Bread, Circuses and The Welfare King: Alexander Spanos

by on January 20, 2011 · 10 comments

in Culture, Economy, Environment, Labor, San Diego

Editor: This contribution by Rocky Neptun is a continuation of the debate about a new football stadium in downtown San Diego, begun by Andy Cohen here.

When I began my property maintenance business a few decades ago, I used 80 percent of my assets and borrowed an amount equivalent to another 50 percent. At that time, or even now, there was never a consideration that you, as a taxpayer, should finance my business venture.

Yet, Alexander Spanos, worth over one and half billion dollars, according to Forbes Magazine, wants you and me to subsidize his new football stadium in the East Village, downtown San Diego. The entire notion of corporate welfare for his project and the millionaire fat assed football players who smash and crash against one another chasing a stupid looking ball, would bring laughs in any enlightened social order. Yet, in our society, where single-mothers, without work or funds, are harangued and fingerprinted, treated like criminals for asking for a helping hand, the Mayor of San Diego, the city’s main major newspaper and other bought shrills would have us spend $800 million on an oversized playpen for aging adolescents who just can’t seem to get it up for cable television or internet broadcasts of this tedious brawling, called football.

Alex Spanos.

This titan of sports events would have you believe that his million dollar profit each night will bring jobs and prosperity to the region. Shades of a roman emperor, he would give us bread and circuses. Like any con artist, sovereign or not, with the precise skill of a pickpocket , the secret is to let your victim think that everything is normal, that this is the way things are done. If one’s prey is a large group of people, then, in Orwellian fashion, all the gears and levers of the corporate state, its media, politicians, advertisers, snake oil salesmen, must be put into motion to dupe the citizens into believing the lie. From weapons of mass destruction to the financial benefits of a football stadium, the process of propaganda and untruth is the same; begin with a false premise, repeat it over and over, spend a few million plastering the message on walls and between segments of Oprah Winfrey, narrow the parameters of the debate by a bought media and its cowed journalists.

Right up front, one thing must be made perfectly clear – there has never been a sports stadium which has made money using taxpayer dollars – except Miller Park Stadium in Milwaukee which is not only a multi-use facility of football and baseball, but its Green Bay Packers football team is a community owned franchise, with all profit being returned to the neighborhoods.

Football is all about money, lots of money for owners and the players. Those who cling to this wealth, like barnacles on a whale, or those who feel their macho manhood (and, increasingly, macha womanhood) is tied into a symbiotic relationship with a home team, will try to tell you that stadiums bring jobs and spending to the community.

“Wealthy sports moguls have turned bilking taxpayers into an art form,” Doug Bandow, conservative senior fellow at the Cato Institute and former assistant to President Ronald Reagan, reminds us. “Franchise owners typically win taxpayer support only through threats; pay us off, or we will leave they say, give us a new stadium, or we will go someplace else.”

“Government stadiums benefit economic and political elites,” Bandow reports. He cites a study done by two economists, Robert Baade of Lake Forest college and Allen Sanderson of the University of Chicago, who looked at 10 metropolitan areas which built stadiums and found “no net employment increase.” The study pointed out that, except for the initial construction jobs, most of which were specialists brought in from other parts of the country, the remaining jobs were low-wage, mostly part-time and lacked benefits.

Also, in terms of stadium advocacy about boosts to the local economy through new revenue “which will offset the taxes used to subsidize the new stadium,” they found that no new out-of-town attendees are attracted by a new stadium with more than 90 percent of ticket buyers local residents and that sports spending primarily substitutes for other outlays.

“Most people have entertainment budgets, and the $100 they spend taking the family to the ballgame is $100 that they don’t spend on movies or bowling later in the month,” the report said, “but nobody seriously thinks that we should raise taxes or spend millions on bowling alley or movie theatre subsidies.” This is called the substitution effect which smashes the economic multiplier effect claimed by most stadium proponents.

Conservative Bandow blasts socialism for billionaire sports moguls, like Spanos, saying:

“stadiums don’t constitute a great unmet social need, sports should be a private enterprise, privately funded.” Suggesting a far greater pull for suburban residents, he called for a string of public restaurants or “if the goal is trickle-down consumer spending and business development, why not build a new automobile factory, retail outlet, grocery store or software facility to attract and maintain companies, jobs and economic growth?”

The real reason that Spanos wants a new football stadium is not community stature or more jobs or an economic benefit for you and me, it’s because he wants more elegant skyboxes than Qualcomm has. These imperial balconies can rent for as much as $250,000 a year and, better yet, for Spanos, unlike entrance fees, he doesn’t have to be split skybox income with the National Football League.

