Shit’s gettin’ real-ish in Kansas City:
- Missouri Gov. Mike Kehoe met with city and Jackson County leaders yesterday for 30 minutes to discuss plans for Chiefs and Royals stadiums. County legislator Sean Smith, who was a swing vote in approving a referendum on the last stadium-funding proposal for the teams, came away saying “it went really well” and “the governor indicated that there’s clearly some state-level tools they can bring to bear,” which is unspecific but sounds like state funding of some kind is in play.
- State officials said they’ll work on property tax reform, which #1 stadium backer county legislator Manny Abarca said could help get county voters on board with raising taxes for stadiums.
- KFVS-TV opined that “The Kansas City Chiefs bring more than just championships to Missouri. The Chiefs estimate Missouri receives $28.8 million in tax revenue each year from their games.” (That sound you just heard was millions of economists suddenly crying out in terror and being suddenly silenced.)
- In neighboring Clay County, meanwhile, two state senators introduced legislation to create a county sports complex authority to spend money it would get from somewhere, somehow.
- In neighboring Kansas, House Rep. Sean Tarwater recommended against using money from a fund to lure sports teams to spend on education instead, on the grounds that the state is currently negotiating with the Chiefs and Royals owners and if officials offered money and then had to reveal they blew it all on schools, “we’d look like jackasses.”
- The video from the same KMBC story that reported on Tarwater opined that Missouri house speaker Jon Patterson said last spring’s stadium funding referendum “likely failed because there wasn’t a sense that Kansas City Jackson County were on the same page,” which, okay, Jon.
Nothing concrete, in other words, but the bidding war is clearly very much on. Presumably legislators are currently putting their heads together to figure out how to approve money in a way that doesn’t require going before voters, or at least going before voters with a “but we’re cutting your property taxes at the same time!” carrot. The Chiefs and Royals owners, meanwhile, have not publicly commented, which has been working pretty well so far as they’ve let competing elected officials do their work for them, bwahahaha.
28.8m in tax revenue?
Zero incremental tax revenue is from locals as spending on sports is just spending they wont do eksewhere locally .
So all of that must come from out of town fans. Ill presume that 10% of Chiefs attendees dont live in KC. Assuming 12 home games per year (incl. 2 playoff and preseason games) that generates 91,000 visitors.
That equals $316 per fan in taxes. That presumes $3500 in non airfare, non ticket, non stadium spending per fan per game. And it only counts if the spending is in the jurisdiction with the stadium.
The real number is probably closer to 8 or 9 million per season.
Well Missouri has a 4.8% top income tax rate and the Chiefs payroll is approaching $300 million. So that’s north of $12 million. Yes players only pay taxes on home games but then you have visiting team payrolls so that’s a wash. Then you have front office staff to add on top of that and the corporate income tax on the team. As far as out of town fans go, we don’t know how many of them are from the Kansas side. Or if the money spent on other activities if the Chiefs weren’t there would be on the other side of the border.
Don’t players have salary paid to charitable foundations to avoid taxes? There has to be some form of tax dodging.
Are teams exempt from business taxes? If politicians are willing to hand over money for stadiums, I have to imagine they will write carve-outs into the tax code in exchange for free tickets. If not, there must be creative accounting and shell corporations to decrease taxable income (how many parking concessionaires are based in the Cayman Islands?)
Yes they do.
And I would loooooove to look over any NFL team’s tax return(s).
I bet they all struggle to generate any net profit and practically operate as public services… at least according to their tax returns.
How is such a thing possible when teams pretty clearly generate $100-400m in net profit annually?
That’s what accountants get paid for.
Not tax returns, but many years ago in some court case (maybe one of the Raiders’ LA cases, can’t recall right now), NFL teams’ financials were included as exhibits.
Now, the landscape has changed quite a bit since then, in terms of revenue, between TV and new stadiums just for starters.
But unless I can find the PDF I saved, I’m going to have to go by memory and say that, yeah, they were all profitable and were all trying really hard to seem poor.
You simply cannot be poor and pay a quarterback who can’t play $46M.
“I can turn a $4 million profit into a $2 million loss and get every national accounting firm to agree with me.” — Blue Jays exec Paul Beeston
Former Missouri taxpayer here. I ended up paying about 50% of the tax rate percentage liability due to deductions.
Plus there are all kinds of partial year conventions that may be employed.
Furthermore its possible that only a small fraction of that money ends up back in KC, as state income tax may go to the state.
The actual KC portion of those taxes may be as low as a million bucks.
Agreed. Just based on their claim of nearly $30m annually, I knew it couldn’t be more than $3m in reality.
Pretty soon some KC area politician will propose a dome so they can get into the Super Bowl rotation
You’re 10 months too late:
https://www.kmbc.com/article/kansas-city-chiefs-domed-stadium-renderings-kansas-city-kansas/60655197