Sunday, November 23, 2008

How taxpayers might help the Nets land LeBron James

By shedding expensive contracts, the New Jersey Nets have cleared salary cap space and positioned themselves to make big offers to free agents in 2010, notably superstar LeBron James of the Cleveland Cavaliers. (So have the Knicks, though the Nets have a stronger supporting cast.)

Maybe we should think of it another way, as well. It's not just about the Nets' contracts. It's about where the team owners would get the money to pay a free agent. Sure, a smaller payroll helps, but that's not the only thing.

It's also about the subsidies.

The example of the Yankees

The issue came up on the CUNY-TV talk show City Talk regarding the new Yankee Stadium, which I wrote about yesterday.

One guest was Baruch professor Neil Sullivan, author of The Diamond in the Bronx: Yankee Stadium and the Politics of New York (2001, updated 2008),

He pointed out how the San Francisco Giants privately financed PacBell Park:
Everyone was, 'Ohmigod, you can't build these things, you'll have no money left for the ballplayers.' They signed Barry Bonds, they went to a World Series, they functioned fine.

The great question in the off-season, one of the great questions that the Yankees will be considering, is do they make an offer to Manny Ramirez, that's going to be 20 to 25 million dollars... for four or five or maybe six years. Where do you think that money comes from? In this stadium game, one of the ways I think about it, the state picks up, the public picks up the capital budget for this private business. All of that money, hundreds of the millions... goes over to the operating side. They can go chase anybody they want.


Remember, the direct subsidies for Atlantic Yards so far total $305 million. The savings on tax-exempt bonds could be $165 million. Other subsidies and tax breaks would be enormous as well, though no one's produced definitive numbers.

That could help pay for a few good hoopsters.

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