Have public finance principles been shut out in financing new stadiums for the NFL?
Over the past 15 years, new stadiums in the National Football League have been built at an unprecedented rate, and most new facilities have utilized significant public funds. This paper looks at whether the methods used to finance these new facilities honored public finance principles regarding equity and efficiency. While some common sources of public funds for sports infrastructure such as ticket taxes and personal seat licenses are both equitable and efficient, an examination of the 20 NFL stadiums constructed or refurbished since 1992 reveals a trend towards an increased reliance on taxation of visitors through hotel and rental car taxes. Although taxation of persons living outside one's own metropolitan area is appealing, this paper suggests that these sources of funding are neither equitable nor efficient.
Sports facilities in the United States for the four major professional sports leagues have been built recently at an unprecedented rate when the entire experience of the twentieth century is considered. Taxpayers in the host communities have shouldered the burden to a substantial degree. The purpose of this paper is to determine if the financing methods through time and currently have honored public finance principles relating to equity and efficiency. If not, why not? Attention in the paper is focused on the National Football League (NFL) in part because it is arguably the most popular and prosperous of the four major professional sports leagues in the U.S., and the NFL has the most comprehensive revenue sharing arrangement, which has implications for various hypotheses identified and analyzed in this report. The evidence and analysis contained in this report suggests that the NFL has been able to use the excess demand for its teams to induce cities to provide subsidies for stadiums that result in substantial increases in revenues, franchise values, and player salaries. The team financial gains are partially the result of appropriating a portion of fan/consumer surplus. Only the largest cities are capable of negotiating with the NFL on near equal footing, and only through collective action can cities counter the NFL's dominance in negotiating stadium deals and other contracts.
The first part of this paper identifies those public finance principles that are commonly invoked in designing and evaluating projects that are publicly funded. In the second part of the paper developments in funding NFL stadiums are identified and analyzed. The analysis will include those imperatives that account for any notable changes in the manner in which stadiums or teams are funded. In the paper's third section the current funding schemes are evaluated using the public finance criteria identified in the first section of the paper. The final section of the paper concludes the work and offers some policy suggestions.
Evaluating Proposals for Publicly Funded Projects
The evaluation of any public works project can be broken down into two main questions. The first question that must be addressed is whether public expenditures for the project can be justified at all. Once it is established that a particular project merits government funding, the next question is how the required revenues for the project are to be raised. Generally these two questions can be answered sequentially, although as will shown later, in many cases a project may merit public funding only if a financing mechanism can be devised that minimizes dead-weight loss or economic transfers.
Government intervention in the free market is generally justified when significant reasons exist to believe that private markets are unable to provide a good or service in an efficient manner. Examples of such market failures include externalities, public goods, and monopoly.
Subsidies for professional sports are often rationalized on the grounds that teams generate substantial economic value for host cities. If sports franchises and stadiums generate economic profits for hotels, restaurants, and retailers, for which team owners receive no compensation (i.e. external benefits), the free market will lead to an underprovision of teams and facilities that can be corrected through subsidies. Numerous academic economists such as Coates and Humphreys (2003) and Baade (1996), however, have generally found no significant correlation between new facilities or franchises and citywide incomes or employment. The most common explanation offered up by economists for this, perhaps, surprising lack of economic impact is that spending on professional sports is simply a substitute for spending on other goods and services in the local economy so that while the economic impact of a sports franchise may be large in a gross sense, teams have little net effect on a city's economic variables.
If the external economic benefit provided by professional sports teams is negligible then the rationale for subsidies rests on a consumer surplus or hedonic argument. In other words, sports provide benefits well in excess of that which people have to pay through ticket prices by providing an amenity to residents that improve the quality of life in the host city. In the words of former Minnesota governor Rudy Perpich, "Without professional sports, Minneapolis is just a cold Omaha."
Among the ticket buying public, there is conflicting theory as to whether sports franchises provide significant consumer surplus. On the one hand, sports teams engage in a great deal of price discrimination in the form of group sales, season ticket discounts, premium vs. regular seating, and differential pricing based on the day, week, or month a game is played or based on a team's opponent. Price discriminating monopolists tend to minimize the amount of consumer surplus in a market by making each ticket buyer pay as close to their willingness to pay as possible. On the other hand, many teams frequently experience sold out games meaning that significant excess demand exists and that those customers obtaining tickets are likely to retain some amount of consumer surplus.
It is not among ticket buyers, however, that the largest consumer surplus may accrue. The majority of people watching a particular NFL contest on any given Sunday are viewing the game free of charge over broadcast television. These customers certainly experience some degree of consumer surplus from the existence of the team and would be willing to assume some degree of taxation in order to support the team. In fact, even those persons who are not currently active sports fans may be willing to subsidize a professional franchise. Borrowing concepts from the environmental economics literature, city residents may place an option value on a local team reflecting the value people place on a future ability to watch a game even if one is not currently a sports fan or season ticket holder. Certain residents may also place a "non use value" or "existence value" on a team, i.e. a value placed on a franchise even if those residents never plan on watching the team play (Tietenberg, 2005).
While the psychological benefit of a team may be substantial for the relatively few city residents who paint their faces on game day and relatively modest for those who kibitz about team developments around the water cooler on Monday morning, it may be that the primary justification for public subsidies actually lies among casual observers rather than hard core fans as it is relatively easy to collect rents from ticket holders compared with television viewers. Indeed, live sporting events at large stadiums and arenas cannot be considered public goods in the truest sense of the definition as those who do not pay for tickets can be excluded from the game, but games broadcast on television (as well as the more amorphous concept of simply being a fan) are both non-exclusive and non-rival, the very definition of a public good. Thus, it is likely to be easier to justify a subsidy to attract a team or to keep a team from leaving town (and thereby provide benefits to casual fans) than it is to justify building a new playing facility with public funds that provides better amenities to hard-core season ticket holders.
The amenity value provided by professional sports franchises is notoriously difficult to measure. Coulson and Carlino (2004) demonstrate that housing prices in cities with NFL franchises are higher than those in similar non-NFL cities suggesting that home buyers are willing to pay a premium for the privilege of living in a city with professional football. The robustness of their results, however, has been the topic of significant skepticism (Coates & Humphreys, 2005).
One final justification for subsidizing a sport franchise that is a monopolist would be that public subsidies can work to move a profit-maximizing monopolist closer to a perfect competition level of output. At the league level, certainly monopoly leagues have a much stronger incentive to locate in new markets when potential expansion cities provide highly subsidized playing facilities. At the team level, existing monopolists within a city should increase the number of seats available for games with the proper subsidy.
