By Kevin Hardy
But just months later, attention turned to Kansas, where officials in December announced plans to fund 60% of a new stadium for the NFL’s Kansas City Chiefs. The state committed to spending up to $1.8 billion — the largest-ever professional sports subsidy.
(Photo- Kansas Gov. Laura Kelly, a Democrat, holds a Kansas City Chiefs jersey with team owner Clark Hunt ahead of a news conference last month in Topeka, Kan., announcing the team would build a new $3 billion stadium in the state. Experts say the $1.8 billion state subsidy sets a record for public funding of professional sports venues.- Photo by Anna Kaminski/Kansas Reflector)
Geoffrey Propheter, who studies stadium deals as an associate professor in the School of Public Affairs at the University of Colorado Denver, thought the Commanders deal would stand out for years to come “for how ludicrous it was.”
Geoffrey Propheter, who studies stadium deals as an associate professor in the School of Public Affairs at the University of Colorado Denver, thought the Commanders deal would stand out for years to come “for how ludicrous it was.”
The D.C. Council in September finalized a plan to dedicate more than $1 billion in public funds to move the Commanders some 7 miles from a suburb in Maryland to a new facility planned for the old RFK Stadium site.
The city’s deal, which offers free riverfront land and exclusive development rights, means the district could forgo between $6 billion and $25 billion in revenue over time, Propheter said. By his calculations, that makes the planned Commanders stadium project the most valuable package ever awarded to a sports team. The team is primarily owned by Josh Harris, an investor with a net worth above $11 billion who also owns majority stakes in the NBA’s Philadelphia 76ers and the NHL’s New Jersey Devils.
The stadium deals in Washington and Kansas — both involving relocations within the same metropolitan area — have set separate records for taxpayer subsidies to sports teams. They serve as further evidence that public officials are uninterested in curbing giveaways to billionaire team owners, despite decades of research suggesting stadiums are a wasteful use of limited tax dollars.
And the deals could further push up the public price tag for projects in Chicago, Denver and Newark, New Jersey, all of which are discussing new or upgraded venues for NFL and NHL teams.
“Kansas lawmakers have done every NFL team and every pro-subsidy lawmaker everywhere else in the country a huge favor, because now teams can look at the Kansas deal and say, ‘Hey, what we’re asking for is not nearly as bad or as crazy or stupid as what Kansas is offering,’” Propheter said. “So now we’ve just pushed the expectation upward.”
Decades of research has found stadium subsidies are a poor investment of public dollars. Yet the median, inflation-adjusted stadium subsidy amount has ballooned over time.
The Chiefs deal is poised to surpass the $1.48 billion in inflation-adjusted dollars awarded to Montreal’s Olympic Stadium, opened in 1976, marking it as the costliest outlay ever in the U.S. and Canada, said J.C. Bradbury, a Kennesaw State University economics professor who researches stadium subsidies.
Adjusted to 2024 dollars, the median stadium subsidy for projects that opened in the 2010s was about $400 million. That increased to $605 million for projects slated to open in the 2020s. Already, 2030s-era projects have reached a median of $825 million, he said.
“There are many different ways we can measure these deals,” he said, “but by any metric, the recent Chiefs and Commanders deals are historically high.”
The Kansas deal
Officials maintained the new stadium would spur billions of dollars in economic activity despite serious questions from experts and local officials about taxpayers’ ability to cover the massive new debt.
“Quite frankly, I believe [it is] the biggest economic win we’ll ever have in the state of Kansas,” Republican state House Speaker Dan Hawkins said last month.
But officials also acknowledged the pursuit was about more than economics: Democratic Gov. Laura Kelly said landing the NFL team would make Kansas a tourist destination, help retain young people and defy stereotypes of Kansas as a flyover state.
“And what could be cooler than being home to the Kansas City Chiefs?” she said.
Kansas officials, the Chiefs and the Commanders did not respond to Stateline’s questions about the deals.
