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Joyce Clark Unfiltered

For "the rest of the story"

It has been 17 years and 139 days since the city’s pledge to build the West Branch Library.

The cost to host the Super Bowl is estimated at $3.4 million to $4.1 million dollars. Let’s take a look at the revenue earned by the city. The oft touted public mentioning of Glendale as the host city will not be considered. It is an intangible that cannot be quantified. It has been my experience as a councilmember when the city hosted its first Super Bowl in 2008 that whatever publicity there was did not attract any new business to Glendale. Public safety will not be considered. The costs and reimbursements to and for public safety have been related in a previous blog. Instead we will focus on any revenue earned by any Glendale department.

My Public Records Request generated the following information related to revenue earned by the city:

  • The Glendale Media Center provided figures that reflect both the Pro Bowl and the Super Bowl. It seems reasonable to attribute 40% to the Pro Bowl and 60% to the Super Bowl. Total revenue earned less expenses was $8,480.57. Attributing 40% of the revenue earned to the Pro Bowl revenue was $3,392.23. Attributing 60% of the revenue earned to the Super Bowl was $5,088.34.
  • Planning Review (all departments) submitted a figure of $23,297.94 as revenue earned.
  • Permits earned $36,129.39 in revenue to the city.
  • Total Airport earned revenue for the Super Bowl was $12,686.00.

Super Bowl revenue earned as reported by the city for the above areas totaled $77,201.67.

That leaves the burning question of sales tax revenues earned by the city. City provided sales tax figures for January, February and March of 2014 and 2015 are:

City Sales Tax Revenue

Category January 2014 February 2014 March 2014
Retail sales $9,972,625.07 $5,637,641.32 $6,051,941.00
Contracting 745,079.38 518,696.33 616,690.00
Rentals 1,288,183.21 1,231,427.59 1,198,958.00
Utilities 601,681.64 583,784.06 530,215.00
Telecom/cable TV 405,525.87 416,381.31 448,315.00
Restaurant/Bar 1,495,519.46 1,323,988.20 1,308,653.00
Amusement 273,379.62 164,735.96 **
Other 558,426.02 445,446.71 1,116,070.00
TOTAL $15,335,417.00 $9,905,713.90 $11,271,212.00
  January 2015 February 2015 March 2015
Retail sales $9,372,364.50 $5,907,360.87 $6,747,767.00
Contracting 875,261.45 364,980.35 313,977.00
Rentals 1,491,967.04 1,202,529.74 1,324,516.00
Utilities 550,498.45 652,889.28 533,143.00
Telecom/cable TV 413,887.84 399,566.79 378,533.00
Restaurant/Bar 1,672,493.84 1,470,676.34 1,795,488.00
Amusement 313,548.98 110,242.04 **
Other 626,308.30 648,248.08 3,702,783.00
TOTAL $15,316,326.00 $10.756,493.00 $14,796,226.00

Total revenues for 3 months (Jan. – Feb. – Mar.)

Year 2014 Year 2015
$36,512,342.90 $40,869,045.00

** You will note that the city supplied no figures for the Amusement category for March of 2014 and 2015. I requested the March 2014 and 2015 seperately and received the following with the figures provided: “The requested information is included below with the exception that the category of Amusements has been combined into the category labeled Other.  Due to laws regarding taxpayer confidentiality, the information on Amusements had to be aggregated.  Therefore, the Other category includes Amusements, Hotel/Motel, Use Tax,  Printing, Publishing, Advertising, Jet Fuel, and other small dollar categories.” When I asked for a further explanation of this new practice the explanation offered by Ms. Vicki Rios, Glendale’s Acting Finance Director (now that Tom Duensing has been named as Interim Assistant City Manager replacing Julie Frisoni) was: “Mrs. Clark, 

“Section 21.1-450 (a) of the Glendale City Code states in part, “Except as specifically provided, it shall be unlawful for any official or employee of the City to make known information obtained pursuant to this Chapter concerning the business financial affairs or operations of any person.” 

“We take our obligation to protect taxpayer information very seriously.  During the month of March 2015, the mix and volume of taxpayer transactions in the Amusement category was such that if we were to disclose that category separately it would compromise the confidentiality of one or more taxpayers.  Therefore, we had to aggregate the category with other items for that month.  Because the taxpayer base and volume of transactions changes monthly, we evaluate each request independently.  Therefore, we were able to provide that information in the prior months.” The Amusement category would include sales tax receipts related to the Pro Bowl and Super Bowl.

January sales tax reflects December; February sales tax reflects January; and March reflects February. That is because sales tax is reported and paid in the month following the actual sales.

