Vikings Stadium Miscellaneous Discussion

[mullen]

this project cannot begin developement soon enough. if there is one thing this state excels at, it's whining about stadiums, debating stadiums and wringing their hands over stadiums. i think kstp devotes 5 mins a night on their news to the subject.

the cutting and addtion of elements to a building project is commonplace. things get cut and added as the contractor prices out the materials and labor costs. it's just on a mega scale when it comes to a football stadium. nothing new here. twins stadium played out the exact same way. but to our parochial local media it's like this has never happened before.

[Rich]

Let's say the Vikings use the stadium for 40 years. During that time the taxpayers' share of construction and operating costs will total $798 million. Ouch! But shouldn't we consider the other side of the ledger? The Vikings pay $20 million in state and local taxes a year, and visiting teams add another $1 million. Over 40 years that replenishes government coffers by a total of $840 million. Not bad.

[Tom H.]

I guess the standard response to that is this:

All the money that the Vikings pay in taxes comes, ultimately, from the fans buying the tickets or watching the games on TV. If you remove the Vikings, those fungible entertainment dollars just get spent elsewhere, and end up in the State's coffers anyway. In general, sports teams don't really add a whole lot of new money to the economy - they just redistribute it.

It's a pretty simple argument that boils down to this: entertainment is not a 'productive' industry - it merely gives people a place to spend their unallocated income, and supports some jobs along the way.

[moda253]

Having a town with 4 major sports teams undoubtedly makes the area more attractive. That is having a town with a vibrant and diverse entertainment an social fabric makes the area appealing to more people. Having an area that is apealing to people means population retention and grwoth. Having a town with good population growth and retention means more tax dollars available. And not just money spent on entertainment and social expenditures but on everything taxable that they buy. Saying that it isn't worth it because Viking fans will just spend it on something else isn't correct. Because it is about all the entertainment and attractions that draw people to our area and everything they are taxed on. Whether or not anyone likes one particular element of our entertainment and social landscape means nothing. There are some things that I don't enjoy but I pay for willingly because I know there are people that do enjoy those things that enjoy living here because of those things.

In the end there will be very little if any impact on the poor. It's a great talking point as it pulls on peoples heartstrings but if we did nothing as public works because some poor person somewhere might be ill affected we wouldn't ever do anything. Contrary to popular belief this doesn't work like the household checkbook. We can take care of the poor and manage to keep a vibrant city. One thing doesn't pull against the other.

[Rich]

If you remove the Vikings, those fungible entertainment dollars just get spent elsewhere, and end up in the State's coffers anyway.

I get the fungibility logic, and it does make sense. Although I'm sure that the money that's spent on the Vikings wouldn't necessarily all be spent locally on something else. A lot of that money would end up being spent outside the city, and much of it outside the state. Some would just end up in savings.

Also, the majority of that $840 million - about $460 million - is income tax revenue generated from the salaries of VIkings players and staff. That money would absolutely vanish completely if you remove the Vikings.

In addition, $300 million in wages will be paid to stadium construction workers, which generates another $16 million or so in tax revenue that otherwise wouldn't exist. The purchase of construction materials will produce sizable sales tax revenue as well, right?

Also, 3,400 stadium employees will be paid about $4 billion in wages over 40 years. That's another $200 million in income tax revenue. And these are precisely the kind of jobs that are needed for much of our population. With no stadium, how easily would the local economy be able to replace those jobs?

All in all the tax revenues might not totally offset the tax expenditures, but they're still significant.

[mplsjaromir]

If the NFL entertainers leave town, people will hire new entertainers and their wages will be taxed. It may not be a 1:1 ratio since NFL players pay a high marginal tax rate. Also they tend to be less of a burden on Social Security and Medicare because they tend to die in their mid fifties from high levels of brain damage and elevated rates of suicide. But to make the claim that their $20 mil in annual tax revenue will simply disappear is not accurate.

[MNdible]

I don't for a second believe that the economics of this make "sense".

Worth noting, though, that a large share of the Vikings revenue and player salaries (and therefore a large chunk of the taxes that they pay) are funded by national sources -- national TV contracts, which are in turn paid for mostly through national advertising, which is in turn paid for by purchase of goods and services bought everywhere, regardless of whether or not they have an NFL team.

That is money that would be lost to the local economy, in the absence of an NFL team.

[Rich]

If the NFL entertainers leave town, people will hire new entertainers and their wages will be taxed.

I know I know. Fungibility.