The Chiefs are owned by the Hunt family of Texas, one of the nation’s wealthiest families, estimated by Forbes to be worth nearly $25 billion.
As both the Chiefs and MLB’s Kansas City Royals — also in Missouri — openly weighed new stadiums in 2024, lawmakers in Topeka passed legislation amplifying an already lucrative tax incentive program to lure a pro sports team across State Line Road.
To fund Kansas’ expected $1.8 billion share of the new Chiefs stadium, state officials will divert sales taxes from a wide swath of the metropolitan area to pay back stadium debt. Officials say that won’t cause tax increases, but those tax diversions could cut deep into other city and state spending priorities.
Neil deMause, a journalist who has written extensively about stadium subsidies, said Kansas was effectively “negotiating against itself,” since Missouri was not prepared to offer such a lucrative deal. The same situation was true in Washington, he said, as it became clear that Maryland and Virginia, which were also vying for the new stadium, would not offer billions in free land and other benefits.
The new Chiefs stadium will be owned by the state, meaning the team won’t be subject to property taxes, a lucrative perk. The Chiefs will pay rent, but those funds will go into an account that can be used for ongoing facility maintenance and security. The state will also contribute millions to that fund every year.
The Chiefs will keep all revenue from ticket sales, parking and concessions, including for nonfootball events such as concerts and Final Four basketball games.
In Missouri, the Chiefs had previously committed $126 million in funding for education, transportation, health care and other community benefits over a 40-year period. But no such arrangement has been announced in Kansas.
In a nonbinding 33-page term sheet released by the state, the team agreed to set aside $3 million per year for a community impact fund. That fund, though, is controlled by the Chiefs, who can spend it on charitable endeavors or on profit-generating, team-branded ventures like fitness clubs.
The Chiefs also agreed to match their current charitable and volunteer efforts in Missouri, but neither the team nor Kansas officials answered questions on how that provision would be calculated or enforced.
Kansas will receive some access to its stadium for events including graduation ceremonies and free concerts, but those are subject to team-determined availability, and the state must cover all costs.
State officials are guaranteed one stadium suite for most events. But the term sheet notes that state officials must pay for their own food, except for free soda and water.
“They could have at least held out for free jerseys or something,” deMause said.
"It's about panic"
“For whatever reason, we’re in a moment where team owners feel entitled to demand a lot more billions of dollars than anybody else has,” he said. “And the more they get away with that, the more their fellow owners are going to be emboldened to ask for the same thing.”
In Illinois, lawmakers have discussed for years an effort to relocate the NFL’s Chicago Bears from Soldier Field to a new site along Lake Michigan in Chicago or in the suburb of Arlington Heights. For decades, the team has been primarily owned by the McCaskey family. Last month, Bears President and CEO Kevin Warren cited a lack of “legislative partnership” in announcing the team would explore a potential stadium in neighboring Indiana.
5 comments:
Stadiums and Data Collection Centers nobody voted for. What are we going to do about a government that doesn't give citizens what they want and need?
To be fair - the fault lies with the state willingly falling all over themselves to bring the team across state lines. Any competent business goes where the net profit will be highest.
We can't have nice things unless the rich daddys say we can.
Another Stupid Democrat, Kansas Gov. Laura Kelly, giving away the State, forcing taxpayers and a future generation to subsidize a Stadium for the Rich Hunt Family and a few, all the while the burden will be on the taxpayers, when she is long gone - talk about DUMB, she has NO CLUE the overall Costs that she has set into motion and what it will truly cause to the development and excessive tax burden put upon the taxpayers and the counties that will be trying to pay this debacle off for decades. Missouri you are so fortunate to have voted out the New Stadium in 2024 - SO SMART!
Kansas can have their stupid expensive stadium.
Joplin will keep winning with a data center!
Joplin has plenty of water and electricity for them to turn into artificial intelligence. In return we get lots of high paying jobs!
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