The Deets

Here are some questions I haven’t been able to find answers to regarding the Vikings stadium plans and financing schemes. To me, these are things that would be worth understanding BEFORE offering to pay for the stadium:

1. Will the stadium be as multi-use as the Metrodome? I didn’t see any mentions of running or rollerblading in the stadium bills. I mentioned that it would be worth getting this into writing to a few legislators, but it didn’t seem to happen. Is there any guarantee that the stadium will be built with running and rollerblading friendly concourses? If not, we were sold on a building based on its multi-use potential that would support dozens and dozens fewer events than the existing, paid for, Metrodome.

2. How will non-Vikings events be accommodated during construction? The Vikings are planning to use the U of MN’s stadium. What are the plans for college baseball, high school football, runners, rollerbladers, etc.?

3. Who profits from e-pulltab device manufacturing and leasing? The stadium bill says that the devices will be leased to bars. I asked Rep. John Kriesel, the gambling bill’s author, who would benefit from this government created business. He never addressed this. Someone’s going to make millions off this, but the public has no idea who. I bet Rep. John Kriesel and others know. Why haven’t they told us?

What would you add?

It’s interesting to see how much the reporting on the Vikings stadium bill has improved now that the Vikings corporate welfare stadium bill has passed the MN House and Senate.

MPR looked at the redevelopment potential (the day after the bill was signed) with an urban vitality consultant, Charles Landry, who had the following take on stadiums:

In general, stadia neutralize the space around them and kill the city- as an urban construct.

Patrick Reusse, writing for 1500ESPN less than 24 hour after the bill passed, has an impressive piece looking at how much the public was fleeced by the Wilfs. Bob Collins calls Reusse’s after the fact reporting “journalistic malpractice”:

From Reusse’s column:

We in the Twin Cities sports media were so amped up over getting a new stadium for the Vikings and thus maintaining them as a subject to write and talk about that not much time was spent looking at the financial realities.

Nick Coleman points out the problem with Reusse’s piece (Reusse also writes for the StarTribune):

Reusse closes his piece on 1500ESPN by pointing out that the Vikings are probably only putting $27 million of their own money toward the construction of the $975 million stadium:

Add it up – naming rights, license fees, NFL grant _ and you have $450 million of Zygi’s $477 million. That doesn’t seem to be much suffering for a fellow now being depicted as the patient martyr of stadium negotiations.

That’s something we never saw in the StarTribune. And, something people chanting “BUILD IT! BUILD IT!” clearly didn’t understand.

Rep. Mary Kiffmeyer’s letter to colleagues explains how much the public got hosed over in the conference committee. The House and Senate both passed versions of the Vikings stadium which then went to conference committee to reconcile the differences.

But, that’s not what happened.

Both bills heading in to conference committee were better bills for the public than the bill that came out. Instead of a regression toward the mean, we saw the public’s regression toward a private business owned by a New Jersey businessman:

Usually bills get better when they come back from a conference committee.
This time, it got worse. Additional pork for St. Paul and Minneapolis was added, a shocking data privacy for the Vikings was included, the funding mechanism of the pull tabs continued, the percentage to charity got smaller, no user fees included and the general fund continues to be at risk of bailing out this project in the future. In addition, the “new” $50 million the team is “adding” to their portion is offset by the team getting the naming rights instead of the state. The Wilf family also got back in their exclusive rights to a Soccer team for the next five years or so. Quite an amazing package for the owners.

I realized that this was a set deal between the Vikings, the Governor and the bill authors and that no matter the amendments or arguments, it would get done. They had enough votes to force it through.

This is becoming a classic NFL scam. Get the media to focus on the up-front construction costs, while ignoring the real money in a stadium deal. The public will receive nothing from naming rights, concessions, parking, user fees tied to tickets, suites or merchandise. But, the public will have the opportunity to pay for the stadium, to maintain the stadium, and to continually upgrade the stadium to NFL standards. Minneapolis takes a huge hit on this, with $675 to $890 million in stadium obligations over 30 years.

