Spite Is Behind Motivation To Block Super Bowl

Mercedes Benz Stadium In  May 2015
Mercedes Benz Stadium In May 2015
This week’s Courier Herald column:

During the process to approve partial taxpayer financing of Atlanta’s new Mercedes Benz stadium, I was perhaps one of the most frequent and outspoken of the critics. Atlanta had and has many infrastructure needs. The decision to tie up a dedicated revenue stream for three decades in order to replace a 20-year-old Georgia Dome didn’t seem to be the highest priority.

I lost the battle. And I moved on. Others, apparently, have not.

One of the benefits of building a new stadium is that favorable consideration is given to that city to host a Super Bowl. Atlanta is now in the running to host “the big game” in either 2019 or 2020. The bid package for review includes a requirement that sales taxes on the ticket sales to the game be waived. This would require legislation to be approved by the Georgia General Assembly this year. This is also giving critics another opportunity to resume fighting lost battles.

The argument of the critics is standard fare for populists, which is the message that is selling this political cycle. “No more giveaways to the billionaire owners and to the NFL”. “Let the NFL pay the sales tax if they want to come here so badly.” The problem with populism is that it sells to people that usually think someone is taking something from them. When sold, the net result is that it usually costs the people who bought this message some money.

Let’s start with very simple math. The sales tax on tickets would be roughly $10 Million which would be waived under the terms of the NFL’s bid package. The state’s portion of this is $5 Million, with the balance going to Fulton County, The City of Atlanta, and MARTA. Every city that is competing with Atlanta already waives their sales taxes for events such as this by law. Georgia and Atlanta do not, putting us at a disadvantage and likely keeping the game out of Atlanta.

If we don’t waive this tax, the NFL is holding the cards and will likely choose one of the other cities like Miami, Tampa, or New Orleans – all who have this exemption Georgia is seeking already in place. That’s just how markets work. The NFL has the power of the decision, and they will likely keep it on their terms.

So the choice is this: If the state holds firm, the state gets $0 in sales tax, and we get no Super Bowl. If we waive the sales taxes only on ticket sales, then the state and local governments get the sales taxes on all the increased sales that surrounds the Super Bowl. This includes not only the merchandise and concessions in the game, but all of the increased restaurant meals, rental cars, hotel stays, and other expenses the couple of hundred thousand tourists and business folk the game brings in over that weekend.

Economic impacts for recent games range from $700 Million on the high side (Arizona) to about $250 Million on the low end (Dallas, with an ice event), but those aren’t the numbers that matter if you’re a purist standing on principle. The numbers that matter are this:

If Atlanta is chosen to host a Super Bowl, the net sales tax increase is projected to be $30 Million. If we don’t waive the ticket fee, we get nothing other than a slow seasonal weekend in February that doesn’t usually draw conventions, fill hotels, or draw area residents into shops, bars, and restaurants.

The investment of $5 Million in waived state sales tax revenue would net the state $15 million in sales tax alone. That doesn’t count any additional hotel taxes, rental car taxes, or income taxes that would also be raised. The state and local coffers would be unambiguously better off.

Will many of Atlanta’s large corporations see a benefit? Sure. But where is the roughly $400 Million of economic impact going to be felt? By bartenders, waiters, restauranteurs, Uber drivers, and the other people who would have an exceptionally good weekend and pocket some extra cash on what would otherwise likely be a cold and quiet few nights.

Legislators have a choice. They may either approve a standard convention waiver that should apply to all large events and are customary to support a convention industry – and in doing so increase the wallets of not only the state and local treasuries but of everyday Georgians alike. Or, they can listen to those that still want to spite a local billionaire in order to win a battle in a war that has already been lost. A battle where the real casualties would not be the net worth of Arthur Blank, but would instead be a loss of incremental income to the state, and to the wallets of many who make a working class living in Atlanta’s hospitality industry.


Charlie Harper is the Executive Director of PolicyBEST, a public policy think tank focused on issues of Business & Economic Development, Education, Science & Medicine, and Transportation. He’s also the publisher of GeorgiaPol.com, a website dedicated to State & Local politics of Georgia.

