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Joyce Clark Unfiltered

For "the rest of the story"

Oct 17

4

Does federal legislation blocking taxpayer funding of pro sports facilities have legs?

Posted by Joyce Clark on October 4, 2017
Posted in Arizona Cardinals • City of Glendale • National issues • NFL • University of Phoenix Stadium • Yucca district  | Tagged With: , , , | 2 Comments

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

 In the wake of players’ refusal to stand for our national anthem it appears that two Congressional bills are picking up steam. The NFL backlash is just beginning. Fan ticket sales dropped by 20% last week. TV ratings are down by 18%. Now Congress is getting into the act having introduced a bill, Eliminating Federal Tax Subsidies for Stadiums Act of 2017 (S. 1342), to hit the NFL where it hurts – in its pocketbook. Its purpose would be to treat any bonds as taxable regardless of who is providing the bonds.

Senator James Lankford, R-Okla., and Senator Cory Booker, D-N.J., have introduced a bipartisan bill that would prevent professional sports teams from using municipal bonds that are exempt from federal taxes. Representative Steve Russell, R-Okla., and Representative Matt Gaetz, R-Fla., have introduced companion legislation in the House.

For years sports teams have used specially created tax breaks that allow the public to finance their very expensive arenas and stadia. The mechanism used is tax-exempt municipal bonds. These bonds were originally designed and reserved for public projects such as bridges, water systems and other municipal infrastructure projects. Ah ha…there is a loophole in the tax code that has allowed private stadia and arenas to take advantage of this tax break…and boy, have they ever. Very few major sports teams have used private money to construct their facilities.

Since 1997 twenty new NFL stadia have opened at a price tag of $4.7 billion dollars in taxpayer funds. Currently two new stadia are under construction in Atlanta and Minneapolis at a startling cost of $700 million dollars in taxpayer funds. You, the taxpayer paid for most of the University of Phoenix Stadium, home to the Arizona Cardinals, at a cost of approximately $300 million dollars.

Over the past 17 years, 36 professional sports stadia have been built or renovated by federal tax- exempt municipal bonds. The Brookings Institute reported that this has cost taxpayers $3.2 billion dollars.

It is estimated that the NFL, the most profitable sports league ever, generated $14 billion dollars in revenue last year (2016) with an estimated $1 billion dollars in profit. Everything about the NFL is pricey. It can easily cost a family of 4 at least $400 to attend just one game. The NFL teams sell $1.5 billion to $2 billion dollars worth of luxury and high-end club seats a year. Add in the fact that sponsors spend about $190 million dollars a year to the NFL for the right to cover a stadium with their company’s logo and other advertising signage. The NFL also receives much of its operational costs free of charge as a condition for the awarding of the Super Bowl to a community. Everything from player towels, to transportation to meals is free, comp-ed or discounted.

As Senator Booker said, “Professional sports teams generate billions of dollars in revenue. There’s no reason why we should give these multimillion-dollar businesses a federal tax break to build new stadiums. It’s not fair to finance these expensive projects on the backs of taxpayers, especially when wealthy teams end up reaping most of the benefits.”

You reap what you sow and the NFL is learning that has reaped the enmity of its fan base by becoming political. All that fans wanted was a break from all of the national bickering and strife for a few hours. They wanted to be lost in the fantasy of the game – not reminded that we are a country divided.

© Joyce Clark, 2017   

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘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 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 material. 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.

Oct 15

20

Glendale’s Super Bowl Analysis

Posted by Joyce Clark on October 20, 2015
Posted in City Council Actions • City issue and actions • City of Glendale • Glendale and the NFL Super Bowl • Glendale and the Super Bowl • Glendale finances • NFL • University of Phoenix Stadium  | Tagged With: , , , , , , , | 4 Comments

It has been 17 years and 292 days since the city’s pledge to build the West Branch Library.

On October 8, 2015 Glendale released its analysis of the expenses incurred in hosting the Super Bowl. Here is the link to the full report: SuperBowlXLIXPostEventAnalysisFinal2015_10_08 . I don’t know why this report is not on the city’s website. It should be available to every Glendale resident. The report is comprehensive and offers, “The purpose of this report is to provide a comprehensive overview of the city’s obligations and how they were met, a summary of the ancillary events and activities that took place, an analysis of specific city services provided, an assessment of stakeholder impacts, and a comprehensive financial analysis (page 2, executive summary).” I do take issue with some elements of Glendale’s final report, namely, cost avoidance and the lack of tracking employee time.

As I have suggested innumerable times, the only way hosting the Super Bowl works for Glendale is if a reimbursement mechanism is created by the State Legislature or the Host Committee. Whether the loss is a half million dollars or two million dollars, it is not a cost the taxpayers of Glendale should bear to enrich the state or other Valley communities. Glendale noted, “Other communities around the country that host Super Bowl have established a state-level funding mechanism to cover costs to local communities, or in some cases, Host Committees reimburse cities for associated costs. As an example, the city of Santa Clara, California (host of the upcoming 2016 Super Bowl) entered into an agreement with their stadium and Host Committee wherein the Host Committee is responsible for reimbursing the city’s direct costs (actual costs incurred) for all planning and execution activities associated with providing governmental services inclusive of public safety, traffic management, planning, building inspection, and public right-of-way clean-up (page 2, executive summary).” Until such time as a reimbursement mechanism is created Glendale should not participate in hosting another Super Bowl.

The report emphasizes the issue of cost avoidance. What is cost avoidance? According to the report, “At the onset of planning, staff was tasked with identifying service delivery alternatives or creative innovations that could be implemented to reduce costs or engage community partnerships in support of the city’s planning and execution efforts associated with Super Bowl XLIX. As a result of the combined efforts of the city’s planning team, Glendale realized cost avoidance of approximately $672,781…(Page 15).” Cost avoidance is only legitimate when it absorbs costs to provide necessary services to plan or execute the Super Bowl event. There were 2 items that could be classified as true cost avoidance: Light towers provided by the Department of Homeland Security at a cost of $12,000; and the city’s successful negotiation to eliminate a shuttle obligation at a cost of $200,000. These 2 items totaled $212,000.

