Should taxpayers money be used to fund sports teams/arenas?

Question

I know being hockey fans, your tendancy is going to be to say, hell yes, to this question. However I urge you to have an open mind and realize that they are funding billionaire owners and millionaire players. Also, it is cutting into other funds like education and health care. Also, it attributes to higher taxes.
Not everyone is a fan, should they be on the hook too?

One of the reasons I ask is that in the area where i live, there is a need for some type of complex for concerts and maybe a future CFL team. There seems to be a split group of people who have strong opinions on it on whether tax money should be used for this.

Personally, I am all for it, even if taxes go up a little but I am biased as a sports fan. Selfish of me maybe. Not sure.

Thoughts on this please?

wdx- that is a revealing fact indeed.

An argument I like to make is that the money is somewhat recouped in the form of taxes on tickets, player salaries, etc, heck everything gets taxed really so it does create revenue.

Lubers- good argument. Of course that is just the Philly example but nonetheless, you make valid points. Would you still think the same way if it were low salary players or a non-professional team, like junior hockey? Just wondering?

Answer 1

I believe that taxpayer money should be used to fund arenas, but not pay for the entire thing. I am very familiar with how Philadelphia's tax laws work so I will explain briefly their rules and use them as an example. I cannot state that I am 100% accurate in my statements, some of the things I am about to say are estimations but I have given this subject some thought and have been involved with discussions with people who are more knowledgeable on the subject.

In Philadelphia, if you do the work you are being paid for in the city boundaries, you are taxed for it. My father worked his entire life as a truck driver. While his company was located in Philadelphia, he worked maybe 2 days per year within the city limits so most of the city wage tax he paid was refunded. I believe the number is still 1%. So if a player makes $100K for a game, regardless of whether you are a member of the Flyers or the away team, the city makes $1K. That pertains to both home and away teams. The city typically makes as much or more on their city wage tax from the 45-50 players and coaches for any given home game than they did from all of the other employees in the building on that night because of the high salaries. There is also a city sales tax in place. For a typical Flyers game, I don't think a half million dollars from taxes is too gross of an over estimation in profits for the city per event. That works out to about $20M per season, just from the hockey team without figuring in the Sixers, Soul and other events in the building. My point, the city benefits greatly from having the arena in their city.

However, I feel the teams should also share in the expense. In addition to the revenue the owners make at the gate, they also increase the value of the franchise. The Phillies are a good example of this. They are currently valued at just under a half billion dollars. That is a drastic increase from what the current ownership paid for the organization. Despite the fact that they have not won anything in over 30 years and that management will not break their self-imposed salary cap to get the team over the hump, with the new stadium they still have great numbers at the gate which further increases the value of the team. With the new stadium, the fans are turning out in droves regardless of how the team is doing.

Bob: I think I would feel the same way. Trenton built their arena about 8 years ago, it seats a max of just over 7K and they landed the Titans, an ECHL team. The player salaries are pretty insignificant from a tax standpoint, but up until this past season, they came close to selling out the arena for each game. They also had a minor league basketball team and host concerts and other events frequently. Obviously, the cost is going to much less than building a 20K seat arena but there is still a significant amount of money to be made for a city by having a venue capable of hosting an event with 7-10K people. There was some talk about the ECHL moving the Titans because of the attendance drop, but the city would have been able to continue to turn a profit on the other events they were able to host.

Bob: I thought about this a little more last night and I definitely am supportive of smaller cities contributing towards arenas. The example I used was Trenton. They built a baseball and hockey arena and brought in minor league teams. While it didn't come close to solving all of the issues the city has, it has resulted some major upgrades in their waterfront area. It has become a nice place to go year round as a result and is creating significant revenue for the city.

