Go Vikings! And take Senator Dick Day with you

Vikings-logo I agree with Republican activist Andy Brehm who has a commentary in today’s Strib: The Vikings? Great. Gambling? Not good. "Dick Day’s proposal to pay for a stadium with proceeds from a ‘racino’ sounds painless, but would in fact be very damaging." That would be soon-to-be-lobbyist Senator Dick Day.

I also agree with Craig Cox, a former colleague at Utne Reader, who chastised the Strib in his letter to the editor last week for not asking Vikings owner Zygi Wilf some hard questions:

 

  • Why exactly does Wilf need a new stadium?
  • Didn’t you know when you purchased the team that the Vikings lagged behind the rest of the league in revenue? Did you assume that taxpayers would eventually pay for a new stadium?
  • If the Metrodome’s lack of revenue hampers the team’s ability to compete, how have you been able to afford high-priced free agents such as Jared Allen and Brett Favre?
  • Are the Vikings a profitable franchise?

And in case you were wondering, I’m a die-hard, fair-weather Vikings fan.

26 thoughts on “Go Vikings! And take Senator Dick Day with you”

  1. The argument I have heard from someone who is deeply involved in trying to get the new stadium built is that it does in the long run bring in a lot more taxes then it costs to build and that is what kept the 30 year old present stadium up and running.
    I have also heard that the present stadium is somewhat of a accident about to happen.

    And in case you are wondering, I am a die hard fan of whatever keeps people from killing each other at the average rate of 16,000 per year in the USA.

  2. Andy Brehm is spot on about the damaging effects of funding a new stadium with racino proceeds. Legislators too often take this easy way out by not raising taxes to fund programs. As Andy Brehm says, gambling (including the lottery in my view) is a regressive way to raise money for state programs. If the Vikings need a new stadium, and if it is to be built with state revenues, it should line up with the other state capital needs to be considered during the debates on bonding in the next legislative session.

    The other problem I have is with a legislator retiring early to become a lobbyist. I’m surprised we don’t have a law in Minnesota requiring a “decent interval” between serving as a legislator and becoming a lobbyist.

  3. This was the best question asked:

    Didn’t you know when you purchased the team that the Vikings lagged behind the rest of the league in revenue? Did you assume that taxpayers would eventually pay for a new stadium?

    Mr. Wilf knew exactly what he was buying. His plan is (and was) clear: extract money from the citizens of Minnesota, or extract money from some other city/state. It’s the same business model embraced by (almost) every other pro sports franchise in the country.

    I hope there’s more resistance to his campaign here than in other states, but I’m not holding my breath. These teams almost always seem to manage to get whatever they want.

  4. It will be interesting to see if the build-a-new-stadium effort will receive any critical coverage in the local press. My past experience is that local papers and television news outlets find sports coverage quite profitable, and never really ask tough questions about these stadium deals.

    In Milwaukee (my home at the time) in the mid-90’s, the Brewers pushed hard for – and eventually obtained – a new taxpayer-funded stadium. Interestingly, the biggest proponents of the stadium effort were the media outlets that were also reporting on the effort. In Milwaukee, Journal Communications controlled 1) the TV station that broadcasted the Brewers, 2) the radio station that broadcasted the Brewers, and 3/4) the two newspapers that covered the Brewers. Every one of these made a lot of money off the Brewers, and none of them every seriously questioned or analyzed the Brewers’ proposals. Rather, they served primarily as cheerleaders.

    Indeed, the CEO of Journal Communications was the chairman of the Milwaukee Stadium Commission. He was also a registered lobbyist promoting the effort to build a new stadium.

    When Journal CEO Robert Kahlor was asked (by a Madison WI reporter) about his company’s pro-stadium position, he conceded that the

    coverage has “been positive. But it’s been positive for the right reasons – because our reporters and editors understand that [a new stadium] is good for Wisconsin.”

    Page 5 at http://www.commoncause.org/atf/cf/%7BFB3C17E2-CDD1-4DF6-92BE-BD4429893665%7D/TALEOFFIVECITIES.PDF – the original article(s) not being available/easily findable on the web.

    It will be particularly interesting (from an LGN point of view) to see if this stadium-news-coverage dynamic is changed at all by the proliferation of web-based outlets which are not subsidiaries of large companies.

