Using ticket tax to fund new Revolution stadium in Boston would cost fans $41 a pop

In case you’re wondering, yes, New England Revolution (and Patriots) owner Robert Kraft still wants a new soccer stadium in Boston, whether or not it’s a converted Olympic stadium. In fact, the Boston Globe reports that Kraft has been talking to Boston Mayor Marty Walsh about it, and even has an idea for how to pay for one:

One scenario Kraft has floated with City Hall is having Boston build and own a $200 million soccer stadium, according to a person close to the situation who spoke on the condition of anonymity because the talks are ongoing. The debt would be repaid by a tax charged on tickets.

The Globe then goes on to lots of speculation about where a stadium would be built and whether Walsh would go for public funding, but let’s stop for a minute to explore another question: Does building a $200 million soccer stadium and paying for it with a ticket tax make a damn bit of sense? Selling $200 million in construction bonds would cost something on the order of $14 million a year to pay off, depending on interest rates and financing charges. Let’s give the Revolution the benefit of the doubt and assume they’ll sell 20,000 tickets per game (they average maybe 15,000 now, but MLS attendance figures are famously squishy), or 340,000 per year. That means a simple ticket tax of a mere $41.18 per person would be enough to pay off the stadium debt. Easy-peasy!

Okay, add in a few soccer friendlies and other exhibition games and maybe you could get the tax down to $30 or so, and maybe selling naming rights could knock off a few more dollars, but you get the point. This, in a nutshell, is why it’s so damn hard to get the numbers on new stadiums to work out: They’re really expensive to build, and there’s only so much more you can charge fans above what they’re already paying. Which raises the question: Why build a new stadium in the first place, as nice as it would be for Revolution fans in Boston to take the T to games, if it would be a massive money-loser? That’s another question to be addressed in future Globe articles, I guess.

17 comments on “Using ticket tax to fund new Revolution stadium in Boston would cost fans $41 a pop

  1. Pretty one-sided article that makes several assumptions while playing fast and loose with the numbers. Not suggesting the author doesn’t have a point: A soccer specific stadium or any larger sports facility is a tough sell that provokes legitimate concerns that extend beyond simple N.I.M.B.Y. activism, especially a private one that ultimately may demand public concessions in terms of $$$. That being said modern stadia similar to those the Krafts might explore are multi-purpose facilities that allow for a multitude of revenue streams (naming rights or lease agreements for example) in addition to those provided through the primary tenant; Red Sox ownership can certainly speak to this… If the Krafts and the City of Boston can work together on a financing plan that makes sense for their respective constituencies then a SSS ‘in’ Boston is possible with a much better cost to benefit ratio than other ideas (cough, cough… Summer Olympics).

  2. Check your numbers again. The Rev’s are averaging over 15,000 per game. Using lower than real numbers is an indication of a biased article.

  3. Evan – He made an allowance for other events.

    KraftOwnzRevs – He used 20,000.

    Thanks for dropping by.

  4. Criticize someone for “playing fast and loose with the numbers.”

    Then provide no numbers of your own (but use lots of fun phrases—like ‘work together on a financing plan’ and ‘cost-to-benefit ratio’—that pretty much require numbers to have any use in an argument).

    Excellent job.

  5. Wow, Neil, you really got under the Boston sports mob’s skin with this one. Should have thrown in a “deflated soccer ball” joke for good measure.

  6. I used the Revs attendance numbers from this site, which apparently hasn’t updated for the last home game or two:

    Checking Wikipedia, which I should have done in the first place, gets the average attendance figures all the way up to 16,000, which is right where it was last year:

    I still think 20,000/game is a generous guesstimate for a new stadium. The larger point, though, is that unless they’re planning on building a 200,000-seat soccer stadium or expanding the season to 100 games, there’s no way a ticket tax will raise any significant portion of a $200 million stadium’s construction cost.

  7. The Revs are at 16,410 for eight home games at the moment. How many of those are paid, only the Krafts know for sure.

    Being in that general area is not an indication of a biased article (though it is an indication of imprecision). Your knee-jerk reaction to that IS an indication of being a fanboy, KraftOwnzRevs.

    It might very well be the case that a stadium IN Boston could attract more paying customers. Maybe it’s 20,000 a game, maybe not. But the numbers probably are tough to make work either way. If a stadium was a guaranteed money-maker, Kraft would just do it himself, wouldn’t he?

    But team owners – even billionaires – don’t do that.

  8. It’s like a word salad of development lingo and attacks on those poor bastards who are against “progress” i.e. people who don’t want their tax dollars going towards stadiums. Meanwhile, like the movement for the Olympics in Boston, actual public infrastructure is being neglected and seeing tax hikes through the roof.

  9. Keith: “they average maybe 15,000 now, but MLS attendance figures are famously squishy” @ KT Re: Your “FanBoy” comment. I’m a supporter who goes to every home game. I have a real sense of how many people come. I also know the secret that this is the best value, by far in New England for a sporting experience, but I guess that’s beside the point. If more people realized how good a time it actually is, then even Gillette would sell out. But the reality is that the media ignores the Rev’s and Boston sports fans have Red Sox on the brain 24/7. Even you can only speculate because apparently, you don’t know much Re: Revs either.

  10. Okay, let’s lay off the name-calling (“fanboy,” “you don’t know much”) here.

    I can’t speak for Keith, but I’m a fairly big soccer fan who goes to at least a few Red Bulls games a year, so I know the value of a soccer-only stadium in terms of fan experience. I also know that reported MLS attendance figures are laughable, though, and that there’s no way you’re going to pay for a new stadium just by surcharges on fans. Could you piece together ticket taxes, naming rights, and something else? I’m still skeptical, though let’s see what Orlando City comes up with and see if it’ll scale up for Boston.

  11. I’d actually disagree–it doesn’t have to be that expensive to build a “stadium”–i.e. a place where people watch sports. It is expensive to build places like that in the most expensive real estate in a city, with very expensive luxury boxes and the crazy architecture that surround them.

  12. @KraftOwnzRevs: I had Revolution season tickets for 14 years, the last 10 in the Fort, so I also know who attends games and how much a new stadium near the city could impact attendance and atmosphere. I wish Revs games were like what we see on TV in Seattle or Portland. But that’s not the point here. Just because we want a new stadium doesn’t mean the taxpayers should have to pay for it. Time and time again municipalities get completely screwed when financially supporting construction of these venues.

    @Evan Whitney: So many projects can provide “much better cost to benefit ratio than” any new sporting venue based on similar examples across the country, so I don’t understand why providing concessions for a new stadium should even be on the agenda. And I’m curious what other events a new multi-purpose Revs stadium could host that would provide significant revenue streams to help pay off any government assistance; there are a few other similarly-sized concert venues in the area and big soccer matches will continue to go to Foxborough or Hartford. I have met you and know how educated you are so I do respect your opinion – I just hope that “Revs Fan Evan” doesn’t cloud “Taxpayer Evan’s” judgement.

  13. GDub: Sorry, you’re correct — I meant to say “to build a $200m stadium.”

  14. How ’bout this? Mr. Kraft gives $200 million to Boston to build and own a stadium. Boston slaps on a ticket tax and rebates it to Mr. Kraft until the 200 mil is paid back. What’s good for the goose…..

  15. If Robert Kraft was forced to liquidate all of his businesses besides the New England Patriots and Gillette Stadium/Patriot Place, I’m not sure if he could come up with $200 million. The value growth of his NFL team made him a billionaire while his paper plants paid the interest payments.

    If there is a bright spot in Kraft’s $200 million offer, he may want Boston to take out the loan at the low rate, and KSG seems willing to make the payments. The team would be obligated to pay for the stadium until they file for bankruptcy. Boston residents have nothing to worry about.

  16. @Jim, the problem is that Krafts / team can’t really be obligated to pay for the stadium (if the city builds it with tax-free bonds, which is the idea). The law is that you use tax-free bonds, it has to be a 90%+ public project. Meaning, Kraft can’t just make an agreement with the city where Kraft promises to cover stadium costs, because then the project wouldn’t be public.

    If the city goes with this idea to use tax-free bonds, then the only way they can get their money back is via taxes. Like, a tax on ticket sales or whatever. So that’s why it’s important to have realistic math in advance. Can the city really get their money back via taxes? What kind of taxes and how big?

  17. You can’t use ticket taxes for tax-free bonds — you need to use “generally applicable taxes,” not ones that only apply to the stadium in particular.

    The whole idea of this law was to prevent the use of tax-free bond for for-profit projects. That it’s now being used to justify even bigger public subsidies for for-profit projects has had Pat Moynihan rolling his grave since before he was even dead.