Answer 2

Depends on the amount that is being spent. Now take the Pens who could have had a FREE ARENA had the slots license got to Isle of Capri. It wasn't even like Isle of Capri had a terrible bid, they were offering a very serious big past that. So when the State says no(and I think it was because they wouldn't have made any money off that Arena) doesn't the team deserve some help? Now when you talk of it with Canada I can't say much because I am not in Canada and don't really have much say in how things are done for them, so I'll stick with my example. So now the City and State will hold some ownership of the Arena. Based on that the team will be paying them some Rent. So in the end they help PAY for their own arena right? Yeah the State has to put the money up front BUT they recoup the money over time. Next consider what happens IF the Arena isn't built. In the Pens case it meant the team would move. That is a LARGE TAX BASE being removed. I think people forget that these people have to pay tax as well, on top of that think of the short term "tourism" you get with the people that come to town to watch the games. I think that if it is a REASONABLE amount and is to help pay then they should do it. If the new stadium/arena is replacing one that is only about 5-10 years old then NO. The deal should be if you want to upgrade in less then say 15 years YOU have to pay for it. I'm not sure what the real limit I would set would be but I would set a limit as to when you could have a NEW one. Sure help pay for some upgrades(when it is more about safety and such) over that time, but not all and don't build a new stadium/arena every year.

Answer 3

This is a tough one. And a complicated one.

You are right when you say we are giving money to millionares (players) and billionares (owners) who don't need it.

The two responses to that go like this. One, aid goes to many cultural organizations in the community -- music, art, etc. A sports team and its arena definitely adds to the quality of life in a community. Is that worth something? Probably. In particular, a new arena can bring in a wide variety of events.

Meanwhile, there's hardly a company out there that doesn't at least ask for some sort of tax break on a new inventment. Why should a sports team be any different?

Personally, I have my doubts about the wisdom by governments of spending a lot of money on a facility for teams when there is no public usage of the building. Some teams essentially control all events in a building, and that's not right in a publicly funded building. However, I can certainly justify expenditures in the area of infrastructure surrounding the stadium -- roads, parking lots, traffic control, etc.

One revealing fact on this -- if a government official put support for a team or stadium up on a public vote, it would fail every single time.

Answer 4

Yes and no.

With childhood obesity on the rise, it would be a good idea for the government to fund sports teams. It's not a good idea for them to be hockey teams though, with equipment ranging from $700 per player to over a thousand dollars per goalie. I was actually thinking more along the lines of basketball, soccer, and even baseball.

Also (still on the yes here), it would boost tourist revenues like crazy. If it's worth the gamble, then do it.

However, in Ontario at least, the provincial government is already having a tough time balancing their books when everybody wants money. Hwy. 401 and Yonge has been under repairs for the past five years with no end in sight; teachers and support staff were striking, being locked out, and walking off the job throughout most of my 4 years of high school (that was 6-7 years ago); Toronto municipality are, apparently, facing a fiscal crisis and are politically jockeying the province to give them more money after they screwed up their own books (frivolous spending like meals from the taxpayers, million-dollar renovation of the mayor's office, and, my personal favourite, giving free booze to the homeless); they have also been giving in to Toronto transit (TTC) union's demands at the drop of a hat (anyone from Toronto remember that sudden walk off the job on a Monday morning?) even though the province gave them $1-point-some-odd BILLION dollars about a year ago.

Bob, I remember you saying somewhere that you're from Nova Scotia. To be honest, I don't really pay attention to Nova Scotian politics, but if it's just as bad over there, it won't work. Taxes and politics go hand in hand, politics is an invention of human ego, and that will cause corruption.

Answer 5

yes, I think it is okay.

In greensboro, our downtown was dead. Absolutely dead. they were talking about building a new baseball stadium, and moving our minor league team there to help revitalize it. In short, they did get the stadium, but the taxpayer issue never fully played out all the way because a private individual donated the money. (a rich individual)

But it boosed the downtown economy. Now, downtown is a live place once again. people spend time there. It's been a positive aspect on local business and the community as a whole.

Even though I'm not really a huge baseball fan, I would have voted for a bond to build a stadium there. The old one was falling apart, and it really does help the community to have something like that. My only objection is the new team name (the grasshoppers- feeder team for the FL Marlins...)

Sports teams can be a good way to get people interested in local business. In that way, the money goes back into the community, and I find that a good thing.

I've only seen one game of theirs, but I would have gladly shelled out an extra cent to let them pay there.


Now we need a Hockey team back... The High ups want nothing less then an AHL franchise, and that's not happening soon.... We had an ECHL Team, but it wasn't an important enough league and wasnt' makingthem enough money.....