An item that should not be considered cost avoidance ($415,625) is Valley fire and police agencies contributing staff time at their own expense. It is generally understood and accepted by all that any host city (anywhere) is not capable of providing the total police and fire services required. Other agencies understand that they will provide staff time at no cost to the host city. This action occurs at all Super Bowls, not just here. Calling this item cost avoidance is no more than ginning up the cost avoidance numbers. Other items listed as cost avoidance such as the Visiting Public Safety Officials Program ($16,656) were not required or necessary to plan or execute the Super Bowl. True cost avoidance totaled $212,000, not the $672,781 touted by Glendale.

Another problematic area of the report deals with Glendale’s reluctance to and lack of tracking of employee time spent in preparation and execution of the Super Bowl. Glendale says, “Preparations and planning for Super Bowl XLIX began in August 2013 with the assignment of two project managers and a team of approximately 20 employees representing multiple disciplines over 12 departments. All participating members of the planning team took on the responsibility in addition to their regular duties. Planning activities included participation in the following activities: internal core team meetings/communications, budget development, regional public safety planning, Host Committee briefings, stakeholder engagement, transportation planning, NFL production team, vendor engagement and media interviews (Page 12).” This team consisted of primarily salaried employees (paid an annual wage and benefits no matter the number of hours worked) and included:
• Economic Development Officer Jean Moreno
• Development Services Director Sam McAllen
• Police Commander Richard Bradshaw
• Interim Public Works Director Cathy Colbath
• Building Safety Manager Justine Cornelius
• Assistant Fire Chief Chris DeChant
• Transportation Systems Manager Trevor Ebersole,
• Airport Administrator Walter Fix
• Planning Director Jon Froke
• Fire Inspector II Anthony Gavalyas
• Senior Marketing & Communications Manager Joe Hengenmuehler
• Licensing & Taxpayer Analyst Tammy Hicks
• Fire Marshall Charles Jenkins
• Assistant Police Chief Matt Lively
• Assistant Planning Director Tabitha Perry
• CVB Manager Lorraine Pino
• Economic Development Administrator Kristen Stephenson
• Intergovernmental Programs Director Brent Stoddard
• Communications Director Julie Watters

I can see it now. When one of these people had to meet regarding the Super Bowl, they designated an associate to be in charge of their regular duties. Their responsibilities transferred to someone else who had to pick up the slack. These are valuable employees whose time was taken away from administering their departments and providing service to every Glendale resident. How much time was diverted from providing service to you, me, all of us? 1,000 hours, 2,000 hours? Glendale may consider it inconsequential to track their time but we, the taxpayers of Glendale, would like to know how many hours and the value of their time was diverted as a result of the Super Bowl. It is a true cost that must be accounted for.

Add the cost of non-salaried employees (paid wages and benefits for a 40 hour work week) who were tasked with carrying out the plans of this committee. It constitutes a direct transference of service time belonging to Glendale residents and diverted to support the Super Bowl.

Glendale’s rationale for its failure to track employee time and consequently the value of that time as a direct cost occurrence is, “In conclusion, the determination was made that the task of serving as the host city for the Super Bowl was a service being provided as a result of Council direction (Page 13).” On the face of it, that is one of the most illogical statements ever. Glendale goes on to say, “More importantly, requiring employees to track time would not be an effective or efficient use of scarce resources and there was no monetary gain that could be accomplished by doing so (Page 13).” Really? True, no monetary gain would be achieved but thousands of employee hours at real cost as well as service delivery avoidance to Glendale residents should be accounted for. It is a true cost to the taxpayers of Glendale that to date has remained hidden.

Glendale goes on to say, “Setting aside cost avoidance, after accounting for Glendale’s direct costs and direct fee-based revenue, the result was a negative net financial impact of $578,965. It is important to note that this does not account for any costs associated with pre-planning activities (Page 2, executive summary).” If the costs of employee time were recognized in this report it is expected that the true cost, rather than the $578,965 acknowledged would double to over a million dollars.

It is to be expected that Glendale would put as much positive spin on its hosting costs as possible and goes to great lengths to point out that Glendale does not have enough hotel rooms or venues to gain financially as well as offset it costs to host a Super Bowl. The overarching issue remains that Glendale experiences a financial loss in hosting the Super Bowl. Until that is remedied Glendale should not be in the Super Bowl hosting business.

© 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 ‘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 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 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.

Jan 15

26

NFL: the really big, bad boy of the sports leagues

Posted by Joyce Clark on January 26, 2015
Posted in Arizona Cardinals • City issue and actions • City of Glendale • Glendale and the Super Bowl • Glendale elected officials • University of Phoenix Stadium  | Tagged With: , , , , , , | 6 Comments

I’ve had it up the Yazoo with the antics of the NFL. It’s a non-profit organization that stands to earn about $10 billion dollars this year. It pays very little tax to anyone. The profit sharing among the team owners, while never divulged, is very healthy indeed. It seems as if NFL Commissioner Roger Goodell and the 32 team owners that comprise are the NFL have allowed a breeding ground of thugs and miscreants.

The San Diego Union Tribune has a database of all NFL player arrests and citations since 2000. They say it’s a list of anything “more serious than speeding tickets.” Their list includes 719 records and they say it isn’t necessarily comprehensive.  Here are just a few of the most publicized NFL players that made the limelight in recent years:                                 Aaron Hernandez                                                                              Team: New England Patriots                                                          Position: Tight End                                                                                Alleged Crime: Three murder charges, armed assault and attempted murder.

Adam “Pacman” Jones                                                                     Team: Cincinnati Bengals                                                                 Position: Cornerback                                                                      Alleged Crime:  Too many incidents to list. His most well-known involves a shooting incident at a Las Vegas strip club that left one person paralyzed and two others injured. Police said Jones incited the incident. Jones pleaded no contest to a charge of conspiracy to commit disorderly conduct and agreed to testify about the shooter

Michael Vick                                                                             Team: NY Jets                                                                                   Position: QB                                                                                 Crime: Convicted of running a dog fighting ring.  Served two years in prison.

