Should public funding for pro sports stadiums be banned?

[Admiral Yi]

Airports and utilities are something else.

How so?

[Valmy]

How so?

Well in Texas it is not even legal for non-Utility companies to build utilities so how exactly would the owners of the factories and offices be paying for them themselves? No federal tax money is being lost there.

I am not sure why I have to go into the idea why having Airlines build Airports would be a little rough on the transportation network, even if they could afford that.

[Admiral Yi]

Well in Texas it is not even legal for non-Utility companies to build utilities so how exactly would the owners of the factories and offices be paying for them themselves? No federal tax money is being lost there.

I am not sure why I have to go into the idea why having Airlines build Airports would be a little rough on the transportation network, even if they could afford that.

Privately owned roads are built.

You don't have to go into the idea why having airlines build airports would be rough on the transportation network, even if they could afford it.

[Valmy]

You don't have to go into the idea why having airlines build airports would be rough on the transportation network, even if they could afford it.

Oh good because I figured it would be obvious.

Privately owned roads are built.

Without eminent domain that strikes me as tricky. Are roads really something a company could demand or they are abandoning their factory for a road being built in Indianapolis?

[Berkut]

Three is clearly a radical difference between the state funding infrastructure and the state shoveling cash to businesses in return for them locating in their area.

Building the 49er's a new stadium is not public infrastructure. Again, excepting only the most tortured definition of the term.

[Admiral Yi]

Oh good because I figured it would be obvious.

Not to me.

Without eminent domain that strikes me as tricky. Are roads really something a company could demand or they are abandoning their factory for a road being built in Indianapolis?

I imagine eminent domain is required to build a private road.  I don't understand your question.

[Baron von Schtinkenbutt]

However, this is a *classic* case of a prisoners dilemma. We make decisions at some local level, but the market is NOT local. This gives the owners of sports teams a massive negotiating advantage on an emotional and political issue, which allows them to then divorce themselves of what would normally be considered perfectly standard business decisions. This then warps the economics of professional sports.

The net effect of all of this is something that if we all stepped back and looked at it holistically nobody would agree is a reasonable outcome. We end up having public funds paying exorbitant salaries to athletes, team owners making outsized profits because they don't actually have to bear one of the largest costs of running their business, and all of it being funded not by the people who actually want to watch or go to these events, but rather the taxpayers! That is not libertarian or free market economic theory at all!

This is no longer an economic decision. The question of whether the Braves should be in Atlanta or Cobb county is not being driven by business concerns, but rather by *political* concerns. At that point, this is not longer a question of economics at all, but one of politics. And if the owners want to try to extract massive funds from the state by getting into politics, then I don't at all think we should be holding to some faux allegiance to "free market" ideology. Free markets don't involve politics and state funding of entertainment.

Libertarian theory would demand that if some team wants a $400 million stadium, then they should be able to support that cost by selling their product - not by blackmailing politicians into funding it for them.

The wrench in this is that, with the exception of baseball stadiums, municipalities generally stand to gain from these projects.  Take for example the planned $500m renovation to Joe Robbie Stadium.  Dade County and many residents rightfully balked at the suggestion from billionaire Steven Ross that the county should fund the renovation.  However, at the same time the county was leaning on Ross to pay for it himself they were leaning on him to do the renovation and to make sure it included certain attractive features.

Why?  The county wanted the stadium to be an attractive venue that would bring the Super Bowl, World Cup and Olympic soccer, and more college bowl games to Miami.  All things that have nothing to do with the Dolphins.  In fact, were it only about the Dolphins this renovation would probably not be happening.  Ultimately, Ross and the county cut a deal that I think is actually equitable: he pays for the entire renovation, the county pays him a flat fee every time they bring a marquee event to the stadium for the next five years.

So, while expecting cities to fork over billions of dollars and acres of eminent domain land (Hi Jerry!) is offensive, so is the idea that teams should be expected to invest hundreds of millions or billions of dollars in their venues when significant cost is added for the purposes of supporting events that do not benefit the team.

Also, on a tangent, what Federal tax is the article referring to?  I may have missed it, but I don't see where the author explained the tax that was being dodged using municipal bonds.

[Valmy]

I don't know either vM, I just saw that and assumed it was true for purposes of argument.

[Admiral Yi]

Also, on a tangent, what Federal tax is the article referring to?  I may have missed it, but I don't see where the author explained the tax that was being dodged using municipal bonds.

Income tax on interest.

[Baron von Schtinkenbutt]

Also, on a tangent, what Federal tax is the article referring to?  I may have missed it, but I don't see where the author explained the tax that was being dodged using municipal bonds.

Income tax on interest.

So, the tax the lenders or private bond owners would be paying if the team had borrowed the money in a more conventional manner, not a tax the team would be paying directly.

[Admiral Yi]

Right.

[The Brain]

Berkut thinks business transactions are blackmail? OK. Is his rage at 11 yet?

[Admiral Yi]

Far short of 11 I'd say.

[MadImmortalMan]

Further to berkut's point all the pro sports leagues are to some degree or another cartels, with de facto or even de jure partial exemption from antitrust law.  In that economic and institutional context, Berk's concerns about the lack of a free and fair market are well taken.

Does the fact that they are cartels make it worse than, say, offering a manufacturing company a tax break to set up shop locally because the community needs jobs?

[Valmy]

Does the fact that they are cartels make it worse than, say, offering a manufacturing company a tax break to set up shop locally because the community needs jobs?

That is the main reason I would think they are different. The anti-trust stuff.

But besides that it is basically the same thing...well ok taking out millions in bonds maybe more of a burden than just not collecting taxes. Maybe.