointed out, compare our situation to the Vikings and then tell me how you feel about ours.

 

 

*The $20-25 mil figure is derived from multiple quotes by Gorski, Giambra, Collins, and Poloncarz over the years. As player salaries have gone up, so has this number. 20 years ago it was $10-15 mil and has been steadily rising. I couldn't find a comprehensive break down during a cursory google search, but I've heard/seen this multiple times. As I mentioned before, it is nearly impossible to gauge the economic impact on microlevels because it is seemingly understood the general population is going to spend X percentage of their earnings on something, whether it is Bills related or not.

Edited December 29, 2012 by uncle flap

[bbb]

There would be a lot more money to go around if it wasn't spent on the Yankees , Mets & Nets stadiums ... Good thing we got there before the Rangers , Islanders , & Knicks had to have a new place to play but there again that would be OK b/c the money would be being dumped into the black hole Oh i'm sorry thats not politically correct NYC AHH Thats better !!

 

Go Bills get what you can while you can !!!!

 

The Rangers and Knicks actually do have a new place to play. MSG is being totally renovated at a cost of $850M-$1B. However, state taxpayers are not paying for it................The Islanders are moving to the Barclays Center.

[Doc]

"The rent too damn high!"

 

Gotta hand it to old Krafty... He at least financed The Razor himself.

Nope. He financed half himself and the other half was from the NFL's "G-3" fund.

 

There isn't a definitive way to measure the TOTAL impact, but there are two main ideas associated with the the economic impact of the Bills.

 

There is $20-25 million generated annually through income tax (on players, coaches, and other NFL employees) and sales tax (on tickets only).*

 

That is not a lot in the grand scheme of things, but more than offsets the state and county's investment in the Bills.

 

The other side of the coin is that the amount of money that fans spend on the Bills (food/beer for tailgating, etc) would be spent on other things if the Bills were not here. For example, If there were no BIlls games to go to, you would spend that money on going out to dinner or the movies or whatever. Im not a big fan of Schopp but he made a good point regarding the NHL lockout: Are you a couple hundred dollars richer right now because you didnt go to a few Sabres game this fall? No, you probably spent that money on something else.

 

What that counterargument doesn't take into consideration is the out of state/county money that is brought in. There are often Canadians and fans from PA and OH at Bills games. Without the Bills, it is far less likely that money comes into WNY. This isn't enough money to make or break the economy here, but I think many would argue every little bit helps.

 

So basically when it comes down to the economic impact- strictly speaking, there is no significant impact locally. On the most micro level, yes there are bars and such that survive almost exclusively on Bills games, but while those fine proprietors would suffer economically w/o the Bills, the county would not, as the people who spent their money there would spend their money elsewhere and thus generate the same amount of tax revenue for the county.

 

On the state level, they basically even out. Purely numbers-wise, there is an argument that giving the Bills money is a good investment because the state would be spending that money on something anyway without nearly as good of a return.

 

None of this is to say I totally agree with public money going to support NFL teams when that money could be better used elsewhere. I'm just pointing out that 1. The economic impact is basically zero either way, and 2. Those that are upset about public money going to the Bills should realize that all things considered, its a GREAT deal for the state. In today's socio-economic climate, it's a given that public money is going to support pro sports. As someone else pointed out, compare our situation to the Vikings and then tell me how you feel about ours.

 

 

*The $20-25 mil figure is derived from multiple quotes by Gorski, Giambra, Collins, and Poloncarz over the years. As player salaries have gone up, so has this number. 20 years ago it was $10-15 mil and has been steadily rising. I couldn't find a comprehensive break down during a cursory google search, but I've heard/seen this multiple times. As I mentioned before, it is nearly impossible to gauge the economic impact on microlevels because it is seemingly understood the general population is going to spend X percentage of there earnings on something, whether it is Bills related or not.

Good post. Apparently taxpayers are on the hook for $226M, and using the $20-25M in revenue annually, that's break-even at worst, since NFL revenue continues to grow. Other outside-the-area money only adds to this. Not to mention losing the Bills would have a devastating effect on an area with an already fragile psyche.

[PromoTheRobot]

"The rent too damn high!"

 

Gotta hand it to old Krafty... He at least financed The Razor himself.

Now consider how many breaks his teams get from the refs and the NFL? Why? Because the league has a lot of money riding on the Pats and everyone knows if they start to suck no one will go to games. The Pats are mortgaged to the hilt.

 

PTR

[KD in CA]

 

The Rangers and Knicks actually do have a new place to play. MSG is being totally renovated at a cost of $850M-$1B. However, state taxpayers are not paying for it................The Islanders are moving to the Barclays Center.

