Minnesota gov signs stadium bill, it’s okay to talk about how crappy it is now

Minnesota Gov. Mark Dayton signed the Minnesota Vikings stadium bill yesterday, putting an end to one of the longest-running stadium campaigns in professional sports. Under the final bill, a new domed stadium will be built on the site of the Metrodome in Minneapolis, with a target opening of 2016; the city and state will put in $498 million (though operating subsidies could bring the total public cost to $800 million), while Vikings owner Zygi Wilf will put in $477 million (though that cost could go up if Wilf decides to make the roof retractable).

It all sounds very equitable — halfsies! — but there’s a lot that that equation leaves out. First off, the Vikings will control all football-related stadium revenue, and as this is going to be a football stadium, that means the team will get vastly more than half of the proceeds from the new building. Second, Wilf’s $477 million will largely be covered by new revenues: He’ll be getting a $200 million loan from the NFL (really a grant, since it’ll come largely from money the team would otherwise have to share with the league); plus maybe $210 million in naming-rights fees over 30 years (worth about $100 million in present value), since under the deal the state gets nothing from the sale of the name of the building it will own and pay for half of; plus an estimated $40 million in up-front seat-license sales.

These numbers are courtesy of an astonishing 1500ESPN radio column by longtime Minnesota journalist Patrick Reusse that ran last Friday — astonishing less because of the figures in it than the tone that Reusse took once the stadium deal was all but finalized:

We in the Twin Cities sports media were so amped up over getting a new stadium for the Vikings and thus maintaining them as a subject to write and talk about that not much time was spent looking at the financial realities.

We have allowed owner Zygi Wilf to be crowned as a patient, generous hero in the proceedings that led to the approval of the stadium on Thursday in the State Legislature. … The truth is that at the new number for the team share, $477 million, this remains a marvelous deal for Wilf and the Vikings.

Both Minnesota Public Radio’s Bob Collins and former Star-Tribune reporter (now independent blogger) Nick Coleman immediately tore into Reusse on Twitter, noting, as Coleman put it, “Failure: Little or none of Patrick Reusse’s financial analysis of #Stadium deal was in StarTribune. Ever.” (Collins called Reusse’s first paragraph “a journalist admitting malpractice.) Indeed, Reusse’s blog item includes citations of my own reporting on the $200 million NFL loan from December, so either he’s only now gotten around to Googling for the details of the stadium finances, or he’s been saving up critical material until it’s too late to matter. Instead, Reusse has been writing such things as this column on how if a stadium isn’t built, the Vikings will move to Los Angeles just like the Lakers did a half-century ago, which concluded:

Five decades later, that should be a lesson to us: Not only will those slicksters steal our football team … they won’t flinch to call themselves the Los Angeles Vikings.

That was on April 19, the day that NFL commissioner Roger Goodell flew to Minnesota to threaten that the Vikings would move, an action that received wall-to-wall media coverage that effectively jump-started the then-dead stadium bill.

In his current blog item, Reusse is quick to stress that he supported the stadium bill — “for the same biased reasons as other people making their living in the sports media,” but also because he thinks that “an active downtown Minneapolis is the most-important element in maintaining a vibrant metropolitan area.” That’s certainly a legitimate position. But it might have been nice for Reusse to come clean about it fully to his readers — “this is a massive giveaway to the Vikings, but I still think it’s worth it” — when there was still time to make a difference.


16 comments on “Minnesota gov signs stadium bill, it’s okay to talk about how crappy it is now

  1. The performance of the local media during this period, especially KFAN, the Vikings flagship station, is an eloquent argument for bringing back the Fairness Doctrine.

  2. What’s the old saying? If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it. That’s the Fairness Doctrine in a nutshell.

  3. Ben, when I referred to the Fairness Doctrine, I had something very specific in mind, that is, a policy the FCC had from 1949 to 1987, which required broadcast license holders fairly present all sides of controversial issues. I mean you would think that (Neil, prepare to blush) America’s leading authority on stadium finances would have been interviewed at least once during this mishigas, instead of being quoted only when it was too late.

  4. I wonder who Ben Miller is? I see his name on this site quite a bit taking the team side…..

  5. Its good to people from all sides, I just wish he had better arguments.

    His positions seem to be “taxes and government regulations are bad”
    and
    “it is great when the government uses taxes to subsidize sports”.

    I don’t understand how those are consistent, perhaps he is just a troll. But this ia a rather dry and sparsely populated site to bother trolling.

    Perhaps it is arch-satire?

  6. It never ceases to amaze me that so-called “conservatives” who on the one hand advocate for LESS government “interference” in all aspects of life & business, will simultaneously ENGAGE government for hand-outs for multi-million dollar (if not billion) sports stadiums.
    How is that not welfare, albeit “corporate welfare?”
    Of course, the “begging with hat in hand” by multimillionaires to local and state legislatures is enabled by both Republicans AND Democrats…while the lawmakers are supposed to represent the people, it seems that the only people they truly represent are the ones “donating” BIG $$$ to their campaigns, while the rest of us end up ponying up for new stadiums…
    Call me a cynic, but NOTHING will change…the Millionaire sports owners will always get what they want from our local & state government.

