The Miami Dolphins want some help paying for a $350 million renovation to Sun Life Stadium. In particular, they want voters to back a plan for Miami-Dade County to set aside $289 million from a hotel tax. The team would borrow against this money to finance the upgrade and pay the county back up to $120 million in 30 years. (You can learn further details here.) The problem is that Miami has been down this road before. In 2009, the county agreed to help the Miami Marlins pay for a new $650 million stadium that now serves as a very expensive home for a team nobody wants to see .
So Dolphins owner Stephen Ross is making the rounds to sell the renovation plan ahead of a May 14 referendum. “Well, first of all, the benefits of this—the public is the one that really benefits,” he told the Miami Herald on Friday. “As we disclosed in our financials, we don’t make a lot of money. In fact, we lose a lot of money.”
Perhaps the same could be said for the public in many such deals. Last year analysts at UBS released a report titled “Batter Up: Public Sector Support for Professional Sports Facilities.” It is worth quoting at length:
“Unfortunately, independent academic research studies consistently conclude that new stadiums and arenas have no measurable effect on the level of real income or employment in the metropolitan areas in which they are located. Feasibility studies for professional sports facilities often fail to account for the substitution effect. Individuals generally maintain a consistent level of entertainment spending so money spent on sporting events typically comes at the expense of cash spent in restaurants, on travel, and at movie theaters. … Despite consistent evidence that subsidies are counterproductive in the long run, the public sector remains intent on directing expenditures for this purpose.”
And the Dolphins are probably not as badly off as they would like Miami to believe. Setting aside that Forbes estimates Ross’s personal fortune to be $4.4 billion, the Dolphins released only a “one-page summary” of the team’s financial status to public officials. If sports ventures want to claim need, as they often do when seeking public help, they should release several years’ worth of statements. Until they do, a good rule of thumb is never to trust a sports owner who cries poverty.
(Update with input from Miami Dolphins)
Eric Jotkoff, a spokesperson for the Dolphins renovation plan, contacted me this morning to point out that the team made more than a “one page summary” available to the county. That summary is what the county released after having “qualified consultants” review “summary operational cash flow schedule covering several fiscal years,” according to a memo from Miami Mayor Carlos A. Gimenez. This is still not full disclosure, but it’s more than many teams do.