Also, like Wal-Mart and other low-wage exploiters, who get the public to subsidize the working poor with food stamps, health care and other essential needs, public dollars underwriting stadiums help Spanos absorb the inflated payroll of millionaire football players. The city of San Diego already loses $17 million a year subsidizing Qualcomm Stadium, does anyone really think that will change with a much more expensive location, not only in terms of land costs but in day-to-day traffic delays and police outlays.

Then there are the additional unseen costs of subsidizing a billionaire’s expanding fortune. There is the obvious fact that bond money spent on a new stadium could go for much more vital infrastructure needs which serve the greater citizenry, like aging sewer lines which spew into city streets and the ocean, streets, libraries, parks, or affordable housing. Just one year after Minneapolis’ Minnesota Twins got a new stadium in 2007, the city’s I-35 bridge collapsed, killing 13 people and injuring over a hundred, because repairs were delayed for lack of funds.

There is also the issue of using tax-exempt bonds to finance private ventures, like stadiums. Not only will San Diego pay a much higher rate on the municipal bond loan because of its structural deficit and bad credit rating, but because of the tax exemption on the bond the state of California and the Federal Government, reeling from the economic downtown, will lose millions in tax revenue from the Spanos family which will have to be made-up by either increased taxes or the loss of essential government services.

For every $100 million in tax exempt bonds issued, the Federal government loses $21 million in tax revenue, so, tax payers – you and me – would have to help make up the $100 million or so loss during the life of the bond. So San Diegans will get a double-whammy, while Alexander Spanos sings his way to the bank.

Now for almost a decade the Chargers have said they would build a new stadium without public money, yet recently they have said they cannot do it without corporate welfare. Why the change, especially in the middle of a recession? Could it be that it took that long for their people to be embedded in the redevelopment agency, CCDC, and city staff? Why did Mayor Sanders, who as a campaign promise, said no city money would be used for a stadium, suddenly do an about face and now parrots the notion? Could there be a consulting position in the works? Why has CCDC spent close to $200,000 and the San Diego City Council another $500,000 of public money to study how to finance the construction when Spanos should have paid for these studies? Are there bribes, kick-backs and/or campaign contributions in the mix? And how many millions will Spanos spend on distortions and lies in the upcoming referendum over the stadium?

“Corporate welfare is always unsavory business,” Raymond J. Keating, chief economist for the Small Business Survival Committee says, “the politically connected and high profile gain at the expense of small business owners and consumers who work hard day to day but have no friends in high places, decision making is shifted from the private sector, which is guided by price and profit signals to meet and create consumer demand, to the public sector, which is guided by politics and the quest for power, taxes are increased on the many, so that resources can be funneled to a select few – in the case of subsidized ballparks, billionaire team owners and multi-millionaire team players.”

In his book, The Baseball Economist: The Real Game Exposed, J.C.Bradbury documents that there is absolutely no public economic development benefit to new stadiums. While Michael W. Lynch of the Conservative blog, Reason.com, bluntly tells it like it is:

“publicly funded sports stadiums are like crack cocaine to local politicians and business bigwigs,” he writes, “these folks are just like addicts, they deceive everyone around them for the sake of a fix, they resort to public theft to pay for their fix, forcing citizens who couldn’t care less about sports to subsidize teams.”

Rocky Neptun, who has never lasted through a full football or baseball game in his long life, is a soccer fan. He is the volunteer director of the San Diego Renters Union (www.SanDiegoRentersUnion.org)

{ 10 comments… read them below or add one }

avatar Shane Finneran January 20, 2011 at 10:55 am

Thank you for this thorough and convincing rebuttal to the stadium pushers, Rocky. Spanos and all the other billionaires who want to maximize their profits and foist their expenses on the rest of us are like reverse Robin Hoods, working their connections and their fortunes to divert public money into their private businesses.

I think this observation of yours is particularly devastating: “Just one year after Minneapolis’ Minnesota Twins got a new [taxpayer-funded] stadium in 2007, the city’s I-35 bridge collapsed, killing 13 people and injuring over a hundred, because repairs were delayed for lack of funds.”

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avatar Andy Cohen January 20, 2011 at 3:18 pm

Ya know Rocky, I stopped reading your piece after the first couple of paragraphs. Terms like “fat assed football players” and comparing Spanos to a Roman Emperor doling out bread to the masses; calling him a “con artist”…….those snarky, insulting, childish remarks that fill your article don’t do you or your argument any credit. It just makes you sound jealous.