  5. First, a disclaimer regarding my philosophical bias. I am opposed to any governmental unit profiting from the addictions of its citizens. I believe this is government at it’s worst. This includes municipal liquor stores, which profit daily from the addictions of its citizens, and state run lottery programs. I have watched countless people in bars “donate” an inordinate percentage of their paychecks to charity by way of pull tabs.

    The fact is, however, that gambling is pervasive in Minnesota. I cant drive anywhere without hearing a radio commercial urging me to buy one of the state’s cleverly devised lottery ticket promotions. It seems that no matter where you live in Minnesota, you are within a stones throw of a casino. Isnt the horse already out of the barn? Isnt it way too late to be asking the question “what would legalized gambling do to the citizens of this state, and what would be the social costs of such a policy?” Would the addition of a “racino” really take money from other businesses, nonprofits, churches etc? Are there people out there who are having difficulty disposing of their “gambling” budget now? Would the addition of a racino take money from other business, non-profit or charitable concerns, or would it simply take money from another arm of the ubiquitous gambling enterprises already available in this state? Isn’ the more appropriate question: “Given that the policy in this state is to encourage people to spend their money on gambling, what is the best use of that gambling money?”

    I don’t know how the Viking stadium would fare in such a debate, but, for better or worse, I think that is what the debate is about at this point in time. Wolf is no fool. He knows this is a good time to push for a stadium, and he knows that he is holding the trump card – that he can move this team and there will be takers who will build him a new stadium. It doesn’t matter whether or not Wolf is making money at the Metrodome, or how much.The fact is, there are cities that want an NFL stadium that will build new. better and more profitable stadiums for the owners.

    The Vikings, as an entertainment resource, are important to a lot of people. If they left town, they would be missed. The decision to let them go might ultimately be the will of most of the people (although I would be surprised if this were so), but it seems a little late in the day to argue that we cant help fund them with gambling because, dog gone it, gambling is bad for us.

  6. Well said, Lance.

    The proposal is about allowing competition in casino gambling. Competition that would pay a heathy per centage of the winnings to the state. People will gamble. The state sanctions and profits from gambling. Limiting the scope of state sanctioned and sponsered gambling is more about protecting the Native American franchises, than about protecting citizens from the expansion of ‘vice’.

    I say let the tracks have full blown casino gambling; blackjack, craps, etc. Just make sure that a healthy chunk of the profits go to state coffers.

  7. Lance, you summarize the gambling issue very well. The current status of gaming in Minnesota frustrates a lot of people—but for a wide variety of reasons. A lot of people today seem to line up in the category of “As long as we have it in Minnesota, let’s deal with it well.” That generallky means let’s have decent competition and let’s also have the state share in the profits of all casinos and gaming operations.

    Then there is a segment of the population that would like the legislature to wean itself from the earnings it takes in fram gaming, and then, once it has done that, pass laws outlawing all gambling in Minnesota. If Minnesota did that and went a full year without any gambling, the tribal compact agreements become invalid and Minnesota essentially has no gaming any longer.

    Then we also have a segment of the population that would like to see gaming expanded to almost any and all venues. There are proposals each year in St. Paul to allow bars and restaurants to have a set number (10-25) of slot machines. These proposals generally show revenue of between $750 million and $1.2 billion to the state. South Dakota has this type of system.

    So we have lots of folks that support a wide variety of gaming plans, and then lots of folks that want to eliminate gaming in Minnesota forever. It would be very interesting to see a state wide vote on gaming today, as we did in 1984 (?) to implement the system we currently have in place. Would we see Minnesota vote to continue what we have? Expand it? Eliminate it?

    Jane brings up a good point about lobbying. When I served in the legislature we always tried to get a bill advanced that limited the time between legislating and lobbying. I seem to remember Speaker Steve Sviggum carried the bill but even with his clout he could never get it advanced. I agree that we should have restrictions in this area. When the voters asked me to step aside as their Representative I was approached by a few groups that asked me to help lobby for various causes. My construction business would not permit accepting such jobs, but I also have a distaste to moving too quickly between the two positions.

  8. One thing that I feel is sorely missing in the discussion about a Viking stadium is the same thing that was missing in the discussion about a Twins stadium….namely, the team or team owner does not own the stadium. Our current HHH Metrodome is owned by the Met Sports Commission. It has been paid for for a number of years. It makes a ton of money and has for many years. The new Twins stadium is owned by Hennepin County. I am quite sure they will make money on the stadium if they hold on to it for a decent number of years. The money paid by the Twins for the new stadium is nothing more than prepaid rent.

