Billionaire's playground: the world of professional sports

[theHandpuppet]

I'm not sure why this subject has been so taboo on DU (previous attempts to broach this subject have been met with surprising reproach) but let me wade in here once again. Perhaps we all need to be reminded that at a time when Americans are losing benefits, having pensions slashed, cities are going bankrupt, schools are locking their doors, the poor are being told there's simply not enough money to feed, clothe and house their children, there's at least one tier of citizenry who are laughing all the way to the bank -- owners of professional sports franchises. While most families in America work multiple jobs to make ends meet, owners of team sports hold financially strapped cities in a type of financial blackmail, demanding taxpayer monies to build their stadiums and all manner of compensation packages, right down to breaks on their utility bills. Even better for these owners, the federal government seems a willing partner to this sham with the huge taxbreaks proffered to sports industries from NASCAR to the NFL which, in case you didn't know, has tax-exempt status.
Then again, perhaps I'm being too hard on these shining examples of American entrepreneurship. It could just be a matter of.. well, as Seattle Seahawks owner Paul Allen put it so simply, "I'm better at life than you."
What is it about the sacred cow called professional sports that no amount of greed and corruption can stir an ongoing debate, much less the slightest outrage, about the inequity of it all. To the billionaire owners it's just a game, and one they play with house money.

To begin, let's take a look at a sampling of some non-sports jobs and what they pay. The following wage figures were garnered from several sources, including the Bureau of Labor Statistics, Forbes and ESPN

Average salary (median) for the following professions (in thousands of dollars)
Elementary-high school teacher: 40 –44.6
Firefighter: 42.4
State governor: 124
Mail carrier: 40 – 56.7
Day care worker: 21.3
Staff nurse, RN: 67.4
Maids and housekeeping cleaners: 21.8
Plumbers, pipefitters, steamfitters: 46.6
PFC, US Army <2 yrs experience, active duty : 20.3
Speaker of the House: 223
Retail salesperson: 25.3
Sanitation worker: 28.9
President of the United States: 400
Housewife: 0; calculated compensation due: 134.1

Now let's compare those incomes with the median annual salaries in professional sports: (in millions)
MLB: 3. 4 (Alex Rodriquez, per game: 150 thousand)
NBA: 5.1
NHL 2.4
NFL: 1.9
NFL Commissioner, including compensation: 29.4
Highest paid college coaches, top 50: 1.49 - 5.19
Highest paid golfer: Tiger Woods, 78.1*
Highest paid tennis pro: Roger Federer, 71.5*
*includes monies paid for endorsements; figures provided for MLB, NBA, NHL and NFL do not include monies paid for endorsements.

http://profootballtalk.nbcsports.com/2013/03/26/paul-allen-is-the-richest-nfl-owner/
Paul Allen is the richest NFL owner, by far
Posted by Mike Florio on March 26, 2013, 1:50 PM EDT

Like Seattle star cornerback Richard Sherman recently told Skip Bayless,
Seahawks owner Paul Allen once again can declare to his NFL colleagues, “I’m
better at life than you.”

Forbes has issued its annual list of worldwide billionaires. Not
surprisingly, more than a few of them own NFL teams. The richest of all NFL
owners, via SportsBusiness Daily, is Allen, at a whopping $15 billion.

A full 11 figures in the distance is Rams owner Stan Kroenke, at $5.0
billion. (Coupled with wife Ann Walton Kroenke’s $4.5 billion, that’s a
$9.5 billion power couple.)

The bronze is shared by Dolphins owner Stephen Ross and Buccaneers owner
Malcolm Glazer, both of whom are listed at a net worth of $4.4 billion.

Next on the list is Jaguars owner Shahid Khan, at $2.9 billion. Giants
co-owner Joan Tisch also has a net worth of $2.9 billion.

Cowboys owner Jerry Jones is worth $2.7 billion, followed by Patriots owner
Robert Kraft ($2.3 billion), Browns owner Jimmy Haslam III ($1.8 billion),
Texans owner Bob McNair ($1.8 billion), Ravens owner Steve Bisciotti ($1.8
billion), Falcons owner Arthur Blank ($1.6 billion), Colts owner Jim Irsay
($1.5 billion), Titans owner Bud Adams ($1.2 billion), Saints owner Tom
Benson ($1.2 billion), 49ers co-owner Denise York ($1.1 billion), Redskins
owner Dan Snyder ($1.0 billion), and Chargers owner Alex Spanos ($1.0
billion).