You would have been better served to stick to the facts. Why does a new stadium not benefit San Diego? If San Diego DOES, in fact, benefit from it, then why shouldn’t the city contribute toward it? How does the attention brought to San Diego by the NFL and other events held at the stadium not justify the city making an investment of this nature? Do sports teams even matter economically to their home cities? And if not, then why are they considered so important by city leader after city leader all across the country? Why the efforts to lure/keep these teams?

If a team owner foots the entire bill for a stadium, and the city benefits from it, should that team owner be entitled to collect the tax revenues that his team generates?

These would have been better topics for your discussion, and would have made your argument more convincing. As it stands, you simply sound bitter and angry, and uninformed.

(By the way: Alex Spanos doesn’t run the team. His son Dean does.)

You also showed your ignorance of the subject matter: Miller Park in Milwaukee is a baseball only facility, located in Milwaukee, WI. The Milwaukee Brewers baseball team plays their home games there.

The Green Bay Packers call Green Bay, WI, their home, which is over 100 miles away from Milwaukee. They play their games in Lambeau Field, which is located in–you guessed it–Green Bay! I know. I’ve been there.

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avatar Shane Finneran January 20, 2011 at 4:52 pm

This article struck me as loaded with facts:

–economists studied 10 metropolitan areas which built stadiums and found no net employment increase; more than 90 percent of ticket buyers local residents; sports spending primarily substitutes for other outlays
–Twins got a new stadium in 2007 and the city’s I-35 bridge collapsed in 2008 because repairs were delayed for lack of funds
–tax exemption on stadium bonds will cost California and the Federal Government millions in Spanos taxes, leading to higher taxes or less government services for rest of us

And Rocky might have had a couple details of Miller Stadium wrong, but can you challenge the overall point he was making: other than Miller, “there has never been a sports stadium which has made money using taxpayer dollars”

Finally, many pro football players clearly are fat asses, and not just the linemen… you pretty much have to have at least a somewhat sizable can to generate the lower body power necessary to survive in the league! ;)

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avatar Rocky Neptun January 20, 2011 at 5:40 pm

Hey, Andy. I work hard for my money and when someone who has over a billion and half dollars is trying to dig in my pocket for handouts, your lucky I was as nice as I was in my choice of adjectives. I would say the same thing to his face in a discussion. If you want unemotional objective prattle which only serves to aid the staus quo by what is left out, the attempt to hide the “feel” of the event or issue so no advertiser or corporate sponsor is angered, you need to read the Union-Tribune.

If you want the stadium, by all means contribute as much money as you want. As for me, I would rather see after school programs funded, school lunch programs for hungry kids, libraries for poor kids without access to the interent or books, parks for youngsters who live in cramped apartments with public funds rather than subsidize a billionaire and his millionaire players.

I relied on a friend’s misinformation about the Green Bay team. Sorry. My knowledge of useless sports trivia is zero; hell, I thought the Brooklyn Dogers won the last Super Bowl game.

Rocky

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avatar Dustin D. Delon January 20, 2011 at 6:04 pm

Mr. Cohen, Rocky didn’t say Alexander Spanos ran the team, he said that he OWNED the team. Of course, his millionaire son runs the team and has a stake in his inheritence, so what is your point, other than try and add up mistakes.

As far Rocky’s personal remarks, anytime wealth and power can be brought down to street level, off its pedestal, it is a small victory for all us “little people.” There was a time when we couldn’t speak degrogotory about the “masta” in the plantation house, are you suggesting we go back there.

Resistance to the tyranny of wealth and power can take many forms. To call a greedy SOB just that; is, indeed refreshing and give’s hope we may someday take back our city government from the oligarchy which controls it.

Dusty Delon

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avatar John Lawrence January 21, 2011 at 1:29 am

For my money, Rocky Neptun is right on. I totally agree with him and so does David Cay Johnston author of “Free Lunch.” In that book there is a whole chapter which echoes the themes that Rocky has presented, mainly, that professional sports teams have perfected the scam of getting taxpayers to pay for their stadiums. Of course, the whole tax free scam has also been used by other corporations which have successfully gotten concessions out of local governments including free land and other subsidies.