Once a decision is made to finance all or part of a stadium through a public subsidy, a method of taxation must be developed that can generate sufficient revenue to finance the project. Public officials generally subscribe to the idea that public funding for projects should observe the two broad principles of equity and efficiency.
Equity considerations are based on the basic idea of whether a tax is considered fair. Several ideas are grouped together under the heading of equity including vertical equity, horizontal equity and the "benefit principle." The benefit principle, also known as the "user pays principle," is the straight forward proposition that the tax burden imposed on anyone for a publicly funded project ought to reflect the benefits they derive from it cleanly linking tax policy to expenditures. For example, the use of motor fuel taxes to provide highway infrastructure clearly satisfies the benefit principle. Similarly, this linkage is an appropriate basis for discussing equity in the funding of professional sports facilities.
Vertical equity, also known as the ability to pay principle, is the notion that a tax should be fair with respect to those of varying income levels. Generally, a tax where the poor bear a disproportionate burden of the tax compared to the rich would be considered inequitable. Horizontal equity is the idea that otherwise similarly situated individuals should pay similar tax rates. The income tax code, for example, contains hundreds of loopholes that allow specific taxpayers to pay less in taxes than others with similar incomes.
Efficiency is the ease with which revenues can be raised while imposing low excess burdens on taxpayers. To satisfy efficiency, a tax system should be simple to understand, easy for government to collect, impose low compliance costs among taxpayers, and have a low rate of tax evasion. In addition, the tax should minimize the amount of dead-weight loss (also known as efficiency loss or excess burden) imposed upon the taxpayer.
With respect to dead-weight loss, the Ramsey Rule states that dead-weight loss is minimized when goods with low elasticities are taxed highly while elastic goods face a low tax rate. Counterbalancing the Ramsey Rule, however, is the fact that deadweight loss rises with the square of the tax rate. Therefore, there are some efficiency gains to be made from applying a moderate but uniform tax rate rather than having a system that exempts some goods from taxation while making up for the lost revenue by imposing a larger tax on the remaining goods. In addition, a tax system with many different rates on varying goods may have high compliance costs and a high prevalence of tax evasion on certain goods.
A good tax system also should be designed so that it is understandable to the taxpayer. A lack of transparency in the tax code confuses consumers or requires an investment in information or knowledge that may exceed the potential benefits to the individual, but not to the sum of individuals. The use of hotel and car rental taxes to fund sports infrastructure, for example, violates transparency in some respects. It would appear credible, for example, at first blush to say that the imposition of a hotel tax in a city hosting a team would make non-residents pay for a new stadium, but the economic reality is far different.
First, to the extent that transient taxes (i.e. taxes paid by visitors to the city such as hotel and car rental taxes) or hospitality taxes do shift the burden of taxation from local residents to visitors, the concept of fungibility must be considered. Transient taxes used to pay for stadium construction could just have easily been used to pay for other local services such as schools, infrastructure, and police and fire protection or could have been used to reduce other taxes borne by local residents.
Next, the economic incidence of any tax must be considered. When the government imposes a tax on an industry, the burden of the tax is split between both the producer and the consumer based on each side's relative elasticity of supply or demand. While out-of-towners will pay some portion of the tax, local hospitality providers will also bear a portion of the tax in the form of lower prices leading to lower wages and profits. As a consequence, the hospitality industry has begun to lead the fight against public subsidies for sports infrastructure. For example, a coalition of car rental agencies funded the fight against the imposition of new taxes in Kansas City to build a new arena designed to attract an NBA franchise.
Finally, transient occupancy taxes give the impression that residents will be spared the burden of paying, but that is likely to be true if the city imposing a transient tax is the only city to do so. The reality, however, is quite different as host multiple host cities have sought to use these means to raise revenues for sports facilities that minimize public resistance. While any single city may be able to pass on stadium costs to visitors, when all cities attempt the same strategy, the fallacy of composition manifests itself. Do taxpayers understand that they may not be shouldering the tax burden in their home community for stadium construction, but on a national level, they are paying for stadiums in part because their home community has attempted to deflect the tax burden and other cities have retaliated by adopting similar policy?
It is often the case that a city will justify increases in a nonresident tax by noting that other cities "have done it to us." The inefficiencies potentially associated with professional sports exhibit a national character, at least to some degree. This sort of retaliation may lead to a tax system from which no single city can afford to move away but which is inefficient for all cities as a whole, a classic example of a prisoner's dilemma. It is important, therefore, to discuss the nature of current sports facilities funding strategies to better fashion methods for eliminating inequities and inefficiencies created through publicly financing sports facilities. In the next section of the paper the nature of strategies for funding sports stadium in major league host cities are identified and discussed.
A final point regarding the excess burden of hospitality taxes must be considered. One might argue that hospitality taxes fall on a fairly inelastic resource since a visitor to the city cannot easily avoid the tax by renting a car or staying in a hotel in another metropolitan area. High transient taxes, however, may be quite important in determining whether a trip to a particular city is made in the first place. Indeed, recreational travelers, at the very least, are generally thought to be quite sensitive to price (hence the significant discounts on airline tickets that include a Saturday night stay). Therefore, goods and services provided by the hospitality industry are likely to be elastic and should be subject to low rather than high tax rates.
In addition to efficiency and equity considerations, a "good" tax structure minimizes interference with otherwise efficient markets or if market imperfections or inefficiencies do exist, then a good tax could correct for the imperfections that exist for reasons not related to taxation. For example, effluent taxes (and other Pigouvian taxes) are widely hailed by economists as an efficient way to reduce the societal costs of pollution. Similarly, the four major professional sports leagues in the United States operate as unregulated monopolies, and that qualifies as a market imperfection. Every student of economics understands that monopolies charge higher prices and restrict supply (supply less of the good than society would find optimal) in pursuit of maximum profit. It follows in theory that professional sports utilize too few resources so that resources are underprovided relative to other goods and services in the economy. If society sought to correct this outcome through imposing taxes or providing subsidies, then industries other than professional sports should be taxed and/or the professional sports industry should be subsidized in order to expand the number of franchises or tickets available to consumers. The professional sports industry would prefer the subsidy solution for obvious reasons, and to "correct" for the underutilization of resources in the professional sports industry, society has adopted this course of action.
The efficacy of the subsidy solution depends on the responsiveness of the quantity to a decrease in the marginal cost of production or a shift of the monopolist's supply curve to the right. If the monopolist's supply curve is perfectly inelastic, fixed supply, then the supply is invariant with respect to the change in marginal cost, and the society providing the subsidy receives the same amount of the good, the same number of seats or franchises, at a higher social cost.