Esme Murphy blogged about the change in public sentiment regarding public financing for a stadium:

Somewhere in the haze of the past few months of the Vikings stadium debate, I heard someone say if legislators really thought people wanted a Vikings Stadium that they would vote for it.

I honestly can’t remember where I heard it, or who said it. But I kept thinking about it. It was so simple, so basic, so true. And in the end, it was why I was convinced that there was not a chance of a stadium bill getting through the legislature.

A couple of months ago, if you mentioned the topic on the radio, the phone calls and the texts were overwhelming in anger and opposition. But in a remarkable and fundamental turn around, public opinion began to shift and ultimately lawmakers began to soften.

Albert Breer with The NFL Network explained (on May 11th, of course) how gullible MN legislators and Governor Dayton were regarding the Los Angeles relocation threats:

The league is no closer to returning to the nation’s second-largest market. And the truth is, there’s a good chance the NFL is still a long way from returning to a city it vacated — twice over — 17 years ago.

…

The league actually has found L.A. to be a profitable market from a TV standpoint if it’s simply fed the best games week to week, which happens because there isn’t a local club to stop that from happening.

Supporting the public financing / corporate welfare package was surely easier for people who didn’t understand the terms of the deal. In fact, it seems like Vikings fans who paid close attention to the debate still don’t understand what the public has given Zygi:

To me, that’s the real failure of the media on this issue. When people disagreeing on an issue can’t at least agree upon the facts surrounding that issue, the media has failed the public.

Below are examples of letters I’ve received from readers during the Vikings stadium debate with names and personally identifying information removed.

I’m sure you’re taking a lot of heat from stadium proponents. Even though I am one, I’m not going to do that.

Instead, I’ll say thank you. Even though we were on opposite sides of this issue, I enjoyed reading your posts and tweets and respected your opinions. You stood up for what you believed in, and were influential on a lot of people. You deserve credit for that.

The deal isn’t perfect, but it was revised to be a better deal for the taxpayers and it keeps the Vikings here. You sent me an email a while back saying you felt the deal would get done, but it would be in Minneapolis and the Wilf’s would have to kick in some more money. You were right on both those accounts.

So again, even as a proponent of this stadium bill, I want to thank you for your work. It should be admired and respected.

Go Vikes

Awesome, Ed. Thanks. And god bless you for dealing with all the crazed Vikings fans up there. It’s been impressive to watch you against the masses.

I’m not writing to you to debate the stadium issue–let’s just agree that you’re not going to change my opinion, and I’m not going to change yours.

I just wanted to write you and tell you that although we don’t agree on the stadium, I appreciate your political passion on this, and I respect the fact that you doggedly defend it. If more people were as politically active as you are, I think this country would be a lot better off.

Hopefully, that’s something we can both agree on.

I would wish you luck this week, but that would mean defeat for me, which would make me damn near disconsolate. Hope you understand.

Been following your exploits on TwinCities.com, the StarTribune, and, more recently, The Deets. All I can say is that you’re a better man than me. It’s amazing the way Vikings fans have been indoctrinated by the team to carry so much water. Your patience and persistence is admirable. I usually follow discussions on the Strib site as _______ and It seems like their readers are more balanced. The TwinCities.com readers are, to be frank, pretty ignorant about the whole stadium situation. You pretty much get abused by people who are “supporting their team” and are then accused of abusing Vikings fans. There’s so much “straw-man” argument on that site I think it’s going to burst into flames one day.

To my main point, I just wanted to send you out an email to thank you and encourage to to continue.

I read the deets this morning and found the “true” cost both astonishing and irritating. Thanks for getting this info out.

I stumbled upon The Deets over the weekend, and I just wanted to say “Thank you!” I have already referenced your columns in arguments with friends and shared articles on Facebook.

I am outraged with the proposed Vikings stadium. From what I can tell in your blog, you are not a fan either. I am a Ramsey County resident, and everyday I see the much needed projects that desperately need funding. The sad irony is that these projects would have direct impact to some of the neediest residents while a new stadium will do little for their cause.

I am writing to ask you what I can do to get involved. What sort of actions are citizens taking to put a halt to the super rich taking money from the super poor in the form of a regressive sales tax? I am reaching out to you because you seem to be a knowledgable, well-connected, and similarly outraged individual.