That’s 19 teams owned by billionaires, with every team in the AFC South
owned by a billionaire. Which means, excluding the publicly-owned Packers,
12 teams are owned by non-billionaires.

Which makes us wonder what those owners are doing with the money that owning
an NFL team allows them to print.

Follow these links for a small sampling of articles on the subject :

Congress Gives NASCAR a $40M Tax Break
http://usgovinfo.about.com/b/2010/12/24/congress-gives-nascar-a-40m-tax-break.htm

Why Does the National Football League Deserve Tax-Exempt Status?http://www.huffingtonpost.com/brian-frederick/nfl-tax-exempt_b_1321635.html

Big-time sports tax breaks: 'How much does it bother you?'http://www.wral.com/nfl-is-tax-free-how-much-does-it-bother-you-/12063209/

House panel OKs $60M in tax breaks for sports facilities (Florida)
http://articles.orlandosentinel.com/2013-03-20/business/os-sports-facilities-tax-break-bills-20130320_1_sales-taxes-house-tax-committee-new-tax-collections

Kentucky govt. diverts economic development funds from Appalachian counties for basketball arena
http://www.democraticunderground.com/10023147631

[a kennedy]

1. Pretty d*mn sick isn't it.....

[Mr Dixon]

2. IMO

Great read, IMO we the people are to blame, I was thinking about this yesterday after watch a few short clips on “The NBA is rigged like the WWE”. The bottom line is we the people the consumers allow for this these billionaires to live their lifestyles on our dime. We build up a game, a musician and actors as god like figures, but in reality they only entertain us; no significant accomplishments to speak of a Super bowl ring, a platinum record or an Oscar mean absolutely Jack. We spend billions of dollars every year and have the audacity to complain about the rich? Would they be rich without our complicit worship?

[theHandpuppet]

3. Bread and circuses, my friend

One of the reasons, I believe, this has been a hands-off topic is because in order to have a real discussion/debate about it, we have to admit our complicity in this sorry state of affairs.

[Mr Dixon]

5. Agreed

[Fumesucker]

4. For the most part musicians and actors don't work in state financed facilities

Practically all sports stadiums though are publicly financed to one degree or another.

[theHandpuppet]

9. I agree, which makes pro sports truly "a league of their own"

Although for the life of me I cannot understand why a Kim Kardashian has more dollars to rub together than she has brain cells, which I'm guessing is somewhere between 2 and 5.

[Dawson Leery]

6. All major sporting events, including the World Cup and Olympics are

heavily subsidized by the taxpayer.

[bhikkhu]

7. One good aspect of my RW area's sports fannage -

is that not many of them care for professional sports. Most of them follow college sports, and little league is a big thing, where its fun to watch and the game is still about learning sportsmanship, kids playing other kids, not millionaires vs millionaires.

[theHandpuppet]

8. That's what sports should be about

Not exercises in greed and narcissism. The other topic I'd really like to discuss sometime is the "plantation mentality" of major college sports, where young athletes make millions for others and yet can get tossed out of school for accepting a pittance for an autograph or a jersey. The system especially exploits and abuses young black athletes, some who have even admitted to going hungry because they don't even have pocket money for food. Oh, don't get me started on that one...

[hedgehog]

10. College sports - where professional team owners pretend to be interested in education!

[hfojvt]

11. unfortunately, sports are big business

what would be the impact on Kansas City, for example, if they lost the Chiefs?

Or consider another example that I have witnessed - the Kansas City Speedway. It opened in 2001, about the same time I moved here. I can remember even when Nebraska Furniture Mart first opened down there - there was nothing down there, only NFM, and I guess Cabela's. Now the place is loaded with stores. (Although I have also noticed that 3 or 4 other furniture stores have gone out of business since the arrival of NFM. That may be normal though, stores go out of business periodically anyway.)

All those stores mean retail jobs and sales tax revenue and the Speedway itself brings in a lot of money. "A 2008 survey by The Washington Economics Group revealed that Kansas Speedway brings $243 million to the state of Kansas each year. It also provides over 5000 jobs, with 4000 jobs coming directly from track operations." http://en.wikipedia.org/wiki/Kansas_Speedway

Well, 5,000 jobs at even minimum wage means $75,000,000 in payroll and the impact that that has on the economy as those workers buy food, gas, and furniture, etc. for their families.

If Kansas City lost the Chiefs it would lose that kind of revenue. It would also lose status and quality of life in the eyes of many of its residents. My brother in law recently posted a picture on FB of himself, my sister, my brother and his wife all celebrating my sister's anniversary at a Royals game. People enjoy their sports.

