A pretty innocuous piece in U-T San Diego on Saturday got me fired up.
“DeMaio, Filner oppose public funds for a new stadium,” is the headline.
In it, mayoral candidates Bob Filner and Carl DeMaio swear off public funding for a new Chargers stadium and the Chargers tactfully try to scold them for it.
It’s not what the candidates for mayor are saying in the piece that got me. It’s what they’re not saying.
Let’s take a look at five things they’re not telling you.
I. That they’re calling the Chargers’ bluff: Both candidates have determined that there is no public appetite for a big taxpayer investment in a new stadium. I don’t have any polling, but it makes sense. Even diehard Charger fans don’t seem all that excited about plowing hundreds of millions of public dollars into a stadium while roads and neighborhoods crumble.
At the same time, the team says that it needs a new stadium and it reminds us that, every year, it has the option to leave.
There’s currently no precedent for building an NFL stadium without public funding.
That means that telling the voters you are against public funding for a stadium is, to the Chargers, equivalent to telling the team to leave or shut up about it.
The two brash and outspoken candidates, however, are not willing to say that outright.
II. That this is a change for DeMaio: Not long ago, DeMaio, the staunch fiscal conservative, had one of the most liberal positions on public funding for a stadium. The city already loses $12 million or more every year maintaining Qualcomm Stadium for the Chargers. DeMaio was one — of many — who believed you could package that annual loss and turn it into a subsidy for a new stadium.
But at the last NBC televised debate, and here in the U-T, he’s taken a much more direct stance: No city taxpayer dollars for a new stadium.
“I will not allow for a public subsidy for a new stadium. I do not believe it is necessary,” he said at the NBC debate.
If anything, the city’s financial health has improved since he had a more open view of a subsidy. So what changed? He’s not saying.
III. That no alternative financing model exists: Both candidates seem to believe that it might be possible to build a stadium without public subsidies.
DeMaio is being more proactive about this, as he pushes a task force to find this public-private unicorn.
But his task force will find the same thing I did: Across the country, NFL stadiums are built according to a simple formula: An owner hints at, or threatens to leave. Fans clamor. Mayors capitulate. A tax increase, or bunch of them, is passed. A new stadium rises. The owner’s equity in the team skyrockets.
Chargers special counsel Mark Fabiani regularly notes now (and did again in the U-T piece) that the average public subsidy for an NFL stadium makes up 65 percent of its cost.
Note the important feature there: A tax increase is passed.
Most other cities can pass tax increases much more easily to handle that. For instance, in conservative Texas, a city needs only get 50 percent of voters, plus one, to get a tax increase passed for a stadium. But in California, you need 66.7 percent of the vote. It’s a much higher hurdle.
This is why we’re trying to be so clever about how to finance new stadiums in San Diego and Los Angeles. The way most other cities do it is not available to us.
The candidates don’t seem to want to embrace this reality. It’d be fine if they were painting a different picture. But simply saying you can build a stadium without a public subsidy right now is no better than saying you have a magic potion that cures baldness but don’t know what’s actually in the potion.
IV. Filner’s stance obligates him to talk about big changes in cities’ relationships to the NFL: When Bob Filner approached this discussion, he chose an innovative route. He turned the tables on the Chargers and owner Dean Spanos.
In other words, the Chargers want to force the city to make a decision: Invest in our football team or lose your football team.
Filner flipped it around, very cleverly, and said, essentially: OK, we’ll invest in the team if you give us equity ownership in it. It’s smart. It forces the Chargers to demand a handout instead. Do investors just hand their capital out? Only to nonprofits.
Unfortunately, no matter how attractive getting equity in the team would make the investment, the NFL doesn’t allow cities or normal people to own parts of its teams.
So Filner’s idea has evolved into a kind of revenue-sharing vision. City builds a stadium, somehow gets money back.
“What is the city getting back? If I’m going to invest a dollar and get back 10, yeah, I’m going to do it. I’m not going to give them a dollar,” he told the U-T.
Sounds great, but he’s not even trying to grapple with how hard this would be to pull off. He’d have to convince his buddies in Congress, for example, to push the NFL to stop excluding the public from owning shares of the teams lest they lose anti-trust benefits. Or he’d have to negotiate an unprecedented deal that would open the NFL’s books and return the city a profit.
If he’s not thinking along those lines, then he’s just spouting off.
Will he at least hint at how he can pull such a feat off?
V. That a stadium is a luxury. Buy it if you want it. At the end of the day, a stadium and an NFL team are luxuries for a metropolis. The way the game is rigged, you have to pay to enjoy the luxury (and even if you pay, they’ll black out the games sometimes).
I’m giving up hope that the NFL will ever stop depending on government and raise capital for their facilities the way capitalists do: by selling shares.
Let’s leave it on an optimistic note, though.
Perhaps California will be the NFL’s wake-up call. Maybe it will realize it can’t build stadiums here because the broke cities just can’t hand them fat checks anymore.
And maybe that will force the NFL to consider some big reforms that give cities better deals. And then, maybe, that will encourage other cities to demand better deals.
The fact is, the rules in this game need to change.
They won’t, though, as long as we don’t talk about them.
I’m Scott Lewis, the CEO of Voice of San Diego. Please contact me if you’d like at firstname.lastname@example.org or 619.325.0527 and follow me on Twitter (it’s a blast!):
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