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We should be proud that the Dubs are self-financing the SF arena

Warriors ownership is self-financing its new arena, which turns out to be good for taxpayers. A recent study shows that taxpayers essentially paid billions of dollars since 2000 to subsidize other sports facilities around the country.

New Orleans Pelicans v Golden State Warriors
Warriors ownership living the #LightYears life.
Photo by Ezra Shaw/Getty Images

Sociopolitical issues are increasingly tied to sports and even individual players these days, be they concerns for player safety, civil rights infringements, or even national tax policy. It’s not as easy for fans to remain unaware of these issues today as it was in the past as social media creates greater access to players’ lives and insights. And teams risk alienating their fan bases if they don’t act responsibly when navigating these testy waters.

While Dub Nation has mixed feelings about the Warriors’ impending move from Oakland to San Francisco, a recent study from the Brookings Institution suggests that we should be proud of Golden State’s ownership for bearing (most of) the cost of the move. It’s yet another example of how they are #lightyears ahead of the competition. An examination of the study shows that more should be done to hold other ownership groups in sports accountable for doing the same.

Taxpayers subsidize most stadiums and arenas

In the Brookings study, Ted Gayer (disclosure: a former professor of the author) and his team estimated that $3.0-3.7 billion in federal tax revenue was not collected as a result of the way most stadiums and arenas built since the year 2000 were financed for the major sports leagues in the US. These taxes were not collected because municipalities (e.g., local governments) paid for the construction or rehab of sports facilities, financing it through a tax loophole that allows them to issue bonds that are exempt from federal tax.

So what does that mean? Think of it this way: if the projects had been financed by the owners (thus, without this tax break), the federal government would have collected $3 billion more to spend on things like roads, schools and medical research across the country. Or, if you prefer, citizens could have paid $3 billion less in taxes since the taxes on the stadium work would have generated that same $3 billion.

Taxpayers might ask themselves, “Would I rather have lower taxes, more tax money for schools, or a new stadium for the New York Yankees?” If you don’t live in New York or particularly care for the Yankees, you’d probably prefer either lower taxes or more money for schools. But the way our tax code is currently written, we have chosen to go with a stadium for the New York Yankees.

Gayer estimates that the Yankee Stadium received around $400-500 million in federal tax breaks, so congratulations to all the taxpayers out there who subsidized that stadium! Perhaps you’ll spend more money to visit it someday, where the poor Steinbrenners will undoubtedly thank you for your contributions and graciously tell you that they couldn’t have done it without you.

For those wondering if the loss of tax revenue in the construction of the facilities is compensated by a subsequent boost in the economy due to the operation of the stadiums and arenas, Gayer addresses that in two ways . First, he notes that multiple studies found no link between new stadiums and boosts to the economy. People who would have otherwise spent money on other forms of entertainment instead spend it on the sporting activity; the same amount of money gets spent.

Second, even if a local economy were to benefit from a new stadium, it doesn’t make sense to give up federal tax money for the sake of one local economy. If a city thinks that the intangible benefits (e.g., team spirit, sense of community) to its constituents are worth subsidizing a sports facility, it should feel welcome to do so with city or local tax revenue. But putting tax collections from citizens across the country on the line for something that benefits one particular region seems inappropriate.

What should be done?

Gayer notes that the best option in this situation is for Congress to put an end to the loophole that allows municipalities to use tax-exempt bonds for sports facilities. If that’s too hard, Congress should at the very least limit the extent to which these bonds can be used for such projects. So get on the horn with your representatives in Congress and tell them to get on it!

Aaaaaand ... it’s going to take a lot more than that. Congress is slow to act on anything, particularly if team owners are among their donors. The best shot we have is to create an uprising that pressures them into action. We need to create a movement!

One of the first things we’ll need is a spokesperson. We need a Colin Kaepernick for the Stop Owner Subsidization (SOS) effort to draw attention to the issue. Who should we recruit, Dub Nation?

In a nod to our Ranking the Warriors Assets series and his play during the Finals, perhaps we could recruit Anderson Varejao to refuse to play more than three minutes (representing the $3 billion) in any game until sports facilities are declared ineligible for stadium projects. Actually, for some of us that may create a disincentive for the SOS movement to succeed...

If we’re more serious about this thing, we could ask Klay Thompson to refuse to allow any more pictures of Rocco until we see some action in Congress. THAT will get some attention. But I’m not sure Dub Nation is ready for that sacrifice.

Or we could get Draymond Green to tattoo “SOS” on ... Wait, no, let’s just leave Draymond out of this.

It looks like Dub Nation will have to act as its own spokesperson, making an effort to share our concerns on the matter with our social media networks and speaking out when we hear of other facilities that will be financed using this tax loophole. If owners can’t find a way to make money in sports these days, they should sell their teams or arrange for the league to pay for a construction subsidy rather than force US citizens to bear the brunt of this tax burden. There’s too much money being made in sports to put stadium financing on the backs of taxpayers, plain and simple.

Well done, Bay Area

The Warriors organization is acting responsibly by self-financing the new arena. And for those wondering about the other franchises in the Bay, the Giants and 49ers self-financed AT&T Park and Levi’s Stadium, respectively. Props to the Bay! However, I wouldn’t bet on the Raiders self-financing their Las Vegas stadium someday...

Share your reactions and any ideas for spokespeople for the SOS movement in the comments!

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