Ray Rice                                                                                       Team: Baltimore Ravens                                                                 Position: RB                                                                                  Alleged Crime:  Aggravated assault of his then fiancée. Rice was cut by the Baltimore Ravens on September 8

Aldon Smith                                                                                  Team: San Francisco 49ers                                                          Position: Linebacker                                                                      Alleged Crime: Two DUI’s, possession of an assault weapon and a bomb threat at LAX. Currently serving a ten-game suspension from the NFL

Ben Roethlisberger                                                                        Team: Pittsburgh Steelers                                                            Position: Quarterback                                                                   Alleged Crime: Accused twice of sexual assault. One case was dropped and the other was settled out of court. Roethlisberger served a four-game suspension for violating the NFL’s personal conduct policy. Oh, and let’s not forget Inflategate.

Add to the litany of the NFL’s scandals and outrageous profits the ongoing bad blood between Michael Bidwill and the City of Glendale. Bidwill has not been happy with Glendale since the University of Phoenix stadium landed in Glendale. The city has never “rolled over and played dead” for Bidwill regarding his many, oft times extreme, demands, whether they were football related or development related.

Make no mistake when it comes to the actions and decisions of the Arizona Host Committee, Bidwill is large and in charge. Jay Parry may be the current President of the Arizona Host Committee but nothing is done or a decision made without Bidwill’s knowledge and approval.

On January 25, 2015, the New York Times ran an interview with Glendale’s own Mayor Jerry Weiers. Here’s the link: http://www.nytimes.com/2015/01/26/sports/football/albatross-of-debt-weighs-on-super-bowl-city.html?_r=0 . In the article Weiers bemoans the fact that he has been snubbed and has not been invited to the Super Bowl despite his being the mayor of the host city. It seems he has taken a page out of former Mayor Scruggs’ play book by complaining publicly in the hope that he will get tickets just as Scruggs did in 2008. Whether it’s Scruggs or Weiers, it’s embarrassing to have one’s mayor publicly whining. If the feud had been a staring contest, Mayor Weiers blinked first.

The host committee could have provided tickets but chose not to. Oh, really? If Bidwill had said make sure the Glendale mayor is invited, Weiers would have his ticket. One can assume the host committee declined to invite Weiers so as not to be on the receiving end of a Bidwill fit. Bidwill, when asked by Channel 12 news about the Weiers ticket situation, tried desperately to ignore the question and kept trying to turn the story into a good news story for the state and the region — to no avail.  Here is the link: http://www.azcentral.com/story/news/12-news/2015/01/26/12-news-michael-bidwill-cardinals-glendale-jerry-weiers/22335269/ .

In Bidwill’s parting shot, when asked why Phoenix and Scottsdale were hosting most of the Super Bowl parties instead of Glendale, said that was the decision of the Arizona Super Bowl Host Committee. “They’ve landed in cities that have been extremely supportive of the hosting of this Super Bowl,” Bidwill said. He went on to say that Glendale has been a “poor partner.” Has it occurred to anyone that if Glendale had refused to participate in the bid process that landed this year’s Super Bowl, there would have been no Super Bowl in Arizona this year?

Make no mistake, sometime in the future Bidwill and the Arizona Host Committee will want to bid again. At one time it was thought that Arizona would be part of a permanent rotation of the Super Bowl among southern or warm cities. Can you imagine if this year’s Super Bowl were being played in New Jersey? After all, the northeast is only dealing with a blizzard. Flights are cancelled and public transportation is at a standstill.

Until Glendale is assured, in writing, that it will be reimbursed for its costs, just as the host cities in Texas and Florida, it has no business being a Super Bowl host. The really big, bad boy of the sports leagues and the Bidwills, instead of spite will have to learn to use some sugar…the green kind, in large denominations, please.

© Joyce Clark, 2014

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 material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Jan 15

18

NFL: The big gorilla

Posted by Joyce Clark on January 18, 2015
Posted in Arizona Cardinals • Glendale and the NFL Super Bowl • NFL  | Tagged With: , , , | No Comments yet, please leave one

It seems fitting with the Super Bowl in Glendale only two weeks away and the Packers/Seahawks and Colts/Patriots games on today, January 18, 2015 that the NHL and its nonprofit status merits another look.

Many of you may not know that the NFL has nonprofit, 501 (c) 6 status. What other types of organizations enjoy 501 (c) 6 status? Chambers of Commerce and Boards of Trade. Hmmm, which one of these is not like the others? It originally received its tax exempt status in 1945. It’s doubtful if anyone remembers why. In 1966 Congress reaffirmed the NFL’s tax exempt status in return for a merger between the AFL and the NFL; the promise to locate a team in New Orleans and other miscellany.

The NFL is a billion dollar industry. This year the media is reporting that it will earn well north of over $10 billion dollars (that’s billion with a ‘b’ and not a typo). To be fair it does pay some taxes through a subsidiary, NFL Ventures, for its TV deals and some merchandise sold.

The NCAA, NHL and PGA Tour do have a similar non-profit status. Other sports organizations with the same stature as the NFL do not share in this form of congressional largesse. Major League Baseball gave up its nonprofit status in 2007 and the National Basketball Association has never been tax-exempt.

What makes the NFL nonprofit status so obscene to so many people? It revolves around the ever growing and greedy, very detailed and specific stipulations required to be met by state host committees. It’s gotten to the point that nearly everything, down to the towels used by the players, must be comped or deeply discounted. The bid always requires the payment of no taxes by governments – local, county and state. State host committees are forced to solicit more and more dollars from the public/private sectors to offset the costs of promotion and hosting. For example, the City of Scottsdale ponied up a million dollars to the Host Committee. In 2008, the last time Arizona hosted a Super Bowl, the Arizona Host Committee’s budget was approximately $18 million dollars. This year its budget is over $30 million dollars.

