Shahid Khan spent a reported $760 million to buy the Jacksonville Jaguars National Football League (NFL) team in November 2011. The deal was finalized in January 2012. Khan spent a lot of money buying a football team in a small market that was struggling economically under the former owner Wayne Weaver. The team did have economic goodies thrown at them by various forms of local and state elected officials.
Jacksonville politicians rewrote a lease with Weaver for use of the city’s stadium that gave a private company, the Jaguars, the ability to keep all of the money for stadium naming rights. Khan also inherited a 30-year, $2-million a year tax rebate from politicians, including the governor in Tallahassee, that runs through 2024 for stadium improvements.
That apparently isn’t enough, and the Republican State Sen. Rob Bradley wants to make sure that Khan and billionaire Stephen Ross, the owner of the NFL’s Miami Dolphins, and other well-heeled team “major league” sports owners get more state money for their teams and facilities.
In Bradley’s mind, it makes sense to kick in an additional $60 million to Khan and Jacksonville Jaguars ownership over a 30-year period for stadium improvements at the suddenly antiquated city-owned facility that opened in 1995. The taxpayers’ dollars would make sure Khan is happy and would keep Khan from paying for the improvements. Khan, being elated, would keep his team in Jacksonville in an old facility that desperately needs an upgrade.
The money would come from sales tax that is generated in the stadium.
Jacksonville spent more than $120 million to “renovate” the old Gator Bowl. The stadium was essentially gutted and a new facility rose in place of the old building for the right to become “major league” and continue the Florida-George annual college football game.
The NFL awarded small-market Jacksonville a franchise in 1993, thinking the Sun Belt city would grow both economically and in population. The city has struggled to support the franchise, and the team has closed off sections of the stadium to reduce seating capacity. Khan’s lease with the city of Jacksonville ends in 2027.
Meanwhile, Bradley is pushing the “Professional Sports Franchise Facilities” bill, which would provide financial relief to various owners in various leagues throughout Florida. Ross and his Dolphins are seeking $3 million annually over 30 years. Ross already has a 30-year, $2 million tax rebate deal in place.
Bradley thinks the bill’s passage would end rumors that the city will lose the football team to another, presumably, well-heeled city offering the world to Khan or whomever owns the Jaguars.
Micky Arison, the Carnival Cruise ship owner, enjoys the same deal for his National Basketball Association’s (NBA) Miami Heat. Major League Baseball’s (MLB) Tampa Bay Rays, the NFL’s Tampa Bay Buccaneers, the National Hockey League’s (NHL) Tampa Bay Lightning and the Florida Panthers, along with the NBA’s Orlando Magic (owned by Amway’s Rich DeVos, another billionaire who seems to not have problems funding his political agenda) get subsidies.
The city of Orlando also wants a mechanism in place to get tax rebates for a potential owner of a Major League Soccer franchise in the city should one be granted.
Right now, the state is giving $16 million annually in sales tax collected at games to the teams instead of into state coffers. The argument being that it is better to give that money back because having the teams generates other taxable revenue and bolsters the local economy. It sounds good in theory, but professional sports franchises hardly make a dent in an overall economy of a region.
Professional sports give a region a “big league” feeling and offer a diversion from everyday life.
MLB owner Jeffrey Loria, who has the Miami Marlins, doesn’t qualify for the tax rebate. Of course, Loria got a great deal on the taxpayers dime in Miami with the new Marlins’ baseball facility.
Ross wants Miami-area voters to give him about a quarter of a billion dollars to upgrade his stadium, which is severely lacking the amenities that are needed for a Super Bowl. Miami is out of the Super Bowl rotation because the last round of upgrades, which cost about $300 million, weren’t good enough. Ross now wants a roof, high-definition lights and a better scoreboard.
Ross probably could afford all of the improvements and pay for it by himself. But, Dolphins’ CEO Mike Dee told Miami Herald columnist Glenn Garvin that isn’t how the stadium game works.
“Just because someone is wealthy enough doesn’t mean he should invest money in a way that is unwise,” Dee said.
In Florida, there will be more government spending on sports. Miami wants the 2024 Summer Olympics and plans to bid for the Games. Local elected officials are undaunted by the baseball stadium public spending fiasco and the news that the 2014 Sochi Olympics are five times over budget and will now cost Russians $50 billion, instead of the original $10 billion budgeted.
Don’t blame the owners for public spending on sports. The owners have every right to ask for anything they want. It is the elected officials who ultimately make decisions on whether sports is a good or bad financial decision for the public. And, according to New York State Comptroller Thomas DiNapoli, there has never been a study commissioned to find out whether or not these sports expenditures are worth it.
Of course, many in government know what the answer is: It’s not. But they don’t want to know that officially.
(Editor’s Note: The financing of major league sports facilities continues to be a hot button issue among those interested in public policy and the impact that sports can have on political and economic decisions. Evan Weiner writes frequently on the seeming madness afflicting public officials as they throw scarce tax dollars at pro franchise owners.)
Evan Weiner can be reached at email@example.com His e-book, “The Business and Politics of Sports, Second Edition” is available at www.bickley.com and Amazon.com and another e-book, “America’s Passion: How a Coal Miner’s Game Became the NFL in the 20th Century,” is available at www.smashwords.com, iTunes, nook, kobo and Diesel.