Newspaper article

Vikings vs. NWA: Does the NFL Really Deserve the Largest Subsidy in Minnesota History?

Newspaper article

Vikings vs. NWA: Does the NFL Really Deserve the Largest Subsidy in Minnesota History?

Article excerpt

Many Minnesotans may know that the subsidy being considered for the Vikings is around $700 million (actually closer to a cool billion by the time it's fully financed). However, I'll wager that few people realize that this would actually be the largest public subsidy of a private company in the history of the state. Do the Vikings really deserve the largest subsidy in our state's history?

Typically large public subsidies for companies are justified with compelling economic arguments. The largest public subsidy in Minnesota history thus far was the Northwest Airlines subsidy back in the mid 1990s. The NWA subsidy amounted to around $600 million: $330 million from the state, and $250 million from the Metropolitan Airport Commission. In 1992, NWA employed around 11,000 people in the state, was promising to create another 1,000 permanent jobs. It was teetering on brink of bankruptcy, which would have put thousands of Minnesotans out of work.

With NWA you had several compelling reasons for public subsidies. NWA was (and Delta remains) the largest tenant at the Minneapolis/ St. Paul airport; its failure would have damaged a regional asset. Northwest's employees, with an average salary of $40,000 a year, bought a lot of cars, groceries, houses, etc. You get a huge multiplier effect to the economy with that many people. And NWA was promising to create 1,000 new jobs (in addition to temporary construction jobs) . Things didn't quite work out the way it was planned, but NWA did eventually create another 600 or so jobs.

What about the Vikings? The Vikings directly employ fewer than 130 people, only a handful of which work year-round, and 53 of whom are athletes. Beyond temporary construction jobs the Vikings promise no new jobs or economic expansion whatsoever, nor can we expect any indirect economic growth or expansion. What about the Dome, you say? The Metrodome employs 19 full-time workers and there's no reason to assume more people will work at the new stadium. You get almost no multiplier effect at all with an NFL franchise because you have so few employees, and so much of the revenue is not recirculated locally.

Second largest nonsport public subsidy: MOA

The second largest nonsport public subsidy was for the Mall of America, which got around $300 million in state and local aid. The MOA created around 12,000 permanent jobs (in addition to construction jobs), and 2.5 million additional square feet of retail space. The Vikings stadium? The new stadium will simply replace the old one and is not that much larger.

Aside from the small number of jobs and minimal economic impact, there are a number of unique characteristics that make NFL franchises particularly bad candidates for public subsidies. …

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