In November of 2014 legislation was introduced in Congress to remove the NFL’s tax exempt status. Don’t expect it to go anywhere. This time it is spite legislation and an attempt by some Democratic congressional members to provide pay back because of the NFL’s refusal to change the name of the Washington Redskins and its failure to address the issue of domestic violence (ala Ray Rice) in a more appropriate fashion. The legislation was offered under the guise of earning the federal government over $100 million dollars in tax revenue over the next ten years.

Congressional efforts to rein in the NFL will, as in other years, die quietly. The NFL spends millions, reportedly over $2 million in the past two years, in support of various congressional candidates.  They will not willingly kill their golden goose. Throw in the dollars spent on pure lobbying efforts to kill any such legislation and the NFL’s nonprofit status will remain intact.

So, it seems the big gorilla will remain the big gorilla, for now, as the league and team owners enjoy tremendous profits on the backs of you, me and every other taxpayer in the country.

© Joyce Clark, 2014

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 material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Feb 14

9

The cardinal rule

Posted by Joyce Clark on February 9, 2014
Posted in City issue and actions • City of Glendale • Glendale and the NFL Super Bowl  | Tagged With: , , , , , , , , | No Comments yet, please leave one

Lately media reported the reason Glendale would not be hosting NFL Super Bowl related events was that the Bidwills, the NFL and the Arizona Host Committee felt Glendale was not fulfilling its obligations with regard to the parking provision or capping Glendale’s hotel room rates. Oh really? It was all smoke and mirrors. Let’s revisit the Cardinals/Arizona Host Committee bid.

Mike Sunnicks had an article about the bid in the Phoenix Business Journal on October 12, 2011, 2 and 1/2 years ago. Here is the link: http://www.bizjournals.com/phoenix/morning_call/2011/10/arizona-super-bowl-to-have-downtown.html  .

The story says in part, “Concentrating more Super Bowl-related events in downtown Phoenix was a key component of the winning presentation put together by the Arizona Cardinals, advertising agency E.B. Lane and the Arizona Host Committee.” It went on to say, “For the 2015 game, the Valley’s bid promoted more downtown Phoenix events. That includes the media center and media hotels.

There could also be a Super Bowl Village fan experience at the Phoenix Convention Center as well as major concerts, public and private parties, and other events hosted at CityScape, downtown hotels and other venues — possibly including theaters, Chase Field and US Airways Center.”

Rutherford, New Jersey can feel Glendale’s pain. That’s where this last Super Bowl was hosted but the media ignored Rutherford and planted themselves in New York City, a far sexier site. Nearly every advertisement and every major NFL related event for the Super Bowl was in New York City. Gosh, New York renamed a street as Super Bowl Boulevard. That is exactly the treatment Glendale got the first time around and will experience this time as well. All major advertisements and the media will tout Phoenix, not Glendale.

At the time of the latest bid clearly Glendale was already being pushed aside by the Bidwills, the NFL, the Arizona Host Committee and the Arizona Sports and Tourism Authority (AZSTA). That is why when Michael Kennedy (past President of the Host Committee and the Cardinals’ attorney) presented the bid before the Glendale City Council seeking their support he positively sneered at my request that the Host Committee support a bill that would recompense Glendale for its expenses. All of them probably rue the day they decided to build the stadium in Glendale because they sure act that way. It appears to be inconsequential to them if Glendale loses money as the host city. Their view of Glendale is as a minor player and has never been welcome at the “big boys’ table” with any sense of legitimacy.

Why the public vituperation by Michael Bidwill now? It sounds good to accuse Glendale of a lack of cooperation hosting the Super Bowl but that’s just more smoke and mirrors. The real reason is likely that the Bidwills want Glendale to build that darned parking garage…now. Is he using the Super Bowl to put pressure on Glendale? That is for you to decide and many of you may come to the conclusion…yes.  Mr. Bidwill violated the cardinal rule (no pun intended!) about airing dirty linen in public. In so doing, he may very well have damaged the Valley’s chances to host future major events.

© Joyce Clark, 2014

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 material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Jan 14

8

The pressure is on the NFL

Posted by Joyce Clark on January 8, 2014
Posted in City Council Actions • City issue and actions • City of Glendale • Glendale and the Super Bowl • Glendale finances  | Tagged With: , , , , , , , , , | No Comments yet, please leave one

The first item on the Glendale city council workshop session of Jan. 7, 2014 was a legislative update.  Council’s interest was in making a run on the state legislature to adopt a mechanism to reimburse host cities for major events. Reimbursement could be applied to anything major such as the Barrett Jackson Auto Show or a major NBA tournament. It’s an idea long overdue.  From the time Glendale hosted its first Super Bowl and lost money doing so, I have continually pressed for such action. Even in discussions with the Host Committee regarding Glendale’s second hosting of a Super Bowl their reaction in pursuing such legislation was tepid. In the past 7 years there has been no interest, except in Glendale, to create such a mechanism. Glendale’s Intergovernmental Director, Brent Stoddard, continues to sound less than enthusiastic about its successful adoption by the state legislature in direct contrast to Mayor Weiers who said several times that he was “optimistic” that this would be the year for such successful legislation to be adopted. I would prefer to believe that this is the year for its adoption. Let’s hope they suceed in obtaining some kind of legislation to remedy this situation. Glendale simply cannot afford to host events that, in fact, benefit the entire state.

That leads to something that the TV media has been reporting lately. Sen. Tom Coburn, R-Okla., has filed a bill to end the tax exemption status of the NFL (granted in the 1940’s) on grounds that Americans are subsidizing a for-profit sports league. The NFL’s non-profit status was something I had highlighted in one of my blogs several months ago. Many were surprised to learn that it had a non-profit status.

Coburn’s bill, the Properly Reducing Overexemptions for Sports Act (PRO Sports Act), would do away with the tax break currently enjoyed by the league offices of the National Football League, the National Hockey League, golf’s PGA Tour, and the Ladies Professional Golf Association. Major League Baseball and the National Basketball Association have voluntarily given up their nonprofit status. Coburn has argued that if all the professional league offices were denied this exemption, Americans could recapture the estimated $91 million that goes each year for the subsidy. There is a group called the Rootstrikers, (http://www.rootstrikers.org), created in 2011 by Harvard law school professor Lawrence Lessig and political activist Joe Trippi to fight political corruption. They want to give momentum to this issue and have started an online petition to support Coburn’s bill. If you feel so inclined, check it out.