From a franchise standpoint, public subsidies appear to have been quite effective in providing leagues an incentive to engage in expansion. In the NFL, for example, no expansion occurred between 1977 and 1994, a period of relatively low public expenditures on sports infrastructure. Since 1995, however, the league has added 4 new franchises (Jacksonville, Carolina, Houston, and Cleveland), all in cities that built new stadiums for their teams. The pattern in the other major sports is similar.
When it comes to providing seating for existing franchises, however, the subsidies that society does provide for professional sports are often used to replace stadiums that have become economically obsolete. A primary driver for new stadium construction is luxury seating. The pursuit of the special "ambiance" that comes from smaller ballparks (from the producer's point of view, an increase in capacity utilization) in professional baseball at least, has involved replacing seats available to the general public with loges and other luxury accommodations available for an elite audience. The public subsidies provide nothing more in such cases with a convenient means through which the monopolist can price discriminate.
Given a perfectly inelastic supply curve (i.e. a fixed number of stadium seats), team revenues will increase with an increase in supply if the price elasticity of demand exceeds one. Even then the team motivated by profit maximization might not have an incentive to increase supply if seats available for sale to the public for individual games substitute for more lucrative luxury seating as noted above. In fact, the modern sports facility in the United States can be thought of as a collection of distinct game-day experiences differentiated by more than sight lines. Revenue sharing arrangements peculiar to the league (1), capacity constraints defined by the distance of remote seating to the playing surface, and the market for luxury seating all factor into the stadium design and seating capacity. There has been a trend in professional baseball in North America to build smaller stadiums to enhance the ambiance and spectator experience and to eliminate chronic "off-peak" excess capacity. Similarly, over half of the teams in Major League Soccer (MLS) in the United States have moved or have plans underway to move from NFL-sized facilities to stadiums with capacities of 20 to 30 thousand fans, less than half that of the stadiums they replace. Of course a major difference between MLB and MLS is that most of the financing for the new soccer facilities has come from private sources. In Tables 1 and 2 below, the seating capacities for old and new stadiums in the NFL and for Major League Baseball (MLB) have been recorded.
The point is that imperfections or inefficiencies that exist in the market for professional sports in the abstract have the potential for correction through taxes or subsidies only if certain conditions with regard to demand exist. Even then the rapidly changing financial character of the professional sports industry does not necessarily lend itself to classic solutions in the long term. While public subsidies in the presence of monopoly should be used to increase supply, in the majority of new professional baseball stadiums as well as in several new NFL stadiums, for example (see Tables 1 and 2), subsidies have instead been used to reduce supply and raise prices resulting in windfall profits for teams at public expense.
The data arrayed in Tables 1 and 2 indicate that on average the new NFL stadiums have larger seating capacities than those that they replaced, but seating capacities have shrunk for MLB stadiums on average. The reason for that may well be the relative infrequency of NFL games. There is greater interest in each NFL game which translates into high capacity utilization rates in those stadiums compared to MLB where an 81-game home schedule diminishes the importance of individual games all else equal.
The contraction of MLB stadiums may well be an attempt to capture the success of the Boston Red Sox at Fenway Park and the Chicago Cubs at Wrigley Field. The ambiance and experience of attending a game is enhanced by involved fans in an intimate space, and Fenway and Wrigley offer that kind of experience both inside and outside the ballpark (Yawkey Way in Boston and Wrigleyville in Chicago). The point once again is that it should be expected that a system of taxes and subsidies, a decrease in the marginal costs incurred by teams does not necessarily result in an increase supply of seats for professional sporting events. Indeed, a subsidy may even be used to reduce the number of seats available to the public, and in such instances the subsidy provides a windfall for the team.
Financing Professional Sports Facilities
It is important to review a history of the funding for professional sports stadiums in the United States. Table 3 provides historical information on the number and cost of stadiums in the U.S. as well as information relating to the public subsidies.
The information recorded in Table 3 indicates several noteworthy developments. First, the number of stadiums built in the United States has increased over time. Furthermore, the pace of construction has accelerated with more than half of the stadiums currently in use having been constructed since 1987. In this year, Joe Robbie, the owner of the NFL Miami Dolphins at the time, unable to get approval for public funding for renovating the Orange Bowl in Miami, parlayed revenue from the lease and sale of luxury seating and personal seat licenses into the financing necessary to build his own stadium. The mining of these new sources of revenue by Robbie represents a watershed in stadium economics, and has become a part of the financial blueprint for other stadium projects.
Second, Robbie's financial creativity did not preclude public funding. The evidence recorded in Table 3 suggests that PSLs and luxury seating provided additional revenues for owners rather than substituting dollar for dollar for public funds. While not all stadiums have been primarily financed with public money during the recent surge in stadium construction in the United States, the vast majority of them have been. Furthermore, the fraction of stadiums receiving some public funding has remained relatively constant since the early 1950s. It should be noted that public subventions take many forms, some of which are difficult to quantify. When stadium infrastructure, land acquisition subsidies, zoning variations, and tax abatements are figured into the subvention equation, every stadium project in the past three or four decades has received some public financial support. The figures in Table 3 do not include billions of dollars in subsidies for tax-free municipal bonds, interest paid on debt, smaller renovations, facilities for which information was not available, lost property and other tax revenues not paid on facilities, taxpayer money risked on failed venues, direct government subsidies paid to teams, and subsidies for minor league facilities (2).
Third, stadium construction costs are increasing in both nominal and real terms. Escalating construction costs are responsible, at least to some extent, for the increase in the size of stadium subsidies. The public sector in general is contributing absolutely more for stadium construction in both real and nominal terms.
To summarize, the number of stadiums that have been built since 1987 to the present is unprecedented. Approximately 80 percent of the professional sports facilities in the United States will have been replaced or have undergone major renovation during this period of time. The new facilities have cost more than $19 billion in total, and the public has provided $13.6 billion, or 71 percent, of that amount. In few, if any, instances have professional teams in the United States been required to open their books to justify the need for these subsidies. Rather, teams have convinced cities that to remain competitive on the field they have to be competitive financially, and this, teams claim, cannot be achieved without new playing venues.
The trends in NFL stadium financing follow a pattern of innovation and imitation. Painting with the broadest possible strokes and for the purposes of this analysis, the innovation relates primarily to the discovery of new revenue streams spawned in part by actual or threatened changes in tax laws regarding stadium funding. The decline in the public finance percentage noted for 1986 through 2002 can be explained by six developments: first, the sale or lease of luxury seating, the Joe Robbie innovation previously noted; second, the 1986 Tax Reform Act, which, among other things, terminated industrial development bonds (IDBs) for "sports facilities" (some transition / grandfathering allowed); third, the sale of "personal seat licenses (PSLs)" by the Carolina Panthers in 1993 (Peter, 2002); fourth, the St. Louis Rams' use of a government agency to sell PSLs, which avoided a significant tax burden assumed by the Carolina Panthers in their sale of PSLs in 1993 (Peter, 2002); fifth, the release of final regulations by the federal government on private activity bonds on January 10, 1997; and sixth, the attempt by the late Senator Daniel Patrick Moynihan to reintroduce legislation to eliminate the use of tax-exempt financing for professional sports facilities (3). The "Moynihan Bill" apparently died in committee, but it sent a strong signal to professional sports leagues that public sentiment against the use of tax-exempt financing for their private gain was strengthening.
