A bunch of New York City journalists, including my old Village Voice colleagues Nick Pinto, Max Rivlin-Nadler, and Chris Robbins, have launched a new NYC website called Hell Gate, and they asked me to write something about Gov. Kathy Hochul’s $1 billion (more like $1.1 billion if you count letting the team owners have all the naming rights for a publicly owned stadium) Buffalo Bills deal — specifically, about how the hell it happened when everyone in New York state seems to hate it. And the answer turns out to be: Because New York state, and states in the eastern part of the U.S. in general, aren’t very good at this whole “democracy” thing.
Before Hochul’s Buffalo Billion dropped, there was a growing belief across the country that large-scale sports subsidies were on the wane, as pundits pointed to recent stadiums and arenas that had been built largely with private money. The Golden State Warriors owners spent$1.4 billion on a new arena in San Francisco. Steve Ballmer devoted $1.2 billion to a new home for his Los Angeles Clippers. The owners of the NHL’s Seattle Kraken poured $1.2 billion into a wholesale reconstruction of their arena. And in the most eye-opening number of all, St. Louis Rams owner and Walmart heir by marriage Stan Kroenke spent more than $5 billion out of his own pocket on a new stadium in Los Angeles so he could move his team there—then paid another$790 million to settle a lawsuit over having skipped town in Missouri without following NFL relocation rules.
Geographically savvy readers may have noticed something about all of the above private-money deals—they’re all on the West Coast. And that’s no coincidence, because residents of those states have something that all of us on this side of the country are largely lacking: a greater ability to subject massive public spending projects to a public vote.
The reason for the referendum divide, it turns out, has to do with which states’ constitutions were most influenced by the turn-of-the-last-century Progressive movement’s love of direct democracy, which in turn has to do with where the Progressives were the strongest and which states were new enough to be still figuring out their constitutions when Progressivism took hold. This hasn’t always had the most salutary effects on public policy — in particular, California’s citizen-led Prop 13 cap on property taxes has been a disaster for the state’s schools — but it has led to things like requirements that new local taxes go up for a public vote, which means way more stadium deals need to get popular approval and not just the okay of one legislative body. And since it’s much harder to win a referendum than a legislative vote — 58% of public votes approve sports venues, while a whopping 96% of legislative ones do, according to research by University of Colorado economist Geoffrey Propheter — this means team owners are less likely to successfully demand huge public subsidies, and end up being more likely to build with private money.
There are other pitfalls to direct democracy, like figuring out how to stop the people with the most money for petition-gatherers and ad campaigns from dominating the initiative process, but go read the whole story for, you know, the whole story. It’s free if you sign up with a valid email, which Hell Gate needs so it can stay in touch with readers and figure out how to make this whole “let’s put on an investigative journalism website!” thing viable into the future, so you’re not just reading one article, you’re supporting the future existence of good reporting and collective ownership. And if that’s not worth at least $0, I don’t know what is.
Looks like Oakland could break this West Coast streak Neil with their potential $1 BILLION+ public subsidy for stadium infrastructure; one that the Oakland pols are intent to keep the public from voting on (Democracy anyone?). We’ll see on that one. I’d also add Neil that area’s of the West with deep pockets (corporate support, disposable incomes) also plays a part in the private financing of venues. Area’s that are relatively poor like Oakland? Just ask for hundreds of millions for infrastructure spending while keeping the citizens from having a say. Maybe it works, maybe it doesn’t..
It’s not really a streak per se — the Kings got a new arena out of Sacramento without having to have a public vote, for example. But public votes remain way more common in California than New York.
Neil, you used to work at the Village Voice? Cool! I have fond memories of that paper! Used to subscribe in the late 1980’s…..
Kroenke paid the $790 million after trying to weasel out? I must have missed that…..
Indeed, it was ‘so’ quiet that it has me wondering what backroom deal Kroenke’s pals in the NFL owner’s club might have agreed to help him offset these costs going forward.
Maybe the rent on the NFL’s west coast HQ inside SOFI will be rising ahead of the SoCal commercial curve or something.
Yeah too bad, that trial would have been epic…which is why they made him settle. There’s an ESPN article about the sh*tstorm of an owner’s meeting that ensued when Stan said he wasnt covering owner’s legal fees.
I may be in danger of straying off the sports related topic here… but one of the fundamental failings of federal governments (not just in America) today is that they don’t seem to understand just how much their own behaviours are inspiring the very divisions they claim to wish to heal.
It’s not “ALL” down to them. But there are many ways in which they contribute to it. Rampant corruption – which includes the kind of backroom deals all parties have been engaging in: sports stadium deals as well as other types of sole sourced contracts handed out to friends, patronage appointments etc – is really what is behind most of the public dissatisfaction and unrest.
I think we know it has always existed, but it at least feels like it is growing… and at such a massive rate that it threatens to destroy democracies. Whether it is actually growing or whether we just see a higher percentage of the examples of it than we used to is, I think, an open question.
When you have officials elected to represent the people that are not only not following the spirit or letter of the laws of the land, but are actively seeking to create back room deals that are specifically structured to bypass laws that the same government created precisely to prevent these kinds of deals from happening, it is not hard to see why ordinary voters and taxpayers throw up their hands and say “They are all the same. They are all crooks”.
