Sunday, January 20, 2013

Oakland Cuts Police Force by One-Fourth While Continuing Payments to Football Team; Meanwhile City Considers Building New Stadium As Team Threatens to Leave

A reader sent me an article which linked to an excellent Bloomberg article on what is happening in Oakland and the cost of the subsidization of professional sports to communities:
Oakland, California, the fifth-most crime ridden city in America, faced a $32 million budget deficit last year. It closed the gap by dismissing a fourth of its police force, more than 200 officers.
Untouched was the $17.3 million that the city pays to stage 10 games a season for the National Football League’s Oakland Raiders and to host Major League Baseball's Athletics in the Coliseum. The funds cover debt financing and operations and are supplemented by $13.3 million from surrounding Alameda County, based on data compiled by Bloomberg from public records. 

Now the city is under pressure to replace the 46-year-old structure to keep the Raiders. The team’s owners may move to nearby Santa Clara and share an under-construction, $1.2 billion venue with the San Francisco 49ers, or to Los Angeles, where the City Council has backed a $1.5 billion stadium hoping to lure the NFL. Losing the Raiders would leave Oakland with about $145 million in debt, which originated 17 years ago in part to bring the team back from Los Angeles.

Publicly financed stadiums for all U.S. major-league sports, including soccer, cost taxpayers about $10 billion more than forecast when accounting for the costs of land, infrastructure, operations and lost property taxes, according to a study of all 121 facilities in use during 2010 by Judith Grant Long, who teaches urban planning at Harvard University.  The NFL has the highest public price tag, with taxpayers putting up about 87 percent of the expenses for NFL stadiums, she writes in her 2012 book, “Public/Private Partnerships for Major League Sports Facilities.” 


The $18.6 billion of taxpayer subsidies to the NFL reflect costs and investments since 1986, when a new era of publicly funded stadium construction began in response to new laws on the use of municipal bonds for professional sports....

The total includes $7.1 billion for stadium construction, $6.5 billion in forgone property taxes and $4.3 billion for interest costs. Land acquisition and infrastructure expenses beyond those wrapped up in the stadiums account for the rest. The data don’t account for revenue that flows back to cities or states from the buildings, covering some costs. Long estimates the average state or city receives net payments after expenses of about $9 million over a 30-year lease for all stadiums and arenas -- or about $300,000 a year.

“There is never a good reason for taxpayer monies to subsidize for-profit entertainment businesses, especially extremely high-profit entertainment or sports businesses that are largely unaffordable to the vast majority of citizens,” said Leo Hindery Jr., managing partner of InterMedia Partners LP and founder of the YES Network, a regional sports cable television channel in New York controlled by the Yankees. “I don’t believe in state-sponsored finance of private enterprise at all.”

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