    If a county, city or other public entity decides they want to move forward with a stadium plan for the Vikings, as long as it makes sense financially I don’t see what the objection is. I can envision a plan similar to the Twins stadium where there is an upfront rent paid by the Vikings, some long term debt taken on my a pubic entity, and some public assistance from the state for highway upgrades that could make a stadium happen. As Bright notes, there is millions of dollars of tax revenue that is collected every year from sports related activities.

    But as long as the main stream media continues to do a very poor job explaining how stadium financing actually takes place, who owns the stadiums, what kind of money is made on the stadium, etc. we will have crazy dialogs going on. I am quite sure many, many people today actually believe the Twins, or the Pohlad family owns the new Twins stadium and that taxpayers gave it to them….all completely false.

    1. Great comment Ray. The issue takes on an entirely different flavor when you realize that the owner of the sports franchise does not own the stadium. This divorces the stadium argument from the current state of the team, which is as it should be. The stadium decision should have nothing to do with who currently fills the quarterback position on the team. Likewise, a stadium not owned by the team can be used for lots of other things (and presumeably a football stadium would be, since it would otherwise be vacant for half the year) some of which could make a substantial amount of money for the stadium owner.

    2. Ray, could you explain how the Metrodome “makes a ton of money”?

      The latest comprehensive financial report on the website of the Metropolitan Sports Facilities Commission is for the year ending Dec 31, 2005 (use this link — http://www.msfc.com/news.cfm — and scroll to the bottom of the long page). That report shows revenues of $40,899,903 and expenses of $45,427,138. In that year they appear to have covered the $4.5 million shortfall with reserves. The cash flows are not quite so bleak, but there’s also red ink there. There may be more recent financials buried in the minutes of meetings since then, but if the 2005 numbers are representative of a typical year, it sure doesn’t look like a money-maker. Do you have some other way of reading these numbers?

      As I understand the media reports of the Wilf’s expectations, they “need” to capture more of the revenue from a new stadium. So, if the MSFC can’t cover its costs on a paid-for stadium in which the commission captures more of the revenue than a team owner wants it to, what makes you think that public financing of new stadium is economically a good deal for citizens?

    3. Randy,
      Thanks for linking to that financial information. The Metrodome sure doesn’t look like a great moneymaker for the public based on that.

      I looked for other sources on the subject, but unfortunately, google searches of “metrodome losses,” “metrodome deficit,” “metrodome budget,” and the like seem to garner an awful lot of irrelevant hits, so I haven’t found any more useful information on the subject of the Metrodome’s financial status.

  9. This isssue illustrates perfectly the issues surrounding our budget problems.
    Everyone wants government to be frugal and live within it’s means…except when it comes to their own pet projects.

    I am a big football fan (Steelers not Vikings sorry)but I would never support tax dollars for a new stadium. Especially a stadium that will only benefit a small sliver of the population.

    How many families can really afford a NFL ticket these days anyway. Given our current budget woes we have more important issues to solve.

  10. Randy, It is my understanding from information given to legislators during the Twins stadium debate, that the metro sports commission has made many millions of dollars. In fact, I believe they are still sitting on a pile of money. I assume that is where they take shortfalls from. I can’t say that the current metrodome will be profitable since they have lost a major tenant. However, they have done well, have retired the full debt on the dome, and it can be argued that they provided the public service to which they were given the task.

    Thinking back to something someone else raised in a thread, we don’t ask many of our public facilities to pay for themselves. We don’t do that with libraries, although I guess we could if we increased fees, etc. We don’t do it with universities….again it could be done if tuition and fees were raised. We make investments in public facitilies that hopefully make sense. Some people think a public staidum leased to sports teams makes sense.

    1. Ray, although I personally don’t want to subsidize the business interests of a billionaire, I can see lots of reasons others might want to. Entertainment, the ego satisfaction of being an NFL city, a modest boost in tourism when the cheese heads drive over from Wisconsin to watch the Packers play, etc.

