Sunday, February 24, 2013

As New York vies for marquee sports events, a good deal for the public or just good business for owners?

From a New York Times Sports section article today headlined New York Builds Momentum in Sports:
In the next few years, though, the New York metropolitan area will host numerous marquee events that will thrust it into the sports spotlight. This summer, the major league baseball All-Star Game will be played at Citi Field, followed next year by the first outdoor cold-weather Super Bowl, at MetLife Stadium. A few weeks later, basketball fans will head to Madison Square Garden to see the final rounds of the East Regional of the N.C.A.A. men’s basketball tournament. By then, the N.B.A. will probably have decided whether the 2015 All-Star Game will be played at the Garden or at Barclays Center in Brooklyn.

Throw in the N.F.L. and N.B.A. drafts in Manhattan and the N.H.L. draft at Prudential Center in Newark, as well as annual events like the United States Open tennis tournament and the New York City Marathon, and New Yorkers will have a full slate of top-flight sports to attend.
The Barclays Center perspective

The article explains what's good business for the Brooklyn arena:
Brett Yormark, the chief executive of Barclays Center and the Nets, said that hosting boxing matches, college basketball games and other events helped put his arena on the map outside the city.

“We want to host events with national appeal,” he said. “It creates value for our naming rights partner, and it’s important to be seen nationally because boxers, artists and others will aspire to perform on our court and stage.”
In other words, it's all about the bottom line.

A good deal for the public?

The article equivocates:
For all of sports’ appeal, critics contend that stadiums and arenas rarely generate the economic benefits that their backers claim because cities, including New York, provide builders with hundreds of millions of dollars in tax breaks and other subsidies that could be used for other things, like hospitals and schools. Others argue that New York is already one of the most visited cities and does not need an All-Star Game, for instance, to boost tourism.
Consider a 9/7/10 article by the same reporter, headlined As Stadiums Vanish, Their Debt Lives On:
How municipalities acquire so much debt on buildings that have been torn down or are underused illustrates the excesses of publicly financed stadiums and the almost mystical sway professional sports teams have over politicians, voters and fans.

Rather than confront teams, they have often buckled when owners — usually threatening to move — have demanded that the public pay for new suites, parking or arenas and stadiums.
Or a 10/11/09 article by the same reporter, headlined In East Rutherford, N.J., New Football Stadium, but at Whose Cost?:
But critics remain unrepentant. George Zoffinger, then the authority’s chief executive, who opposed the deal, said that the authority might ultimately need to ask lawmakers in Trenton to help make its payment to East Rutherford.

“It’s a travesty that no one is focused on them building a $1.5 billion stadium and that they don’t pay any more in taxes,” he said. “At the end of the day, the authority is going to have to go back to the state for subsidies.”

Zoffinger said that while the teams liked to claim that they built their stadium with private funds, New Jersey taxpayers are on the hook for about $400 million in road improvements, a new rail link from Secaucus and more than $100 million to retire the debt on the old stadium after it is torn down.

[East Rutherford Mayor James] Cassella added that under the terms of the authority’s agreement with the teams, the Jets and the Giants can keep any money from stadium naming rights, parking and other revenue that is sometimes shared with local governments that subsidize sports complexes.
Ditto for the Barclays Center, but there's no authoritative local official to protest about a decision made by a larger political entity. And while the arena is not publicly funded through a bond issue, the nearly $300 million in direct subsidies, more than $100 million in free land, and other tax breaks/assistance add up to significant advantage.

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