The National Football League is easily the most successful sports franchise in the United States; its already high ratings continue to increase year after year culminating with the Super Bowl. The league grossed $10.5 billion in revenue last year alone, half of which came from licensing fees to broadcast networks CBS, Fox, NBC and ESPN, according to CNN.
However, none of this could be possible if it weren’t for you, the American taxpayer.
For example, $4.7 billion of taxpayer money has been spent to create 20 brand new sports arenas throughout the country since 1997. For most local governments, taxpayers are funding these stadiums in order to keep interest and revenue in their community.
Spending billions of dollars on one stadium gets quite expensive, but it’s not as painful as it could be. The federal government gives tax breaks to football teams if they use municipal bonds to pay for their arena. The idea of tax-free bonds was intended to pay for roads and schools, but like many things in government, the original idea seemed to lose its purpose over time.
After shelling out millions to create the stadium, local governments still have to work on their own to obtain some kind of revenue. According to Forbes, “local and state governments get new tax revenue from stadium-related events in two ways: steering purchases toward activities with higher tax rates and taxing out-of-town visitors.”
Teams are in a win-win situation, as well. They collect up to $4 billion using the tax-free bonds and receive special treatment from state and local governments through free security services and discounts on local restaurants. Villanova professor Rick Eckstein believes this preferential treatment is a growing and worrying trend.
“There is a shift going on from obvious brick and mortar subsidy to more hidden, subtle form of subsidy,” the professor told CNN.
With the NFL being the most-watched and richest franchise of all sports in America, corporate sponsors want a piece of the success, too. Some $190 million is spent in just one football season by corporations to advertise at big name stadiums. The organizations take all of that money, leaving the cities and taxpayers with nothing.
In his budget last month, President Barack Obama proposed to remove the tax-free bonds for sports stadiums. However, his budget has not received support from many Republicans or Democrats in Congress, meaning the proposal will likely not come to fruition this time.