It is estimated that the NFL realizes $9 billion dollars annually and their top executives earn more than most corporate CEOs. For example, the NFL’s CEO is paid $30 million dollars a year. With that kind of revenue the NFL is a gorilla when it comes to congressional lobbying. In recent years it spent nearly $4 million dollars and at the same time contributed nearly $2 million dollars to congressional campaigns. It has a lot of clout and Senator Coburn will have an uphill battle to get his bill passed successfully.

Later today we’ll take a look at other council discussions at its recent workshop: one on municipal marketing and one on organizational restructuring.

© Joyce Clark, 2014

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.

Nov 13

17

What the heck?

Posted by Joyce Clark on November 17, 2013
Posted in City issue and actions • City of Glendale • Glendale and the Super Bowl  | Tagged With: , , , , , , , , | 4 Comments

Two recent news stories can have you scratching your head and saying, “What the heck?” Just when you think Glendale has its act together it trips over itself and acts either incomprehensibly or incompetently.

It appears the NFL is still miffed with Glendale. I don’t buy it. Glendale successfully hosted one Super Bowl and is using the same model, only updated, to host the next one. Supposedly the NFL is in a stew about three issues: parking, Glendale hoteliers’ refusal to join the NFL’s room bloc and lack of Glendale leadership.

What about parking? Glendale provided the necessary parking at the last Super Bowl and will do so again. It has the requisite parking lined up already. It’s a non-issue.

What about the room bloc? Glendale cannot tell private businesses what to do and what to charge for room rates. Perhaps if the NFL sweetened the pot a bit for Glendale’s hotels there would be incentive for joining the room bloc.

What about Glendale’s leadership? It appears that the current city council has sent numerous signals that they are on board and willing to take whatever action necessary to make the Super Bowl a success. It is a smoke and mirrors issue apparently being jinned by two entities: the Arizona Host Committee and the Bidwills. On nearly all levels of Glendale must communicate with the NFL executives through one or both of those entities. Remember the kid’s game of post office? By the time the original message went through several people the final message was nothing like the original. Glendale’s message is filtered by two, not-so-friendly entities.

The Host Committee has got to be walking around with a bag full of guilt knowing that all events but two are sited outside of Glendale and that Glendale will get the bill for the Super Bowl and probably lose money again. They have been very reluctant to assist Glendale in legislatively crafting a mechanism to make Glendale whole. Apparently Glendale’s losses are not a concern.

The Bidwills apparently are not giving the NFL kudos about Glendale because they are angry about NFL Super Bowl unrelated issues. They are angry that they didn’t get their way about putting up a training tent on Glendale’s Youth Sports Fields adjacent to the stadium and they are angry (perhaps in this case justified) that their partnership with SMG to bid on managing Jobing.com was ignored. Glendale did handle that badly by accepting bids and then letting them hang out there in limbo while it brazenly accepted IceArizona’s deal to manage the arena. The entire situation was strange to say the least. Another issue may be one of the lack of a parking garage. The Bidwills know that Glendale cannot afford to build one at this time. Soooo….the Bidwill’s land on both sides of stadium already has approved zoning (including the right to build a parking garage or two) as Sportsmen’s Park, East and West. If the Bidwills want a garage so badly why don’t they take out an incredibly low interest loan from the NFL and build one on their land??

It’s time that the Host Committee and the Bidwills stopped stewing and accepted the fact that Glendale is the host city. To make this event successful it’s time they lifted Glendale up rather than attempting to stomp it into the ground. They say publicly that they want Glendale to be a full participating member of the team but behind the scenes Glendale is virtually ignored. When another successful Super Bowl is over it will be in great measure because of Glendale’s efforts to insure its success.

Glendale is showing that its methods of operation haven’t changed much, if at all, under new City Manager leadership. It appears that Glendale missed the FEMA deadline for submitting paperwork regarding its flood prone areas in the city. A special council meeting had to be scheduled last Tuesday despite the fact that Weiers, Sherwood and Chavira were attending the National League of Cities convention in Seattle. They participated telephonically, something the Surprise city council just voted to abandon as a practice.

It was only discovered after several citizens called the city to complain that they were denied coverage. Don’t believe the disclaimer that it’s not a big deal because most of Glendale’s flood plain is in its river beds. There is also substantial land along Grand Avenue that has historically flooded and is in the flood plain. How could this fall through the cracks?

And the City Manager’s remedy? Expect another firing of some employee becoming the latest “fall guy” in the string of recent firings. Glendale hasn’t changed under new leadership. It still fudges on transparency. It refused to publicize its investigative report generated from the half million dollar external audit until the Arizona Republic made a Freedom of Information Request. It continues to follow the philosophy of omission; leaving out the negative, in an effort to spin any issue positively. Sometimes Glendale, you just have to say that you screwed up.

© 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.

Oct 13

15

Who needs a clue? Not Glendale

Posted by Joyce Clark on October 15, 2013
Posted in Glendale and the NFL Super Bowl  | Tagged With: , , , , , | 1 Comment

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.

Oct 13

2

NFL is a “Super Bully,” Part 3

Posted by Joyce Clark on October 2, 2013
Posted in Glendale and the NFL Super Bowl  | Tagged With: , , , , , , , | 1 Comment

Disclaimer: I voted in favor of Glendale’s hosting of the 2008 Super Bowl. I wanted to see if its results benefited Glendale financially. It did not. As a result, I voted against Glendale’s hosting of the 2015 Super Bowl. Please take a moment to participate in my informal Super Bowl poll to the left of this article.

The NFL is a non-profit and also a monopoly. It has tremendous wealth and power. It encourages potential host cities to upgrade or construct football facilities with the promise of a Super Bowl. It validates the economic benefits of a Super Bowl by funding economic studies and then uses their results liberally.

