Public subsidies for billionaires

In a recent episode of The Simpsons, Monty Burns wins control over a professional basketball team and moves the franchise to Springfield. He then convinces the town to build him a new arena. On opening night, he tells the crowd: “Welcome to the American Dream: A billionaire using public funds to build a private playground for the rich and powerful.”

Sound familiar? If not here’s a quote from today’s Toronto Star:

Jim Balsillie will seek public funds to renovate Copps Coliseum if he scores an NHL team for Hamilton. The BlackBerry billionaire would foot the bill for initial upgrades, estimated at about $30 million, to get the arena ready for a team. But when it comes to a long term overhaul of the city-owned facility, which could cost upwards of $150 million, Balsillie would ask Hamilton to “work with the two upper tiers of government to seek infrastructure funding,” said his spokesperson Bill Walker.

Don’t get me wrong. I’m a huge hockey fan and would love to see an NHL franchise go to Hamilton. The NHL’s experiment in expansion to southern US cities, where it does not even snow in winter, has been a disaster, revealed by the ongoing recession.

A facility and team that will ultimately charge big bucks for anyone to attend a game should not be financed by taxpayers. It is a nice reminder that everytime the state spends money it is income in someone’s pocket. Most of the time, government spending is progressive, financing income transfers to those in need and providing good-paying jobs in the public sector, as a recent study by Hugh Mackenzie and Richard Shillington for the CCPA points out. But it is extremely regressive for government to foot the bill for (again, in the words of the Simpsons) “a decadent monument to excess” that subsidizes a billionaire owner, plus senior executives in corporations who will buy boxes (they get subsidized twice over by not having to pay tax on the gain of attending these games, with the companies being able to write off the expense against income) and the merely affluent who can afford to attend the games.

Don’t even get me started on the Olympics.

2 comments

  • Oh arenas are way bigger than the Olympics. Firstly, there is not a single skating arena that breaks even. The energy cost of freezing so much ice and then covering it with scalding hot water after the zamboni’s massive razor blade scrapes over everything, all adds up to a pretty big bill. If it weren’t for the public subsidy, many of these arenas would never exist. It seems like it would only be fair that the rink should be owned by the team and the profits and cost would balance out. But…

    Welcome the entertainment-athletics industrial complex. These folks are extremely good at building a fan base and getting people to come out to events and pour their emotions out, all while dishing out hundreds of dollars for sports jerseys. In terms of public consultation on whether to build a subsidized arena, the meetings are always packed with sports fans who are emphatic that people need access to these facilities. And you can imagine the money and talent lined up behind the brochures, the camera work, the acting and the marketing that comes from corporations that do this kind of thing for a living.

    Don’t forget the clustering of “protect our troops,” “built ram tough” and the “go team!” crowds, who in all cases are adamant that this is not political, while putting a democratic front on this sleazy corporate cash grab.

  • Thomas Bergbusch

    Hi All!

    I’m sorry I don’t have anything of value to say about North America’s sports plutocracy.

    However, on a hockey-related note, given the performances of Marc-André Fleury, Sydney Crosby, Pascal Dupuis and Philippe Boucher for the Penquins, I wonder if one of you progressive economists could approach the brilliant Marc Lavoie to get his take on performance differentials in the post-lockout National Hockey League. It seems to me that drafting patterns of NHL teams (or, more important, the composition of team rosters, since the two do not lign up, necessarily, for a variety of reasons, some to do with the NHL salary cap) suggest that the Style-of-Play Thesis has won the day. Aren’t there more francophones, and more talented/skilled hockey players in general, in the national hockey league since the end of clutching and grabbing? I don’t know if Mr. Lavoie has looked into this, but this suggests to me that discrimination, although far from non-existent in hockey, cannot therefore be held to have been responsible for the formerly imbalanced makeup of NHL teams.

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