isfa

ISFA Chatter

A similar version of this story posted on The Third City December 21, healing seek 2012.\n\nThe Chicago Tribune, search recently ran a story by Jared S. Hopkins harping on an Illinois Sports Facilities Authority employee with a “$57,240 taxpayer-funded salary” for spending time at work digging up White Sox tickets for Big Jim Thompson and other big wigs.\n\nFor those who are unaware, the ISFA was invented by the Illinois state legislature in 1988 for the purpose of giving Jerry Reinsdorf taxpayer money for his privately owned baseball franchise, Chicago White Sox, Ltd.\n\nThe argument sports franchise owners usually make is that they bring economic development and tourism to the cities in which they run their businesses.  And that means more jobs and a larger, richer, tax base.  For showering all of this good upon the community, team owners want a little quid pro quo.\n\nIt’s right there in the ISFA’s founding document, where its authors declare that “professional sports facilities can be magnets for substantial interstate tourism resulting in increased retail sales, hotel and restaurant sales, and entertainment industry sales, all of which increase jobs and economic growth.\”  As a result, the ISFA was formed to \”materially assist the development and redevelopment of government owned sports facilities\” because doing so \”is in the public interest.\”\n\nSo taxpayer subsidies appear to be a good deal for everyone: team owners and Jane and John Q. Public.  There is only one problem: the flawed premise upon which the stadium subsidy argument is based.\n\nEconomists paid to do studies by team ownership—the studies that are circulated to politicians and the media—make all sorts of economic projections based on soft data and economic theory.  Meanwhile, academic (i.e. independent) economists who have made calculations based on actual case studies over the past few decades find almost unanimously that sports stadiums have a negligible economic effect on the cities in which they are located; effects made adverse by public subsidies.\n\nThe White Sox park is no exception.  In a 2006 study out of the International Association of Sports Economists titled \”A Tale of Two Stadiums: Comparing the Economic Impact of Chicago’s Wrigley Field and U.S. Cellular Field,\” three professors of economics named Baade, Nikolova, and Matheson determined that \”U.S. Cellular Field…provides the classic case of the sports stadium as a ‘walled fortress’ that internalizes all economic activity in order to maximize revenues for the franchise at the expense of local economic development.\”\n\nInstead of “increasing jobs and economic growth” around the stadium, the White Sox have done everything in their power to discourage it, in order to insure that fans spend every penny of their entertainment dollar at the park.\n\nThe ISFA serves as an enabler in this scheme, since it bankrolls White Sox operations, and demands virtually nothing in return.  According to the ISFA management agreement with the White Sox, the team keeps all of the revenue from parking and concessions.  They keep all revenues from taxpayer built restaurants inside and outside the stadium.\n\nThe White Sox pay no property taxes because they lease their facility from the state.  Although the Sox pay no rent, so they’re essentially corporate squatters.\n\nAll the signage around the taxpayer built stadium—the advertisements you see around the park and on TV—the Sox get all of that money.  The $68 million U.S. Cellular paid for the naming rights to the park?  It all went to the White Sox.  And the revenue from media companies like Comcast and WGN, who broadcast the White Sox playing games in the taxpayer funded stadium (the Sox deal with Comcast alone is worth a reported $45mil per season)?  The ISFA doesn’t see a dime of it.\n\nAccording to the management agreement, the White Sox pay “Base Fees” of $1.5 million per year, and then a fee per paid attendance ticket over 1.925 million tickets sold for the season.  But this is a drop in the bucket.  According to ISFA annual reports, it doesn’t cover the yearly costs of park renovations, maintenance, and cleanup.  It doesn’t cover the principal or interest payments on the hundreds of millions of dollars in bonds issued by the ISFA, which the state is on the hook for.\n\nThis is the nature of the relationship between the ISFA and the White Sox, and the Tribune is worried about ticket giveaways?\n\nNot to say this ticket business isn’t shady.  Especially because the White Sox are allowed to hawk 150,000 tickets per season for $3 or less, and those tickets do not count toward “paid attendance” as it is defined in the management agreement with the ISFA.  In other words, the White Sox have it built-in that they can give away tickets without paying fees to the state.\n\nIn 2011, the White Sox drew 2,001,262 in “total paid attendance,” according to the ISFA’s auditor’s report.  That’s 76,262 fans over the 1,925,000 threshold.  Without the complimentary ticket clause in the management agreement, the White Sox would have paid $228,786 in fees to the state for those tickets.  But the team gave away or enormously discounted 137,755 tickets and so it paid no ticket fees at all.\n\nThe Tribune doesn’t disclose any of this.  Instead it focuses on a middling ISFA staffer, probably just doing what she’s told.\n\nThe relationship between the ISFA and the White Sox requires closer scrutiny by the media, but giving umbrage to a low ranking employee for doling out free tickets to some folks with clout ignores larger transgressions; like an agreement drafted by a government body that greatly favors private over public interests, binding until the year 2028.\n\nLarger transgressions, that is, unless your definition of “wasteful government spending” is middle-class public employees “wasting time” on the job and not hundreds of millions of dollars going to prop up private companies owned and run by wealthy executives.\n\nJust a slight disagreement over semantics, I guess.

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