Congressional Republicans have drafted a bill that would put an end to the sale of municipal bonds; used to finance the development of professional sports stadiums and privately funded infrastructure projects (i.e. toll roads, airports). Should the legislation pass, the cost for teams to build new stadiums will increase, as municipal securities carry lower interest rates. The proposed bill, which also includes a provision that would eliminate tax breaks for cities and states that borrow money to build stadiums, is part of a larger tax overhaul plan that would increase government revenues by $39 billion over the next 10 years.
Howie Long-Short: There will be resistance to the bill as proposed, as President Trump’s $1 trillion public infrastructure plan, which certainly has its advocates, requires private investments. However, any changes to the legislation would be unlikely to benefit billionaire sports franchise owners. There is momentum on both sides of the political spectrum to end public subsidies for stadiums, with tax exempt financing on sports facilities costing the federal government $3.7 billion in revenue since 2000. The NFL argues that new stadium development is an economic driver in local communities, but 86% of economists say government subsidies are likely to cost the taxpayers more than any economic benefits realized from the finished facility. Here’s to hoping the we’ve seen the last of public spending on facilities for privately owned businesses.
Fan Marino: While professional sports franchise owners threaten to move their teams when they fail to receive public funding for a new stadium or arena, Amazon (AMZN) can get a “world-class sports and entertainment stadium” built, at no expense to them, just by showing up. Sterling Bay, the Chicago developer on the proposed Lincoln Yards site, has sweetened Chicago’s bid for HQ2 by offering to build the internet giant a stadium on campus. I’m not sure that’s going to seal the deal considering Jeff Bezos doesn’t own a professional sports franchise; but with an estimated net worth north of $93 billion, he could buy every NFL team and still have $13 billion in the bank.
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