At first blush, when looking at the total sales tax reported for Jan. – Feb. – Mar. in 2014 and 2015 the first inclination is to say the $4,356,702.10 increase year over year is due to the Super Bowl.

Not so fast. There are mitigating factors to be considered. Tom Duensing, in his May 19, 2015 presentation to the city council on sales tax, stated that much of the increase is due to growth within the city. He indicated that new businesses have located in Glendale and they contributed to the sales tax revenue increase. In fact, Tanger Outlets grew substantially. Since Glendale does not publicly further refine its sales tax receipts the assumption is that an estimated $500,000 of that sales tax increase can be attributed to Tanger Outlet growth. If $500,000 is subtracted from the $4,356,702.10 year over year increase the figure is now $3,856,702.100 in sales tax revenue that can be attributed to all 3 major events: the Fiesta Bowl, the Pro Bowl and the Super Bowl.

Using the 40%/60% assumption, 40% can be attributed to the Fiesta Bowl and the Pro Bowl arriving at a figure of $1,542,680.80 in sales tax revenue. The Super Bowl sales tax figure at 60% is assumed to be $2,314,021.20. Add to this figure $77,201.67 in direct revenue the city received for the Super Bowl and the assumed figure for revenue earned by the city for the Super Bowl is $2,391,222.87.

Mr. Duensing budgeted $2.2 million dollars for the Super Bowl. Under his scenario the city only lost $191, 222.87 to host the Super Bowl. However the assumption is that the Super Bowl costs ranged from a low of an estimated $3.4 million to $4.1 million dollars. Based upon the figures used in this and the previous Super Bowl blogs the estimated loss to the city to host the 2015 Super Bowl ranges from a low of $1,008,777.13 to a high of $1,608,777.13.

The city admittedly had no mechanism to track all costs associated with hosting the Super Bowl and while it may have the figures of sales tax directly attributable to the Super Bowl it does not publicly divulge them. It should be of concern to all Glendale taxpayers that the city does not track each and every Super Bowl related expense. Based upon available expense and revenue figures the city was able to provide an estimated loss of $1 million to $1.6 million dollars is a reasonably accurate estimate. If you accept that the city only lost an estimated $191,000 I have a bridge in Brooklyn for sale.

The last Super Bowl blog will share some interesting information on Super Bowl credentialed Glendale employees and how much some Glendale employees made in overtime or time and a half working these 3 major events. Some of the figures will astound you.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted from this material site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

On Sunday, October 13, 2013 the Arizona Republic posted an editorial entitled City Finally Getting Clue on Super Bowl. Here is the link: http://www.azcentral.com/opinions/articles/20131007glendale-super-bowl-editorial.html . If I wanted a sermon I can always get one from my priest.

At least the editorial acknowledged the NFL’s heavy-handed demands with, “The NFL can be a demanding taskmaster when it comes to operating its big game. It wants to have things just so, and those things can be costly.” And that’s the point. The costs borne by the Host City far outweigh the revenue earned to cover those costs. Not so for Scottsdale, Phoenix, etc., who reap the revenues from major NFL events that earn enough to pay for their expenses. The editorial failed to acknowledge or even mention that other states, Texas and Florida, do pay Host Cities for their losses.

It goes on to say, “But, like it or not, if you want to continue playing host to the Super Bowl, you mostly have to play by NFL rules. That is just how it is.” There are two assumptions in that remark. There is an assumption that Glendale wants to continue to play host to the Super Bowl. I am sure every other Valley city most certainly wants to but is it in Glendale’s best financial interest? Not currently. Don’t be so quick to assume that Glendale should host future Super Bowls without recompense. The other assumption is that every Super Bowl Host City is held hostage by the NFL with their remark, “that is just how it is.” It’s time for potential Host Cities to form their own monopolistic league and negotiate terms with the NFL. It’s time when the NFL asks a Host City to jump, the Host City stops asking “How high?”

The article lays blame on Glendale, its usual modus operandi and its favorite city to bash, by saying, “…Glendale has been slow to grasp these essential details.” Oh really? Glendale successfully hosted a Super Bowl. It knew what to do and when to do it and performed at a very high level.  Glendale has proven its ability to host successfully. Glendale understands what is required of it and when but it is up to the Arizona Host Committee and the NFL to acknowledge Glendale as a full, participating partner. They have failed to do so to date.

Lastly, it says, “The Valley of the Sun has developed a strong reputation among those in college football and basketball and within the NFL who make the decision about where to host their marquee events.” Then it’s up to the member cities of the Valley of the Sun to create a mechanism that makes their sister city, Glendale, financially whole. Glendale was proud to host a Super Bowl and would be proud to host future ones but not by committing financial hari kari.

