Paying for some football.

Photographer: Luke Sharrett/Bloomberg

The NFL's Squeeze on Players and Taxpayers

Kavitha A. Davidson is a former Bloomberg View columnist.
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Pro sports owners have mastered the art of getting other people to pay for things, especially when it comes to the boondoggle that is stadium financing. Stadiums that are at least partially funded by the public almost never fulfill their promise to infuse money and jobs into the local economy. Teams and leagues enjoy most of the revenue.

NFL owners even tap their players to finance new stadiums. Bloomberg's Scott Soshnick reports that the league is in talks with the NFL Players’ Association to extend a provision in the collective bargaining agreement to help pay for a new stadium for Los Angeles, which hasn't had a team in two decades. The players could be on the hook for as much as $300 million for proposed arenas to be built in either Carson or Inglewood.

In 2011, the union agreed to lower the amount of annual revenue shared with the players and put some of that money into stadiums. The agreement sets aside 1.5 percent of revenue for the arenas -- dollars that would otherwise go to raising the league's cap on player salaries. The NFL's revenues are at about $12 billion, so the total for these stadium credits, as the contract calls them, would amount to $180 million per year.

The problem is that a construction boom has already exhausted the credits allotted until the agreement expires in 2020. So the NFL now has to go back to the players to ask for more money, which presumably would shrink the amount of revenue apportioned for players under the league's intricate salary-cap formula. According to Soshnick, the union sees such funding as a long-term investment that will generate even more stadium revenue, thereby expanding the salary cap and returning the benefit to players. But as Field of Schemes' Neil deMause puts it, higher salaries don't do players much good if they just give it back to the league to fund more arenas.

At least the players had a say in their role in stadium financing; taxpayers usually aren't so lucky. Back in April, the Carson city council approved a $1.65 billion plan for a stadium to house one or two teams, the transplanted San Diego Chargers and Oakland Raiders. That came shortly after the Inglewood city council approved a $1.86 billion proposal for an arena to lure the St. Louis Rams. Both passed without being put to a public vote.

All this demonstrates the lengths to which owners will go to get other people to foot the bill for their shiny new stadiums. An NFL team in L.A. is an all-around terrible idea, but at this point, it's not a matter of if -- it's a matter of when. It's a matter of which other city’s heart the league plans to break, and which will be exploited for the most concessions in exchange for keeping their team.

Keep in mind how the existing stadium credits got maxed out in the first place: with a construction boom in football arenas to maximize profit and pass on the cost. New arenas have grown more expensive while their lifespan shrinks. Teams like the Minnesota Vikings and Atlanta Falcons, whose current home is all of 23 years old, build billion-dollar stadiums by making empty threats to relocate to L.A. The well of public funding runs deep and the NFL still goes back and asks the players to spare some change.

Ideally, the money provided by players would help offset the cost to taxpayers and local municipalities. But that idea is nothing more than California dreamin'.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Kavitha A. Davidson at kdavidson19@bloomberg.net

To contact the editor responsible for this story:
Jonathan Landman at jlandman4@bloomberg.net