Ohio gov says $2B stadium slush fund would let state avoid selling bonds (SPOILER: It wouldn’t)

Signal Cleveland has read Ohio Gov. Mike DeWine’s stadium slush fund plan so you don’t have to, and even I don’t have to. (Which is appreciated, because the first two sentences of the bill are doozies.) Here’s highlights of what they found:

  • Doubling the online sports gambling tax from 20% to 40% would generate an estimated $130-180 million a year, which is a lot, and would easily cover a couple of billion dollars for Cleveland Browns and Cincinnati Bengals stadiums, for starters. Signal Cleveland does not report how that estimated figure was estimated — presumably at some level of increased taxation, people would stop using online sports gambling altogether and the revenue would drop to zero — so we’ll just have to take the governor’s word on this one for now.
  • Any resulting windfall of money would be available for either: major-league stadium renovations costing at least $100 million or new stadiums costing at least $1 billion; mixed-use developments around stadiums that are funded at least 60% by non-state sources; or minor-league stadium renovations costing at least $10 million or new stadiums costing at least $50 million. This would cover pretty much anything, though possibly an MLS team might have to appeal to be considered “minor league” if it couldn’t come up with $1 billion worth of crap to stuff into a stadium.
  • The newly-created Ohio Advisory Committee for Sports Facility Construction and Youth Sports Education (that’s the OACSFCYSE to you and me) would be required to “prioritize funding facilities or programs that promote economic development, support youth sports education and encourage training in team or individual sports” and “helping communities in the state attract major sporting events or create tax credits to promote youth sports education,” which, yet again, would appear to allow pretty much any pro sports uses.

DeWine, meanwhile, says all this would be great for the state, because it would mean taxpayers wouldn’t have to worry about paying off any nasty bondses:

“We should pay for this with cash,” DeWine said. “We should not bond it with the state.”

That’s … dumb? I’m going to go with dumb. (Collecting even $180 million a year also wouldn’t work to pay off $2 billion in Browns and Bengals costs up front, but maybe DeWine means to pay those off with separate bonds, which, yeah.) As anyone who has taken out a mortgage knows, paying with cash isn’t necessarily better than borrowing the money and paying it off later, especially if you can get a good interest rate — and states have access to significantly lower interest rates than normal humans. Whether borrowing stadium money or paying for a project up front works out better for taxpayers is a financing question, not a public policy question; which is to say that the most efficient way to get a good return on $180 million a year in stadium spending is not to spend $180 million a year on private sports stadiums.

All this still needs to be approved by the Ohio state legislature, where Signal notes “Republican leadership has publicly expressed skepticism,” but there’s still lots of budget haggling yet to go. Hopefully once budget hearings actually start, someone will remember to bring a calculator.

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Ohio Gov. DeWine wants to create a $2B+ stadium slush fund for Browns, Bengals

Ever since the Cleveland Browns owners let slip that they were looking for $1.2 billion in public money to help pay for a $2.4 billion domed stadium in suburban Brook Park, there’s been speculation about whether and how Ohio Gov. Mike DeWine would propose to come up with a pile of state cash. Yesterday, DeWine dropped one hell of an other shoe, proposing a new Sports Facilities Construction and Sports Education Fund that would collect between $130 million and $180 million per year to be used for stadium construction, specifically naming the Browns and Cincinnati Bengals owners as beneficiaries:

DeWine on Monday proposed creating a new stadium and youth sports education fund with money generated by doubling the state’s tax on sports gambling from 20% to 40%…

DeWine said the gambling revenues would be controlled by a newly created Sports Facilities Construction and Sports Education Fund, whose members would be appointed by the governor’s office and the legislature. He said fund proceeds could be used either on stadiums used by major or minor-league professional sports teams, or sports education. To illustrate what he meant by youth sports education, DeWine offered the example of helping needy families afford sports-related expenses that might otherwise prevent them from participating.

Oh, isn’t that nice, needy families, I’m glad they’re getting something ’cause they have a hell of a time! DeWine did not specify how the fund’s DeWine-appointed managers would determine how much to spend on each of its two disparate missions, though it’s hard to see the state of Ohio finding $180 million a year worth of family sports-related expenses to cover.

