NFL Stadium’s Construction Costs Hit Minnesota Taxpayers Hard

Published September 15, 2015

Construction of U.S. Bank Stadium in Minneapolis, the forthcoming new home stadium for the Minnesota Vikings, a football team in the National Football League, is costing more than originally projected.

Reports say cost overruns are due to disputes occurring behind closed doors between contractors and the Minnesota Sports Facilities Authority, a public agency established in 2012 to oversee the stadium’s construction.

About $500 million in taxpayer money is being used to construct the privately owned stadium, which is scheduled to open in mid-2016.

‘Superior Negotiating Position’

Robert Baade, a professor of economics and business at Lake Forest College, says sports teams strong-arm cities into paying to host them.

“When we think about why it is that the public sector is involved as much as it is [with the funding of] stadiums and mega sports events, it has a lot to do with the fact that those who own teams have systematically limited the supply of them,” Baade said. “So, in effect, they’ve maintained an excess demand for professional sports franchises. If there’s an excess demand for sports franchises, it really puts the teams in a superior negotiating position with the public sector when it comes time to build facilities or renovate facilities.”

Baade says the claim made by sports team owners that taxpayers benefit from sports subsidies is false.

“In the world of professional sports, it is always the case that those who benefit are not those who pay,” Baade said. “We’re talking about what amounts to those who have, in most cases, extraordinary financial privilege, reaching into the wallets of those who, in many cases, are struggling to make financial ends meet.”

Misdirection Plays

John Spry, an associate professor of finance at the University of Saint Thomas in Minnesota, says the state’s taxpayers are being kept in the dark about how their money is paying for the Vikings’ new stadium.

“One of the things that isn’t real clear to the public is how the Vikings stadium is being financed,” Spry said. “Nobody understands how it’s actually getting paid for, because when they passed the Vikings stadium initially, they were told that there would be no general fund money going to it.”

Spry says business owners, including the owners of sports teams, should invest their own money in capital improvements instead of sticking taxpayers with the risk and pocketing the rewards.

“It [should] be up to the owners to think, ‘Do I have enough business to justify expanding my bait and tackle store?'” Spry said. “What’s different about this is you have the revenues generated going to the owners of the sports teams, but the cost going to the taxpayers.”

Amelia Hamilton ([email protected]) writes from Traverse City, Michigan.

Internet Info:

Joseph Bast, “Sports Stadium Madness: Why It Started, How to Stop It,” The Heartland Institute: