One of the most confusing parts of calculating stadium subsidy costs is accounting for the present value of future expenses: It’s how F.C. Cincinnati‘s $213 million in taxpayer largesse is really more like $81 million once you factor in that a lot of the spending doesn’t need to take place for decades.
(Note, by the way, that this isn’t directly about inflation: Even if inflation were zero, a dollar spent 30 years from now would still be less of a cost than a dollar spent now, simply because you can put a fraction of a dollar in the bank now and end up with a dollar in three decades.)
Anyway, all of this is to say that when the Columbus Dispatch reports that the public cost of the new Columbus Crew stadium has risen from $115 million to $140 million, it’s important to determine whether this requires an asterisk, if some of that cost is in the future. My previous calculation of the present-value public cost was $88 million; the new total is, per the Dispatch:
- $28 million in cash payments from the city of Columbus, plus $12 million to build a new public sports park.
- A county contribution of $2.5 million a year for 30 years, which comes to $45 million in present value.
- A state contribution of $20 million.
- $25 million in property taxes that will be diverted to the stadium.
- ???????? for purchasing the stadium land, which is supposed to be figured out by August 15, though that deadline could be extended.
The Dispatch actually seems to have done a good job of accounting for present value, but unless I’m missing something, they’ve done a less good job on addition: $40 million + $45 million + $20 million + $25 million = $130 million, not $140 million. Which isn’t to say the public cost won’t reach $140 million — the public land costs could easily drive it that high — but it seems like the current price tag should be “$130 million plus land,” so that’s what I’m going with.
The Crew, meanwhile, would according to the Dispatch “market, control and have the rights to all revenue from the new stadium,” including naming rights, paying just $10 a year in rent. You might think that with the public putting up about half the cost of the building, they should get something like half the revenues — but if so you clearly haven’t read the subtitle of the book that launched this website. Silly you!