  7. The problem with the Vikings stadium is that it wasn’t the conservatives that passed it. More DFL’ers (that’s Democrats to those outside of MN) voted for this than Republicans. The Governor is DFL, the Mayor of Minneapolis is DFL and almost the entire Minneapolis city council is DFL. The only thing conservatives are guilty of is aiding and abetting in this crime. They let it happen. DFL’er are supposed to be for the little guy. This whole stadium debate is exactly like the Twins ballpark debate. It was outstate representatives “letting” Minneapolis pay for this. Everyone of them will claim that they saved the Vikings and it didn’t cost their constituents a dime.

  8. James,

    Sports fan from Milwaukee who lives in Los Angeles. I travel a lot for work so I visit a lot of sports venues. I have no vested interest in any sports franchises. I just like to discuss sports and stadiums.

    SNO, it’s up to you to decide whether the tax/regulate/subsidize mantra is bad. I was merely pointing out that people didn’t give two shits about the Fairness Doctrine until talk radio became successful. And if you extend the idea to the Internet and force Neil to offer me a column, then I’m all for it.

    JN, you’re confused. Nobody (well, almost nobody) thinks that there should be no taxes or regulations. Everybody thinks that tax dollars should be spent in what they believe is a useful way. I think that in many cases stadiums are a useful expenditure of tax revenues, especially for mid-to-upper-mid sized markets. I mean, look at MSP. They probably hand out more tax dollars to teams than anyone (as a percentage of local economic activity, at least) and that place has done better economically than any upper-mid sized cold weather market over the last several decades. (And of course there are other factors involved, but still.)

    Look, I went to Glendale, AZ for both Wrestlemania XXVI and Sunday night’s Kings vs. Coyotes game. If you think there is ANY F’N WAY I would’ve ever spent several hundred dollars on tickets, a hotel and meals in that city without those two stadiums there, you’re nuts. You’re only slightly less nuts if you think that I have a hard entertainment budget, which means that my economic activity is new business (not business taken from elsewhere, as substitution theory devotees would have you believe). I realize that there are limits to what makes sense in terms of sports stadium subsidies (and, in fact, Glendale may have surpassed its limit), but this idea that local governments should stonewall owners and risk having a successful, nomadic business move away is nonsense.

  9. I’m confused.
    40 million in seat licensing fees? That’s conservative. At a “mere” 5k a seat you’re talking about 8000 seats. So I’m missing the math you used to calculate this.

    I’d be a lot more curious if anyone had an idea of what the various owners made from PSLs over the years. I’m guessing the Cowflops have got to have taken in about 400 million alone.

  10. As noted, all those numbers are Reusse’s, not mine. (Though I did take the liberty of present-valuing his naming-rights money, since he just totaled it up.) I agree that they should be able to bring in way more than $40m from seat licenses.

  11. Neil: You’re correct, they aren’t your numbers and I should have actually read his column. He’s getting some really warped data on the PSLs. The Cowflops were asking 5k per seat for the cheap seats.

    I suppose it can be calculated by the season ticket base and the backlog for season ticket requests in Minneapolis. I’m figuring over well 100M just on the PSLs and whatever they soak the skybox buyers for on one-time fees.

  12. Hey Guys!

    This is not a done deal! Watch for Rallys for a People’s Referendum on Wed 5/23, Thur & Fri around the Mpls City Council. They have to approve the deal & it was a 7/6 vote last time. It will have political fallout. The whole process from media to state house smells bad to all. Thanks for the tip on the Trib-that will be grist for the Milltown! The deal involves a backstop by state General Fund and eliminates the Mpls City Charter provision that requires a referendum for any expenditure over 10 mil on arenas.(Take our tax money & take our vote…not so fast!) It also introduces more gambling to the state which is not desirable. We are seeking national attention to end this extortion!All hands on deck!

  13. The jealousy of this board is quite pesky.

    Master Zygi is still being worshipped because of his grand scheme.

    Vikings fans have been bowing all week.

    We got a first class stadium that will blow away the Cowboys current home.

    And you don’t.

    lol

    Minnesota Vikings future SB Champs.

    PS

    This board will be a memory in a few months.

  14. “…but this idea that local governments should stonewall owners and risk having a successful, nomadic business move away is nonsense.”

    Perhaps nonsense for a specific local government, because they have to compete with other localities who choose to subsidize. But there’s nothing nonsensical about wanting all local governments to take the “stonewall” approach. The stadiums and arenas will be built in any case, the leagues have to have somewhere to play and they can afford to build them.

    It’ll never happen but I’d love to see Congress end it by invoking their right to regulate interstate commerce. Any locality that subsidizes a local sports team to keep it from moving to another state is interfering with the free market. Make it illegal and local governments are soon saving $billions.

  15. There’s an even easier way to regulate it: In the late ’90s, a Minnesota Congressman named David Minge proposed legislation that would have levied a 100% excise tax on local corporate subsidies — in other words, if you got $300 million from your state for a stadium, you’d owe $300 million in federal taxes.

    It went nowhere, of course, and Minge is now out of office. But there’s nothing stopping anyone from trying again.

  16. I’ve got a feeling the low PSL number is because that’s what the Vikes think they’ll actually get. Fans have become very anti-PSL, in part because reselling season tickets at face value or above is unlikely unless you have awesome seats. Lots of teams suck out the resale value with high initial prices.

    I also got a good laugh out of the idea that making a new regulation banning stadium subsidies would somehow be protecting a free market. Now that’s thinking like an economics professor!