These six developments arguably have contributed to a discernible change in strategies and methods for financing professional sports facilities. Before identifying and discussing the change in strategies, it would be useful to list the public sector funding sources for stadium financing in recent times. They include: 1. sales taxes; 2. hotel/motel taxes; 3. car rental taxes; 4. general revenue bonds; 5. tax increment financing (TIF); 6. lottery funds; 7. ticket surcharges; 8. parking revenues; 9. sin taxes; 10. revenues, surplus and otherwise, from other government agencies or funds such as the $13.5 million of construction fund investment income used to fund the stadium for the Cincinnati Bengals (Harrow, 2002); and 11. sale of assets owned by the government, e.g., to help fund the stadium for the Detroit Lions, Wayne County sold $20 million worth of "surplus land" (Harrow, 2002). In Table 4 below information to the extent it is available is provided on the mixed use of these 11 revenue sources for funding stadiums.
The decision as to whether to count PSLs and ticket surcharges as public or private contributions is largely an arbitrary one. For example, to make a public contribution appear smaller, a team and city could mutually agree to a fixed ticket surcharge but could stipulate that ticket buyers would pay this "tax" to the team rather than to the city. For accounting purposes, all of the PSLs in his study except Oakland were designated as private contributions while all of the ticket surcharges except Cincinnati and Houston were designated as public contributions.
The information recorded in Table 4 indicates at least five things worth noting. First, the numbers indicate that sales taxes and car rental taxes are being used with increasing frequency. In fact, compared to the period 1992 and 1999, the number of cities using sales taxes and car rental taxes from 2000 to the present to fund stadiums has doubled and tripled, respectively, albeit the incidence of their use is still relatively small. Second, hotel taxes continue to be popular in stadium financing with almost half of the sports facilities projects using hotel taxes. Third, there have been no general funds used to back stadium projects since 1999. Fourth, ticket surcharges of one form or another, one-time fee (Green Bay) or taxes imposed with each ticket sale (Cleveland), are being used with increasing frequency. Ticket surcharges were imposed twice in the period 1992 to 1999 in the NFL, but were employed on five stadium projects during the period 2000 to the present. Fifth, during the period 1992 through 1999, only two of the eleven stadium projects were subjected to a referendum. Between 2000 and 2006 eight of the eleven stadium projects identified in Table 4 were decided through a referendum.
Taken together these developments arguably suggest that residents of NFL host cities have increasingly resisted the use of their tax money to fund the construction of new stadiums. Politicians are no longer able to give away large subsidies without at least putting the issue to a public vote, even if these voter referendums pass with an increasing frequency (Mondello & Anderson, 2004). Furthermore, when the NFL and host cities propose significant subsidies, they have had to find ways to fund their stadium projects using financing techniques and strategies that are more tolerable for taxpayers.
The evidence from recent stadium construction in the NFL also supports the view that NFL owners and players have been the financial beneficiaries of public largesse. The statistics recorded in Table 5 indicate that on the basis of average team revenues, new stadiums increase franchise values by 56 percent from the year before a stadium is completed to the year after (from $360 million to $547 million). While any estimate of a franchise value must be taken with a grain of salt, all franchise values increased by a substantial amount following the construction of the stadium (3). In the words of Abrahamson and Farmer (2004), "NFL financial documents ... reveal a robust enterprise that gets more so each year as team after team moves into new or renovated stadiums, many paid for by taxpayers."
As shown in Table 6, new stadiums resulted in increased payrolls for most teams in the NFL, but not all. In six of the sixteen cases of new or renovated stadiums in the NFL identified in Table 6, payrolls actually decreased when play began in the new facility. The fact that the evidence indicates that two years prior to the new stadium (t-2) three teams exhibited a payroll above that for the year the new or renovated stadium was built suggests that payrolls may have been increased the year before in anticipation of new stadium revenues. These results are all the more surprising in light of the fact that the national broadcast money, the most important source of revenue in the NFL, has steadily increased. One would expect an upward trend in payrolls for all NFL teams for each year if for no other reason than the increase in broadcast revenues. That makes the decline in payrolls for the year in which a new stadium appears all the more unanticipated. In part this may be due to the NFL's salary cap system that constrains the amount an owner can spend on players even in the presence of the increased revenues resulting from a new stadium. The evidence, however, on the whole indicates that player salaries positively correlate with new or renovated stadiums as would be expected.
One might argue that an average fan benefits from higher player salaries in that team success has generally been found to correlate with payroll. Therefore, if a team spends any revenue windfalls from a new stadium on better talent, an indirect effect of this spending will be to increase the welfare of local sports fans who like to see their team win.
This argument is tempered by two factors, however. First, as shown in Table 6, payroll increases, in the NFL at least, compromise a relatively small percent of the increased revenues that teams receive. Second, since wins and losses in sports leagues are a zero-sum game, only higher payrolls relative the league average payroll correlate to on-field success. Therefore, if all teams are building new stadiums, it is impossible for all of the teams to experience improvement in the win-loss column. Indeed, in Major League Baseball, latecomers to the stadium game such as the Detroit Tigers and Milwaukee Brewers have been unable to parlay their new ballparks into success on the baseball diamond.
New stadiums boost revenues in the NFL not only through selling more seats but also through the sale or lease of luxury seating. It should not be too surprising, therefore, that the average weighted ticket price in the NFL increased following the introduction of a new or renovated stadium. Table 7 shows average ticket prices for NFL teams building new stadiums.
As the information in Table 7 below makes clear in only two cases, did weighted average ticket prices fall with the appearance of a new NFL facility. On average ticket prices the year before the new stadium were only 77 percent of what they averaged the year the new stadium was brought into play. It is interesting, however, that ticket prices have remained stable, even declined a bit on average for teams the year after and two years after the new stadium was introduced.
In the next section of the paper, the most current funding strategies used by the NFL are evaluated based on equity and efficiency.
