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February 02, 2011

How much is a Vikings stadium worth?

My MPR appearance has concluded; you can listen to my recorded archive of the whole show here. It was an enlightening hour of conversation, with not just myself and Minnesota state stadium czar Ted Mondale, but also the incomparable Judith Grant Long, compiler of the world's best database on stadium costs and subsidies and author of the hopefully soon-to-be-released book "Full Count" on the same subject.

Mondale, in particular, was far more cautious about his promises of getting a Vikings deal done than I've heard him in the past, repeatedly stressing that Gov. Mark Dayton would only do a deal if it generated "public benefits." He also, of course, cycled through the main pro-stadium arguments, saying that a new stadium was needed to keep the Vikings in town (while later backtracking and saying that move threats were not "helpful to the cause"), asserting that keeping the Vikings would have economic benefits (Mondale claimed $18-20 million in annual benefits to the city of Minneapolis, though he didn't cite a source), saying it's important for the team to remain "economically competitive," and so on.

One of his most telling statements, I thought, came about five minutes into he segment, when the MPR host asked why the Vikings owners shouldn't just build a stadium themselves, given all the windfall profits they'd earn. Mondale's response:

"I don't think it's economically viable to think that the Vikings are going to pay for the entire new stadium. Because I don't think it fits within the value of what they are going to get back."

Read that again: The Vikings wouldn't build a new stadium with their own cash because they'd lose money on the deal. It's confirmation, in other words, that most new stadiums don't actually make money; they're actually big money losers, which can only allow teams to turn a profit if there's a public subsidy.

The big questions, then, is whether there are enough public benefits, in increased tax revenues, job creation, and just the feel-good-ness of having a pro team to root for, to make a subsidy worth it. Or rather, to better state the question: What level of subsidy can be justified in terms of real tangible public benefits?

Here's where Long gave us an intriguing glimpse at the findings of her new book:

"My prescription on [stadium] deals is that the average deal in the U.S. over the last 25 years has been a 75/25: public 75, private 25. And my best deal is actually a flipflop: 25 public, and 75 private. And my rationale actually tries to gather up some of the things that Mr. Mondale has suggested, which I believe are true — there is some benefit associated with having a stadium. And so how do we try to figure out what the correct formula is?
"My 25 percent tries to bring in the urban redevelopment component, the civic image/civic pride, the idea that having a sports team is an amenity — by the way, it doesn't even crack the top ten of important amenities for people looking for jobs, but it is in the top fifteen. So there are some benefits, but let's try to keep the benefits proportional in the deal."

I haven't seen Long's latest research yet, but from what I've found myself, that certainly sounds like in the right ballpark: Teams get about three-quarters of the benefits of a new stadium, whereas the public gets (at best) one-quarter. The question I then asked on the air: What happens if, with a price tag of nearly $1 billion, a 25/75 split turns out to be too rich for the blood of the Vikings and the taxpayers?

Mondale replied that it's entirely possible that a new stadium deal can't be made to work. It'll be very interesting to see if he says the same thing when push comes to shove in the state legislature later this spring.



Sounding good on PR!

I'm almost done your book and besides Fenway Park is there any other place in North America that you can think of that is a win-win situation for both sides that you'd hope to see held up as the watermark of what a stadium deal should be?

Posted by Andrew T on February 2, 2011 06:50 PM

I think both sides did pretty well with Pac Bell Park, which was relatively inexpensive, well designed, and well situated (and 90% private). Maybe some soccer stadiums that were cheap and mostly private? The Metrodome, which cost only $90 million and was repaid by the teams. Um... does Ebbets Field count?

The upshot is, it's very hard to get a win-win deal when you're building something that costs $500 million and up. There just isn't enough new money that a stadium brings in for everybody to get enough slices of the pie.

That said, this is exactly what Judith's book is about, so I'll withhold final comment until I see it.

Posted by Neil deMause on February 2, 2011 08:43 PM

Really enjoyed the show and I thought that Mondale came off as savvy, knowledgeable and likable; I guess I imagined 'the stadium pr guy' to have horns and hooves or something. Anyway, I cringed a bit at his line about the Metrodome being 'funded by taxes.' Yeah, but, isn't the Metrodome an example of a good use of tax money regarding stadiums? That is, the public fronted the money and then got paid back. Am I right on this?

Posted by Adam on February 3, 2011 12:01 AM

Slowly reading your book. There is so much to absorb it's not read like a novel. I'd like to hear more info on the Regina SK stadium. Would also like to get Ms Long's take on it as well. Tried to send an e-mail to her but the e-mail addy is listed as permanently failed. Do you have a way to contact of her? I'm looking forward to her book.

Posted by H Knight on February 3, 2011 12:00 PM

I enjoyed the program, Neil. Thx for the link.

Wow, Wrigley field sure dodged a bullet, huh? Missing roof tiles... man, if that had happened in Minnesota instead of Illinois, they'd have had to demolish the entire structure and rebuild at public expense...

Posted by John Bladen on February 3, 2011 01:44 PM

Mondale said it is not economically viable for the Vikings to build the a new stadium. He did not say that it is also not economically viable for the state to build it.

Posted by Peter on February 3, 2011 02:25 PM

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