Barclays seems pretty small for hockey. I guess they are counting on the Islanders continuing to suck forever.

[bbb]

They don't move in for a few years so I wonder if they'll do any renovating for hockey.

[PromoTheRobot]

Barclays seems pretty small for hockey. I guess they are counting on the Islanders continuing to suck forever.

Or keep ticket demand high if they get good. If you are the Islanders do you go to the smallish arena in NYC or hope Nassau County builds you a new barn?

 

PTR

[Mr. WEO]

Nope. He financed half himself and the other half was from the NFL's "G-3" fund.

 

 

Good post. Apparently taxpayers are on the hook for $226M, and using the $20-25M in revenue annually, that's break-even at worst, since NFL revenue continues to grow. Other outside-the-area money only adds to this. Not to mention losing the Bills would have a devastating effect on an area with an already fragile psyche.

 

Same old flawed argument. The current 20-25m in tax revenue (reportedly) generated by the Bills will not pay for an extra cost of 226 m over ten years. That, obviously, will cost an EXTRA 20-25 M per year in tax revenue from the Bills, or twice as much as they bring now. How do they double their taxable income with new stadium renovations?...

Now consider how many breaks his teams get from the refs and the NFL? Why? Because the league has a lot of money riding on the Pats and everyone knows if they start to suck no one will go to games. The Pats are mortgaged to the hilt.

 

PTR

 

Why does the league have so much money riding on the pats? And why them? Why do Jerry Jones or Snyder or Ralph or Bud Adams 0r ANY other other (they ARE the league, in case you haven't heard) care what happens to the pats?

Edited December 29, 2012 by Mr. WEO

[KD in CA]

Or keep ticket demand high if they get good. If you are the Islanders do you go to the smallish arena in NYC or hope Nassau County builds you a new barn?

 

PTR

I'm guessing they'll expand Barclays. Wang and his crony politicians already lost the Nassau County fight; the new arena was voted down.

 

Sometimes the taxpayers actually get a say and decide that spending a billion dollars to benefit rich athletes and super-rich owners is just plain ludicrous.

[uncle flap]

Same old flawed argument. The current 20-25m in tax revenue (reportedly) generated by the Bills will not pay for an extra cost of 226 m over ten years. That, obviously, will cost an EXTRA 20-25 M per year in tax revenue from the Bills, or twice as much as they bring now. How do they double their taxable income with new stadium renovations?...

 

 

Well, I wasn't "arguing" anything. If you are arguing that The Bills should pay for the (Erie county owned) stadium's upgrades, fine, I agree.

 

But as a practical matter, that's not going to happen. Part of the "cost" of keeping the Bills in town is that public money. If one believes that the Bills would leave town without the support of public tax dollars, then so does that $20-25 mil/year. But then the state would just spend that money on something else, almost certainly not getting that type of return financially.

 

I think we discussed this some time ago when I inaccurately used the phrase "pays for itself." In the literal sense, you are correct, the renovations do not pay for themselves. But if one looks at the situation as "X amount keeps the Bills in Buffalo, and approximately X is generated by the Bills staying Buffalo", then it is indeed a zero sum game.

[gumby]

There have been several studies that show major league sports teams (NFL especially) are an economic drain on a community. There is a lot to be said for the entertainment value and/or the pride such a team can bring to an area. That does have a certain value it's just not an economic one.

[uncle flap]

There have been several studies that show major league sports teams (NFL especially) are an economic drain on a community. There is a lot to be said for the entertainment value and/or the pride such a team can bring to an area. That does have a certain value it's just not an economic one.

 

That's not exactly true. If you read those studies you'll see that there is essentially no economic impact, positive or negative.

 

Some studies have shown that there is a correlation between the presence of a sports franchise and a net loss of jobs in the area. But there has been no direct link drawn between the two. That's not to say there isn't, but it could simply be a coincidence.

 

More likely, cities with pro sports franchises are also subject to the same sort of non-sports related socio-economic factors. For example, substitute "cities w/ a population over 300k" for "cities w/ pro sports franchises" and I imagine the same sorts of conclusions would be drawn.

[Doc]

Same old flawed argument. The current 20-25m in tax revenue (reportedly) generated by the Bills will not pay for an extra cost of 226 m over ten years. That, obviously, will cost an EXTRA 20-25 M per year in tax revenue from the Bills, or twice as much as they bring now. How do they double their taxable income with new stadium renovations?...

I said the revenue generated by the team annually would at-worst off-set the (average of ) $22.6M annually given by the taxpayers. In this era of pro sports teams getting all they can from their counties, this is about the best you're going to get. Should all pro sports teams pay for themselves? Sure. But that's not reality.