4. An Evaluation of Current NFL Funding Proposals
As noted previously, a good tax system exhibits two broad characteristics: equity and efficiency. In this section of the paper, the methods for funding stadiums are evaluated based on these criteria. The primary implication of Tables 5, 6, and 7 is that players, fans (although not necessarily ticket buying fans who are subject to much higher prices), and especially owners have benefited from new stadiums. The evidence recorded in Table 3, in particular, indicates that taxpayers have shouldered the majority of the financial burden. Taxpayer resistance has shown signs of galvanizing, and stadium-tax strategies reflect that fact. Hotel taxes, car-rental taxes, sin taxes, and small, incremental changes in sales taxes have become more popular precisely because stadium subsidy proponents recognize the need to placate taxpayers. Hotel and car rental taxes give the impression that people outside the community will fund stadium projects. Sin taxes do not find ardent opponents, in part, arguably because smoking, drinking, and gambling are perceived as socially undesirable and problematic behaviors. Sales taxes are often imposed in multi county areas in small increments precisely because the individual incremental tax burdens will be too small to encourage active resistance.
The taxes identified in the previous paragraph that are growing in popularity in funding stadiums generally fail any reasonable test of equity. As noted previously, hotel and car rental taxes, which ostensibly deflect the tax burden from residents to nonresidents, fail the benefits principle since there is no reason to expect that those who rent cars or hotels are sports fans. They also fail horizontal equity if no obvious link between professional sports and hotel and rental car usage can be made since there is no reason why rental car operators should have to bear the burden of providing sports infrastructure. In addition, these taxes fail efficiency tests because of a lack of transparency and high excess burden. Hospitality taxes are sold on the assertion that non-residents bear the burden of the tax when, in fact, due to the tax incidence of these fee and the fungibility of government expenditures, these taxes are actually borne primarily by local residents. Furthermore, as competing cities retaliate with their own tourism taxes, these taxes essentially become a nationwide tax on a fairly elastic product. Combined with the high tax rates imposed on these goods, this leads to a high excess burden.
Sin taxes similarly violate equity tests since there is again no reason to believer sports fans are particularly "sinful" by nature and since there is no reason why smokers, drinkers, and gamblers should be expected to pay for sports stadiums. Furthermore, sin taxes are generally thought to place a higher burden on poorer taxpayers. And just as hospitality taxes, sin taxes are fungible and could just as easily be used for other purposes. Of course, sin taxes are generally levied on highly inelastic goods, making these taxes relatively efficient on average. However, since most jurisdictions already tax these goods highly, any further increases in these taxes impose large increases in dead-weight loss at the margin.
General sales taxes are probably the preferable to other sin taxes or hospitality taxes in funding stadium construction. Since general sales taxes apply to all consumers, they are reasonably horizontally equitable compared with sales taxes applied to specific goods such as hotels and car rentals which place a higher tax burden on those individuals who frequently travel. It should be noted that sales tax increases are often imposed on multi-county areas contiguous to the county in which the stadium is located. The smaller the tax burden imposed on any one person, the less inequitable is the tax used to fund stadiums in an absolute sense. To the extent that people from neighboring counties attend games, however, these counties may actually be subsidizing the relocation of amusement and recreation spending toward the team's home community.
Ticket surcharges and PSLs, of course, are likely the best source of funding for stadiums as they clearly satisfy the benefits principle. Obviously, ticket taxes and PSLs are not horizontally equitable, but most economists would suggest that the user pays principle is more important in determining the equity of a tax system than horizontal equity. Unfortunately, this type of direct financing of new stadiums rarely raises a sufficient amount of revenue to cover the expense of building a new stadium. Notice that none of the stadiums identified in Table 4 are funded solely by these types of charges. As a further example, the average size of the public subsidy for the 31 stadiums and arenas built with public money for teams in the big four American professional sports since 2000 is just under $250 million (see Table 3). The average gross level of public funding for NFL stadiums alone since 2000 is similar. Finance charges on such an expense might exceed $20 million per year (assuming a 30-year, fixed rate, fixed payment loan at 7% interest rate). The average annual attendance for a team in the NFL in 2004 was roughly 539,000. If a new stadium is to be paid for exclusively through ticket taxes, the average ticket tax would need to be roughly $37 per ticket, a figure that would represent an extraordinarily high 67% tax rate based on an average NFL ticket price of $55. In addition, ticket taxes and PSLs do nothing to capture rents from casual fans who, as previously discussed, may represent a majority of the hedonic value of a sports franchise.
Most taxes used for stadium construction such as general sales taxes, ticket taxes, or visitor taxes such as hotel or rental car fees do not place a disproportionate burden on the poorer sectors of society. When examining taxes designated for a specific purpose such as the construction of a sports facility, however, both the expenditure and revenue sides of the equation must be examined. If a subsidy for a sports franchise serves to enrich millionaire players and billionaire owners through the taxation of the general public, as is shown to be the case in Tables 5 and 6, a stadium tax should be considered vertically inequitable even if the actual revenue generating mechanism itself is not inequitable.
Efficiency of the tax system with respect to correcting market failures can be analyzed through considering the extent to which the profit-maximizing motivation of the firm(s) induces a market outcome from that which would occur in a perfectly competitive situation. The NFL is an unregulated national monopoly, and individual teams are unregulated local monopolies. The NFL has systematically constrained the supply of teams to maintain an excess demand for franchises. In such a case, the marginal social benefit characteristic of the last team exceeds the marginal social cost, and to maximize social well being, society wants teams in an amount such that marginal social benefit and cost for the last team are equal.
One solution to this problem is to encourage the monopolist to supply more at a lower price through a public subsidy. Locally that could mean an increase in the number of seats available to the public at lower prices, i.e., larger stadiums. The public subsidies that have been provided for professional sports teams have not always been used to expand seating, but have in the case of MLB actually resulted in smaller stadiums at higher prices. While the NFL has expanded the size of their stadiums in general, prices on average have gone up. The price increases are attributable, at least in part, to the sale of luxury seating, but should the public be asked to subsidize the construction of stadiums that increasingly exclude citizens who pay for the facility? On these efficiency grounds, the funding proposals currently in place do not generally pass an efficiency test.
The current methods for funding stadiums are also anything but transparent. Indeed the emphasis appears to be on trying to make the funding schemes as obscure, trivial, and inconsequential to taxpayers as possible. It is appropriate to describe the nonresident taxes to fund stadiums as a national shell game in which citizens of each host city are duped into believing that the tax burden for sports facilities can be deflected to citizens elsewhere in the country. This proposition crucially depends on the fact that other cities do not adopt a similar strategy. To ascertain the tax burden imposed on anyone with the widespread adoption of transient and car rental taxes is a monumental undertaking, and the difficulty of completing such a study serves the interests of those supporting stadium subsidies through ostensible nonresident funding.
