February 01, 2012   |No Comments

SFC’s Frederick to Congress: Sports Becoming “Glorified Real Estate Scam”

Sports Fans Coalition Executive Director Brian Frederick told a House Judiciary subcommittee today that professional sports has become a “glorified real estate scam” because owners are able to manipulate the public into financing stadiums that provide little to no economic benefit. Frederick said Sports Fans Coalition supports a bill to end rental car taxes that are often used to pay for these sports stadiums.

“Professional sports in America has become a glorified real estate scam, where individual owners prey on fan loyalty in order to manipulate massive public subsidies toward private coffers using tools such as car rental excise taxes,” Frederick said. “These team owners play cities off one another, threatening to uproot teams from their fan bases and move them to a new city in order to get the public to approve hundreds of millions of dollars for new stadiums. Once the stadiums are built, owners raise ticket prices and black out the games if fans don’t buy tickets.”

Frederick was speaking to the House Judiciary Subcommittee on Courts, Commercial and Administrative Law regarding a bill called the “End Discriminatory State Taxes for Automobile Renters Act of 2011.” Joining Frederick in testifying were leaders of the National Consumers League and the Global Business Travel Association.

Frederick specifically pointed to Indianapolis’ Lucas Oil Stadium, where the Super Bowl is being played this weekend, as an example of how owners take advantage of cities using public subsidies. The public’s share of the $720 million was 92%, Frederick said, paid for by taxes on hotels, food and rental cars.

“Only one year after it opened, Lucas Oil Stadium was in danger of closing because its operating authority, the Capital Improvement Board, faced a $47.4 million operating deficit,” Frederick said. “[Indianapolis Colts owner Jim] Irsay and the Colts refused to help out, even though the team receives $3.5 million annually from non-Colts related events. But Irsay was willing to raise the cost of the cheapest Colts ticket after only one season in the new stadium by 42%.”

Eliminating rental car excise taxes “will help shift the responsibility back toward sports team owners to privately finance stadiums,” Frederick said.

You can read Frederick’s written testimony here.

Sports Fans Coalition is the largest nonprofit fan organization in the country. It was founded in 2009 by former staffers of the Clinton and Bush White Houses and fights for fans on public policy issues. In January, the Federal Communications Commission agreed to review its 36-year-old sports blackout rule after a petition from Sports Fans Coalition and other groups.

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