Thanks for any information you can provide. I will keep checking your blog.

Ed, shut the fuck up. Seriously. You have no idea what the financial situation would be. You can’t read the future, you can only predict. Your methods include nothing but 10 Vikings home games either. What about the rest? It’s sooo fucking sad that you are trying to go to great lengths to sabotage this whole situation which will be unsuccessful anyways. Truly sad. Get a fucking life you hipster douche bag.

I had a chance to talk about the transfer of wealth from Minnesotans to a New Jersey businessman via a publicly subsidized Vikings stadium on The Rick Smith Show tonight. Pennsylvania’s progressive talk radio listeners got to hear about how Minnesota progressives are working to transfer money to the 1%.

Thanks to Sumnums for recording the segment.

Download here.

In related news, Sank has a good post up about the challenges of being a Vikings fans, while not being able to ignore the finances of the current stadium bill.

He describes the same issue the legislature is dealing with. Unfortunately, based on tonight’s MN House floor session, it don’t seem to have figured out an agreeable way to offload the non-rational costs onto irrational fans who clearly see more value in the team than what can be justified at the state or city level.

I hope the Senate will continue to improve the bill from where it is today before it reaches the desk of the state’s #1 corporate welfare lobbyist, Mark Dayton.

MN Senator John Marty is making a last ditch effort for common sense to prevail on Vikings stadium financing:

Dear Colleagues:

By this time, it is likely that most legislators know how they are voting on the Vikings stadium issue. However, prior to the floor votes, it is important that we recognize the amount of public money that we are expecting our constituents to pay to subsidize Mr. Wilf and his fellow investors.

As I pointed out previously, the Senate legislation that passed out of the Senate Committees last week is equivalent to a taxpayer subsidy of $77.30 for every ticket for each of the 65,000 seats, for every Vikings home game, for the next 30 years.

Some have questioned whether that is a fair way to measure the subsidy when the stadium will be used for high school sports and other events. But the reality is, as Ted Mondale stated, “The whole reason we’re doing this is so the team can make money.”

Using the numbers that were developed by Ramsey County for the Arden Hills proposal last fall, annual ticket revenues for the Vikings in the new stadium would total $90 million; the ticket revenues for all other events were estimated to total only $2 million/year.

In other words, Vikings ticket revenues would be 45 times as great as all other stadium events combined!

You don’t need a billion dollar stadium for monster trucks or high school sports. This legislation is here only because the Vikings want it. It truly is a $77 subsidy for every ticket, at every game, every year.

This $77/ticket subsidy doesn’t count the property tax break that this legislation gives to the Vikings – the people who can afford to lease a suite at $250,000 for ten games are exempted from property taxes, while Minneapolis homeowners and renters are struggling with increasingly large property taxes. That property tax exemption is worth an additional $25 million/year, which is an additional $750 million public subsidy in over thirty years.

Some legislators seem to be fooled by the many phone calls and emails generated by the Vikings lobby, demanding that we fund the stadium. One Senate member claims his emails are running 100 to 1 in support.

Is the public’s consistent, strong opposition to public funding of sports franchises weakening? When the Star Tribune (despite its financial conflict of interest related to land ownership near the stadium) has produced three polls in the last three years showing public opposition ranging from about 2 to 1 opposition to 3 to 1 opposition, don’t trust the Vikings lobby “grassroots” campaign as reflecting public opinion.

Obviously, there are strong feelings on both sides of the issue. But when the state has borrowed so much money from schools, and many of our constituents are struggling to afford healthcare, it is likely that many people will chafe at the idea that we are spending $77 in public money to subsidize a highly profitable football team so that Mr. Wilf and the Vikings “can make money.”

Let’s create construction jobs by addressing the multi-billion dollar backlog of repair and maintenance of our public infrastructure instead.

This stadium subsidy is not a good deal for our constituents. Thank you for your consideration of this information.

Sincerely,

Sen. John Marty

As of 3:20pm the Vikings stadium financing plan has been improved by $105 million thanks to Rep. Garafalo. That’s a good start.