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Saltycracker
Saltycracker

The cities bidding should jointly appeal to the NFL to drop that provision. Tickets will be resold to over $5k, a beer yesterday was $15….. $1o million is chump change in the big picture and will make no decision change for those participating.

Throw the local communities that are laying out big bucks plus to be attractive a damn bone.

Raleigh
Raleigh

Replacing a 20 year old stadium because the NFL (or pick one NBA, NL, etc.) said so is crony capitalism at its worst but yes we have lost that battle. The next hoop that they want us to jump through is to give up tax revenue on ticket sales. Now we will (I don’t think it will be stopped) surrender and give away 5 dollars to make the 15. Unfortunately it makes since to do so but I don’t believe Mr. Roger Goodell and the NFL will be satisfied with those taxpayer giveaways so what’s next? How much more? We… Read more »

Saltycracker
Saltycracker

Local alcohol and corn products (cakes, nachos, hush puppies, moonshine) taxes of 25% during super bowl week ?

Raleigh
Raleigh

Stadium concession tax. I like it Salty.

bethebalance
bethebalance

For the incremental decision to waive the sales tax for a Super Bowl, this is fair. But, the decision to have taxpayers fund part of the broader stadium construction should always be fair game to argue spending priorities. To my memory, research on the economic impacts of stadiums have inconsistent results, but so long as the economic impact arguments try to gauge 20 years of economic impacts, I predict there will be 20 years of argument.

Raleigh
Raleigh

Indeed we do wave property tax with mixed results. One office furniture manufacture in Cherokee County opened a huge facility using those incentives and about the time the incentives were about to expire they moved on elsewhere. Recently Caterpillar was a recipient and just a few weeks ago they announced they were closing an older plant and moving it somewhere else. The new facility is still ok for the time being. There are several examples of this business practice all over Georgia. Will we “recoup” all of the ticket tax revenue? No not likely but can’t we try lose a… Read more »

Ellynn
Ellynn

Do a little Google research – Brown County, Wisconsin is an easy way to compare sales tax revenue for a NFL post season game. Nothing happens is Brown county during an average January weekend. No conventions, no major shows – NOTHING. Then look at the sales tax revenue for any weekend Green Bay has a home field playoff game. Not only does it effect Brown County but any county close by. My own hometown is 3 county lines and 67.8 miles from the stadium, but on the interstate. Trying to find a table at any restaurant 5 minutes from my… Read more »

gcp
gcp

Always thought economic benefit of Super Bowl is overblown and we never hear the cost to the host city. Atlanta would benefit by trying to get a few more high profile college games. We already got the Chick-fil-a Bowl, SEC Championship Game but why not a few more college games. As far as I know college games don’t require a tax waiver.

Pete Gibbons
Pete Gibbons

Revenues with Super Bowl $0 in ticket sales tax, $30 million in state sales tax through other means. $100+ million dollars spent in and around Atlanta. Several millions of dollars in free advertising for Atlanta and her businesses.

Revenues without Super Bowl. $0, $0. $0. $0. $0. $0

Saltycracker
Saltycracker

Something is better than nothing is always a shady argument. Those that demand it or roll with it are suspect. The NFL does not need to grab this bully pulpit.

Ellynn
Ellynn

The NFL already has the pulpit… They have the entire Lord’s Day and then some. The NFL both technically and literally owns the ball. You don’t play by their rules they can take their ball elsewhere. They don’t need Atlanta to have a Super Bowl.

Saltycracker
Saltycracker

Correct but the cities need not cower in the corners but jointly hold a news conference asking easement, The NFL might not like the press. But I really doubt city leaders would mess with these billionaires, easier to let the chumps loose out. So we’ve had enough fun on this.

Will Durant
Will Durant

Chump change compared to the half-billion in tax credits given out by Georgia last year to the film industry.

MikeSilver
MikeSilver

If the super bowl is such a boon to Atlanta, why doesn’t Atlanta reimburse the state for the waived sale taxes?

I’m skeptical that Superbowl is a net positive for the economy after all of the give-me’s are extorted by the NFL.

Benevolus
Benevolus

Me too. Extra police is costly. And we freak out when a storm is two states away, can you imagine the standby costs to hopefully avoid icy road conditions for about two weeks?