It’s still a bit uncertain how much money could be raised by doubling the state’s sports gambling tax, since no one knows how much sports gambling will take place in the future, especially once it’s saddled with a 40% tax. But if DeWine’s estimate of $130-180 million a year in tax revenues is correct, that would be enough to cover debt service on between $2 billion and $2.8 billion of stadium expenses — and potentially more than that if tax revenues rise over time. That would be enough to cover the public funding asks of both the Browns and Bengals owners, and likely leave room for more largesse in the future to other Ohio sports teams, who you know would be lining up once they heard about the DeWine handouts. [UPDATE ALREADY: The Columbus Blue Jackets have entered the chat.]

The governor focused his announcement on all the reasons why hiking the sports gambling tax is a good idea — “These sports gaming companies … they’re getting Ohioans to lose massive amounts of money every year” — while skipping past the bit about who he’s hoping to give the proceeds to. In fact, DeWine portrayed a proposal to dedicate more than $2 billion in tax money to pro sports team owners as a way to save taxpayers money:

“This proposal that I have outlined has the added benefit of no longer will we have to, at any time in the future, go to the people of the state of Ohio and say, your tax dollars will go for this stadium or that stadium,” DeWine said.

I’m sorry, that is incorrect, but we have some lovely parting gifts. Or rather, DeWine is part right: He would no longer have to go to the people of Ohio to say “we want your tax dollars to go for this or that stadium,” but only because he would have created his own slush fund so he would no longer have to ask.

In any dedicated tax funding scheme like this one, it’s important to remember that there are actually two decisions at work: One on which taxes to tap for the money, and the other on where to spend the proceeds. There’s nothing stopping the Ohio legislature right now from doubling the sports gambling tax and spending it on education, or spending it on roads, or just putting it in the general fund and letting future legislators decide what the state most needs at the time. Once the 20% gambling tax hike is dedicated to stadiums, though, that money is gone and can’t be tapped for any other public needs. And that’s assuming the gambling tax revenue even comes in at the rate you hope for: As Minnesota found out to its chagrin with its Vikings stadium funding deal, sometimes the gamblers don’t show up right away, and you have to tap other state funds to cover your budget hole.

All this is merely a proposal at this point, and has to be approved by the Ohio state legislature, some of whose members represent Cleveland and will be none too pleased to hear about the governor hoping to use state tax money to help Jimmy and Dee Haslam move the Browns outside city limits. (Though they’re Democrats and the state legislature is Republican-controlled, so that may not matter so much.) While we wait on word of state legislators’ response, we do have a reply from Browns COO Dave Jenkins, which comes down to thanks, but we like our tax kickback scheme better:

“We appreciate Governor DeWine’s commitment to looking at creative ways to solve sports facilities development while positively impacting youth sports throughout Ohio. … At the same time, we continue to work with the appropriate stakeholders and other experienced experts to develop alternative funding mechanisms for an enclosed Huntington Bank Field in Brook Park, knowing the importance of not tapping into existing taxpayer funds that go to other pressing community needs. The model we’ve proposed on the state level would leverage only the incremental tax revenues from within the development itself to enable the project.”

Everybody’s tax kickback scheme is really a way to save taxpayers money, apparently! Funny how that happens.

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Friday roundup: Hamilton County spends $30m on Bengals parking land, Oakland Coliseum may get second life as soccer venue

Note to reporters seeking help with your research into sports economics issues: I’m more than happy to talk with journalists from all over the political spectrum, as the great stadium swindle is, as has been discussed here time and again, one that neither Republicans nor Democrats have a monopoly on. But if you’re asking for my assistance, maybe don’t include a link to a page with a report your site did saying anti-trans legislation is about “banning males from competing on female sports teams” — if you can’t keep at least one foot on the ground of factual accuracy, what you’re doing isn’t journalism.

