Tax Analysts Blog

Follow the Tea Party on Stadium Financing Issues

Posted on Dec 18, 2013

The Atlanta Braves are planning to move their stadium to the suburbs. The Braves blackmailed, threatened, and coerced the backboneless politicians in Cobb County, Ga., to pay for the stadium. You might think that Cobb County is run by conservative small government leaders who disdain picking winners and losers in the marketplace. It turns out that Cobb County is actually run by leaders who practice the most corrupt form of crony capitalism. Public money is being used to enrich a private enterprise. It is a great system if you are the private enterprise. By the way, the Cobb County schools are facing a $80 million deficit. So it might seem odd that the county would give really rich folks $370 million so they can build a new stadium. How rich are the owners of the Braves? The team is owned by a company called Liberty Media Corp, which is in turn essentially owned by a guy named John Malone. Malone is worth $7 billion. He is also the largest landowner in America -- owning 2.1 million acres. Liberty Media Corp., has $26 billion in assets. I admire Malone and his ability to acquire wealth. I just don't think he should be getting public money.

And neither does the Georgia Tea Party. As far as I can tell, the only organization to have put up any fight against this insane corporate welfare is the Atlanta Tea Party. The Atlanta Tea Party Patriots have have voiced strong opposition to the deal and have filed a suit to stop the stadium financing plan. But where is everybody else? Other than the Braves, who can support such a travesty? If the Braves want to move to the suburbs, that is terrific. If they want a new stadium, they should pay for it themselves.

Read Comments (7)

David BrunoriDec 18, 2013

Dear Viv, That was an excellent retort, although I do not agree with all of
your points.

First, I still believe if the Braves need or want a new stadium they should
build it -- not the taxpayers of Cobb County. While the government may "own"
it, the almost exclusive beneficiary will be the Braves (Falcons are getting
their own deal from Atlanta).

Sure, the players, fans, and hot dog vendors will benefit. But if the
government was not doling out the cash, I suspect the owners would pay for the
stadium and maybe pay outfielders 15 million a year instead of 20 million. I am
not convinced the Braves would not have a new stadium if the government refused
to participate.

I get your point about the hyperbole -- in the commentary business it is
often a substitute for sound arguments.

More importantly, thank you for writing. I hope you will continue to participate
in 2014!

Jay Starkman, Atlanta, GADec 18, 2013

The Braves current home, Turner Field, was a $250 million gift from the 1996
Atlanta Olympics, for which Ted Turner claimed the right to name after himself.

The new Braves stadium will be built in the Galleria section 10 miles north of
downtown Atlanta. Those familiar with this area know how bad traffic on I-75
and I-275 is on normal days. In addition to the stadium, Cobb County must
build new roadways to channel traffic. There is no public transportation to
the new stadium.

Negotiations were secret, and kept secret until after the November 5 municipal
elections in order not to embarrass Atlanta politicians. Cobb officials have
refused demands for a referendum on whether to allow a stadium in such a
crowded area.

It's not just the Braves stadium in Cobb. The City of Atlanta is paying $200
million from new bonds to build billionaire (Home Depot co-founder) Arthur
Blank's Falcons a new $1.2 billion stadium in downtown Atlanta. In connection
with this project, Atlanta is applying for a $250 million Federal housing grant.

The Braves offered to stay downtown if the Atlanta would make $150 - $250
million of improvements. Cobb County offered a better deal.

Still, the finances for both stadiums are murky. It's hard to get details.
That's how the politicians want it.

travis rechDec 18, 2013

A few years down the road when Mr. Malone sells the Braves to another
billionaire, the government paid portion of that asset will be added to his
sale price. Other beneficiaries or not, Mr. Malone will do quite well on this
transaction.

David, there is reason why no one is speaking out against this...

These are the type of minion-level thinkers in Cobb County government we are
dealing with.

vivian darkbloomDec 19, 2013

"So it might seem odd that the county would give really rich folks $370 million
so they can build a new stadium."

Once again David, you've identified a very bad policy and I agree with the
criticism; however, once again the incidence of the tax and spending benefits
here is partly misplaced.

Do you really think the sole beneficiaries of this bad policy are the owners of
the Braves? And, even if that were true, do you reaIly think the net benefit
to them is $370 million?

I would guess among the other beneficiaries would be baseball players and to a
lesser extent baseball fans.
Not only are you giving a misleading account of the incidence of any benefits
of this arrangement, you are severely overstating your case that the city is
handing over $370 million to the owners so *they* can build a stadium. Why do
I say that?:

1. A government-created "Authority" will own the stadium under these
arrangements, not the Brave owners. That means the owner is free to lease the
stadium to other users as well (Falcons?) to recover part of the investment.

2. The total cost was listed as $672 million with $372 coming from the Braves
and $300 from the city (you seem to have reversed this). The bulk of the $372
paid by the Braves appears to be up-front annual lease costs, but that's not
entirely clear from reporting and I'm not privy to the agreement (but I'm also
not making unfounded claims).

In doing these deals, cities can often borrow money at lower rates than those
who use it and this is partly due to the tax exempt nature of development
bonds. So, government at all levels may bear part of the cost.

It is a bit ironic that we should mention Liberty Media here. I don't know if
they broadcast baseball games over their cable network, but if they do, the
non-baseball fan subscribers to that cable network (or any other network
running Braves games) would end up paying more for baseball than they already
do if the Braves built their own stadium because those non-fans are forced to
finance baseball through their cable package whether they are fans or not.

There are a lot of "special" interest groups that appear to benefit from this
arrangement. The owners might be a main beneficiary, but not the only one.
That doesn't make the policy any bette---and it truly is bad policy as you
state----but attacking it with hyperbole is not an effective counter strategy
in the longer run.

edmund dantesDec 25, 2013

The Braves can't own their own stadium, then they'd have to pay property taxes
on it. If assessed on fair market value, those taxes would be crippling.
Accordingly, stadiums almost have to be owned by nontaxable entities, such as
municipalities.

emsig beobachterDec 25, 2013

This article is a testament to everything that is wrong about professional
athletics and testosterone driven politicians who desire "crown jewels" (huge
stadiums, arenas, etc.) rather than providing high quality public services. If
Thomas Jefferson were truly prescient, he would have tried to build a wall
separating government from professional level athletics!

Incidentally, economic studies by less biased academics have shown that the net
benefits to governments financing these investments is either negative at
worst; or, only slightly positive at best.

Sir VantesDec 26, 2013

In the many stadium proposals in Seattle, not one entity has been able to show
an objective net benefit from the public money invested.

Like David said, if they want one, let them build it themselves out of their
own funds.

If it is such a good deal, why let the public into the earnings.

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