Some seldom-considered reasons why subsidizing a new Charger stadium is a bad idea

Richard Rider, Chairman, San Diego Tax Fighters Undesignated 4 Comments


The Chargers (via the media that usually profit from having professional sports teams in town) are blitzing San Diego, trying to get a new stadium largely at taxpayer expense. Naturally I oppose such a subsidy for millionaires (players) and billionaires (owners).

There are many arguments against such subsidies, and I’ve voiced them over the years.  For instance, we taxpayers foot much of the bill, and the owners and players pocket 100% of the increases gross profits and team resale profit.

In addition, most of the ticket revenue is from people within the county, resulting in the “substitution effect.”  Chargers revenue is money that otherwise would have been spent on some other recreational or entertainment activity — bowling, movies, restaurants, etc. — unlike the convention center, it’s not much of a draw for income outside the region.

There are MANY other arguments, but here’s five seldom-considered factors that harm the Chargers’ chances of competing successfully against the other teams in the future — regardless of the San Diego stadium they play in:

1. San Diego pro sports teams draw from a small demographic region — the 3.1 million people in SD County. Most other teams draw from a larger population (adjoining counties often reaching out 100 miles or more). We draw few from the Pacific Ocean, Mexico and Imperial County. A few more come from OC and LA, but that will likely disappear when (not IF) LA gets an NFL team.

2. Most of the region’s well-to-do (the more senior crowd) moved to CA from outside the state, and thus have split team loyalties. Their attachment to the Chargers is not as strong as native football fans.

3. We don’t have many big corporate HQ’s here, so we are a lousy market for sky boxes — a KEY component for any pro football team (team keeps 100% of the rent). No matter how nice our sky boxes are, they won’t rent for anywhere NEAR what such boxes rent for in San Francisco, Dallas, Houston, NY, Atlanta, LA, etc. IF SD sky boxes rent at ALL (Chargers have many vacant sky boxes as it is).

4. California now taxes income above $1 million dollars at a sky-high rate of 13.3% — a rate far higher than anyplace outside NYC (which is about 12.696% — why taxed to the THOUSANDTH of a percent is a mystery). We are 21% higher than second place Hawaii, 34% higher than Oregon, 47.8% higher than the next two states, and a heck of a lot higher than all the rest – including nine states with zero state income tax on “earned income.”  BOTTOM LINE:  It will become harder and harder to entice quality free agents to sign with the Chargers.

5.  If the San Diego Padres experience is any indication, a new sports stadium provides only a temporary boost in ticket sales. After a fabulous 3,000,000+ first year in beautiful Petco Park, the attendance started to slide, and is now at or below the old Jack Murphy stadium days (though at a significantly higher cost per ticket).  Oddly enough, the last four years seasons’ Padre attendance has been nearly identical — between 2.13 and 2.16 million.  What’s particularly interesting is that one year the Padres were 90-72, and yet that winning season had no discernible positive effect on attendance.

Two other factors that fans are not sufficiently considering:

1. Qualcomm stadium offers a TERRIFIC tailgating experience — one source claimed that it’s the third largest parking lot west of the Mississippi.  Build a new stadium downtown, and tailgaters will find that the drab parking garages offer no such benefit.  For many, tailgating is half the fun.

2. If as threatened the Chargers move to LA (a regional market at least six times the size of San Diego), our blackout days are ended.  The diehard SD area Charger fans can still attend if they like.  But for most of us who these days watch the games on the big screen TV’s, the broadcast is crucial to our viewing pleasure.

Subsidizing pro sports stadiums is a contentious subject.  Many “conservatives” and even some libertarians try to carve out an exception for this amazing crony capitalism.  I’ll continue to provide the loyal opposition to such ill-advised efforts.


Comments 4

  1. I’ll have to dust off a persuasive paper my daughter wrote in 6th grade on why taxpayer subsidized stadiums never live up to promises of employment and revenue. It was written four years ago, so it may need some updating, but then it’s off to the city council. 😉

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    Another thought. SD County is about 3.1 million. SD CITY is about 1.3 million.

    I’d bet dollars to doughnuts that the majority of fans in the (every pricier) Qualcomm stadium seats reside outside the city limits. Yet our city is supposed to carry 100% of the subsidy.

    And speaking of pricier, in a sane free market, the vendor tries to sell all its seats (consider airlines) by establishing “market clearing” prices. But pro football is not a free market.

    Hence there’s reluctance by the Spanos family to reduce some ticket prices to better fill the seats. Perhaps these owners want to make the case for moving out of San Diego — if they don’t bet their new stadium with uber-pricey seats.

  4. Years ago several of us were eating lunch at our desks in a suburban aircraft factory and laughingly thanked adjacent desk occupying San Diego City taxpayers for building the Jack Murphy stadium for the rest of us. The more things change the more they stay the same.

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