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Commissioner Testifies on Stadium Legislation
Proposed SenateBill
Commissioner Paul Tagliabue recently appeared before the United States
Senate Judiciary Committee to testify in opposition to the proposed Senate
Bill 952. Following are excerpts from his testimony.
The core element of S. 952 is its proposed
requirement that each NFL club and each club from Major League
Baseball–alone among professional sports teams–contribute 10 percent of its
national television revenues each year to a fund that would finance 50
percent of the cost of any new or renovated stadium. Indeed, the bill would
impose such a requirement retroactively to all stadium projects that had not
been completed on the day that the bill was introduced.
We strongly oppose this aspect of S. 952.
These provisions are unnecessary and would have significant negative,
unintended effects. They unfairly ignore the very substantial contributions
that NFL clubs today make toward stadium construction. They would improperly
interfere with state and local decision making on sports facilities. And by
decreasing the amount of equally shared revenue received by each NFL team,
they would threaten lower revenue clubs. Finally, if enacted into law, these
provisions would risk undoing what is currently the most successful labor
partnership in professional sports.
Needless to say, it is both prudent and
common for soundly managed businesses to use increased current
revenues–which may or may not be recurring over the long term–to invest in
new facilities that will help to secure the business’s success for the long
term. The NFL and its clubs, together with the NFL Players Association, have
been doing just that with respect to the investment of current revenues into
new stadiums.
We have been working in numerous
communities with state and local governments and business leaders to resolve
stadium issues on a win-win basis. Specifically, the league and its teams,
together with the NFLPA, have implemented programs for league-wide financial
support to individual clubs seeking to construct new stadiums or to make
major improvements in existing stadiums. In this decade alone, NFL club and
league representatives have worked with state, county, and city governments
in 17 different states on 23 successful projects for the construction,
renovation, or improvement of stadiums used principally by NFL teams. Each
of these projects involved, in one measure or another, public- and
private-sector cost sharing and financing partnerships.
These 23 successful projects involve not
only a wide range of types of stadiums, but also a wide variety of
arrangements for allocating stadium and related infrastructure costs among
public and private parties. Each tailored to the specific needs of the
involved community, they range from the largely privately financed
Washington Redskins’ stadium in Prince George’s County, Maryland, and the
Carolina Panthers’ stadium in Charlotte, North Carolina, to the largely
publicly financed, multipurpose domed facilities used by the Atlanta Falcons
and the St. Louis Rams. And they include new or renovated stadiums in
communities as diverse as Denver, Detroit, Jacksonville, Nashville, New
York, Oakland, Pittsburgh, Seattle, Tampa, and elsewhere that involve
public-private-sector sharing of construction and financing costs.
The success of these efforts and the
diversity of cost sharing and financing arrangements involved in these
projects demonstrate why the rigid stadium financing features of S. 952
would not serve any necessary purpose and should not be enacted.
Second, by forcing all NFL clubs annually
to contribute 10 percent of their equally shared national television
revenues to a stadium fund, S. 952 would seriously disadvantage the
lower-revenue clubs that already are struggling to make their revenues meet
their expenses. The bill would, in short, exacerbate existing pressures on
teams whose revenues in 1998 were anywhere from $10 to $20 million below the
league-wide average; these clubs, which would experience no corresponding
decrease in their fixed operating costs, depend on equally shared revenues
to remain competitive. Far from promoting stability and competitive balance,
this bill would therefore sacrifice the interests of the weaker communities
and undermine the NFL’s longstanding and successful revenue-sharing
policies.
In contrast to S. 952, the league’s program
for contributing financial assistance to individual teams for stadium
construction directly ties the largest portion of the contributed assistance
to revenues generated in the new stadium itself. Thus, the focus of the
current league program has been to use revenues that are not equally shared
as a source of private funding, and to avoid undermining the effectiveness
of the league’s television revenue-sharing arrangements.
Third, the bill would impose a uniform
national standard in derogation of local public decisions about how to use
community resources. In our efforts with state and local authorities to
ensure win-win solutions to the problem of obsolete stadium facilities,
stadium projects have received the most searching evaluations and have often
been the subject of public referenda. Community leaders, the public, and
teams have acted by recognizing that the benefits and burdens of stadium
construction are properly shared. We have thus developed public-private
partnerships that fairly apportion the costs of stadium-related projects and
that distribute the benefits of those projects throughout the community. In
each of these cases, city and state officials made exactly the kind of
decision that they were elected to make–how to allocate public resources.
There is no reason for Congress to step in and second-guess either the
decisions themselves or the ability of state and local officials to make
them. Fourth, S.
952 would seriously threaten the league’s collective bargaining agreement.
Our current labor agreement is based on a sharing of revenues, including
television revenues, between clubs and players, and required spending in
certain amounts. This collectively bargained arrangement has created some
significant economic challenges for NFL teams, which we have worked hard to
address. But it has largely worked for both the clubs and the players and
has been extended on two occasions. As a result, the NFL is the only major
sports league not to have a strike or lockout during the 1990s. If key
premises of this collective bargaining agreement are negated, as S. 952
would do, this carefully negotiated economic balance will be upset, and
labor strife will be much more likely in the future.
The players recognize that they benefit
from new and improved stadium facilities and the union has worked with us in
a constructive way to assist in funding individual projects. I am confident
that we can continue successfully to negotiate such arrangements in the
future. But those arrangements should be reached through negotiation between
the parties and within the framework of the overall collective bargaining
relationship.
In short, we believe that the stadium
financing provisions of S. 952 are unnecessary and that they would have
serious and negative consequences for local communities, for state and local
governments, for sports fans, and for sports teams themselves. |