I'll just say this. It's one thing for fans to redirect cash expenditures. It's another for those redirected expenditures to lead to hiring (a few less empty seats doesn't necessarily mean you need more staff). And it's another thing entirely for our local entertainment economy to hire enough people to offset the lost salaries of the most ridiculously well-paid entertainment outfit in Minnesota history.

So I'll stand by my claim and argue that if they leave, the income tax revenue leaves with 'em. Especially in the short term. In the long-term we're all dead.

[sanchopanza]

It's De ja vu all over again.

But I guess until construction actually starts, these are the topics of conversation.

[moda253]

It seems that almost every single region that loses a pro sports franchise fights like hell a few years later to try and get one back. Why do you think this is? There is a reason for it. Like it or not it's because it makes a city or region relevent in some circles.

You can't just look to the easily quantifiable numbers and say "See! see!" Every time you look at just the black and white you miss out of all the gray. That is where the money is.

[mplsjaromir]

And it's another thing entirely for our local entertainment economy to hire enough people to offset the lost salaries of the most ridiculously well-paid entertainment outfit in Minnesota history.

So I'll stand by my claim and argue that if they leave, the income tax revenue leaves with 'em. Especially in the short term. In the long-term we're all dead.

The Vikings payroll is $15 million less than the Twins. The Twins payroll was about double the Vikings in 2011. The much maligned Minnesota Timberwolves payroll is $9 more than the Vikings. Both the MLB and NBA teams bring more activity and costs less to house than the Vikings. There is not good argument for this stadium other than pride. At least Target Field made clever use of marginal land. Leveraged new transit capacity (Northstar/Blue Line LRT). Spurred investments in pedestrian (plaza over 394) and biking improvements (Cedar Lake Trail extension). And Continues to help the North Loop a draw lots of interest of developers and potential residents. Some development will be enticed by a new stadium, hopefully since its so big, people will be cool with big buildings in proximity. Having lived in near the Metrodome, I can say its dead and free of activity almost all the time. A scenario where the Vikings left town and the Metrodome site was redeveloped would be preferable to what is happening. Reminder: Its not too late to not build the stadium.

[Rich]

Googling leads me to these numbers: Vikings payroll is $136 m, the Twins is $76 m and the Wolves is $67 m.

[mplsjaromir]

My mistake.

[RailBaronYarr]

I had a post all thought out, but here's the reality. Having this discussion (player wages, economic spend, etc etc etc and its return on public's investment) only really matters if you truly believe the Vikings will leave. They're here now. Without a new stadium. They're here because we're a successful, populated, wealthy metro (and we bring a certain number of tv eyes in SD/ND/IA to the table as well). Yes, having them here keeps Mpls/St Paul a viable, more vibrant/attractive metro for potential residents and businesses, but the direction of the arrow was always be in that direction. A small number of teams moving from their cities since 1980 has been 5 (6 if you include the Raiders two moves). It's highly unlikely that we would lose a team, though the uncertainty and fear is the number one reason people shape the discussion that way.

It's a pointless, circular debate and unfortunately there is no national law to keep cities from subsidizing NFL teams in this way (although I'm not sure how I'd feel about that, seeing as it's such an oddly specific law).

[RailBaronYarr]

I don't for a second believe that the economics of this make "sense".

Worth noting, though, that a large share of the Vikings revenue and player salaries (and therefore a large chunk of the taxes that they pay) are funded by national sources -- national TV contracts, which are in turn paid for mostly through national advertising, which is in turn paid for by purchase of goods and services bought everywhere, regardless of whether or not they have an NFL team.

That is money that would be lost to the local economy, in the absence of an NFL team.

This is very true, although I'd argue that said money isn't leaving the economy so much as it would be leaving through team/staff salaries and therefore income tax revenue. The players do buy houses and spend some time here, but the team itself and players don't spend so much in the local economy (bolstering other businesses) to really worry that much about the share lost from the team's TV revenue source. But yes, this is often lost in the debate.

[Nick]

Has anyone else noticed that economics is absolutely a mystical crapshoot, though?

[talindsay]

Having a town with 4 major sports teams

Let me see, there's the Lynx, the Gophers women's hockey team, the Gophers men's hockey team, but I can't think of our fourth major sports team. Wait, did the Twins make it to a playoff of some sort this decade?

[lordmoke]

I still don't understand why there is a lawsuit regarding this piece of land, or the point of any of this:
http://www.startribune.com/sports/vikin ... 37711.html

[Tom H.]

Has anyone else noticed that economics is absolutely a mystical crapshoot, though?

Winner! I guess we can shut down this topic, then.

[Didier]

I thought it went without saying that my post wasn't supporting the system in which pro sports stadiums are built but rather comparing the public perception of one project vs the other.