Speaking of factual accuracy, here’s your weekly news roundup, fact-checked as well as I can do myself while my fact-checking department is, apparently, out on a long lunch or something:

  • Hamilton County may still be negotiating a lease extension with the owners of the Cincinnati Bengals, but that hasn’t stopped the county from spending $30 million to buy a parcel of land next to the Bengals stadium to use as additional parking and green space. “The Bengals have forgiven us for our [game day] payments,” explained Hamilton County Commission president Denise Driehaus. “It’s about $30 million total. That happened to be the asking price for this property. And so, in essence, the Bengals are paying for the property, and the county owns it.” That “in essence” is doing a lot of work there: From what I can tell from this report, it was back in 2018 Bengals management first agreed to hand over the disputed game day payments, which is money the team owners wanted the county to provide to cover operational costs of holding home games, in exchange for parking — though if they were “disputed” it’s not clear that this was ever team money to begin with.
  • Remember how, just last month, the owners of the Oakland Roots and Soul soccer teams said they wanted to build a temporary stadium before maybe eventually moving to a permanent stadium at Howard Terminal? Forget all that, they were just pulling our legs, now they want to remain at the Oakland Coliseum for “a longer stay.” Guess resident opossums are only an existential threat to baseball teams, not soccer teams?
  • Your occasional reminder that when the Los Angeles Dodgers owners do renovations to their stadium, they spend their own money on it. That likely has something to do with the fact that they have some of the highest attendance numbers and highest ticket prices in baseball, so they benefit the most from upgrades — though it does raise the question of whether, if less popular teams are asking to be subsidized for renovations that won’t pay for themselves, if that’s really about needing renovations or just wanting an excuse to ask for taxpayer money.
  • Chicago Bears president Kevin Warren has upgraded from “steadfast” to “adamant” that his team will break ground on a new stadium in 2025. I do not think that word means what you think it means.
  • The St. Petersburg city council has approved funding for the repair of … Al Lang Stadium! The Tampa Bay Rowdies, who play at Al Lang, are owned by Rays owner Stu Sternberg, so at least St. Pete officials can’t be said to be holding a grudge.
  • The Super Bowl’s coming to New Orleans, everyone get ready to benefit from that cushy NFL spending that will provide … $12/hour jobs to assemble the stage for the $10 million halftime show? Well then.
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The Bengals stadium talks have descended into dadaist poetry

Negotiations between Cincinnati Bengals execs and Hamilton County on a lease extension continue, and as a bunch of emails that emerged last week reveal, they’ve been at times contentious: “It is very clear that we are talking past each other” is one typical missive. Yesterday Hamilton County commissioner Alicia Reece chimed in on the dispute, and uh:

“Our people can get in that room, come back with some changes to this lease, and have a win-win so we can present this to the taxpayers,” Reece said. “Will that be easy? No. If I’m them, I’m hugging the zero down. I’m hugging to give me all the resources. I’m hugging them. I would tell you what’s wrong with this lease. This is a good deal, but the taxpayers did speak. They did vote to have two stadiums, but they never voted for this. And this is what they’re angry about.”

Is “the zero down” a mortgage thing? A football thing? Are the people hugging it taxpayers or Bengals negotiatiors? WKRC-TV included video of Reece’s statements, and the actual transcript (transcribed by me) is only marginally clearer:

“Our people can get in a room, come back with some changes to this lease, and have a win-win and be able to present this to the taxpayers. Now, will that be easy? No. Because if I’m them, I’m hugging to the zero down. I’m hugging to give me all the resources. I’m hugging this lease. I would tell you, ‘What’s wrong with this lease? This is a good deal!’ But the taxpayers did speak. They did go to have two stadiums, but they never voted for this.” (She holds up a sheaf of papers, presumably the proposed lease.) “And this is what they’re angry about.”

With all the focus on the vibes, there’s been little revealed to the public about what’s actually being discussed for a lease extension, which is on the table because the Bengals’ historically sweetheart lease is expiring in June of next year, and the team needs to decide by this June whether to extend it by two years. (The team can extend it for four more two-year periods after that if it wants.) Reece has previously indicated her interest in putting a billion-dollar roof on the team’s stadium and maybe paying for it with state money or NFL money or who knows what. The last proposal from the Bengals negotiators that I can find is one from 2023 where the county would spend $300 million on renovations in exchange for a five-year lease extension, which at $60 million a year would be easily a new record for most expensive lease extension — and would only kick the can down the road until the year 2031. Hugging to the zero down is looking better and better.

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County proposes sticking $1B roof on Bengals stadium, to be paid for by, uh, WrestleMania?

As if proposing $1.2 billion in upgrades to the Cincinnati Bengals stadium with no idea how to pay for them wasn’t enough, Hamilton County officials have now also run the thought experiment “What if we built a dome on it, too?

