Stadium Facts -- Taxpayers Deserve a Fair ShakeBack to indexZygi Wilf has several investment partners who own a share of the MN Vikings. Zygi and his brother Mark are the majority owners. Although it is not public information, they probably own about 60% of the team. Their cousin, Leonard Wilf, likely owns another 20%. Alan Landis, David Mandelbaum, and Reggie Fowler are the remaining investors in the team. Supposing they each own about 7%. Each of the 7% owners expect that they will get 7% of the profits the team makes. Leonard certainly expects his 20% share, and Zygi and his brother would likewise make sure that they get 60% of the profits. That's fair. If you invest 60%, you deserve 60% of the returns. Taxpayers deserve nothing less than other investors. But Mr. Wilf and many Minnesota politicians apparently think so. If an outside investor provides 67% of a new asset that significantly increases the Vikings earnings, that investor should receive 67% of the increased revenue that results from their investment. Instead, the Legislature and Governor are on the verge of agreeing to a bad business deal. State and local taxpayers would invest 67% in a new Vikings stadium, yet taxpayers collect: 0% of the money from naming rights, 0% of the revenues from Personal Seat Licenses 0% of the revenues from Club Seats 0% of the higher revenues received from luxury suites 0% of the additional revenues from higher ticket prices and concessions. -- Taxpayers get 0% of the profits in exchange for their 67% investment. In contrast, for their 33% contribution, Zygi Wilf and his partners collect 100% of all the new revenues! No wonder they are spending more than a million dollars this year in lobbying and PR to convince the legislature to agree to this deal. The Twins ballpark deal is no better. Here, state and local taxpayers would contribute between 75% and 79% of the total (depending on which legislative proposal is used.) Yet again, the taxpayers receive none of the additional revenues that result from new ballpark. Despite all the media hype and PR promoting the Hennepin County ballpark proposal, it is not a good deal for the public. Taxpayers would pay over three-fourths of the stadium costs, yet all of the revenue generated by the facility would go to the owner of the Minnesota Twins. What kind of business deal is this? If you invest 3/4ths of the money in an enterprise, you deserve 3/4ths of the profits. If taxpayers pay 67% of a stadium's costs, they deserve 67 percent of the proceeds generated by that stadium. Taxpayers deserve the same return that any other investor would demand, a proportional share of the profits. What kind of investor would provide capital for a business project if they knew they would get none of the profits? Why should taxpayers be treated differently than any private investor in the venture? Certainly the team owners deserve 100 percent of the revenue that they made from playing in the Metrodome. However, the net new revenues in the new stadium would be shared by all who invested in the facility, proportionally to the amount of their investment. For example, money from the sale of naming rights for the new stadium would be divided by the taxpayers and Mr. Wilf and his partners based on the investment each makes. Yes, many other communities have agreed to equally unfair proposals. But in a handful of communities, taxpayers objected, and owners built privately financed stadiums. If Minnesota team owners want public assistance, they should share profits from that new investment with taxpayers, so the public receives treatment equal to the other investors. There is a responsible alternative, one that could serve as a model for other communities around the nation. If Minnesota passes the Stadium Fair Funding Act, the Vikings and Twins will get new stadiums without shortchanging taxpayers. But instead of working to address those problems he suggests that it is the responsibility of taxpayers to hand over subsidies that enable billionaire owners to overpay millionaire players. John Marty |