The G-3 NFL loan program also benefits from the difficulty of tracing its public character. The fact the League functions as a not-for-profit entity allows in an indirect way the maintenance of tax-exempt financing for stadiums despite all the legislation designed to eliminate it. Ironically, and disingenuously, in describing the nature of the public-private partnerships in funding stadiums, the NFL stadium loan program under the auspices of G-3 is represented as a portion of the private contribution.
In summary, on equity and efficiency grounds, the strategies currently employed in the funding of NFL stadiums fail.
Conclusions and Policy Implications
This purpose of this paper was to analyze the evolution of public financing for building or renovating stadiums used by the NFL, and to analyze the funding mechanisms based on equity, efficiency, and transparency criteria. Various forces have conspired to fashion a movement toward methods for financing stadiums that appear to deflect the tax burden to nonresidents, make the individual burden sufficiently small so as to minimize tax resistance through maximizing taxpayer apathy, and obscure the financing method so that taxpayers have a difficult time determining how the stadium project will affect their tax status overall.
While the increased use of PSLs and ticket tax surcharges should be applauded as equitable methods for funding NFL stadium projects, the other funding methods that are gaining prominence are not equitable or efficient. Subsidies for NFL teams appear to have led to an expansion of NFL seating capacities, but ticket prices have not fallen. The increase in the weighted average ticket price may be attributed, at least in part, to the increase in very expensive luxury seating and other luxury amenities at state-of-the-art NFL stadiums. Equity principles are clearly violated if public money is used to build stadiums that exclude an increasing number of those who provide the subsidy.
The major policy implication is that cities cannot act alone to compel the design of stadium subsidies that are more equitable, efficient, and transparent. The current funding outcome is in large part due to the asymmetry at the bargaining table between the NFL and government. As long as the NFL maintains an excess demand for teams, it can play one city off against the other, use in effect a "prisoner's dilemma" to their advantage, to fashion a stadium funding package that maximizes the well being of the team and league at the expense of the public. Since the league is using national market conditions to create a strategy that maximizes the interest of local teams, cities must develop their own collective or "League of Cities" to countermand the NFL's power. When cities recognize and implement policies based on their shared interests, then subsidies for professional sports will no longer be needed.
The reality is that subsidies for each team ultimately maintain the status quo with regard to team financial standings, and only serve to enhance the absolute wealth of the individual teams and the league. Even if value added taxes of 100 percent are imposed at the new stadiums for each event hosted there, the impact of the combined subsidy/tax will not be equitable or efficient unless the tax revenues are returned in some form in the exact amounts to those who provided funds for stadium construction. That cannot be done without incurring administrative costs. Once the subsidy is provided there will be deadweight losses in any event. The only policy is not to provide the subsidies in the first place, and that can be accomplished only if cities recognize their shared interests and act on them in relating to the NFL and other professional sports leagues.
The authors would like to thank Mimi Nikolova of Lake Forest College for providing excellent research assistance.
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Robert A. Baade
Department of Economics
Lake Forest College
Victor A. Matheson
Department of Economics
College of the Holy Cross
(1) Jerry Jones, the owner of the Dallas Cowboys, for example, reportedly extracted individual seats to make room for luxury seating. This redesign of seating in Cowboys Stadium had to do, at least in part, with the NFL revenue sharing arrangement, which exempted revenue from luxury seating but not the seats removed. Through this stadium modification Jones avoided the "40 percent" league tax.
(2) It should be noted that the use of tax exempt bonds for playing facilities has been tightened over time, and there have been recent attempts to limit their use completely as discussed below. Other tax related issues regarding NFL stadium financing have surfaced, e.g., the tax-exempt status of loans from the NFL to individual teams, and congressional representatives from both political parties such as Senator Arlen Specter (R-Pa) and Representative Barney Frank (D-Mass) have expressed concern about the financial windfall for the NFL as a consequence of the favorable tax treatment extended the IRS in its stadium loan program to individual teams.
(3) Greenberg, 2000: pg.170. Mr. Greenberg provides more detailed information in his "Exhibit D: Development of Tax Law Principles Relating to Sports Facility Bonds," pp. 170171 of his text.
(4) In Tables 5-7, the top figures in each cell represent dollar values in millions, while the lower figures in parentheses represent each dollar figure as a percent of each team's year t value. A word of caution with regard to the calculations is in order. The average percentages in the final row are derived by averaging the individual percentage increases rather than dividing the average franchise value for each period by the franchise value for t. In this way each observation is valued equally in the percentage columns and not weighted in a way that is implicit in an average calculation derived from average franchise value for all teams. Incidentally, the most recent data available indicates that the Washington Redskins are the most valuable team in the NFL at $1.104 billion as of 2004.