      I just don’t want us to be sold a bill of goods on an economic argument, so when you throw out a claim like the Metrodome “makes a ton of money” without a shred of evidence, it raises suspicion. I guess I’m a little surprised that legislators would not have looked more closely at the actual numbers. While it is true that the MSFC had accumulated “millions” (about 45 of them) over a 25 year period, that is hardly an eye-popping return. In 2005 — about the time you and your legislative colleagues were working on the Twins stadium and missed your chance to force the issue on a dual-purpose stadium — the dome had both major tenants and no significant debt. The MSFC operated the facility at a loss.

      The Dome cost under $100 million back in the day. Now, almost 30 years out, the debt has been retired and the MSFC has accumulated a dwindling $40-ish million reserve. It doesn’t take an MBA to figure out that that kind of return isn’t going to pay down the debt on a $700 or $800 million single-tenant facility, especially when the Wilfs want to command a greater share of stadium revenues.

      I’d have no problem with the public financing of a stadium leased to the Wilfs, if the lease actually repays the cost of building the facility and the debt service. I’d expect the lease to pledge some serious collateral against default… say, full ownership of the team. That way, in 10 or 15 or 20 years, if things go south on the current owners, the public stands to cover its losses. We can sell shares in the team to the public, like in Green Bay. But if the economics work, the Wilfs will continue to hold their ownership and the debt on the stadium will be retired. The risk is theirs, which is where it belongs.

      I don’t see a single-purpose sports facility as even remotely the same as public infrastructure like universities or libraries. The former operates for the financial benefit of the team owner and the occasional entertainment of a subset of citizen. The latter is a community investment for the benefit of all, and more importantly, for the education of future entrepreneurs, business owners, workers, and well-educated citizens. I hope you are merely being hyperbolic in equating the two.

  11. There’s a timely article in today’s Strib (http://www.startribune.com/politics/state/79335992.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aUUI) about a new report from the Metropolitan Sports Facilities Commission highlighting the fact that since 1961, Minnesota’s professional sport franchises have generated about $450 million in tax revenue since 1961. Over 48 years, that works out to a whopping $9.4 million per year. If we kicked all of it back to finance a new stadium over the next forty years (setting aside other uses for the money), it would fund about half of the projected cost.

    A 2007 study by Minnesota Citizens for the Arts (http://www.mncitizensforthearts.org/learn/artsresearch/driving-force/) found that arts and cultural organizations generate approximately TEN TIMES that much revenue every year. $73 million in state revenues and $21 million in local revenues EACH YEAR. And the local revenues are distributed around the state. So, by the thoughtful application of Ludescherian Analysis, we should invest in arts and culture over sports as the most productive economic investment.

    1. Randy, your comparison here strike me as disingenuous. To begin with, in pitting a 48-year total against a recent 1-year snapshot, it ignores the roughly 7-fold inflation from 1961 to 2007. It’s not really appropriate to “average” the $450 million to $9.4 million per year. Indeed, the reported number for sports franchises (based on the StarTrib article — I haven’t been able to find the MSFC report itself) is kind of meaningless in that regard; at best it can be interpreted as saying the average per year tax revenue is between $9.4 and $65.8 million. It would be more meaningful to report the current revenues. To be generous (or parsimonious — who knows?), let’s say it’s $30 million per year these days.

      The secondary disingenuosity is that you seem to be comparing *direct* revenues from professional sports to the MCA report of *total* revenues, which include the multiplier effect that any kind of spending has. If you read the MCA report closely, you see that the direct spending is around $36 million, which arguably puts it on a par with what the MSFC is asserting for professional sports. And one might say that the comparison is furthermore unfair in that, for example, the MCA is including every single community theater statewide, whereas the MSFC numbers overlook the tax revenue of high school and college games.

      I have no dog in this fight (if anything, I’d rather see my tax dollars go to support the arts over professional sports), but I think it’s only fair to make fair comparisons.

    2. Randy, in fairness, I should add that I am assuming that the MCA report’s $450 million is “direct” as opposed to “total” revenue. Please correct me if I’m wrong.

    3. Barry, your unpacking of the MSFC and MCA data is no doubt more accurate than simply taking the numbers as reported. I think Ray’s observation that organizations can selectively manipulate a study to support almost any position is also a point well taken. The important thing to me isn’t so much pinning down the actual revenues, as simply getting a grasp on the relative impact of a potential public investment. As a state, we put relatively little money into arts and cultural facilities (some bonding for the Guthrie, the MN Schubert Theater, grants through the State Arts Board, etc.) with, by any measure, a meaningful return on the investment. By contrast, we are asked to put an order of magnitude more money into a couple of single-user sports facilities, that would appear, at best, to generate a similar return, but over a much longer period of time.

