Oakland, California Lawmakers Offer Taxpayer Money to Sports Team Owners

Published January 27, 2017

Oakland, California lawmakers are hoping to talk the National Football League’s (NFL) Oakland Raiders out of plans to move to Las Vegas, offering a taxpayer-subsidized financing deal.

In December 2016, lawmakers on the Oakland City Council and Alameda County Board of Supervisors agreed to offer the team’s owners $200 million in taxpayer funds and $150 million in currently held public property for a new stadium. The proposed Oakland deal was prompted by Nevada lawmakers’ offer of a $750 million taxpayer-financed subsidy agreement in October 2016 as part of their bid to persuade the team to move to Las Vegas.

Despite team owners’ announcement in January 2017 of official plans to move to Las Vegas, a Bay Area investment group, led by former NFL player Ronnie Lott, and area lawmakers are still attempting to convince the Raiders to stay in Oakland.

‘Big Drawbacks’

Craig Eyermann, a research fellow at the Independent Institute, says giving taxpayer money to wealthy sports team owners is a losing deal for cities and states.

“There are big drawbacks to the communities where the government gave into the demands of professional sports team owners to build them stadiums with taxpayer dollars,” Eyermann said. “Building the stadium provides no guarantees that the team won’t still depart for other cities where the owner believes they might make more money as soon as the contracts they have with the city might let them. The taxpayers are then on the hook for finishing paying off a stadium that has no team to play in it. Just look at the story of the St. Louis Rams, who are now the Los Angeles Rams.”

It’s Okay to Say ‘No’

Eyermann says it’s all right for lawmakers to reject team owners’ demands for corporate welfare.

“There are no meaningful drawbacks to saying ‘no,'” Eyermann said. “Cities that have said ‘no’ to financing stadiums for professional teams tend to be much more financially sound than the cities that have gone along with the team owners, where they put the land that would otherwise have been used for the stadium to other productive uses that provide real benefits to the community, such as new housing developments.”

Letting Go and Moving On

Letting the Raiders move to Las Vegas might be a good move for Oakland taxpayers, says David Surdam, a professor of economics at the University of Northern Iowa.

“If you compared the return on $350 million for other projects in Oakland, it is probably dubious that the stadium is the best use of the funds,” Surdam says. “The Raiders’ [annual] revenue in Oakland was $301 million, or less than one-third of one-percent of the county’s [gross domestic product]. If the Raiders were to arrive [in Las Vegas] and garner $450 million, much of that would simply displace other entertainment venues’ revenues.”