It is kinda funny though, in one sense to talk about how sports "generates" revenue. The Speedway's revenue comes from the tens of thousands of people who drive hundreds of miles to see a few races. Presumably if they didn't do that, they would spend that money somewhere else and that spending would be the same $243 million and create the same 5,000 jobs. Wouldn't it? But it might not be in KCK.

So I am not sure that the Speedway "creates" anything. If hundreds of thousands of people were not spending all day watching cars drive really fast around an oval, they could find other things to do with their time.

But ultimately, it is their own choice as to what they want to do with their time. Some people choose to "waste" hours watching cars turn left. Others "waste" hours reading and writing on a message board. It's their own time and their own money, and woe would be to the politician that did not do what they had to do to keep "our" team in our town.

[theHandpuppet]

12. Depends on how you'd rather spend the public dime

I'd rather see taxpayer money spent on public schools, infrastructure projects, public works, etc. Think of the number of people who could be put to work at a decent wage solely on infrastructure projects, especially in urban areas. The additional teachers, first responders, etc that could be hired if taxpayer money wasn't given away to sports franchises. I have no problem with sports as successful businesses but the fact that the owners of these sports industries are filthy rich and have the nerve to be on the public dole is obscene. Does anyone really think the NFL should be run as a non-profit? What a scam. Can a tennis player really justify making nearly 1800 times the salary of a teacher? Why should a firefighter make 1500 times less than a guy who can shoot a basketball into a hoop?
Some owners of pro teams are already moving out of urban areas where they are most needed into the more affluent burbs, where they can strike better deals for tax breaks, zoning deregulation, even getting public monies to build the roads and sewers they'll need for their sports palaces. A lot of the jobs created by these multi-billion dollar industries will end up paying a barely livable wage, if that.
Again, it all depends on where you think public money should be invested -- and this involves not just tax money on the local level, but federal. Frankly, I think we have some really screwed up priorities in this society.

[Mr Dixon]

13. Agreed

That is the point i was trying to make, sports, movies and reality TV add nothing to the greater Good. Yet some people defend the indefensible SMH.

[theHandpuppet]

14. Well, as you can see...

... this topic isn't exactly setting the board on fire, as I expected. Can't slaughter the sacred cow -- you have to stand too close to draw the knife.

[Mr Dixon]

15. Agreed

So Sad

[theHandpuppet]

16. Now just where are our Dem leaders on this issue?

This is embarrassing.

http://profootballtalk.nbcsports.com/2013/05/12/republican-senator-targets-nfls-tax-exempt-status/

Republican Senator targets NFL’s tax-exempt status
Posted by Mike Florio on May 12, 2013, 6:09 PM EDT

The many NFL owners who are staunch Republicans may need to re-think their affiliations.

From Florida House Speaker Will Weatherford, who derailed the effort to upgrade Sun Life Stadium, to Arizona Senator John McCain, who wants to outlaw blackouts at publicly-funded stadium, and now to Oklahoma Senator Tom Coburn, who wants to remove the NFL’s tax-exempt status, a trio of Republican politicians have been putting the screws to pro football.

Coburn’s effort, as explained by Dave D’Allesandro of the Newark Star-Ledger, applies to other pro sports leagues that have shoehorned their way into non-profit status, including the NHL and the PGA. Coburn believes that stripping the assessment from the NFL and NHL alone will generate $91 million per year in additional tax income.

The specific benefit to the NFL of tax-exempt status isn’t known, but the league already has decided that the reduced tax burden justifies the inability to shield from public view the salaries paid to key officials. Commissioner Roger Goodell, for example, made nearly $30 million in the year covered by the most recent filing. If the NFL didn’t possess tax-exempt status, no one other than the league’s owners and a handful of league-office employees would know how much Goodell makes... MORE

[hfojvt]

17. but building a sports stadium

IS a construction project. One which creates jobs like any other infrastructure project.

The tennis player who makes that big money is a world class tennis player, not an ordinary run of the mill player like myself. The Williams sisters make their big money because most people cannot play tennis as well as they do.

Although it is interesting how the pay and the sport has evolved. Fran Tarkenton was one of the best quarterbacks ever, for example, but he probably had less lifetime earnings that the wash-out Ryan Leif, and made less endorsement money that the short career of Bo Jackson.

One guy I remember reading about was a walk on for the New York Jets. Just walked into training camp and made the team. He was the NFL's leading kick off returner for the year the Jets won the Superbowl. And for that he was paid $10,000. Which was not all that much money even in 1973.

