The NFL's great Super Bowl swindle
Miami kind of has everything. The city boasts Art Basel, beaches and Pitbull. But there's one thing it can't have: the Super Bowl.
Miami presented its case to host the 50th or the 51st Super Bowl in front of NFL owners on Tuesday. They lost out to Santa Clara, CA., and Houston. They lost out because Sun Life Stadium is old, by league standards, and in need of an upgrade.
The NFL reportedly really liked what the Miami committee had to offer, but because Florida taxpayers declined to share their wealth with hardworking, underserved billionaires like Dolphins owner Stephen Ross, the NFL doled out its carrot to the other cities.
"The stadium is a very important part of any of these proposals," NFL commissioner Roger Goodell said in a press conference following the vote. "A couple of owners did express to me privately that the condition of the stadium was an important factor to them in their votes. But again, I don't know all 32 owners' perspectives on that."
Except that he kind of did know the owners' perspective. It was the stadium -- he said as much when he answered the next question, one about what it would take for South Florida to get the Big Game back.
"I think it is the stadium at the end of the day," he said. "Their proposal was really quite exciting ... I think the owners would like to be in Miami, but it is competitive right now. We have great stadiums coming on board ... others that are investing significantly to make sure their stadium is state of the art and is a great platform stage for the Super Bowl. That is what we want."
"If we're doing Super Bowls, the community should pitch in," Kraft told USA Today.
Gillette Stadium was built with private investment, but the public contributed its fair share through infrastructure and tax breaks. The team does not pay property taxes. Instead, it pays a portion of ticket sales that is estimated to be less than what Kraft's business would pay in property taxes.
Every NFL stadium is subsidized by the public in some way. A 2012 report from Bloomberg estimates that NFL teams have received $18.6 billion in public subsidy since 1992, ranging from foregone tax revenue to actual construction costs.
But let's get out of New England and back to Miami's Super Bowl bid.
1. $500 million! A Dolphins' lobbyist was promising a half billion dollar windfall for hosting Super Bowl 50, citing a study done by the Super Bowl Host Committee. That money comes from visitors dropping money for hotel rooms, gas, food, drink, strippers, etc.
But there are some basic math problems with that number. First, it fails to account for what communities spend to get ready for a Super Bowl. Second, it does not factor in money that would have already been coming in regardless of the game. In some cases, the Super Bowl tourists are replacing other tourists who decide to stay away because of crowds, increased hotel rates, etc.
New Orleans expected a $432 million economic injection for hosting the latest Super Bowl. A study by PricewaterhouseCoopers estimated $185 million in direct spending as a result of the game. That same study noted that only one out of the last 12 Super Bowls, the 2011 game in Dallas/Ft. Worth, has generated more than $200 million in visitor spending.
Admittedly, there is a certain prestige for a city that hosts a Super Bowl. It's a barrel full of free advertising. It is not a cash tsunami.
2. Tax exempt. The NFL isn't handing out those Super Bowls for free, ya know. The league requests a long list of exemptions from state and local taxes for the big game. That includes taxes on parking, waivers from contributing to unemployment insurance for local employees, and hotel taxes, which are often used to fund stadiums. Oh, the irony.
New Orleans surrendered $800,000 for Super Bowl tax breaks in 2013.
An exemption for hotel taxes became a major sticking point in Miami. It was rejected. The exemption requests are optional, but the league was clear to note that it does factor into their decision for awarding Super Bowls.
3. Carrot and stick. It used to be that a few winks in the direction of Los Angeles could help persuade a city council or a state legislature to pony up for a better stadium. But the threat of bolting for Southern California just isn't what it used to be. The word seems to have finally spread that the stadium projects there lack viability, and Goodell himself has been pretty forthcoming about doing what it takes to keep teams in place. And why not? Even with Art Modell off to a warmer eternity, the league takes a PR hit when a team pulls up roots.
The right to host a Super Bowl is now the league's best leverage play. It even provides owners, most of whom are billionaires, some cover by allowing them to point to the decision makers at 345 Park Ave.
Unlike relocation threats, the NFL's decision to reject Miami's Super Bowl bid comes with a lingering bite. From SB Nation's Dolphins blog, The Phinsider:
Miami will now have to figure out their next move, and how they are going to attract big events to a stadium the NFL just clearly told the world is not capable of hosting those events.
A $200 million commitment to fix up Stephen Ross' stadium never made it to a vote this year. It died via procedural moves in the legislature. Polls show it faced an uphill battle with a public once bitten by Jeffrey Loria and the Marlins.
My gut says the issue isn't dead in Miami-Dade County or Tallahassee. In Minnesota, a House committee tabled the Vikings stadium vote last spring. That set off a whirlwind lobbying trip from Goodell and the governor on behalf of the Wilfs. The statements emanating from Boston following Miami's Super Bowl rejection have a certain passive-aggressive air to them. It sounds a lot like the first salvo in a renewed stadium campaign.
Building stadiums with the hopes that one day the NFL will stick a Super Bowl there requires communities to make a choice. Public money requires a public commitment. The machinations of democracy, no matter how frustrating they can be at times, give voters a say in the matter.
Choices mean sacrifices. To illustrate that, let's go to Oakland, about 40 miles from where Super Bowl 50 will be held.
The week before last, two notable city figures stepped down. Raiders CEO Amy Trask surprised the football world with her sudden resignation after 25 years with the team. Acting police chief Anthony Toribio got pushed out of his job after just two days.
Trask worked on the deal that brought the Raiders back to Oakland. The city pays $14 million per year to operate the stadium where the Raiders play as well as the costs for a nearly 20-year-old loan to renovate the facility. The county pays another $10 million.
Toribio was appointed to acting police chief of a department that has been under federal oversight since 2003, for an incident stemming from a group of crooked cops who steamrolled civil rights. He was forced out because of the department's continued inability to implement a long list of needed reforms.
Compounding the structural deficiencies of the Oakland police is a budget crisis. City deficits forced the police department to remove 138 officers from the payroll last year. Crime rates are up. Officers are stretched thin and under fire for pressing the limits of power.
Trask and Toribio are bit players in Oakland's recent history. Their stories, the stories of their organizations intersect at the point where the municipality locked itself into payments for a football stadium without effectively gauging the opportunity cost.
Like Miami, Oakland isn't getting a Super Bowl anytime soon either.