Bread, Circuses and The Welfare King: Alexander Spanos

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)