But their ridiculous salaries come from public choice. A public that chooses to goto games, and a public that chooses to watch those games on TV.

I think it is absurd, but don't blame the politicians in a democracy for bowing to the will of the people.

Although some of that "will" of the people comes from a mighty marketing machine too.

[HiPointDem]

18. kr

[theHandpuppet]

19. More links...

More links:

http://nonprofitquarterly.org/policysocial-context/22178-new-orleans-gives-800k-in-tax-breaks-to-the-nfl.html
New Orleans Gives $800K in Tax Breaks to the NFL

(excerpt)
According to the study, NFL and team personnel and their “parties” directly spent $33.7 million, including $12.7 million on hotels and lodging, $3.9 million on bars and nightclubs, $1.4 million on entertainment, and $1.3 million gambling. As the NPQ Newswire has previously noted, the NFL typically negotiates these deals, some more lucrative in tax exemptions than the deal in New Orleans (such as Indianapolis), and most recently had a tax deal on the table for negotiations with Santa Clara, California, and its bid for the Super Bowl in 2016 or 2017.

But does the NFL (or its member teams) need exemption from local taxes to make the Super Bowl a viable economic activity? Could the $184 million NFL, and its multiple teams valued at a billion dollars or more, have survived paying $800,000 in taxes to local New Orleans governmental units?

There are still plenty of people who think the pro sports tax subsidy—the nonprofit status granted to the NFL, plus the National Hockey League and the Professional Golfers’ Association—is unnecessary, unwarranted, and wasteful. Writing for the Fiscal Times, Steve Yoder lists the pro sports tax exemption as one of the “10 tax laws that hurt the economy the most.” The pro sports tax exemption doesn’t make the NFL a public charity, but in some cases, the NFL is trying to adopt a nonprofit-like posture. In northern New Jersey, where the next Super Bowl will be played in 2014, the NFL is trying to recruit potentially 20,000 volunteers to greet visitors coming to the region. Ten hours of work, in return for being able to wear an NFL volunteer uniform.

The NFL exists to promote the economic interests of some of the nation’s wealthiest sports franchises owned by exceptionally wealthy individuals. While some observers might contend that paying commissioner Roger Goodell more than $10 million a year is simply a matter of market economics, paying him simply what he is worth in the labor market, others might suggest that the NFL’s paying several seven- and eight-figure salaries plus its earning huge economic returns from its programs, ought to make it classifiable as something other than a nonprofit entity. Its tax-exempt status didn’t cost New Orleans much in foregone taxes, but did it need an exemption from local taxes at all?—Rick Cohen

http://www.thebiglead.com/index.php/2013/03/15/the-nfl-loves-local-tax-increases-for-stadiums-except-when-nfl-officials-have-to-pay-them/
The NFL Loves Local Tax Increases For Stadiums, Except When NFL Officials Have to Pay Them

This narrative is familiar. An NFL team wants more money. Team executives raise smoke signals about leaving for, say, Los Angeles. Local politicians respond with an incentive package of public funding to finance renovations or a new stadium. Twenty NFL teams have built or renovated stadiums since 1997. Nineteen of the 20 projects involved public funding (the Meadowlands had a nine-figure public infrastructure project that does not count as a stadium expense).

Eleven of those 19 projects involved tax increases. Many of those taxes are hotel and car rental taxes, designed to defray the cost from the local population. The NFL loves such taxes, except, of course, when league officials would have to pay them.

Miami and Santa Clara are bidding to host Super Bowl L in 2016. The new 49ers stadium involves a two percent hotel tax. Renovations to Sun Life Stadium would necessitate a one percent hotel tax increase in Miami. The NFL has demanded that league employees be held exempt from local taxes. Santa Clara already agreed, meaning Miami must likely do so as well.


But the region’s rival for the 50th game, Santa Clara, last week announced it would waive hotel taxes for NFL executives. That raises the stakes as the Dolphins lobbying team races to obtain state and county approval of the tax-funded renovation by May 22, when NFL owners will pick a winner....

http://taxprof.typepad.com/taxprof_blog/2004/10/pga_golfers_sco.html
PGA Golfers Score Hole-in-One in Tax Bill
By Paul Caron

PgatourToday's Wall Street Journal has a fasciniating article on how the PGA Tour's lobbyists succeeded convincing Congress to exempt pro golfers from the new tax bill's restirctions on defined contribution plans:

On page 598 of the 650-page bill, at the end of a section designed to limit the use of corporate "deferred compensation" plans, is an exemption for any plan "established or maintained by an organization incorporated on July 2, 1974." In other words -- the PGA Tour Inc., the nonprofit association whose members play on the professional golf circuit....