Answer: It doesn’t matter.

More precisely, it doesn’t matter to Zygi Wilf. Why? Line 16.20 of the Vikings stadium bill:

Life will be really good for whoever can convince legislators to accept such a lopsided deal as this.

Socialize the costs AND the cost overruns while privatizing the profits.

Vikings fans like to talk about how much money they spend when they go to games. They’re real high rollers, ya see. We’d be idiots to not pay for a stadium that they can throw money around in, right?

Well, the MSFC’s annual report suggests otherwise. Take at look at the concessions revenues at games:

This past season, the average person attending a Vikings game spent $11.09 on concessions. Eleven dollars and nine cents. To me, this says “people will have something to eat whether they are at a Vikings game or not, but not necessarily more than they’d eat anywhere else, even accounting for the higher prices at NFL games.”

We would be spending $1.6 billion over 30 years (between construction costs, debt payments, operating costs, and capital improvements [not even counting property tax and construction marterials exemptions]) to steer 58,000 people’s eating and drinking to one business’ state authorized, hand picked, and subsidized, location 10 days per year at the expense of thousands of other MN businesses those people could have eaten or had a beer during those times.

This report also shows that an average of 3,050 people who’ve purchased Vikings tickets don’t bother to show up, or even bother to give away their tickets, based on the differences between purchased tickets and turnstile turns.

Classic case of confusion over who’s responsible for financing the relationship between Vikings fans and the Minnesota Vikings:

Seriously, he’s calling a state legislator shameful and selfish if he’s not willing to vote to extract money from the state’s citizens through regressive gambling and sales taxes in order to subsidize Vikings tickets to the tune of $77 per ticket for 30 years.

If Zygi decided to move the team if MN won’t give him $1.6 billion worth of corporate welfare over 30 years, who’s decision was it to leave?

If fans decide that they are not willing to pay ticket prices high enough for Zygi to make the kind of money he’d like to make, who’s decided to not make Wilf more money?

Even stranger is the juxtaposition of that tweet vs. his prior tweet (only 8 minutes earlier):

Apparently, it’s not good to give tax breaks to Minnesota’s businesses (which would need to be made up for by other taxpayers), but it’s good to extract money from taxpayers in order to give it to a business owned by a guy in New Jersey.

I’m really struggling to make sense of this purple tainted logic.

Thanks to Deets reader, Bryan, for this graphic.

When Vikings stadium wilfare queens demand other people’s money to subsidize their game day experience to the tune of $77/ticket, and people in the reality based community say “no”, things can get ugly. For example:

Or:

Governor Dayton claims to be working on this in the schools:

DFL Gov. Mark Dayton has asked the group to study the bullying problem in Minnesota schools. The task force is expected to take testimony from parents, teachers, bullying experts and students who have been targeted by bullies. Dayton even wants the task force to better define what bullying, harassment and intimidation mean.

While bullying is a problem in Minnesota’s schools, the problem doesn’t stop when people graduate or drop out.

The Vikings are popular with a group of Minnesotans, but not popular enough for them to spend their own money subsidizing a bully from New Jersey who’s threatening to pack up and leave if we don’t commit to meeting his $1.6 billion in corporate welfare demands over the next 30 years. The bullying Vikings fans seem to believe that the best thing the public’s money could be spent on is subsidizing the $77 per ticket they are unwilling to pay for Vikings games. And, if you don’t like that, leave the state.

Is Minnesota “A Better Minnesota” if it caves in to demands from bullies for $1.6 billion in corporate welfare lunch money over 30 years?

It’s time to stand up to the bullies.

They’re adults who are capable of spending their own money on things they claim to value.

Extracting lunch money from the public to subsidize Vikings stadium bullies’ entertainment is bad public policy.

Ted Glover at DailyNorseman took at look at my piece on the Vikings stadium corporate rally at the Mall of America yesterday. Fun stuff. We’re clearly not on the same page regarding whether the public should subsidize Zygi Wilf’s business (or, more accurately, but how much [between zero and $1.6 billion over 30 years]).