© Joyce Clark, 2013

FAIR USE NOTICE
This site contains copyrighted material the use of which has. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

First a disclaimer: On June 28, 2011 the city council passed Resolution 4502 in support of Glendale’s bid to host the Super Bowl in 2015. I was one of two councilmembers who did NOT support that bid. While I enjoy football and in fact, am in a Fantasy League I voted against hosting on principle. Until such time as Glendale is made whole financially for the expenses it incurs as a host city and knowing Glendale’s precarious financial position I cannot support the further financial strain.

Paul Giblin writing for the Arizona Republic had a story in the September 29, 2013 edition entitled NFL Looking to Other Valley Cities for Super Bowl Events. Here is the link: http://www.azcentral.com/community/glendale/articles/20130926nfl-glendale-super-bowl-events.html . Are you furious? If not, you should be. A little background is in order. In 2008 Glendale was the host city for the Super Bowl and lost over a million dollars for that “privilege.” Even though Scottsdale, Tempe and Phoenix made money on the event Glendale did not. Why? Glendale had made great strides in obtaining more hotel rooms, restaurants and other amenities but there still were not enough of those venues to earn the necessary sales tax revenue to reimburse the city for its expenses. In addition, most of the NFL sponsored events occurred throughout the Valley creating fewer opportunities for event attendees to visit Glendale. For example, the teams stayed in Scottsdale’s hotels, not Glendale’s. Even though the region or state benefited there was and is to this day, no mechanism to offset the host city’s losses. Glendale’s situation is becoming more and more unique. Take Texas for example. The state has a mechanism in place to reimburse the host city. Here’s a link: http://www.dallasnews.com/sports/super-bowl/local/20110131-state-fund-to-help-pay-for-super-bowl-expenses.ece . For the 2011 Super Bowl hosted in Arlington, Texas, “A state trust fund that uses tax money to help communities play host to major sports events is distributing its largest grant yet for Super Bowl XLV: $31.2 million.” There is a similar mechanism in Florida. Our state legislature has refused to create such a mechanism and don’t expect them to do so in the near future.

To begin let’s take a look at the NFL. Did you know it is the only sports league to have a 501(c) 6 non-profit status? Well, they do and as a result the NFL pays no taxes. It is estimated the dues each of the 32 team owners pays annually to the league is $6 million dollars on which no taxes are paid as it is considered as a donation to a non-profit. Forbes publishes an annual list of the 52 richest sports franchises in the world. Each year the 32 NFL teams, all of them, are included in that list of 52 richest franchises. The estimated worth of just one team — Jerry Jones’ Dallas Cowboys is $2.3 billion dollars.

The NFL revenue for the 2012 Super Bowl was $9.5 billion dollars (yes, that’s with a “b”). Estimated NFL revenues for the 2014 Super Bowl range from $11.5 to $14.7 billion dollars. If that sounds extreme consider the fact that in 2013 a 30 second TV ad cost $4 million dollars and that in 2014, a 30 second TV ad could cost as much as $10 million dollars. In 2009 Roger Goodell, the NFL president, was paid $9.9 million dollars in salary alone (does not include any perks or bonuses) and by 2019 his salary will be $20 million a year.

Super Bowl tickets are pricey. The nose bleed seats go for $700 and the lower bowl, really nice seats come in at $12,000. The cheapest Super Bowl package (tickets, air fare and hotel) for 2014 right now are priced at over $5,000 per upper level seat and $24,000 per lower bowl seat. Did you visit the Super Bowl Village (NFL Experience) when it was in Glendale in 2008? Admission was free but you probably bought some NFL merchandise. You couldn’t get out of there without having spent at least $100. Multiply that by attendance in Indianapolis in 2013 of 1.1 million people. Conservatively that’s another $110 million dollars. Then there are the TV rights to carry the Super Bowl. According to Forbes over the next 9 years three networks, Fox, NBC and CBS will pay $27 billion dollars for TV rights. Here’s the link: http://www.forbes.com/sites/kurtbadenhausen/2011/12/14/the-nfl-signs-tv-deals-worth-26-billion/ .

You have the picture. The NFL is the only sports league that is non-profit and pays no taxes, local, regionally, state or federal. The NFL is a football monopoly and as a result, can dictate terms. Take them or leave them. The NFL doesn’t care because there’s always another sucker, er…bidder. The 32 team owners that comprise the NFL have the richest franchises in the world. Super Bowl 2014 will earn these men somewhere in the range of $11 to $14B. Next up, in Part 2, we’ll look at host cities, host committees and Glendale’s role in the 2015 Super Bowl.

©Joyce Clark, 2013

FAIR USE NOTICE
This site contains copyrighted material the use of which has. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Lawwho have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to:http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

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