L.A., Say No to the NFL Owners’ Greed

The Los Angeles billionaires who want to be National Football League team owners can’t understand why public funds or subsidies are so hard to come by to bring a team here. It’s happened before. They remember when the Dodgers moved to Los Angeles and were given millions of dollars worth of improvements to Chavez Ravine and surrounding areas to clear the way for Dodger Stadium.

In fact, the Coliseum itself, where the NFL wants a new Los Angeles team to play, was the first large-scale stadium in America that was built with public money, in a successful effort to lure the ’32 Olympic Games.

But the political landscape has changed.

At an April press conference declaring Los Angeles the place for the next NFL team, even NFL Commissioner Paul Tagliabue noted: “We all understand the reality of taxes in California since someone named Jarvis came on the national scene.”

Residual attitudes from the tax revolt Howard Jarvis helped foster have local politicians from the mayor on down declaring that no new taxes will go toward refurbishing the Coliseum for the NFL.

Beware of politicians bearing dictionaries. We are now hearing that there would be no “net” increase in taxes. That argument goes like this: Public money invested in the Coliseum and surrounding area will more than pay for itself with an increase in the economy, which will pay back the invested public dollars to public treasuries. Exactly when, or if, such a payback would occur is uncertain.

Economist Raymond Keating, writing for the Cato Institute about whether local economies show improvement due to new sports stadiums, states, “Nothing is actually added to the area’s economy; instead leisure spending and activity are merely shifted around.”

A spate of studies has been inconclusive in measuring the importance of a pro franchise on a local economy. But, here’s some empirical evidence to chew on: After the Raiders and the Rams left the greater Los Angeles area, the economy still boomed.

The NFL wants to sweeten the pot for the Los Angeles bid by offering a $150-million loan for stadium renovation. But, NFL guidelines dictate that such a contribution can only be made if public funds are invested as well.

With the combined assets of the Los Angeles billionaires who want to own the team, it would appear that there would be enough private money to renovate the stadium and add parking facilities. But, the NFL is not interested in just making a deal with rich owners. The NFL motto is: Show me the money. Public money, that is.

NFL owners have a couple of reasons for wanting to make sure public money is included in the deal. If taxpayers pick up some of the financial burden for stadium reconstruction, NFL owners assume they can get a larger franchise fee from the Los Angeles billionaires to buy into the league, fattening the existing team owners’ wallets. That means, to be parochial about it, in the end, taxpayer money would not be subsidizing our billionaires but some out-of-city rich guys.

Another reason the NFL owners would hate for Los Angeles to deny public funds is that it would end a trend of having public dollars support multimillionaire sports owners. If Los Angeles, a coveted market, can acquire a team without spending public dollars on a stadium, it would send a message across the country that the NFL owners wouldn’t like.

To avoid local entanglements, the prospective Los Angeles owners have persuaded the governor to get involved in negotiations. Will state funds, in one form or another, help close the deal?

We ought to know any day.

But public money from any source doesn’t belong in this rich persons’ club. Certainly, these new stadiums are not built with the general public in mind. A recent story about the new Los Angeles Staples Center sports arena noted that only the privileged who can afford suites and sky boxes will be permitted to luxuriate in the posh restaurants and private lounges.

Transferring the debate to a different level of government is an attempt to move the decision away from local passions, although it’s hard to imagine that voters in San Francisco, Stockton and Eureka will be pleased with the idea that state money will subsidize an L.A. team.

How far will the owners move this quest for public moneys to avoid local resistance? The overflowing federal budget surplus makes one shudder.