That is indeed what the Bengals’ stadium could look like with a dome on it, thanks, crack renderers for the Gensler architecture firm! And how much would this add to the price tag?

Construction companies Turner, Messer, Mortenson, AECOM and Hunt pitched their estimated costs of how much putting an enclosure on Paycor Stadium could be. The answer: Anywhere between $903 million and $1.05 billion.

Hrm, yes, well. Thank you for your time, but surely Hamilton County doesn’t have a billion dollars lying around just to put a dome on a stadium that’s used maybe a dozen times a year—

Bringing in additional major events could help cover the operating costs, [Hamilton County Administrator Jeff] Aluotto explained, such as WrestleMania, NCAA basketball tournaments or large-scale concerts.

I’m sorry, what? To pay off a billion dollars in expense, Hamilton County would need to bring in maybe $70 million a year in new tax revenue, on top of what it currently gets. WrestleMania and the NCAA tournament each happen only once a year, and rotate to different cities each year. Maybe if you’re lucky you could get two or three additional concerts a year from artists afraid of rain because they’re made of sugar. The local share of sales tax in Hamilton County is 2.05%, and 0.5% of that already goes to the Bengals and Reds to pay off stadium construction costs. So the new events alone would need to generate something like $4 billion in annual spending to make the math pencil out, something that doesn’t seem likely even if Taylor Swift clones herself and goes on ten tours at once.

And county commissioners can do math too, apparently, with county vice president Denise Driehaus saying at a presentation yesterday, “From my standpoint, we just can’t afford it.” Commission president Alicia Reece said she wants to keep discussing the idea, though — hey, maybe if you talk about it long enough, math will change, it could happen!

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Hamilton County officials to Ohio: Whatever state money Browns get, we want the same for Bengals

Sorry I missed this one last week: Alicia Reece, one of the Hamilton County commissioners proposing a $1.2 billion Cincinnati Bengals stadium renovation with no actual proposal of how to pay for it, has said that her county should get the same amount of state money that the Cleveland Browns get for their new stadium, assuming they get any:

“You can’t give everything to Cleveland and leave us with the scraps,” Reece said during Tuesday’s public meeting of the Hamilton County commissioners.

The state of Ohio hasn’t actually offered anything toward a Browns stadium yet, though Gov. Mike DeWine met with Browns owners Jimmy and Dee Haslam and Cleveland officials last month to talk about the stadium plans, and his spokesperson said the governor is generally in favor of spending public money on stadiums. Though apparently DeWine is aware of the slippery-slope aspect of giving money to one team owner and having all the others in your state show up, hats in hand:

“When you do something with one stadium and one team, that obviously creates a desire all the way through, to do it multiple times,” DeWine said in answer to a question at a Columbus Metropolitan Club forum [in May]. “And that that is what the legislature and I have to be cognizant of and think about as we look at kind of one-off proposals: what is this do to every other team in the state?”

What is this do, indeed? So far, state legislators haven’t seemed super-enthused about lading gobs on money on the Haslams, and are only likely to get less so if the Bengals have to get equal billing. Still, local officials in both Cleveland and Cincinnati are going to be leaning hard on the state to help “solve” their stadium “problems” — so, even if neither team is threatening to move out of state and it shouldn’t matter to state legislators where in Ohio the Browns and Bengals play, don’t be too surprised if DeWine’s response is less “not my table” than “how big a check, exactly?”

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Hamilton County proposes $1.2B Bengals stadium renovation, with no clue who’ll pay for it

The Hamilton County Commission issued a $1.2 billion plan to renovate the Cincinnati Bengals stadium yesterday, with the money to come from

Okay, yup, those sure are some big video boards, but anyway, the $1.2 billion would be raised by

County officials say under the comprehensive renovation process the 24-year-old stadium would be:

  • An engaging multi-purpose setting
  • Modernized, expanded and updated
  • An enhanced and varied fan experience
  • A sustainable home for the Bengals
  • Enhanced public utilization and team venue.

Um, sure, okay, some of those words don’t actually mean anything, but

This is going to cost $1.2 billion, seriously? There are also some renderings of new party decks and food courts and such, but it still seems like a crazy amount of money.

