Why the Buffalo Bills deal stinks for taxpayers and must be reversed

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Buffalo Bills fans are thrilled about the deal to build the team a new stadium. Losing the NFL franchise to a larger metropolitan area willing to bribe billionaire owner Terry Pegula by paying for a new park that would make him even richer would have been as crushing a blow to western New York’s morale as losing the Dodgers was to Brooklyn’s.

And that was a realistic possibility: It happened to Oakland when Las Vegas lured the Raiders to Sin City. Their stadium was paid for with hotel and tourism taxes that Nevada voters were told wouldn’t affect them.

But the notion that it’s the responsibility of New York taxpayers to fund Buffalo’s happiness is entirely different. The deal calls for the state to kick in $850 million, a figure that may well grow to more than $1 billion when all is said and done, with $250 million of it coming from Erie County.

That means the Florida-based Pegula and the NFL will pay less than half of the stadium’s estimated $1.4 billion cost. (And even some of that will come from the fans, with the Bills planning to charge season-ticket holders for seat licenses to help fund the project.)

Behind this is Gov. Kathy Hochul, who helped negotiate the agreement. She’s a Buffalo native and hopes the deal will boost her re-election prospects. But the fact that her husband Bill is a senior official at Delaware North, the company that manages the lucrative concessions at the Bills’ current stadium, raises conflict-of-interest questions her opponents are using against her.

But even if this weren’t an election-year ploy and more evidence of Albany swamp corruption, there are good reasons to oppose it.

Buffalo Bills owner Terry Pegula was able to use the threat of relocating the franchise to secure money from New York state.
Buffalo Bills owner Terry Pegula was able to use the threat of relocating the franchise to secure money from New York state.
Photo by Bryan M. Bennett/Getty Images

Hochul claims it will generate massive revenue for the state and employment for the Buffalo region. But the idea that state money spent on stadiums is worth it is a myth.

Don’t forget that state taxpayers just ponied up $95 million for renovations at Highmark Stadium, the Bills’ current home, in 2014 and 2018. The team and the league insisted it still wasn’t producing enough revenue for them, hence the demand for a new one. Quite a racket.

More important, while the state is sinking in red ink thanks to the pandemic and a bad economy, Forbes magazine pegs Pegula, who made his money fracking natural gas in Pennsylvania and beyond, as worth $5.4 billion. And thanks to the revenue they get from television and other sources, NFL team owners can more or less print money.

Here in Gotham, the kind of squeeze play Pegula used didn’t work. No one believed baseball’s Yankees or Mets could be enticed to leave the Big Apple. Their new stadiums, which both opened in 2009, were built by the teams alone with government spending for new infrastructure around them. Since governments exist to build infrastructure, those gifts, as well as some tax breaks, to sports moguls like the Yankees’ Steinbrenner family, were more defensible.

Hochul claims the new stadium will generate revenue and create new employment opportunities for the Buffalo area.
Hochul claims the new stadium will generate revenue and create new employment opportunities for the Buffalo area.
AP Photo/Hans Pennink

The state shouldn’t have allowed itself to be blackmailed into giving Pegula a much sweeter deal.

Economists from the left, like those at the Brookings Institution, and the right, at the Cato Institute, have consistently debunked claims about the benefits of building ballparks. The money fans spend attending games is merely transferred from other leisure activities. There is also no net uptick in employment. While they do produce short-term construction positions, most of the jobs created are part-time and low-income.

Unlike attractions that can stay open most of the calendar, sports venues don’t host enough events to produce the promised economic impact. Even the most successful examples of new stadiums built with public money that are intended to anchor neighborhood development have generally failed to be self-financing and require substantial ongoing subsidies. The much-admired Camden Yards, which anchored the redevelopment of Baltimore’s Inner Harbor, costs Maryland $15 million a year, 30 years after it was built.

A rendering of the new Buffalo Bills stadium.
A rendering of the new Buffalo Bills stadium.
Populous

The people who benefit from stadium-building are team owners who make higher profits from parks whose design is geared toward generating increased income from luxury boxes, restaurants and other bells and whistles those older venues lack.

This is a Robin Hood in reverse system that amounts to nothing less than socialism for sports-team owners. We can sympathize with the feelings of Bills fans, if not the governor. But the Buffalo deal stinks to high heaven and must be reversed.

Jonathan S. Tobin is editor-in-chief of JNS.org.

Twitter: @jonathans_tobin



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