Answer 6

I disagree with that "revealing fact". It's probably true almost all of the time. I'm sure there are exceptions though. For example: Heinz Field (aka worst grass in the NFL, lol) was built using public resources and private ones. You can bet that even if there wasn't "privates resources" funding that stadium significantly, because Pittsburghers are so gay for the Steelers, they wouldn't have yapped too much about paying for it. Therefore, I do believe it depends upon the city and the percentage of people within it who are sports fans. The Steelers are the heart of Pittsburgh these days. (They are a huge part of Pittsburgh's culture, which is dying out in most other aspects and Pittsburgh's economy is suffering for it, but our 26-year-old mayor claims he's going to rejuvenate the city anyway). The amount of merchandise sold everywhere for them is astounding. They do more than give back financially to the state and they certainly give back to the community.

Educational funding? I don't know about Canada, but there has been issues with education in the U.S. NATIONWIDE and everyone's favorite president (lol) George W. Bush started the "No Child Left Behind Act" in an attempt to change that. The reason there have been deep cuts to education funding in state budgets is for the fact of declining tax revenues. Whoever mentioned everything that is taxed when it comes to arenas and teams, kudos to you. Sports teams and arenas, especially those that are used for concerts, special events, etc., help contribute to tax revenues for the state.

There are also nationwide issues with healthcare in the U.S. that need to be resolved so that every state isn't left struggling to find its own resolution. I can't help but think of recent issues with nonprofit UPMC, which pays NO TAXES, and is using their huge surplus cash to fund private jets for the use of their staff. And both they and the mayor of Pittsburgh are receiving heat for paying for Mayor Luke Ravenstahl's SECOND day (the Penguins paid for the 1st day, lol) of golfing at Mario Lemieux's Celebrity Invitational Golf Tournament. (LOL, I love this guy.)

Basically everyone just wants to place the blame somewhere. If education and healthcare were where they SHOULD be, there wouldn't be this big of a problem. Understanding that they just aren't, I still see more positives than negatives for having a multipurpose arena and a sports team, especially for the city/town/state.

Answer 7

Personally, I say no. It's not right we the taxpayers are expected to fund facilities for any sports team. I can go farther and say government has no right to spend our money on ANY busines without first getting public approval.
In your case Bob, IF the people say yes and IF the buildin remains in public hands so some of the money spent is recouped then I would agree with it. But building a stadium/arena with our money and then giving it away for peanuts to some sports team is wrong. IF the government is going to set people up in business, then they need to do it for ALL of us.
Yes, Mr Harper, build me a Tim Hortons please. I'm a little short on cash. You pay for it and get your money back from all those $8 an hour emplyees that I hire to work there by raising their taxes. Sounds reasonable?

Answer 8

No. I'm sorry, as much as I love the sport, I don't think our hard earned money should go towards funding arenas or sports. I think as fans we give them enough money with the sale of tickets and merchandise. Lower the paychecks on their end instead. Millions of dollars to play a sport is rediculous anyhow.

The government here already gives a certain amount to children who play Team sports. That already upset me enough. The Schools here are horrible, not enough staff and not enough help for children who need special education. There are children who go to school without having a descent meal, and we fund 'SPORTS?? Not to mention those kids who play hockey who skip studying and practice 4/5 days a week after school, take days off from school to go to tournaments, I'm sorry, but a very very little amount of those children we fund and force to play sports (that so many of them don't even like as they are pushed by their parents) make it into the NHL or any major league team, what's the point?

what about hospitals? ...

no..sorry...my answer is definately NO... 100%

Answer 9

Arenas and sports franchises are private ventures. Because of that, they should NOT be funded at all with tax money.

Let me ask you a question. Should the state/province be allowed to put an additional tax on sports, concerts, and other various mediums tickets?

Answer 10

tax money is used for all kinds of things that not all people use....not everyone uses: libraries, town parks, etc.......arenas should always be made because in most places (such as mine) football fields are the most important(we had a perfectly fine one, they spent tons of money, purposely destroyed it and made a new one that looks terrible lol...and now theres all the gup about making a new arena when we spent millions-maybe even-billions on a stupid football field we didn't even need..I guess it's life, but yeah I think taxes should defiantly support hockey....most other sports are supported, why not hockey