Table 1: Seating Capacities for New and Old NFL Stadiums Present Stadium Present Former Year Built or Seating Stadium Old Seating Present City Renovated Capacity Year Built Capacity Atlanta 1992 71,228 1965 60,700 St. Louis 1995 67,000 1966 60,000 Washington 1997 80,116 1961 56,454 San Diego 1997 71,500 1967 59,022 Tampa 1998 75,000 1967 74,301 Baltimore 1998 69,426 1953 60,020 Oakland 1998 63,132 1966 63,026 Cleveland 1999 73,200 1931 78,512 Memphis 1999 68,798 1965 62,380 Buffalo 1999 73,976 1973 80,024 Cincinnati 2000 65,600 1970 60,389 Denver 2001 76,125 1948 76,273 Pittsburgh 2001 65,000 1970 59,594 Pontiac 2002 65,000 1975 80,311 Houston 2002 69,500 1965 59,969 Foxboro 2002 68,000 1971 60,292 Seattle 2002 67,000 1976 66,403 Green Bay 2003 71,500 1957 60,789 Chicago 2003 61,500 1924 66,944 Philadelphia 2003 66,000 1971 65,352 Average 69,430 65,538 Sources: Baade, et al (2004); Munsey and Suppes (2005); Stadiums of the NFL: From the Past to the Future (2005). Table 2: Seating Capacities for New and Old MLB Stadiums Present Stadium Present Former Year Built or Seating Stadium Old Seating Present City Renovated Capacity Year Built Capacity Chicago 1991 41,000 1910 52,000 Baltimore 1992 48,876 1954 54,000 Arlington 1994 49,200 1972 43,521 Cleveland 1994 42,865 1932 74,400 Denver 1995 50,445 1993 76,098 Atlanta 1997 49,831 1966 52,013 Seattle 1999 47,116 1977 59,100 Houston 2000 40,950 1965 54,816 San Francisco 2000 41,503 1960 57,546 Detroit 2000 40,637 1912 52,400 Milwaukee 2001 42,400 1956 53,192 Pittsburgh 2001 38,365 1970 47,952 Cincinnati 2003 42,059 1970 40,008 Philadelphia 2004 43,500 1971 62,623 San Diego 2004 46,000 1968 47,972 Average 44,316 55,176 Source: Ballparks of Baseball (2005). Table 3: Subsidies for Sports Stadiums in the United States Constructed Between 1887-2003 Number Cost of Public Number of Stadiums Subsidies Percent of of Stadiums (Millions (Millions Construction Stadiums Publicly of 1997 of 1997 Publicly Period Built Financed Dollars) Dollars) Financed 1887- 27 5 493.64 31.4 1939 155.04 1887- 14 0 129.76 0.0 1923 0.00 1923- 13 5 363.88 42.6 1939 155.04 1947- 8 7 163.23 98.9 1959 161.51 1960- 25 21 2,601.40 66.1 1969 1,720.71 1970- 32 29 4,279.45 93.2 1979 3,989.24 1980- 13 13 822.00 92.9 1986 764.00 1987- 55 51 9,488.73 70.6 1999 6,220.19 2000- 18 17 4,968.00 62.8 2002 3,119.40 2003-? 15 14 4,726.30 90.4 4,270.00 Total 193 157 27,542.75 20,400.09 74.1 1887- Source: Keating (1999). Table 4: Sources of Public Funds for Stadium Construction Year Public Public funding Built Contribution Referendum source Atlanta 1992 100.0% No 2.75% Hotel tax Carolina 1995 22.9% No PSL Jacksonville 1995 90.7% No Sales tax, hotel tax, ticket charge, general funds St. Louis 1995 100.0% No 2.5% hotel tax, general funds ($257 mil.) Washington 1997 27.0% No Baltimore 1998 89.3% No Lottery Oakland 1998 100.0% No PSL Tampa Bay 1998 91.2% Yes 0.5% sales tax Buffalo 1999 100.0% No General funds Cleveland 1999 70.7% Yes Hotel tax, car rental tax, sin taxes, PSL Tennessee 1999 75.3% Yes Hotel tax, PSL ($72 mil.) Cincinnati 2000 94.4% Yes 0.5% sales tax, ticket charge, PSL ($25 mil.) Denver 2001 62.2% Yes Sales tax Pittsburgh 2001 59.0% No Ticket charge ($14 mil.), PSL ($42 mil.), other Detroit 2002 26.5% Yes 1% hotel tax, $2 car rental tax Houston 2002 72.9% Yes Hotel tax, car rental tax, ticket charge, sin taxes, PSL New England 2002 17.2% No Seattle 2002 63.7% Yes Sales tax, 2% hotel tax, 10% ticket charge, lottery, PSL ($17 mil.) Chicago 2003 66.1% No 2% hotel tax, PSL ($60 mil.) Green Bay 2003 57.3% Yes 0.5% sales tax, ticket charge ($92.5 mil.) Philadelphia 2003 36.4% No Arizona 2006 66.2% Yes 1% hotel tax, $3.50 car rental tax Sources: Horrow (2002); Baade, et al (2004); Citizens Union Foundation (2005); Arizona Sports and Tourism Authority (2005). Note: not all funding sources can be identified in every case. Table 5: NFL Franchise Values Before and After Stadium Construction Year built value for value for Team (t) (t-2) (t-1) Washington 1997 $151 $184 Redskins (75.5%) (92.0%) San Diego 1997 $153 $169 Chargers (80.1%) (88.5%) Tampa Bay 1998 $164 $187 Buccaneers (47.4%) (54.0%) Baltimore 1998 $201 $235 Ravens (61.1%) (71.4%) Oakland 1998 $162 $210 Raiders (68.9%) (89.4%) Tennessee 1999 $193 $322 Titans (52.3%) (87.3%) Buffalo 1999 $200 $252 Bills (61.3%) (77.3%) Cincinnati 2000 $311 $394 Bengals (73.5%) (93.1%) Denver 2001 $427 $471 Broncos (79.1%) (87.2%) Pittsburgh 2001 $397 $414 Steelers (84.8%) (88.5%) New 2002 $464 $524 England (81.3%) (91.8%) Patriots Detroit 2002 $378 $423 Lions (74.3%) (83.1%) Seattle 2002 $407 $440 Seahawks (76.2%) (82.4%) Chicago 2003 $362 $540 Bears (58.3%) (87.0%) Philadelphia 2003 $405 $518 Eagles (65.6%) (84.0%) Green Bay 2003 $392 $474 Packers (64.4%) (77.8%) Average $297.9 $359.8 (69.0%) (83.4%) value for value for value for Team (t) (t+1) (t+2) Washington $200 $403 $607 Redskins (100.0%) (201.5%) (303.5%) San Diego $191 $248 $323 Chargers (100.0%) (129.8%) (169.1%) Tampa Bay $346 $502 $532 Buccaneers (100.0%) (145.1%) (153.8%) Baltimore $329 $408 $479 Ravens (100.0%) (124.0%) (145.6%) Oakland $235 $299 $315 Raiders (100.0%) (127.2%) (134.0%) Tennessee $369 $506 $536 Titans (100.0%) (137.1%) (145.3%) Buffalo $326 $365 $393 Bills (100.0%) (112.0%) (120.6%) Cincinnati $423 $479 $507 Bengals (100.0%) (113.2%) (119.9%) Denver $540 $604 $683 Broncos (100.0%) (111.9%) (126.5%) Pittsburgh $468 $557 $608 Steelers (100.0%) (119.0%) (129.9%) New $571 $756 $861 England (100.0%) (132.4%) (150.8%) Patriots Detroit $509 $635 $747 Lions (100.0%) (124.8%) (146.8%) Seattle $534 $610 $712 Seahawks (100.0%) (114.2%) (133.3%) Chicago $621 $785 Bears (100.0%) (126.4%) Philadelphia $617 $833 Eagles (100.0%) (135.0%) Green Bay $609 $756 Packers (100.0%) (124.1%) Average $430.5 $546.6 $561.8 (100.0%) (129.9%) (152.2%) Sources: Baade, et al, (2004); Harrow (2002); Greenberg (2002: pg. 46); Citizens Union Foundation (2005); Arizona Sports and Tourism Authority (2005); Ozanian (2005). See Note (9) for a detailed explanation of figures. Table 6: NFL Team Payroll Before and After Stadium Construction Year built value for value for Team (t) (t-2) (t-1) Washington 1997 $46.8 $36.0 Redskins (106.4%) (82.0%) San Diego 1997 $35.5 $43.2 Chargers (82.6% (100.4%) Tampa Bay 1998 $44.9 $49.6 Buccaneers (80.0%) (88.3%) Baltimore 1998 $38.9 $44.1 Ravens (72.4%) (82.0%) Oakland 1998 $48.9 $45.7 Raiders (83.8%) (78.3%) Tennessee 1999 $38.4 $64.3 Titans (59.4%) (99.4%) Buffalo 1999 $39.7 $66.4 Bills (56.0%) (93.8%) Cincinnati 2000 $63.8 $60.0 Bengals (117.7%) (110.7%) Denver 2001 $62.7 $50.2 Broncos (61.1%) (49.0%) Pittsburgh 2001 $65.9 $58.5 Steelers (84.8%) (75.2%) New 2002 $51.3 $65.8 England (111.1%) (142.4%) Patriots Detroit 2002 $54.6 $76.6 Lions (84.9%) (119.0%) Seattle 2002 $47.8 $81.0 Seahawks (82.0%) (138.9%) Chicago 2003 $76.5 $71.9 Bears (92.4%) (86.8%) Philadelphia 2003 $70.9 $81.9 Eagles (91.6%) (105.8%) Green Bay 2003 $69.0 $50.0 Packers (89.3%) (64.7%) Average $53.5 $59.1 (84.7%) (94.8%) value for Value for value for Team (t) (t+1) (t+2) Washington $44.0 $66.7 $53.0 Redskins (100.0%) (151.7%) (120.5%) San Diego $43.0 $71.3 $50.6 Chargers (100.0%) (165.8%) (117.8%) Tampa Bay $56.1 $58.3 $58.1 Buccaneers (100.0%) (103.8%) (103.5%) Baltimore $53.8 $65.0 $54.8 Ravens (100.0%) (120.8%) (101.9%) Oakland $58.4 $64.4 $49.1 Raiders (100.0%) (110.3%) (84.2%) Tennessee $64.7 $55.5 $70.1 Titans (100.0%) (85.7%) (108.4%) Buffalo $70.8 $54.6 $51.6 Bills (100.0%) (77.1%) (72.9%) Cincinnati $54.2 $82.0 $57.9 Bengals (100.0%) (151.4%) (106.8%) Denver $102.6 $62.6 $64.8 Broncos (100.0%) (61.0%) (63.2%) Pittsburgh $77.7 $85.3 $63.6 Steelers (100.0%) (109.7%) (81.8%) New $46.2 $82.1 $71.5 England (100.0%) (177.8%) (154.9%) Patriots Detroit $64.3 $77.7 $81.1 Lions (100.0%) (120.7%) (126.1%) Seattle $58.3 $84.2 $86.9 Seahawks (100.0%) (144.4%) (149.0%) Chicago $82.8 $81.4 Bears (100.0%) (98.3% Philadelphia $77.4 $84.5 Eagles (100.0%) (109.1%) Green Bay $77.2 $83.0 Packers (100.0%) (107.5%) Average $64.5 $72.4 $62.6 (100.0%) (118.4%) (107.0%) Source: Rodney Fort, 2005a. See Note (9) for an explanation of figures. Table 7: NFL Ticket Price Before and After Stadium Construction Year built value for value for Team (t) t-2 ($M) t-1 ($M) Washington 1997 $35.70 $35.69 Redskins (67.5%) (67.4%) San Diego 1997 $37.96 $38.96 Chargers (70.5%) (72.3%) Tampa Bay 1998 $33.06 $35.46 Buccaneers (52.2%) (54.9%) Baltimore 1998 $35.68 $37.44 Ravens (83.1%) (87.2%) Oakland 1998 $51.41 $52.84 Raiders (97.3%) (100.0%) Tennessee 1999 $40.75 $45.11 Titans (73.3%) (81.1%) Buffalo 1999 $35.58 $35.58 Bills (87.0%) (87.0%) Cincinnati 2000 $37.77 $37.77 Bengals (67.2%) (67.2%) Denver 2001 $46.40 $46.40 Broncos (59.9%) (59.9%) Pittsburgh 2001 $40.76 $40.76 Steelers (65.7%) (65.7% New England 2002 $47.77 $47.77 Patriots (62.7%) (62.7%) Detroit 2002 $39.05 $39.05 Lions (77.7%) (77.7%) Seattle 2002 $44.21 $44.97 Seahawks (102.2%) (103.9%) Chicago 2003 $42.70 $51.42 Bears (65.7%) (79.1%) Philadelphia 2003 $46.19 $46.19 Eagles (72.2%) (72.2%) Green Bay 2003 $53.51 $50.73 Packers (98.3%) (93.3%) Average $41.78 $42.88 (75.1%) (77.0%) value for Value for value for Team t ($M) t+1 ($M) t+2 ($M) Washington $52.92 $62.07 $62.07 Redskins (100.0%) (117.3%) (117.3%) San Diego $53.87 $53.87 $53.87 Chargers (100.0%) (100.0%) (100.0%) Tampa Bay $64.58 $64.65 $67.49 Buccaneers (100.0%) (100.1%) (104.5%) Baltimore $42.93 $42.75 $42.75 Ravens (100.0%) (99.6%) (99.6%) Oakland $52.84 $51.68 $51.74 Raiders (100.0%) (97.8%) (97.9%) Tennessee $55.63 $59.33 $60.94 Titans (100.0%) (106.7%) (109.6%) Buffalo $40.89 $46.06 $46.06 Bills (100.0%) (112.6%) (112.6%) Cincinnati $56.21 $56.21 $47.31 Bengals (100.0%) (100.0%) (84.2%) Denver $77.41 $52.50 $57.28 Broncos (100.0%) (67.8%) (74.0%) Pittsburgh $62.03 $49.83 $54.55 Steelers (100.0%) (80.3%) (87.9%) New England $76.19 $75.33 $75.33 Patriots (100.0%) (98.9%) (98.9%) Detroit $50.23 $53.91 $56.63 Lions (100.0%) (107.3%) (112.7% Seattle $43.28 $43.06 $42.80 Seahawks (100.0%) (99.5%) (98.9%) Chicago $65.00 $65.56 Bears (100.0%) (100.9%) Philadelphia $64.00 $61.91 Eagles (100.0%) (96.7%) Green Bay $54.40 $54.40 Packers (100.0%) (100.0%) Average $57.03 $55.82 $55.29 (100.0%) (99.1%) (99.9%) Source: Rodney Fort, 2005b. See Note (9) for a explanation of figures.
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|Title Annotation:||National Football League|
|Author:||Baade, Robert A.; Matheson, Victor A.|
|Publication:||Public Finance and Management|
|Date:||Jun 22, 2006|
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