By all accounts, the Minnesota Vikings’ new stadium in Minneapolis is a wonderful structure and fans have been very happy with the amenities provided. However, as Steven Malanga explains, the non-fan taxpayers in the city and the state have a right to feel plundered by the Vikings:
Fans of the New England Patriots and Philadelphia Eagles will travel to the frigid northern city this week because the NFL granted a Super Bowl to Minnesota as a reward for stepping up with more than half a billion dollars in subsidies for the home-state Vikings’ U.S. Bank Stadium, which opened in 2016. For a city whose mayor recently described it as a “shining beacon of progressive light and accomplishment,” this is some feat, and a reminder that the NFL, whatever its troubles, maintains a firm hold on the taxpayer’s purse in many places.
Vikings owner Zygi Wilf, a New Jersey real estate developer, began pushing for a new stadium soon after purchasing the team in 2005. His supplications became more earnest after the roof of the Vikings’ old home, the Metrodome, collapsed in December 2010. Wilf originally proposed contributing just one quarter of the new stadium’s $1 billion cost, a spectacularly low-ball offer in an era when backlash against stadium subsidies for professional teams increasingly force owners to pony up a bigger share of construction costs. Wilf claimed that he couldn’t afford more, but he wouldn’t release the financial details of his real estate empire. A Minnesota state investigation, undertaken after a New Jersey judge ruled that the Wilf family had defrauded real estate partners in a local project and had to pay them $84.5 million, determined that the family could afford to pay up to $500 million for the stadium.
Even after Wilf upped his offer, the road to the stadium deal was paved with controversy. Minnesota financed a portion of its share of the costs by introducing a state-licensed electronic-gambling game to generate construction revenues, but the game proved a clunker with local residents; to fill the financing hole, Minnesota drew on revenues from its tobacco tax and increased corporate taxes. Then Wilf announced that he’d help finance his part of the deal by charging season ticketholders a seat license fee — prompting a threat from Minnesota governor Mark Dayton to pull government financing. Dayton soon changed his tune, explaining that sports financing has its own ineffable logic. “I’m not one to defend the economics of professional sports,” he said. “Any deal you make in that world doesn’t make sense from the way the rest of us look at it.”
Though it lent its balance sheet to the deal, the city of Minneapolis, according to critics — including one former city councilman — has been “hosed” by the Vikings. The city officially contributed $150 million to stadium construction, but these observers contend that that figure doesn’t include expensive infrastructure improvements that Minneapolis was forced to make. As part of the stadium package, Minneapolis also agreed to send $7.5 million a year in operating subsidies to the authority running the facility, which amounts to $225 million over the course of the deal. City taxpayers also apparently remain on the hook for any shortfalls in the revenues that back the bonds used to build the surrounding infrastructure. Residents understand little of this financing because, as the Minneapolis Star Tribune noted, the stadium deal “was as transparent as the Berlin wall.”
I’m a (very) long-term fan of the team, but that doesn’t mean I approve of the taxpayers being robbed blind so local fans of the team get to watch the game in a corporate welfare palace. Reason has posted several videos exposing the crony capitalist roots of stadium financing, including most recently this one. I first heard of “seat licenses” in 2014 and they sounded like a bad idea to me then. Back in 2012, when the public support was announced, I was not happy about it.
