NFL Dispute – Three Parties: Owners, Players, Public

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NFL Dispute – Three Parties: Owners, Players, Public

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The NFL Labor dispute is really aggravating.  Such a labor dispute might be none of our business – except we the public are heavily invested in the NFL.  There are times in our history when labor disputes have so directly impacted the public at large that our government has been forced to intervene.  Think of the railroad strike in 1950 – a move that would have crippled the entire economy.  Harry Truman threatened the draft all railroad workers into the military and then force them to run the railroads.  The best example, however, is the West Virginia Coal Mine strike in 1901.  These labor disputes are not simply a matter of owners versus workers.

The summer of 1901 found the West Virginia Coal Miners striking for better wages and better working conditions.  The owners bucked up and refused to negotiate.  By September the labor dispute was getting nowhere.  President Theodore Roosevelt recognized that winter was coming, most people heated their homes with coal, and coal was not being mined; the public at large was threatened with very cold prospects – even life threatening prospects.  President Roosevelt called the Labor Union and the Coal Mine Owners to the White House.  The President told them to negotiate – told them he would provide an independent arbitrator to settle the dispute.  The Labor Union agreed – the owners refused, saying they would never negotiate with the Labor Union.  Roosevelt said simply:  There are three parties involved in this dispute – the Coal Mine Owners, the Labor Union, and The Public.  Roosevelt said he represented the public.  Roosevelt told the Owners that he was going to send the military to West Virginia to capture and run the coal mines.  His threat was taken seriously by the Owners and they agreed to arbitration.

We are not suggesting the NFL Labor Dispute is anywhere near as important or as dire as the West Virginia Coal Mine dispute of 1901 – but we are very much suggesting that there are three parties involved in the dispute.   Many cities, counties, and States have invested heavily in support of the NFL.  Stadiums and training facilities are funded in a large part by their host communities.  These community investments are made in the interest of economic development.  NFL Stadiums produce jobs in construction, tourism, hotels, food service, and retail sales of NFL products across the host communities.

Check out these few examples of public investment statistics from scribd.com.

CLEVELAND
$300 million estimated cost for stadium project
Public contribution — $212 million
– $138 million in certificates of participation (similar to bonds) issued by City of
Cleveland; annual debt service backed by City 8% parking tax, 2%
admission tax, hotel tax, and car rental tax, and County “sin tax” extension
on alcohol and cigarettes
– $6 million from City utilities department
– $3 million from Regional Transit Authority
– $33 million from State appropriation
– $32 million from unspecified City sources
Private contribution — $88 million
– $10 million from Cleveland Tomorrow (business community)
– $78 million from team derived partially from the sale of PSLs
Cost overruns
– City most likely responsible for cost overruns
30-year lease
Referendum passed 11/7/95; referendum related to “sin tax” extension
DENVER
$370 million estimated cost for stadium project
Public contribution — $230 million
– $230 million from revenue bonds; annual debt service backed by six-
county sales tax
Private contribution — $140 million
– $140 million from team
Cost overruns
– Stadium district responsible for 75% and team responsible for 25% of cost
overruns
30-year lease
Referendum passed 11/3/98
HOUSTON
$424 million estimated cost for stadium project; this includes $310 million for
stadium construction, $88.4 million for land acquisition and parking, and $25.6
million for financing and other costs
Public contribution — $309 million
– $252 million in Houston/Harris County Sports Authority bonds; annual debt service
backed by hotel/motel tax, car rental tax, and mixed beverage tax
– $31 million from Houston/Harris County Sports Authority for financing
costs
– $26 million from Harris County for chilled water plant
Private contribution — $115 million
– $50 million from team derived mostly from the sale of PSLs
– $65 million in taxable bonds; annual debt service backed by team and
Rodeo rent, parking surcharges, ticket surcharges, and sales tax rebates
Cost overruns
– Stadium to be constructed based on a guaranteed maximum price
contract
Referendum passed 11/5/96
JACKSONVILLE
$161 million estimated cost for stadium project; this includes $135 million for
stadium renovation and $26 million for infrastructure improvements
Public contribution — $146 million
– $120 million in City bonds; annual debt service backed by City general
funds, State sales tax rebate ($2 million per year), hotel/motel tax, ticket
surcharges, parking surcharges, naming rights, and rent
– $26 million in City outlays for infrastructure improvements
Private contribution — $15 million
– $15 million from team
Cost overruns
– Team most likely responsible for cost overruns
30-year lease
No referendum

There is a huge economic impact from investing communities.  We believe these communities should have a seat at the bargaining table of the NFL Labor dispute.

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