How did Glendale end up in this mess? Go back to the time when the Bidwills were looking for a permanent home for the Cardinals’ stadium. Remember? None of the East Valley cities, even Mesa, wanted it. The East Valley was where they yearned to locate but it was not to be. So it came as no surprise that John F. Long’s offer of free land in West Phoenix adjacent to the 101 was rejected. Glendale was the bridesmaid who became a bride by default. After all possible options had been explored Glendale was chosen. It was positively embarrassing.

The state created the Arizona Sports and Tourism Authority (AZSTA) as a mechanism to fund construction of the stadium and the Bidwills took out a loan (at an extremely favorable interest rate) from the NFL’s G-3 Stadium Program. Glendale issued $35 million dollars worth of bonds to pay for enhancing the infrastructure around the stadium. Make no mistake it may be a County facility outwardly under the control of AZSTA but it is the Bidwills who silently manage and operate the facility.

As the specifics of the event unfold it was learned that Scottsdale would continue to have a mutual relationship with the NFL for many years to come regarding hotel rooms and in fact, the teams would stay at Scottsdale hotels. Nearly all of the associated events and parties – even the media center — would be in Phoenix, Scottsdale, Paradise Valley, Tempe — any place but Glendale. We aren’t tony enough. Is it any wonder when you hear when Jacksonville hosted the Super Bowl each of the 32 team owners was given personalized use of a yacht?

It remains advantageous to every entity but Glendale to this day. Just look at the Scottsdale Council Economic Development report of April 30, 2013. Here’s the link: http://www.scottsdaleaz.gov/Asset48262.aspx . Check out the proposed agreement summary below between the Arizona Host Committee and Scottsdale.  Is it any wonder Glendale may not be thrilled with the prospect of hosting at a loss when it continues to receive the back of the NFL’s and Arizona Host Committee’s hand?

“Proposed Agreement Summary

The following are benefits outlined in the proposed agreement between the City and the Arizona Super Bowl Host Committee.

• Host Committee will include 3,194 hotel and resort rooms within Scottsdale in its official Super Bowl XLIX room block.

• Host Committee, working with the SCVB (Scottsdale Convention and Visitors Bureau), will encourage Host Committee sponsors and prominent groups to use Scottsdale hotels and resorts for Super Bowl XLIX.

• Host Committee, working with the Sponsor and SCVB, will encourage the use of Scottsdale venues and businesses as sites for Host Committee events and activities related to Super Bowl XLIX. The Host Committee will encourage the use of Scottsdale bars and restaurants as sites for third parties for private events.

• Host Committee will include Sponsor and SCVB representatives, to the extent qualified, on committees dealing with regional public safety and transportation issues associated with the Super Bowl. Sponsor and SCVB will also be represented on committees, if any, dealing with Host Committee events in Scottsdale.

• Host committee will work with SCVB to highlight key Scottsdale resorts, venues, restaurants, etc. during the Host Committee FAM trip proposed for 2014.

• Host Committee will use commercially reasonable efforts to include applicable Scottsdale businesses in Host Committee’s Business Connect Program, benefiting local minority and women-owned businesses.

• Sponsor will have representation in the Host Committee Business Development program, focused on attracting new companies to or expansion of existing companies in Arizona and Scottsdale, and increasing Scottsdale’s convention and meeting business.

• In accordance with the Agreement and Sponsor Guidelines, Sponsor or SCVB logo or text will be included in Arizona Host Committee promotional materials including website and brochures.

• In accordance with the Agreement and Sponsor Guidelines, Host Committee will include Scottsdale events in its social media and provide support for Sponsor events, which might include guest speakers, mascot appearances, etc.

• Host Committee will provide Sponsor directly, or if requested by Sponsor, provide SCVB for the benefit of Sponsor, with corporate entertainment and hospitality opportunities related to Super Bowl XLIX consisting of:

• 12 Super Bowl XLIX Game Tickets

• 12 Host Committee Pre/Post Game Hospitality Tickets

• 30 NFL Experience Tickets

• 12 Tickets, in the aggregate, to Host Committee events or other VIP experiences as mutually agreed upon between the Host Committee and Sponsor

• Host Committee will designate a Host Committee liaison that is available to the Sponsor for questions, concerns, resolutions.

• Host Committee, at the Sponsor’s request, will provide an annual meeting and/or written communications that provide updates on all that is occurring in the way of progress, planning of the event, as well as sponsorship deliverables beginning December 2013.

• Host Committee shall provide the Sponsor a Post Event Report, which will enable an evaluation of the Host Committee’s performance under this Agreement Report shall include a valuation of the Sponsorship Benefits. The report shall be provided to Sponsor no later than 60 days following the conclusion of Super Bowl XLIX.

• In addition to the Post Event Report, if requested. Host Committee will work with Sponsor to prepare recap for the Sponsor Council within 60 days following Super Bowl XLIX.

• Host Committee will make available to SCVB additional promotional opportunities related to Super Bowl XLIX.”

ESPN has announced it will use Scottsdale as its base for weeklong Super Bowl coverage and will offer the city tons of free publicity as it highlights Scottsdale’s desert scenes. For another “diss” to Glendale check out this website: http://www.visitphoenix.com/media/details/index.aspx?nid=412 that blatantly announces that the NFL has chosen Phoenix as its 2015 host city. Geez…and all along we thought Glendale was the host city. How silly of us. Every Glendale resident should be outraged.