I’ll post Ted’s rebuttals below. If they don’t make sense out of context, read Ted’s post first.

Actually, what we’re trying to do is create 8,000 construction jobs in an area that has an unemployment rate of almost 40% in the construction industry.

Any form of spending achieves this. Money could be spent putting construction workers back to work building things we want or things we need. Personally, I think governmnet’s role should focus on the latter, while Vikings fans are free to use their own money to support the former.

@sumnums has some objective info on construction unemployment rates:

Regarding the 8,000 figure, I think a more intellectually honest way to look at the number of jobs created is to measure the full time equivalent jobs created. While construction work is clearly temporary work, the reality of the stadium construction project money and man hours tells us that we’d be spending $550 million to put the equivalent of less than 700 people to work for three years. There are more efficient ways to do this. One option that would create more jobs is to refurbish the existing Metrodome. Why would that create more jobs? Because a larger percentage of the money spent would go toward labor. If you’ve ever done a remodeling project at your home, this is pretty obvious.

Oh, we’re also trying to keep a 51 year tradition in the state of Minnesota. A tradition that has seen 3 and 4 generations of Minnesotans bond over countless moments of thrills, excitement, and yes, heartbreak.

A tradition that isn’t valued by Vikings fans enough to continue to subsidize with their own money. A tradition that the Vikings organization is willing to destroy if the public doesn’t meet their corporate welfare ransom. This isn’t the type of behavior the public should be subsidizing. Real leadership would be getting the team, fans, and local businesses into a room together to figure out how they can work together to find a solution that suits all of their needs.

Oh, and that ‘extraction’ that this post talked about? Not so much. When it’s all said and done, there’s over a $500 million payback over the course of the life of the new lease of a Vikings stadium.

According to the CSL calculations, those taxes grow to about $1 billion over 30 years — the expected life of a stadium. That would be a net surplus of about $500 million to the state over the typical life of a modern stadium. The Metrodome has lasted 30 years.

Theory one, blown out of the water. But it only gets better. Follow me, after the jump for more.

I’ve written about CSL’s numbers in the past. Ted glossed over the fact that the state isn’t putting in $300 million. Instead, it’s climbed to $400 million over the past year ($100 million more than Dayton said he’d be willing to put toward a stadium). The City of Minneapolis then puts in another $150 million. Both pay a ton of interest on that debt. Plus Minneapolis covers a big chunk of operating and capital improvement costs. Plus the public is on the hook for cost overruns. All of a sudden, the stadium deal turns from a net positive to far into the red:

Private Financing in Purple Pride vs #Wilfare Red

Granted, the net losses to the public start to even out near year-30, but it would take far longer than 30 years to make such a huge public investment pay off. If you want to make a financial case for a stadium, the best case we have is to continue to use the paid-for Metrodome.

Ah yes, let’s use the salary of an employee–a union member, to boot–to try and further blur the edges of your already weak position. What, exactly, does an individual employee salary have to do with the cost of the stadium, regardless of how much they make? Exactly nothing. If we want to go down that road, let’s break it down even further. Beer vendors who work sections could pay for the seats in that section, ticket agents could pay for their own booth, and the grounds keepers could pay for the turf. What? That’s just a silly ass argument? Yeah, yeah it is.

It matters because a millionaire is lobbying to extract money from the public through regressive taxes in order to become become wealthier. Yesterday’s stadium corporate welfare rally was an example of Jared Allen attempting to increase his wealth NOT by creating an entertaining product people are willing to pay to watch. Instead, he was demonstrating that the Minnesotans are unwilling to pay anywhere near as much as what Wilf is demanding for a stadium, so we must extract $1.6 billion over 30 years from Minnesotans to make up for the market’s efficiencies. Yes, to make up for the market efficiencies that tell us that a $1 billion stadium isn’t justifiable.

No, what Governor Dayton did is encourage stadium supporters to get politically active, and fight to preserve the MINNESOTA Vikings.

Governor Dayton, in front of a crowd of rabid fans, should be asking fans how much saving the team is worth to them, then passing a hat to collect that money. Even that goes FAR beyond what a governor should do. His job is not to organize rallies on behalf of a private business owned by a buy in New Jersey.

