How the Super Bowl became a super boondoggle that fleeces taxpayers

By David Sirota , written on January 31, 2014

From The News Desk

The Super Bowl is different things to different people. To many, it is a cherished national holiday that provides a much-needed mid-winter excuse to host a Thanksgiving-like shindig with friends and family. To others like author Steve Almond, it is a hideous example of how American culture happily celebrate -- rather than deplores -- brutality and violence that results in paralysis, brain damage and suicide (and possibly at some point, on-field death). To still others, the thousands of reporters converging to cover the game prove that for all the laments by media organizations that they have no resources to cover news, they have plenty of resources to aggressively cover frivolities like a football game.

To me it is all these things all at once, but it is also more than that. In the midst of cuts to social programs, the Super Bowl is empirical evidence of how America eagerly prioritizes games over even the most basic human needs. That backwards value system is enabled by what I've previously called Selective Deficit Disorder. It is a pathology whereby public budget deficits are cited as a rationale to eviscerate the social safety net, and yet those deficits are selectively ignored when it comes time to spend money on anything (a subsidy, a procurement contract, a war, etc.) that gives taxpayer cash to politically powerful corporations.

As previously reported here at Pando, Silicon Valley is increasingly a beneficiary of Selective Deficit Disorder. At the state and municipal level, local governments plead poverty to justify slashing social services, all while handing out lucrative tax breaks for server farms and corporate headquarters. Likewise, the federal government gets in on the action by citing deficits to slash food stamps and unemployment, while throwing ever-more cash at the tech-sector's private intelligence industry.

But this is far more than just a tech-sector story, as this week so clearly proves. Indeed, in the span of just a few days, there was a damning report showing that states cutting worker pensions in the name of austerity are profligately spending on corporate handouts; there was a new farm bill that cuts food stamps in the name of deficit reduction yet preserves massive subsidies to politically connected agribusinesses; and now the same states slashing social spending in the name of fiscal responsibility are hosting an expensive taxpayer-subsidized football game.

Pro Sports: Your taxpayer dollars at work

No single industry exemplifies Selective Deficit Disorder like sports. Detroit tells one  microcosmic story. There, public officials are making a fiscal-responsibility argument in their push to slash the average municipal worker's $19,000-a-year pension. At the same time, those officials are reassuring private professional sports franchises that massive public subsidies for a new stadium will go forward as planned.

As The Atlantic's Gregg Easterbrook exhaustively documents, this political scheme which transfers wealth to multi-billion-dollar sports leagues has been replicated all over America. In the name of fiscal responsibility, politicians today demand cuts to public workers' pensions, education and basic government services. They then turn right around and throw cash at already-lucrative sports industries.

At the collegiate level, this means resources generated by ever-higher student fees at public universities being used to subsidize big-time NCAA sports and coaches' multi-million-dollar salaries. At the professional level, it means public resources that could be going into social services instead going to finance stadium construction and maintenance costs. It also means special breaks that both allow individual teams to reduce their tax bills and permit multi-billion-dollar leagues to pay no taxes at all. And this is all done, by the way, even though there is almost little proof that such giveaways provide a real macroeconomic benefit to local communities.

As the Brookings Institution reports in a study confirmed by other analyses:

A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.
The NFL Boondoggle

Out of all the sports enterprises benefiting from this pillage, none has more deftly exploited Selective Deficit Disorder than the National Football League.

During this era of budget austerity, Bloomberg News reports that pro football teams have raked in $18.5 billion in stadium subsidies, or more than $900 million a year over the last 20 years. And that's on top of all the other special tax breaks that allow the $9-billion-a-year league to avoid paying the taxes that other businesses (are supposed to) pay.

Each year, the Super Bowl is the ritualistic cash-burning orgy that celebrates these rip offs, and, in the process, puts Selective Deficit Disorder on display for all to see.

For example, as the federal government considers a new round of budget cuts, it -- and not the profitable NFL -- will be spending heavily on security for the game. If history is any guide, it will also probably spend money on celebratory spectacles.

At the local level, it's even worse for taxpayers, as evidenced by this year's game in the New York City region.

There, at the same time New York Gov. Andrew Cuomo (D) and his administration officials have refused to adequately fund schools and demanded government be "more efficient" by slashing public worker pay, they are not only pushing new corporate tax cuts and an estate tax cut for the super-rich, they are also spending millions of taxpayer dollars on Super Bowl revelry. That included a taxpayer-financed party for more than 3,500 members of the media. As Capital New York reported, that one gala saw the state "paying $100 a head from the $5 million Governor Cuomo secured in the state budget" for such festivities. That is on top of the additional security costs that New York taxpayers will be forced to finance.

On the other side of the Hudson River, it is even more offensive. As Gov. Chris Christie (R) has slashed the pensions of his state's workers and reduced education funding, he has already had his state cough up almost $18 million to subsidize Sunday's game. That is in addition to the $400 million the New York Times notes New Jersey taxpayers spent to improve the Meadowlands. It is also in addition to the special tax breaks New Jersey gave the NFL.

Just as they pretend stadium subsidies are reliable tools of economic stimulus, politicians insist that Super Bowl subsidies are investments that will generate far bigger returns for taxpayers. More specifically, they insist Super Bowls generate somewhere between $550 million and $600 million for host cities, even though, as the New York Times notes, there is no verifiable proof that such estimates are vaguely accurate. In fact, the evidence suggests the opposite. It suggests, in short, that just like stadium-subsidies often do not boost local economies, Super Bowls do not produce the promised return on investment, and certainly nothing close to a half billion dollars or more of revenue.

USA Today reports that "the nation's sports economists (say) the actual number is a fair bit lower. Like, maybe, zero." Economist Andrew Zimbalist says it is probably a bit higher than that, but in summing up the data from past Super Bowls, he concludes: "What is strikingly clear from this scholarly work is that what the NFL is putting out is just PR hype. The numbers have no relation to the actual effect."

In sum, there may be a short-term spending boost in a host city, but that doesn't produce anywhere near the revenues to cover for all the stadium subsidies and other public subsidies that the NFL typically requires of prospective host cities.

The Omerta of the sports-industrial complex 

Of course, sports' embodiment of Selective Deficit Disorder is rarely discussed in all the media noise around athletics. Why? Probably because so many media corporations are themselves financially tied to the larger Sports-Industrial Complex, and such ties instill a powerful omerta. That code of silence is only strengthened when, say, the governor of New York spends his taxpayers' hard-earned money to wine and dine 3,500 reporters. When that happens, reporters aren't going to be too eager to seriously scrutinize the spending decisions, much less contrast them with that governor's other budget cuts.

At the same time, though, the omerta has also existed outside the media bubble. America loves its sports and hates its politics, and you get the sense that many haven't wanted to honestly evaluate the unseemly connection between the two.

But, then, that may be changing. Polls are starting to show some real awareness of -- and opposition to -- how we prioritize sports over other human needs. Meanwhile, a few cities have recently seen grassroots left-right uprisings against stadium subsidies. It seems that with the economy struggling and inequality rising, the old corrupt politics that siphons more and more public cash into sports industries may be transforming from something society tolerated into a symbol of a much larger problem.

In all of its taxpayer-subsidized chintziness, gaudiness and America-fuck-yeah-ness, the Super Bowl is the most gratuitous of those symbols, one telling us to wake up and make a change.