      To your question about the MSFC’s revenues, it reads to me as if they are only reporting direct revenues, too. I would imagine that if you put the direct revenue figure in the hands of a financial analyst at the Mpls Chamber of Commerce, he or she could probably come up with a reasonable multiplier effect that would put total economic impact slightly above the GDP of most developing nations.

  12. Many good point Randy. I don’t have the time nor the desire to search out all the details on the metrodome. I do remember that it cost $55 million to build. If they have $40 million in reserve now, that is a good thing. I have no idea how much the sports commission has dedicated to other ventures or improvements to the dome over the years.

    As far as studies by various groups I think it is always very wise to remember that just about any organization today can get a group to present information that supports their cause. Or as an old coach told me, whoever has the chalk last can always win when diagraming plays.

    I would certainly expect any stadium ownership to set out appropriate terms for a leas as you outlined….just as any business deal would do. I really don’t remember all what is in the Twins lease, but I believe it anchors them to Minnesota for a long, long time.

    And don’t get me wrong, I am not advocating for public ownership of another stadium. I just think it is important to get issues discussed fully and understood by all. And as I noted earlier, I know there are lots of people walking around Minnesota that are convinced that the Twins or Pohlad family owns the new stadium….thanks to poor media reporting.

  13. Gambling should be banned period as it has a major negative effect on society and the economy – put up billboards for kids that say, “study hard, be industrious, be inventive and get rich slowly.”

    That said, the Vikings are as well known and associated with Minnesota on a national scale as any other state feature. The value to Minnesota is well beyond the straight line tax collection from their business. Allowing the Vikings to leave to avoid building a new stadium, while philosophically pure and appealing, would be cutting off our noses to spite our faces.

  14. Barry points out an important part of looking at figures….you have to know what they are based on, come from, and compare to. I agree that the $450 million figure is probably more closely related to what the sports commission has ‘made’ from the stadiums. As noted before, it doesn’t talk about total revenue, multiplier revenues, etc.

    I don’t think the state put any money into the Twins stadium. The legislative vote was a vote to authorize Hennepin County to levy a tax to pay for the stadium they own. I’m assuming any Vikings talk will also be based on some similar type of action. This ends up being somewhat of a local issue in that the government that ‘has’ the facility generally reaps most of the spillover ‘rewards’ from the facility. In the case of Hennepin County they stand to gain a lot of revenue from Twins events. Can it work for a Vikings stadium? Who knows at this time. We’ll just have to wait and see what Dick Day and his group, as well as others, come up with for a plan.

  15. In today’s NY Times: Stadium Boom Deepens Municipal Woes;

    From New Jersey to Ohio to Arizona, the stadiums were sold as a key to redevelopment and as the only way to retain sports franchises. But the deals that were used to persuade taxpayers to finance their construction have in many cases backfired, the result of overly optimistic revenue assumptions and the recession.

    1. That’s quite a cautionary tale:

      Nowhere is the problem more acute than in Cincinnati. In 1996, voters in Hamilton County approved an increase of half of one percent in the sales tax that promised to build and maintain stadiums for the Bengals and the Reds, pay Cincinnati’s public schools and give homeowners an annual property tax rebate. The stadiums were supposed to spur development of the city’s dilapidated riverfront.

      But sales tax receipts have fallen so fast in the last year that the county is now scrambling to bridge a $14 million deficit in its sales tax fund. The public schools, which deferred taking their share for years, want their money.

      The teams have not volunteered to rewrite their leases. So in the coming weeks, the county plans to cut basic services, lower its legal bills and drain a bond reserve fund with no plan for paying it back.

  16. We must not let a Viking Stadium become a priority: Let the Vikings fund it themselves: Our priority should be once and for all proper funding for Long-Term Care for 12 years too long Long-Term Care has taken a back seat as a priority for proper funding. It is now time to pay the piper for the crisis that Long-Term Care faces. More and More outstate and yes metro Nursing Homes face the fact that they have been bled dry and can no longer stay open. It is a Moral Obligation on our part to provide care for our elders. I am not a man of the bible nor do I claim to be perfect but I Think that everyone needs to read Luke 4:18-19 that sums up to how we should treat one another. It is time to make Long-Term Care a priority Thank-You David Roberts

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