Fight to preserve over the $12.5 million/yr in tax revenues that just the players and Vikings employees bring in.

That’s worth doing. Spending far more than $12.5 million/yr in tax revenues to save $12.5 million in tax revenues isn’t the way to do it.

@sumnums has something to say about this too:

Let’s think about that. If the team’s salaries come to less than $91 million and the top marginal tax rate in MN is 7.85%, the state would earn $7.185 million in taxes. But, not all income is taxed at that rate. And not all income is taxed. For example, one can assume that players deduct their mortgage interest, thus lowering their taxable income.

Fight to preserve over the $5 million/yr in just the sales taxes produced within the stadium in terms of beer and food sales.

Do people attending Vikings games skip a meal on the 42 weeks/yr there aren’t Vikings games? If not, see the problem with counting that revenue?

@sumnums adds:

Fight to preserve the money that out of state Vikings fans bring in every weekend.

Good idea. But, spending up to $50 million/yr to preserve that money is a net loser.

Yes, out of state fans, who make up almost 25% of the fans on any given weekend, come into Minnesota and pump millions into the Minnesota economy, and almost 40% of fans that go to a game are from outside the Metro area. That equates to 140,000 people coming in from out of the metro area just to go to the Vikings games, and they spend an average of $107 for each game. So, 140,000 x 107 x 30 (years of the lease of the new stadium) = over $343 million.

If the Vikings leave, how do you think the state will recoup that $343 million?

Now, one of the arguments against all that money the out of staters bring in to Minnesota is what is called the “Substitution Effect’. Simply stated, that means that if you have discretionary money that you would spend on everything associated with going to the Vikings game, that if the Vikings were not there you would simply spend that money on something else within the local economy.

That’s all fine and well if you’re talking about a gameday population that mostly resided within the Twin Cities metro area…but we’re not. Let’s use an example of…me, for instance. I live out of state, about an 8 or 9 hour drive from Minneapolis. When I go to a game, I get a hotel, tickets, eat at restaurants, blah blah blah, you get the picture. The Substitution Effect says that if I don’t spend that money on the Vikings, I’ll spend it someplace else locally. Which is true. But for me, locally is St. Louis, not Minneapolis. And locally for 40% of Vikings fans isn’t the TC metro area. So that’s money that may get spent, but I guarantee you it won’t be in Minneapolis once, much less 8 times for the folks that are season ticket holders.

Some would shift to the Twins, Gophers, Wild, or Timberwolves. Some is likely tied to Mall of America trips that would still take place with or without tying in a Vikings game. Some would be lost. But, spending $1.6 billion to save $343 million clearly isn’t the answer.

So when somebody yells RAAAAAWR SUBSTITUTION EFFECT RAAAAAWR in your face, just use this as your reference. Because they’re full of shit.

If someone claimed that every dollar spent at Vikings games would be spent on another form of in-state taxable good or service, that would be true. But, no one is claiming that.

We’ve already deconstructed the financials, so I won’t rehash that. But what does it matter where one spends their discretionary income? It seems you’re looking down at these people, your fellow Minnesotans, because they’re choosing to do something that they enjoy, and it’s not harming anyone, nor is it illegal.

That’s the point of this entire debate. Why shouldn’t people spent their discretionary income on something that they enjoy, that isn’t harming anyone, and isn’t illegal rather than having the state pick a winner for that money? Nothing is stopping Vikings fans from spending money at Vikings games and on a Vikings stadium. But, the lack of financial support from fans for a new stadium is not the public’s problem to solve. Fans should take that up with Wilf.

What, would you rather they be at the publicly subsidized Guthrie Theater?

I’m cool with subsidizing the Vikings to the same rate per ticket that the Guthrie received. That’s generous considering that the Guthrie is a local non-profit while the Vikings are a private business owned by a guy in New Jersey, but I think doing so would be a net positive for the public. The Guthrie received $25 million and has nearly the same annual attendance as the Vikings. The Guthrie’s per seat subsidy over 30 years comes to $1.67, compared to the Wilf’s current demand of $77.