How does the Arizona Host Committee fit into this scenario? It is the interface with the NFL. It prepares and presents a bid for consideration to the team owners.  It is charged with raising millions of dollars to offset the costs (and perks offered to team owners and NFL upper management) of the Super Bowl. It is the visible voice of the Super Bowl until the NFL arrives in town. It must gather thousands of volunteers to work the event. Each of the participating cities must tithe to the Host Committee based on population (ironically, Glendale’s population is greater than that of Scottsdale’s). Prior to the first Super Bowl in Glendale the Host Committee virtually ignored Glendale. It had meetings of which Glendale was not informed and to which Glendale was not invited to participate. From then until now it has treated Glendale as the poor relative to be tolerated.  It never welcomed Glendale as a full participant in the decisions or preparations. When Glendale’s financial loss from the first Super Bowl it hosted was known I began to call for the Host Committee and major beneficiary cities like Phoenix and Scottsdale to lobby for legislation to make the host cities financially whole. After all, it would have benefited them as well. The silence was deafening. What about the Bidwills? After all, they have a lot of influence in this state. Where was their support? Oh wait, they are holding out for a parking garage built by the city. Collectively there was none and instead we heard that perhaps we should wait a few years until the legislative atmosphere was more amenable. Well, a few years have passed and there’s still no support.

The September 29, 2013 edition of the Arizona Republic blares that the NFL will place events in other Valley cities. Oh really? No big deal. They’ve been sticking it to Glendale for years. Excuse me, what are they going to take away when there are no events slated for Glendale to begin with? No, this is really a piece of heavy handed blackmail, big time, by the NFL. They perceive that proverbial crack in the host city dike. They want Glendale’s hotel rooms. Glendale’s hoteliers have declined to participate and why should they? What’s in it for them? Do they get additional publicity because a team is staying at a Glendale hotel? No. Do they get additional publicity because NFL team owners are staying at a Glendale hotel? No. There is no incentive for Glendale hoteliers to cooperate. It earns them nothing other than a cap on what they charge for a room during the event. When will they realize that if they want Glendale’s support and that of its hoteliers rather than using the blackmail stick they might consider the incentive carrot. Our Moms used to say, “You get more flies with honey than vinegar.” It’s time for the Host Committee and the NFL to welcome Glendale into the fold as a full participant in preparation for this event.

Think about this. The NFL has set up a system whereby host cities must bid against one another and are forced to offer more and more outrageous goodies for the privilege. It’s time for the host cities to form a consortium of their own to stop this ever more expensive and crazy bidding war. They should develop their own basic ground rules and commonalities of interest. Perhaps they should develop a rotation system. It would certainly be to their advantage. What is the NFL going to do? Move to Europe? Hardly.

Did Glendale do a good job hosting its first Super Bowl? You bet it did. The city received many kudos. We were told by NFL officials, “You had the best Super Bowl ever.” Is Glendale capable of hosting the Super Bowl? Of course it is. Transportation and Public Safety personnel already have the experience of one under their belts and have been planning for the next one. Our city personnel are competent and experienced. The city is ready. Is parking an issue? No, it is not. Part of the parking requirements in the bid refer to the NFL Experience which is going to Phoenix, not Glendale. No surprise. The NFL rents vacant land to use as temporary parking lots in addition to the parking provided by Glendale. It’s a non-issue. There is one area of concern. In preparation for 2008 the council made a conscious decision to allocate funds in a special account for several years prior to the event. This time there has been no conscious decision to allocate funds for use during the event. Perhaps it will be done at the October 1, 2013 city council workshop or failing that, certainly at the council budget workshops in the spring.  The 2008 Super Bowl cost the city over $2M. Expect that cost to have doubled to at least $4M. Where will it come from? Council must address this issue and do so quickly.

Someone asked if the first Super Bowl was so bad for Glendale why is it hosting another one? The answer is not quite so simple. A majority (I was not one) of the council voted to participate in the bid process and therefore were on board to act on a winning bid. I cannot speak for the majority. Their rationale appeared to be to ignore Glendale’s fiscal loss from 2008 and to focus on the intangibles, especially the Frisoni message of intangible publicity value for Glendale. I question that assumption when the media center will be sited in Phoenix and networks like ESPN will broadcast from Scottsdale.  I assume they thought the intangibles outweighed the negative fiscal loss to the city. Or perhaps they feel that hosting the Super Bowl gets them an invitation into the “big boys club.” Our former mayor, who voted in favor of hosting the Super Bowl in 2015, often stated that the West Valley, especially Glendale, did not get the respect it deserved from other Phoenix metro cities. Councilmembers Knaack and Martinez were very tight with the former mayor and may have shared her perspective.

If I was on Glendale’s city council and another opportunity presented itself to host another Super Bowl, just as for 2015, under the current conditions, I would vote “no.” It’s a matter of principle. Glendale must be recognized by the NFL and the Arizona Host Committee as a full partner in the process. It must reap some of the rewards as a host city by becoming a site for major special events and parties. Until there is a financial mechanism in place to make Glendale whole it makes absolutely no sense for our residents to subsidize an event that seems to benefit everyone but Glendale.

©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.

 

Oct 13

1

The NFL is a “Super Bully,” Part 2

Posted by Joyce Clark on October 1, 2013
Posted in Glendale and the NFL Super Bowl  | Tagged With: , , , , , | 1 Comment

The NFL is a Super Bully. It is incredibly rich which accrues it tremendous power. It is a non-profit that pays no taxes and is a monopoly. Quite literally, it is the only (football) game in town. It can call the shots and is not shy about doing so. It’s also like your miserly grandfather, watching every penny and constantly on the lookout for freebies. Do you think Glendale should host the Super Bowl? Vote in the informal poll to the left of this article.

The NFL has a wonderful scam going. It encourages potential host cities to build or upgrade facilities by dangling the carrot of an economic bonanza with the prospect of a Super Bowl coming to town. The website www.planetizen.com has an article by Boramici from February of 2013.  He says, “ ‘Since 1990, taxpayers have been paying more than 60% of the bill for new NFL stadiums and more than 59% for new professional baseball stadiums in the U.S. While professional sports teams are integral to their host cities, the sense of ‘identity and civic pride’ they lend comes ‘at such a high price, one extracted not by these civic-minded fans, mind you, but by a uniquely undemocratic cabal of mayors and monopolists’, writes Harry Moroz.
“This year’s Super Bowl in New Orleans’s rehabbed Superdome comes with a price tag of $471 million to taxpayers with $41 million of those coming from FEMA.
“Several survey-based recent studies show that the value taxpayers place on professional sports team retention in their cities does not match up to the cost of building new stadiums or even renovating existing ones.
“What keeps the cycle of dependence going?
“With a limited supply and a more or less credible threat of leaving a city, sports teams are able to appeal to the risk-averse part of city leaders’ brains: People forget about $100 million lost here or there, but the departure of a sports team will be written in a mayor’s obituary.”

