June 25, 2011
In the ongoing fight over how to pay for a new Vikings stadium, local government officials have trotted out various plans, all attempting to shift the costs onto taxpayers. But now, a Libertarian candidate is proposing a different idea that could allow a stadium to be built without taxes. His proposal is an approach that’s already been proven to work elsewhere.
Minneapolis Mayor Rybak has proposed raising the sales tax yet again, an assortment of other taxes, and shifting some costs onto state taxpayers. St. Paul Mayor Coleman wants a new statewide beverage tax. Ramsey County is proposing bonds backed by a sales tax increase and is trying to thrust their Arden Hills plan onto voters. Even Governor Dayton is being lobbied by NFL Commissioner Roger Goodell for a stadium subsidy. But with homeowners still being foreclosed upon, many are having trouble affording their own mortgage payments let alone an even higher tax burden. And many remain unemployed. Unlike Democrats and Republicans, Libertarians believe that it’s wrong to force the poor, those facing financial hardship, and those who aren’t sports fans to support a professional football team.
|Tylor Slinger, candidate for St. Paul City Council|
New solutions are needed! Fortunately, Tylor Slinger, Libertarian candidate for St. Paul City Council, is putting a fresh idea on the table. In a proposal developed with LPMN party officials, Mr. Slinger would not seek any taxes for a stadium. Instead, only those willing to support the Minnesota Vikings would provide funding, while those who aren’t fans or who cannot afford it would be allowed to opt out. It’s a proposal based on the method successfully used by the Green Bay Packers.
Long before handing out “corporate welfare” was a gleam in a politician’s eye, sports teams didn’t lobby government to have taxpayers subsidize their expenses. Teams had to use other methods to raise funds. In 1923, facing dire financial straits, the Packers offered shares of stock to the public. Their supporters rose to the occasion, purchasing the shares and saving the team from bankruptcy. Those who chose to purchase stock gave the team the funds it needed and, in the process, became team owners. Further stock sales were held in 1935, 1950, and 1997 when the team needed additional funds. Today the team is owned by 112,158 shareholders, mostly in the Green Bay area. This approach has been a smashing success for the Packers, allowing them to remain viable and competitive despite being the smallest franchise in the NFL.
A similar approach could work for the Minnesota Vikings as well. Unfortunately, NFL rules now require teams to be owned by a single owner or small group of owners, a requirement from which the Packers have been grandfathered. Libertarians believe it’s time for that to change.
Under the proposal by Mr. Slinger:
- The Vikings organization would offer shares of stock to the public. Funds from a stock sale would cover the cost of building a new stadium, if the new shareholders agree. State residents should be given first priority at purchasing shares, to help ensure the Vikings remain in Minnesota. If this is not sufficient to raise the needed funds, the stock sale could be expanded to individuals outside the state. If this is still not sufficient, the stock sale might be opened up to venture capital firms or major investment firms. With cost projections for a new stadium at approximately $1 billion, if shares are issued at $200 each (the share price set by the Packers in their 1997 stock sale), the Vikings would need to sell 5 million shares to raise the necessary revenue. This is a large quantity but is certainly feasible; the Packers have 4.7 million shares outstanding.
- Funding for any new Vikings stadium would be 100% voluntary. Those who support the Vikings could purchase shares to help the team, while those who cannot afford it or who aren’t interested wouldn’t forced to participate via the tax system.
- The NFL should be pressured to repeal their single-owner requirement. Instead of seeking ways to raise taxes, local officials should be pushing the NFL to allow the Vikings and other teams to become shareholder-owned. Ultimately this would strengthen the NFL by rooting each team more firmly in their
communities, encouraging fan loyalty. It would also address an inequity in the league; the NFL now allows Packers fans the choice of stepping up to support their team when financial assistance is needed, while denying Vikings fans a chance of ever doing the same.
- The Vikings would be far more likely to remain in Minnesota. As owners, Vikings shareholders would gain a voting stake in major business decisions of the team. A stock sale would result in a team owned predominantly by Minnesotans who would almost certainly never allow the team to move out of state, just as a Packers team owned by the people of Wisconsin all but assures that they will remain in Green Bay. No longer could the Vikings hold their community and fans for ransom, threatening to move unless they get the government funding they demand.
“The most current proposal depends on an increased sales tax, which would be built on the backs of our state’s poorest individuals without their consent,” Mr. Slinger said, referring to the Arden Hills plan by Ramsey County that would put county taxpayers on the hook for $350 million. “In contrast, a stock sale or similar joint venture is a decentralized solution that would allow each citizen to contribute based on their financial situation, without burdening them for the next 30 years.”
Perhaps unfortunately, the Vikings aren’t truly the “Minnesota” Vikings. They are the Zygi Wilf Vikings. The team is Mr. Wilf’s private property. No one can rightfully force him to share his ownership any more than he can rightfully force taxpayers to bear his expenses. However, Mr. Wilf should be made aware that sharing ownership would produce considerable benefits for him. For one, he would likely receive the funds he needs without alienating his fans. Second, he would be popularly seen as a hero, a businessman who partnered with his fans, rather than as a villian, trying to cram new taxes down everyone’s throats. Third, any threat to move the team may ring hollow; in this sluggish economy, people in other states are unlikely to be receptive to a tax-funded stadium either. Fourth, shareholder-ownership would encourage tremendous fan loyalty, leading to increased merchandise sales that will benefit the Vikings’ bottom line. Fans throughout the state and even nationwide would be proud to show their enthusiastic support for what would truly become their team, the second team in the NFL to be owned by its fans!
Libertarians suggest that the method used by the Packers could be improved. In particular, rather than the Packers’ non-profit structure, the Vikings should be structured as for-profit. Those willing to contribute their personal funds should be able to realize a return on their investment when the team is profitable, and returning profits to shareholders as dividends will encourage Minnesotans to buy more shares of stock. Also, rather than voting for a Board of Directors slate nominated by management, as the Packers do, the shareholders should be able to easily nominate their own directors and vote in contested elections for their representatives on the board. This would ensure that directors remain beholden to the shareholders, not management.
Politicians often claim that government subsidies for a large business will help the economy. But raising taxes to benefit one business just hurts other businesses and individuals, who face a more difficult time meeting their own expenses because they’re forced to pay for someone else’s. Many politicians also claim that government funding can remove uncertainty and guarantee that a business remains in the area. However, in the Kelo vs New London case, a city used “eminent domain” to seize private homes so that Pfizer Pharmaceutical would build a large facility, promising to boost the local economy. But Pfizer was unable to obtain financing and decided to depart the city anyway, leaving people out of their homes, city officials holding the vacant land, and taxpayers footing the tremendous costs.
Libertarians understand that government intervention on behalf of businesses doesn’t work, nor is it ethical to favor a system of “privatizing profits and socializing costs”. Instead, Libertarians support a genuinely free marketplace that is 100% voluntary. Only those willing to support the Vikings or a new stadium should participate.
While many Minnesotans already oppose a stadium tax, few understand how major projects could be handled without government intervention. The LPMN is pleased to promote Mr. Slinger’s proposal as an example of a genuine free-market solution, relying on freewill rather than force.
Concerned about the relentless expansion of government control and the erosion of individual liberty? Consider joining and becoming active in the Libertarian Party of Minnesota. Libertarians stand in support of liberty on all issues, all the time. Libertarianism is a philosophical and political movement promoting individual freedom, voluntary interaction, genuine free markets, and peace.