Vikings Owner: Lets fix this recession with a new stadium!

As you are probably very well aware, the economy is in a recession.  All over the nation, people are looking for ways to cut costs and generate new revenue streams.  One of the more unlikely ways to stimulate the economy comes by way of Minnesota Vikings owner Zygi Wilf.  His idea? “If you build it, jobs will come.”  Build what? A new football stadium, of course! More info by way of the Star Tribune,

The project: A $954 million, state-of-the-art stadium for his football team in downtown Minneapolis — to be constructed using more than $635 million in public money.

Wilf, who would not comment for this article, is proposing to pay about a third, or $318 million, of the cost of the $954 million project, Bagley said. The rest would come from the state and a yet-to-be-determined local government partner, Bagley said. “That’s the market rate,” said Bagley, referring to the public-private split the Vikings envision.

This is the first time the team has presented its plan as a public works project, pinning much of its hopes on the trickle-down effect that the federal government’s upcoming stimulus package could have in Minnesota and the nation.

With a struggling economy, its interesting that the Vikings are placing their hopes in 1. the government giving Minnesota a large enough stimulus package to help fund the stadium after taking care of more pressing matters, and 2. that politicians will buy into the “Vikings as a public good, creating more jobs” argument (which they aren’t).  For all of you budding economists, The Sports Economist reviews the Vikings, as a “public good”,

As is well-known in economics, a public good is something that is non-rival in consumption (my consuming it does not decrease the amount that someone else can consume) and that is non-excludible (the producer can’t keep someone from consuming the good). Yes, there may be an essence of “publicness” in that there are some things that are non-rival – a spirit of community, for instance – generated by the presence of the Vikings in Minnesota that is impossible for them to capture.

But the Vikings are not excludible: you can be kept out of a stadium and the league can blackout contests from being broadcast. Because the Vikes are excludible and, to some extent, non-rival, the Vikes are not a public asset and are more like a club good than a public asset.

So, the Vikings technically aren’t a public good to begin with…more importantly though, how effective is a new stadium at boosting the economy?  The jobs created by the creation of a new stadium (typically concession stand workers, ticket takers, janitorial, etc.)…couldn’t you duplicate that effect by opening a bunch of fast food chains at a lower cost?   And what about the people who work at the current stadium, wouldn’t they take some of the jobs in the new stadium, based on previous work experience?  And sure, you have the construction work, but again, why not take that public stimulus money and actually use it on a good that benefits the entire populous, as opposed to a football stadium?

Obviously, Zygi Wilf wants a new stadium, and he’s willing to use “creative means” to get it.  But majority reliance on public funding?  Whatever happened to relying on personal seat licenses to subsidize some of the costs?

Some people just have impeccable timing…in this struggling economy, I’m not sure that Zygi Wilf is one of those people.

Star Tribune:  Wilf pushes Vikings stadium–as economic stimulus

The Sports Economist:  Headline:  Wilf pushes Vikings stadium–as economic stimulus

Tags: economic stimulus, Football, Minnesota Vikings, New Stadium, NFL, Zygi Wilf

Category: Football