Anyway, sneak past the Cincinnati Enquirer’s paywall and we have our answer, of sorts:

The plan doesn’t lay out the financing. Nor have the Bengals weighed in on it publicly. Administration and commissioners have said they don’t plan on raising new taxes to pay for the stadium upgrades. That means the existing half-cent sales tax that paid for the original construction of the stadium would also pay for whatever the county’s portion of the renovations are.

The county portion of the 7.8% regional sales tax is currently 2.05%, of which 0.5% goes to the Bengals and Reds stadium fund. The county’s tax reporting website hasn’t been updated with figures since 2017, but it’s been reported elsewhere that sales tax revenues were $135 million in 2021, which would make the stadium tax surcharge share $33 million a year. If we project that out for 30 years, depending on how fast taxable spending in the county rises, that could be enough to cover anywhere from around $700 million to $1 billion in stadium renovation bonds.

Of course, the county doesn’t have to spend all that tax money on the Bengals stadium, and may want to set aside some money for when the Reds owners inevitable come calling (or, you know, for things that regular people who don’t own sports teams might need, including lowering that sales tax rate). The Bengals’ current lease expires in 2026, and county officials want to hold out this renovation plan as a carrot for the team signing a new one — though owner Mike Brown has the option to extend the current lease twice for five-year periods, which would guarantee him county spending on holographic replay systems.

The last we heard from Bengals execs, they were proposing $300 million in county spending on renovations while Brown would put in $50 million, in exchange for a five-year lease extension. The county is clearly upping the ante significantly, though whether it would be better or worse for taxpayers depends on how the spending shares and the lease work out, and so far that’s all TBD. In the meantime: pretty pictures! Good thing no one falls for that gimmick anymore

$1.2 billion in proposed Paycor Stadium renovations would transform the riverfront

Sigh.

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Bengals owners to spend $100m on stadium, half from NFL, while seeking $300m+ in public cash in lease talks

The owners of the Cincinnati Bengals have announced they’re spending (or “investing,” in corporate development speak) between $100 million and $120 million on upgrades to their stadium, which will include new audio and video systems, renovated suites and lounges, and improved concession facilities. This wouldn’t normally be news — “Area Business Spends Money on Own Business” — but for the fact that the Bengals are famously recipients of a state-of-the-art clause that requires Hamilton County to provide anything other new stadiums have up to and including “holographic replay systems,” so Bengals owner Mike Brown dipping into his own pocket for upgrades is noteworthy.

And, as you’ve probably expected, there are caveats:

In a post on the team’s website, the Bengals said the league’s finance committee unanimously approved the team’s application to use funds from the NFL’s G-5 loan program.

The G-5 program, successor to the earlier G-3 and G-4 programs, is a loan in name only: Team owners can “repay” the league via money that they would normally have to give to the league anyway as part of revenue sharing, so it’s really just a grant. Owners have to provide their own matching funds, meaning Brown is likely getting only $50-60 million in NFL cash, and, crucially, there must be some public money involved — “purely private projects are not eligible.”

And while Bengals execs didn’t mention public money in their press release about their own spending, that’s the clear subtext here. The team owners and Hamilton County have been engaged in longstanding negotiations over an extension of the team’s lease, which expires in 2026 but can be renewed until 2036, with the county most recently spending $39 million on publicly funded improvements including a new field, refurbished club seating, and an expanded entry plaza. County commissioner Alicia Reece said last month that she wanted to see at least $100 million in NFL funding, and this appears to be an attempt by the team and league to match that number.

While it might seem weird for first the county, then the NFL, to shell out cash as part of lease negotiations in exchange for no actual lease agreement, all of this seems to be a way for the Bengals to zhuzh up their digs while building good will for future upgrades that will likely cost half a billion dollars or more. (The county hasn’t ruled out an entirely new stadium either, though team officials are so far talking just about “investing in the future of the stadium,” implying that it has one.) Last August the Bengals front office proposed that the county commit to spending $300 million on stadium upgrades over the next two years, while the team would put in $50 million, in exchange for a five-year lease extension. County commissioners said that seemed awfully steep — at $60 million per year, it would be the priciest per-year lease extension in stadium history — but don’t appear to have made a counterproposal. It’s all very murky and behind-closed-doors, as most lease talks are, so we’re going to have to wait until word leaks of county commissioners’ response to this latest round of Bengals spending to see if the NFL money can unlock an even bigger amount of subsidies from taxpayers.