I don’t see how anyone can value “entertainment” to the extent that they are willing to put up taxpayer money for it while the city is going bankrupt and can’t pay for essential services. This is totally ridiculous. Johnston points out that most sports enterprises would actually lose money if it weren’t for the taxpayer supplied funding. And that’s how they get their profits.

Again, Rocky, congratulations on a well written and informative article. I reposted it on http://willblogforfood.typepad.com/will_blog_for_food/2011/01/bread-circuses-and-the-welfare-king-alexander-spanos.html – with proper attribution, of course.

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avatar Danny Morales January 22, 2011 at 12:28 pm

ADELANTE ROCKY NEPTUN!- Danny

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avatar JMW January 25, 2011 at 11:47 am

Is San Diego getting anything out of Petco?

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avatar Shane Finneran January 25, 2011 at 1:42 pm

Free advertising. Like all last season, the city was benefiting from the message “There are so many wonderful things to do in San Diego that even with the team in first place, we could only convince 10,000 people to come to this beautiful new stadium.”

Also “San Diego, no longer the home of John Moores.” I know that one makes me like San Diego a lot more.

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avatar dave rice January 25, 2011 at 2:13 pm

Man, I’m about to miss my chance to weigh in on this one before it gets bumped off the front page.

First off, I think it’s a great article in that it’s powerfully written and it raises lots of good points. That said, the extreme tone of condescension hit me so hard that after reading the original post and a few of the comments I had to step back for a couple days…and then almost forgot I’d really wanted to come back around and make a million disjointed comments, which for no particular reason I’ll put forth as numbered statements below.

1. Spanos may be worth $1.5 billion, but how much of that wealth is tied up in ownership of the team? This is important because if he wanted to pay for a stadium, but had to sell the team to be able to afford it, why in the heck would he still want a stadium?

2. I don’t think it’s entirely accurate to state the city is being asked to pay for the full stadium cost. Nor is Spanos offering to foot the bill. I think the fair thing to do would be to assess how much Spanos would benefit from the stadium vs. how much the city would benefit, then start negotiating the costs along those lines.

3. It would probably be impossible to gauge the benefit to the city of improved convention space/TOT taxes/value of advertising NFL provides/etc., even if we wanted to.

4. Anyone that claims it’s possible to put a dollar sign on these figures is probably lying, and the numbers are probably being fudged in the Chargers’ favor.

5. Even if it were fair for the city to pay for a portion of the development relative to the benefit they’d reap, right now is not the time to pony up money for a project like this. We can’t even afford to scoop ashes out of firepits, major economists are expecting 50-100 municipalities to default on bonds this year (we’re on many of those folks’ watch lists), every city program as it is must make do with under-funding.

6. My manhood isn’t tied to there being a local sports team to root for, or to sports at all. I like football and baseball, and root for home teams because we have them. If the Chargers leave town, I’m sure in a few years the NFL will be as significant to me as the NHL is to most people in town today. But I don’t begrudge others their allegiance that may be stronger than mine.

7. Sports is not the only way to waste money. Do we really have enough discretionary funds to begin construction on a new central library, given the death march community branches are being led on?

8. I don’t think the Chargers ever said they’d build a new stadium and all the infrastructure around it without public money. Maybe they were asking for a public land giveaway that they’d have developed and flipped at a profit, but that land would’ve been worth something to the city. Maybe they were asking for improved roads or public transit access to a prospective site, which would’ve cost the city money. But they’ve always had their hand at least partway out, and this goes back to the question of whether it’s fair to bear a portion of cost in exchange for a portion of benefit.

9. While I agree with Andy that the original post is full of insults that appear to provoke emotional attack rather than rational debate, I also agree with Shane that there’s plenty of factual ‘meat’ on the bone as well.

10. The one point Shane brings up that I argue (not because I doubt it’s true, but because from experience I know it’s not true here) is that 90% of ticket buyers are locals. While this is certainly the case in every other city I’ve visited (Buffalo, Atlanta, Cleveland, Green Bay, San Francisco, Kansas City, Baltimore, New England), I’d venture that up to 30% of attendance at Chargers home games is from those who commute far enough to require at least one night’s hotel stay in town. This comes from fans of opponents visiting, but also many fans I’ve met supporting the home side are traveling a significant distance – a group of 8 people who sat behind me and my dad for 9-10 years flew in from Arizona ten times a year to watch games and have a mini-vacation, and they said they knew of a dozen others just in their suburb of Phoenix that did the same. Further, the team’s success has begun to earn them a national following, where people hundreds of miles from any fan base choose to support the Chargers and thus elect to visit San Diego.

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