And this happens, of course, regardless of party affiliation.
I don’t know that Kathy Hochul’s husband’s business relationship with the Bills affected her decision making at all. But I do know that it is utterly inappropriate for an elected official with a family member who holds that conflict of interest to be involved in any discussion, preparation, review or decision relating to an issue that is so obviously non-arm’s length.
And yet here we are. She not only was ‘involved’, she essentially hand crafted the deal and attached it to a budget bill hours before it was passed. Literally every step she took was designed to prevent this deal from being reviewed (or even read) before the state leg voted on it.
If this sort of shady backroom deal had been done in private business instead of government, it would be a RICO violation (extortion/bribery and possibly other clauses).
Of course, it was Nixon who signed RICO into law so, you know…
Yeah, the well-earned distrust of politicians has created a toxic distrust of government and other civic institutions.
In that environment, some people will latch onto demagogues who claim to have all the answers, even if everything they say is a lie. At least it’s simple and it blames other people for the problems.
For sports stadiums, perhaps one of those economist types that study decisions could explain it better – U Penn seems to have a disproportionate number of those people – but I think these politicians get away with this because of how voters misperceive the choice at hand.
Voters are more likely to notice something that has disappeared than the lack of something that never arrived.
The Bills leaving would be very noticeable, especially to the sort of people who buy luxury boxes, and those people might blame the politicians.
But all the better things that money could go to instead aren’t there now – better schools, better roads, better parks, better social services for under-resourced communities – so people are less likely to notice that they aren’t there next year either.
If you actually put it in black and white on a ballot referendum, they’re really forced to think about the pros and cons. But when they’re thinking about voting for or against an incumbent politician, it’s unlikely to be top of mind.
The thing is, though, only one mayor has ever been voted out of office after a team left town. So I think that’s more an excuse that politicians give for voting for these things than an actual motivation.
Right, it’s just a hypothesis.
I’m fairly confident that lots of people tend to fixate more on what’s been lost than what could be gained. Indeed, that seems to be the essence of center-right conservatism.
I’m extremely confident that elections are rarely, if ever, won or lost based on facts.
But I don’t know if stadium deals, or big public giveaways, are ever likely to swing elections.
I’m not sure which mayoral election you’re mentioning, but all that shows is letting the team walk was the wrong decision, politically, in that particular case.
It’s hard to know what would have happened in all those cases where they made a different decision, because each situation is different.
Maybe it does matter more often and the politicians also usually make the right calculation. It’s possible that there were lots of other cases where that would have been the wrong thing to do, so the politicians caved.
We don’t know for sure what the politics of a Bengalsless Cincinnati would be like, for example.
And certainly, giving away lots of money for a stadium can also be bad for one’s political career. My recollection is that the voters were not happy with the Marlins deal.
I certainly don’t see what’s in it for the governor to give away so much to the Bills so enthusiastically, unless she’s playing some Billions-style 4D chess and making deals within deals to get something else she wants passed.
It was the Seattle Supersonics, and by all accounts the mayor could have won reelection if he’d bothered to follow the political maxim of “Be sure to shovel the streets after it snows.”
There’s actually some behavioral economics evidence that people think losing something costs them more than gaining that same thing will get them. (See: People who win NCAA Tournament tickets in a lottery and won’t sell them for anything, while people who lost the lottery are only willing to pay a small amount for the same tickets.) But I strongly suspect that’s less of a motivation in subsidy decisions like Hochul’s compared to “this will make the lobbyists at parties I go to happy.”
I honestly think the whole business of sports from an owners pov(and thus the whole business model) is not about butts in seats in person, or even wins/championships, but a gambit of getting gov money/assistance/real estate through backroom collaboration with those who derive indirect payment and consideration from these perpetual oligarchs. It takes lots of money and connections to win over the other member of your country club that’s vying to win public office. Also to become part of the oligarch tier of the club. The anonymous inexhaustible gov money greases so many wheels in so many different industries as to be astounding at how people still think of mobocracy as a real thing rather than the fantasy it is. Sports just gets more spotlight than most of the other things. I follow your site not because I actually watch any of these various sports, which are all just a form of WWE imo, but to just get a slice of the way things really work. I think it would be interesting if someone did the same for more international sports dramas, like F1 or euro soccer but it’s probably even harder to get info out of those govs.
This site has dipped into European soccer, but there’s only so much time in the week. If anyone wants to apply to become FoS’s Bundesliga correspondent, the job is wide open! (But the pay is terrible.)
I definitely agree that the people that both the owners and politicians are trying to please are other rich people, not the masses.
All of this raises the question of why some owners do actually pay for their own arenas (or most of them). Is it just out of human decency or is there a long-term economic advantage to them of just getting it done without having to negotiate or lobby for public handouts?
Mostly because elected officials (or the voters) said “no,” as noted in the article linked in this post.
So voters approving billion dollar playgrounds for billionaire owners and millionaire athletes is better than their representatives doing the same? This taxpayer disagrees.
Voters are 10.5 times less likely to approve.