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Friday roundup: KC pol seeks to revive sales tax hike for Chiefs only, A’s stadium plans still extremely ¯\_ (ツ)_/¯

This has been a week, for a lot of reasons as well as my trip yesterday to an unseasonably hot Philadelphia to talk with city council staff and community members about the 76ersmuch-unloved arena plans, so I’m declaring editorial privilege to go straight to an abbreviated news roundup:

That’s all I have in me today — if I missed anything, feel free to bring it up in comments. Have a good weekend, and try to stay cool!

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Friday roundup: Two counties plan Royals tax votes, plus fresh subsidy schemes for Spurs, Wild, Jazz, Bengals, [headline capacity reached, stack overflow]

No time or energy for niceties today, let’s get straight to the firehose of news:

  • The Jackson County Legislature plans to vote Monday on putting a measure on the April ballot to extend a 0.375% sales tax surcharge for 40 years to fund new Kansas City Royals and Chiefs stadium projects, even though neither team has decided what kind of stadium projects they want, let alone agreed to lease terms that would determine what if anything the county would get in return. (Jackson County Executive Frank White counters, “You don’t want to rush into something that the taxpayers have to be responsible for for 40 years without getting some equitable agreement with both teams,” but nobody appears to be listening to him.) Meanwhile Clay County appears to be readying its own sales tax hike ballot measure, only with a much larger (as yet undetermined) sales tax surcharge rate because Clay County has fewer people and so less sales. Bidding wars, man, they can’t be beat — I really need to see if I can get New York and New Jersey to compete to see who’ll agree to renovate my kitchen.
  • The San Antonio city council approved a plan to siphon off any future increase in hotel tax revenues from within three miles of the city’s convention center and spend it on convention center upgrades, a renovation of the Alamodome, plus possibly a new Spurs arena. Estimates are that the hotel tax money could come to $222 million, but it’s not clear if that’s present value or over time, and anyway the whole thing is just a guess at how much will be spent at area hotels in the future and what it’ll be spent on is still TBD, but suffice to say there’s a slush fund now should anyone want to tap it.
  • St. Paul Deputy Mayor Jaime Tincher says city officials want to spend “several hundred million” dollars on upgrading the Minnesota Wild‘s arena, and when he says wants to spend, he means he wants the state to spend it, not his city. The Wild’s current 23-year-old arena is “aging,” reports the Minneapolis Star Tribune, and while it’s true that all 23-year-olds are aging just like the rest of us, that’s not usually what the word means.
  • Utah Jazz ownership is exploring building a new arena and entertainment district south of Salt Lake City, and city officials are already preparing a counteroffer to keep the Jazz downtown, playing different parts of a metro area off against each other in a bidding war is absolutely the flavor of the month.
  • As Hamilton County prepares to spend another $39 million on upgrades to the Cincinnati Bengals stadium under their infamous state-of-the-art clause, county board of commissioner president Alicia Reece says she’d like the team’s next lease to require the team owners to pay more of the costs than the 4% they’ve kicked in so far: “You need to put some skin in the game for our team. Give us some respect.” No official word yet on whether Bengals ownership will be insisting on a no-respect clause in any new lease.
  • Tampa Bay Rays co-president Brian Auld says team officials won’t agree to accept $600 million in public money for a new stadium if it would require changing the name to the St. Petersburg Rays because they “want to make sure that this entire project screams inclusive welcomeness.” That’s it, perfect sentence, no notes.
  • I guess “Experts disagree on economic impact of 2023 Super Bowl in Arizona” is better than just reporting the bogus economic impact claims in a press release without rejoinder, but it’s still bothsidesing when the weight of the actual evidence is that the actual impact is a tiny fraction of what the NFL claims.
  • What will the Baltimore Ravens owners be spending their $600 million-and-more in state subsidies on? For starters, a bunch of high-end clubs including an “ultra-premium field-level experience” connecting  to an “exclusive members-only club featuring a speakeasy.” No reports yet on whether it will include a fire pit where well-heeled fans can actually burn taxpayer money.
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Field of Schemes