One might have hope that increased awareness of the scam that is public stadium financing would lead to fewer of those scams being perpetrated, but the practice of states and cities forking over hundreds of millions of dollars so sports teams can build new homes they don't need doesn't look like it will be ending any time soon. Instead, we just get increasingly more brazen and ludicrous justifications.
That's how we end up with the official release announcing that the Tennessee Titans have agreed to a new stadium construction deal beginning like this:
Today, Nashville and Davidson County Mayor John Cooper and the Tennessee Titans announced they have agreed to terms for a new enclosed stadium that would relieve a nearly $2 billion burden on Nashville taxpayers by voiding the current lease agreement.
It will save the people of Nashville $2 billion? My oh my! That sounds like the deal of a lifetime! How could anyone pass up such a lucrative investment opportunity?
The release goes on to explain that these incredible savings will fill the city's coffers because building a new stadium would spare Nashville from paying to upgrade the 23-year-old stadium that the Titans currently play in:
The lease for Nissan Stadium, signed in 1996, legally obligates Nashville to provide a "first-class" stadium until 2039. The Mayor's Office worked with Metro Council to hire Venue Solutions Group (VSG), an independent and nationally recognized public facility consulting firm, to assess the condition of Nissan Stadium and estimate Metro's financial obligation to the Titans. VSG estimates that renovating and maintaining Nissan Stadium would cost between $1.75 billion and $1.95 billion over the remaining 17 years of the current stadium lease. This liability would require general fund dollars that could otherwise support essential priorities like public schools and first responders.
The thing to know about this paragraph is that everything in it is completely made up. "First-class" is a vague and subjective description for the quality of a football stadium, not a list of specific renovation projects that anyone is contractually obligated to pay for. And the estimated $1.75B to $1.95B these unspecified renovations will cost? Also made up. Teams have been hiring consulting firms to pull fake renovation costs, and fake new-stadium benefits, out of their asses for decades now. None of this means anything.
Equally meaningless is the team's and the mayor's explanation for how a new stadium would be financed. The release claims that a new stadium can be built with "zero dollars" being taken out of the city's operating budget, but will require a $500 million one-time contribution from the state, and $760 million in bonds issued by the city's Metro Sports Authority. So how is Nashville supposed to raise $760 million? By adding a one-percent hotel/motel tax.
Putting aside the fact that it is not just tourists who use hotels and motels in Nashville, and that the money could be used for something that's not a new Titans stadium, we are once again dealing with completely imaginary numbers. Cities love to tell people that the up-front costs for building a new stadium will be recouped over time thanks to some new taxes, but there's no way to guarantee that those new taxes will actually produce the revenue needed to cover those costs. When there's a shortfall, as was the case with the Raiders' stadium deal in Vegas, the city remains on the hook for the money, and suddenly it becomes a lot harder to keep that "zero dollar" promise. (Nashville still has $62 million in unpaid bills on the current stadium.)
Of course there's no real way to know how rickety this specific plan is until it's put into action, but that's the point. A real sweetener for teams that enter into these financing grifts is the fact that it is always the taxpayers taking on the risk. The team's contribution to the construction costs is always backed up by guaranteed TV deals, ticket sales, and the ever-ballooning value of professional sports franchises. The city, on the other hand, has to agree to fork over a bunch of cash it thinks it can scrounge together at a later date. It's been this way forever; the only difference now is that you have guys like John Cooper trying to dress up the same old scam as a deal that can't be missed.
