NJ paying up to $20m a year to NBC to use Meadowlands Arena as a soundstage

New Jersey’s now-shuttered Meadowlands Arena, which died at age 33 in 2015 of arena glut, has found new life as the soundstage for NBC Universal TV shows “The Enemy Within” and “Lincoln Rhyme: Hunt for the Bone Collector.” (They’ve never heard of you, either.) That’s a good adaptive, reuse of a state asset that doesn’t cost state taxpayers anything … except that in order to lure the productions, New Jersey Gov. Phil Murphy is paying them a whole lot of money in tax subsidies:

The relationship between NBC and the New Jersey Sports and Exposition Authority, which owns the arena, is the byproduct of a tax credit signed by Governor Phil Murphy that took affect last year and was meant to draw business to the state from film and digital media companies…

NBC reached out to the commission when it began scouting for warehouses to use as a sound stage. The commission suggested the abandoned arena and within weeks, NBC and the NJSEA struck a deal.

The NJ.com article on this doesn’t bother to calculate how much this is costing New Jersey taxpayers, so we’ll have to do the math for them. NBC spent $63 million filming the first season, and the Garden State Film and Digital Media Jobs Act reimburses 30% of a production company’s expenses — not 30% of its taxes, 30% of its expenses, even if that’s more than the company paid in local taxes (this is known as a “refundable” tax credit). So that means that if all of that $63 million was spent locally, New Jerseyans are paying more than $20 million for the privilege of being in close proximity to Russell Hornsby playing a tetraplegic “brilliant but hardheaded forensic criminologist.”

There are benefits to the local economy, certainly, since TV shoots hire local caterers, buy from local vendors, etc.; but numerous studies have shown that these aren’t enough to repay states’ expense on subsidies, which is why lots of states, including New Jersey, have canceled them in the past. (Though former New Jersey Gov. Chris Christie seems to have been motivated less by the program’s terrible economics than by his concern that “Jersey Shore” made the state look bad.) NBC Universal’s current lease is $185,000 per month, and the state sales and income taxes are in the single digits, so it seems inconceivable that New Jersey is getting anywhere near positive bang for its buck.

The NJ.com article, meanwhile, happily burbles along without wondering about any of this, but it does take the time to include this memorable quote from Jim Kirkos, president of the Meadowlands Regional Chamber of Commerce, about how tough it was when the arena closed:

“It was a blow not only to the union workers and stage hands, but we lost the economic impact of event day activity,” he said. “The family of four who take their two kids to Disney on Ice is likely to go out to dinner to a local restaurant. It’s the sports bars, if it’s a sporting event. All the restaurant and hospitality-type businesses lost the positive impact of event activity.”

For those of you who’ve never been fortunate enough to attend a sporting event at the Meadowlands, let me paint a picture for you: It’s in the middle of a parking lot, in the middle of a swamp. I have been to dozens of sporting events and concerts (this was a particular highlight) there, arriving variously by car, train, and bus, and never once have I even been aware of a place that I could have dinner in the vicinity. The already dismal bump to local spending from sports facilities has to be at its absolute weakest in a place like the Meadowlands, to the point where I’m impressed that Kirkos could make the above statement without bursting into laughter.

It’s all just another lesson in a couple of things: One, that sports venues are the tax gift that keeps on costing, as elected officials tend to see them as “too big to fail” in ways that often end up throwing good money after bad; and two, that elected officials will sign ginormous checks for just about anything, so long as it can be declared a “tax credit” and for promoting “development.” The main difference between the rich and the poor, it turns out, is that the former’s grifting is less likely to be punished by bloodshed.

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7 comments on “NJ paying up to $20m a year to NBC to use Meadowlands Arena as a soundstage

  1. While your criticism of the incentives paid is certainly valid, there is a huge shopping/entertainment development next to the arena that recently opened (With government funded infrastructure improvements used in its development as well, of course)

  2. Yeah, but it wasn’t open when the arena was, so it’s hardly the case that local merchants are missing all those Nets fans who used to eat dinner in the swamp.

    I’ll check out Son of Xanadu next time I’m at an international soccer match, I guess. It’s been a half-finished hulk for so long, it’s hard to picture it with actual businesses there. (And it’s only partly open even now, right?)

  3. For me, this place will always be the “Brendan Byrne Arena”. I grew up in Connecticut and anyone who arrived their by any method other than car deserves a medal. You are, if anything, too kind to Mr. Kirkos. Even after the lengthy drive from CT nobody was interested in the “local” businesses. Once you were in your car and waited in the line out of the parking lot it was just as easy to drive into the city or home.

  4. I thought the replacement arena was built in Newark specifically so the, errr, ambiance would be familiar to fans used to going to Brendan Byrne?

    If it were true that sports facilities (or sports complexes) were anchors for ancillary development then the Meadowlands complex would not exist as it does today. If having sports arenas and stadiums triggered privately funded revitalization that meant also having bars and restaurants etc, those facilities would have existed at the Meadowlands in the 1970s (or 80s at worst). This complex was once host to two NFL teams, an NBA team, an NHL franchise and an Indycar race (amongst other events of course. Some idiot even put a USFL team there once). If 110 guaranteed major events a year aren’t enough to convince bars and restaurants to set up shop it rather puts the lie to the claim that sports facilities spur spinoffs, doesn’t it?

    While they may be inconvenient to get to, having these facilities built on relatively low cost (and largely non tax generating) lands out in the middle of nowhere is far better than taking several blocks of prime downtown real estate in a major center permanently off the tax rolls.

    There are cases where smaller downtown facilities have been catalysts for development, but these are the exception rather than the rule.

  5. I really wish the Federal government taxed these tax breaks at 110% to put the nail in the coffin on these. Sure you’ll get $30 million from NJ, but you’ll owe the Federal Government $33 million.

  6. I think the main problem with this is a misperception that most sports fans live the life of a 24 year old. Sports journalists, who are paid to have the activities of that group, are the worst about perpetuating this myth.

    At this point in life, if I somehow go downtown for a game on a weeknight, I’m probably barely making a 7:30 start, depending on transit or traffic. I’m certainly not sitting down to a steak meal for two hours. Nor am I up for a few drinks after the game before driving home. If I do spend money, it is in the stadium.

    A few young city dwellers might be more social, but I doubt that’s much more than a small minority of attendees.

    No other country in the world I know of pretends that stadiums are an engine of economic growth, other than drinking bottled beer on a tram. None I know of put a stadium downtown. take a look at any soccer stadium built in anything but the richest markets (Chelsea) to see what “normal” is.

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