[T]he pension plan -- linked to golfers' performance -- offers a 26-year-old player who began his career in 2001 and plays 17 seasons a retirement nest egg of nearly $43 million even if he ranks No. 75 and never wins a tournament....

The tax bill that Congress sent to President Bush limits the flexibility of deferred-compensation plans to dodge taxes. Among other things, it restricts early withdrawals and withdrawals delayed beyond the date set originally. But the bill exempts the PGA Tour pros.
How did the PGA Tour succeed in having golf plutocrats like Tiger Woods excluded from the provisions in the tax bill? The article includes this tantalizing suggestion: As the bill moved through Congress in June, a crush of influential lawmakers attended the PGA Tour's Booz-Allen Classic at Avenel Country Club in Maryland, where they played with the pros. Ways and Means aides say the boosters of the PGA Tour exemption included Rep. Jim McCrery, a Louisiana Republican. At the tournament, he played with Australian golfer Adam Scott, according to the Hill newspaper....

"I don't know what any of these special breaks have to do with American manufacturing jobs," says Rep. Charles Rangel of New York, the top Democrat on the House Ways and Means panel. "But I do know one thing -- pro golfers and sports-franchise holders won the Washington lobby game, and the American taxpayers have lost." ....

[panader0]

20. If I was a great athlete, and hired an agent coming out of college,

I would take the best offer I could get. I don't think any athlete would say, "No, that's too much money. I want less."
The athletes are NOT to blame. They are merely good at their sport and are offered money to play. Sure, some are too big for their britches, but it is ultimately the fans who support the system. Yes, there is a degree of taxpayer support, but there are also many jobs and a boost to the local economy for hosting a sports team. There are so many here on DU that are very anti-sports. I am not one of those. I played baseball, football, basketball and ran track before moving to Hawaii in '64 and discovering surfing. At the time, surfing was an individual sport, no money involved. Now, big surfers have sponsors too, prize money, just like skateboarders, etc.
Lay off the athletes, pro or amateur, and if you want to blame someone for their salaries, blame the fans. Go Giants!

[theHandpuppet]

21. I happen to love sports

What I don't love are the greed and corruption fostered by pro sports, including massive tax breaks given to billionaire sports owners.

[Mr Dixon]

22. Just Saying

Not sure anyone is attacking sports; I think the entire conversation has been re-routed. This is about the people falling head over heels in love and lust over entertainment. Yes I understand some people could care less about the homeless, or sweat shops or the food service industry being paid peanuts. The problem is the people have their own weapons and refuse to use it unless it is spent on entertainment. Yes you guessed it our weapon is money, fight then with the dollar, if you think abortion is a woman’s choice then stop supporting company that fight against your beliefs, I have seen plenty of list on this site that pinpoint that companies that support Monsanto, the Koch brother’s and many more. Protest is a novel idea but a financial protest is Action that the corporations fear, put your signs down and close your wallets.

[theHandpuppet]

23. Yep. NFL owners have no problem voting with their (sizable) wallets

And it's obviously quite effective, too.

http://www.forbes.com/sites/kurtbadenhausen/2011/10/07/nfl-owners-love-the-gop/

NFL Owners Love The GOP
Kurt Badenhausen, Forbes Staff
Business 10/07/2011

The NFL is filled with fat cat owners who have gotten rich on the backs of their football teams like Jerry Jones and Dallas Cowboys. Others have built their empires through outside means like Paul Allen and Microsoft. By our count there are 15 NFL owners with net worths of at least $1 billion.

Not surprisingly, these owners overwhelmingly funnel their political contributions to candidates in the Republican Party according to a new study by the Center for Responsive Politics that looked at contributions of NFL owners, players and coaches.

Leading the way is Houston Texans owner Robert McNair who made his fortune when he sold power operator Cogen Technologies to Enron in 1999. McNair, worth $1.5 billion, contributed $215,200 to Republican political candidates since January 2009. Democrats got nothing. Led by McNair, the Texans are the most politically active team with total contributions of $293,100. A couple of Texans broke ranks from the boss with $5,800 steered towards Democratic candidates.

Overall the Center for Responsive Politics found $1.4 million in political contributions from the 32 NFL teams since 2009 with the money going to Republican candidates by a more than 2 to 1 margin....