Couple the NFL clarion call to build even bigger and better facilities with its tried and true tactic of funding and issuing an economic study that promises untold financial benefit. There is an excellent piece of research by Victor A. Matheson of the College of the Holy Cross; Department of Economics entitled Economics of the Super Bowl. Here is the link: http://college.holycross.edu/RePEc/hcx/Matheson_SuperBowl09.pdf . He contends, “The Super Bowl is America’s premier sporting event. This paper details basic economic facts about the game as it examines the controversy surrounding the purported economic impact of the game on host communities. While the league and sports boosters claim that the game brings up to a $500 million economic impact to host cities, a review of the literature suggests that the true economic impact is a fraction of this amount.”  In his research paper he refers to a W.P. Carey MBA Sports Business Program study commissioned by the NFL on the economic impact to the Phoenix metropolitan region as a result of the 2008 Glendale hosted Super Bowl. That study claimed an economic benefit of $550.6 million dollars to the greater Phoenix area. He states, “There are reasons to be skeptical of such claims, however, since the league has strong financial incentives to publicize studies that report a large financial windfall for host cities. The NFL explicitly uses the lure of the Super Bowl as a carrot to convince otherwise reluctant cities to provide public subsidies for the construction of new playing facilities.” Relying on a study the NFL paid for isn’t the most reliable indicator as, “It appears that most economic impact reports are “padded” at least as well as the players on the field.” That study has become mantra in the Phoenix area and every time there is renewed discussion of hosting yet another Super Bowl it is cited ad nausea. If you repeat something often enough we assume it must be true. Doesn’t this sound all too familiar? The state created the Arizona Sports and Tourism Authority (AZSTA) to collect hotel and rental car taxes within Maricopa County to fund, in part, the construction of the UofP Stadium because the NFL and Bidwills all but promised that it would host a Super Bowl. And we all drank the kool-aid.

An often cited component of every economic impact study focuses on sales tax collection. It is generally accepted that sales tax figures are a reliable indicator.  How the sales tax figures are generated offers an opportunity for exaggeration. Matheson says, “…of the 23 new  stadiums constructed for NFL franchises between 1992 and 2009, 7 were funded, at least in part, through increases in the local general sales tax rate while another 8 were funded through increased excise taxes, i.e. sales taxes on specific goods and services such as rental cars or hotel rooms (Baade and Matheson 2006b).” Among researchers without a financial dog in the fight the general consensus is that any Super Bowl game generates $100 million dollars – not NFL fueled study numbers of $400 million or $500 million — of economic impact.  Many studies have been done on the South Florida area because of the inordinate number of Super Bowls that area has hosted over the years. One researcher offered this rather sardonic comment, “Finally, it is worth noting that taxable sales in the area during January-February 2000, the year after the game, were $1.26 billion higher than in the same months during the Super Bowl year. Strangely, the NFL never publicized a story announcing, ‘Thanks to the lack of a Super Bowl, there was a $1.26 billion increase in taxable sales in South Florida compared to the equivalent January- February period in 1999.’”

If all else fails and one’s critics will not accept sales tax figures one can always fall back on the intangibles.”… in assessing the impact Super Bowl XLII in Glendale, Arizona, Michael Mokwa, chairman of the marketing department at the W. P Carey School of Business stated, ‘The money is just the tip of the iceberg. Thousands and thousands of people who came here for the Super Bowl, of whom many had never been to the Valley before, took away powerful memories and a good feeling about Arizona.’ This translates, he said, into coveted return visits, family and business relocations, and word-of-mouth marketing throughout the country. Priceless, as MasterCard is fond of saying (W.P. Carey School of Business, 2008).”

The problem with intangibles is they are intangible. They are extremely difficult to quantify and substantiate. Have we ever heard a CEO of a company state that he moved the company to Arizona because he had powerful memories and fell in love with it while attending the Super Bowl in Glendale? It is the stuff of urban legend that was used frequently by Julie Frisoni (Glendale’s Director of Communications and Marketing) in 2008 while making a case for Glendale’s first hosting of the Super Bowl. She continually cited the exposure Glendale would receive in hosting the Super Bowl but to my knowledge, there is no company that relocated to Glendale as a direct result of having attended the 2008 Super Bowl.

Government revenues, another intangible, are also non-existent because of the NFL’s stipulation that it pay no taxes. While there is an increase in employment and as a result, personal income, it does not have a lasting effect beyond the event. It is an event that provides an increase in jobs for perhaps a month and then, poof…they are gone. Matheson goes on to say,“Ex post economic analyses of the Super Bowl by scholars not financially connected with the game have typically found that the observed effects of the game on real economic variables such as employment, government revenues, taxable sales, GDP, and personal income, while generally positive, are a fraction of those claimed by the league and sports boosters. When considering optimal public policy with respect to sports infrastructure, it would be wise to take any claims of super benefits from the Super Bowl with a grain of salt.”

The NFL waves the magic wand of promise of a “Super Bowl To Come” to bring pressure to upgrade or construct a facility worthy of such an event. Then for good measure it issues an NFL funded economic impact study that can prove the region will realize a financial windfall. What’s not to like? It is powerful and enticing and appeals to many regions of the country struggling with the aftermath of the Great Recession. The crushing debt it causes taxpayers will be the catalyst causing us to take a second look and ask the question, is it really worth it?

The very last thing the NFL will tolerate is insubordination in its ranks of host cities. A hole in the dike is to be stopped at all cost to keep a flood of skepticism from washing over its always reliable revenue streams. The sentinel that alerts it to impending trouble is the Host Committee. In the next blog, we’ll look at the Arizona Host Committee and Glendale’s role as a host city.

©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.

 

 

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