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STEVE CHIOTAKIS: Professional football kicks off tonight as the New Orleans Saints host the Minnesota Vikings at the massive Superdome. Forty years ago bonds were sold to help build that stadium, which helped secure an NFL team. But some stadiums — like the old Giants Stadium at the New Jersey Meadowlands — have bonds to pay off, despite the fact they’ve been torn down. And that’s because of a shell game of sorts of publicly-financed bonds. Steven Malanga is a senior fellow at the Manhattan Institute. He’s with us live this morning from New York. Good morning.
STEVEN MALANGA: How are you?
CHIOTAKIS: I’m doing well. So what tactics do these team owners use to get stadiums publicly finances? Connect the dots for us.
MALANGA: Well, first of all, most professional leagues have a limited number of teams and so the teams can begin by threatening to leave — either by going to a completely another marketplace or just in the case of New Jersey, and the Giants and the Jets, leaving New York and going to another state. So that begins to put pressure on politicians right away. And also, to a certain extent, on taxpayers. Although, really, I think taxpayers and fans in general don’t really fall for that anymore. I think the real fault falls with politicians.
CHIOTAKIS: And what are the politicians doing to sort of muck things up?
MALANGA: Well, what they do is they use debt, public debt, to help build these stadiums. And, essentially, these are bonds that go out decades, if you will. And two things generally happen: either these stadiums don’t pay for themselves in many cases, which leaves taxpayers on the hook, or if the venue does happen to be successful — as in the case of the New Jersey Meadowlands — politicians can’t help milking these things. They take the revenues and they put them somewhere else and they don’t pay off the bonds. It’s kind of like the equivalent of not paying off your mortgage. And that eventually leaves taxpayers on the hook too. So it’s like…
CHIOTAKIS: Double jeopardy, right? Double jeopardy.
MALANGA: Yeah, exactly.
CHIOTAKIS: Exactly. And the Giants stadium still being paid off even though it’s a parking lot now?
MALANGA: That’s right.
CHIOTAKIS: Where do these stadiums — how do they get into trouble?
MALANGA: Well, the main reason they get into trouble is because they’re not quite the economic engines politicians claim they are. Politicians give you a lot of studies, which say this is going to do all this wonderful stuff, create all this economic activity, but most academic studies of these stadiums show that they only create low-wage service jobs, they don’t really transform an economy. So if you expect that’s what you’re going to get, you’re wrong.
CHIOTAKIS: Steven Malanga, a senior fellow at the Manhattan Institute, thanks.
MALANGA: All right.