I just cannot understand why Bob McDonnell and the Commonwealth of Virginia are basically subsidising the Washington Redskins and giving them $6.4 million in subsidies ($4mil from VA, $2mil from Loudoun county, and $400k from city of Richmond) for some newfangled idea to upgrade the Loudoun Redskins facility and move training camp to Richmond.
It is a bizarre move that is hard to understand. First, let's understand this. The Redskins is one of the most profitable franchises in sports. The Skins and Dan Snyder are worth close to $1.6 billion. They have just upgraded the Loudoun-based Redskins Park by adding a practice bubble. They have a sh*tload of money and I don't understand why Virginia needs to be paying for things they can plainly afford.
Barton Hinkle has McDonnell's case for this:
Is there anything to be said on behalf of the Skins handout? Yes—and McDonnell said it in a recent interview. While conceding “it’s not the role of government to subsidize sports,” he argued that the Redskins generate more than $200 million in economic activity in Virginia, along with nearly $10 million in taxes. The Skins’ departure would be “a huge economic hit.”
Hmmmm. Spending tax money in order to collect more of it is the dubious rationale of those who have been in government too long. As for the economic benefits of sports subsidies, they are hugely overblown—as a library full of studies from sources as ideologically diverse as the Cato Institute and the Brookings Institution can attest.
Regarding lesser subsidies like the one going to the Skins, it is helpful to place them in the broader context of other handouts—such as the many given to Hollywood production companies (last year Virginia gave billionaire Steven Spielberg $4.6 million to film part of “Lincoln” here), corporate giants (e.g., the $6.9 million Virginia doled out for Microsoft), and smaller beneficiaries such as wine makers and beekeepers.
I get the rationale of trying to keep businesses in your state by giving them reasons to stay, and same goes for the new businesses. I actually don't have as much a problem with some of the handouts to the film industry, wineries, and major corporations that have moved here from other states. Its worthwhile for the state because they actually do bring jobs with them. Lets be real, it is the government redistributing our money (dare I say, "wealth"). But I also understand how the real world works with governments competing with each other for businesses, and I like that.
But the Redskins? Where are they going to go? Training camp? This different. This is not arguing for using state dollars to attract businesses to the commonwealth to bring tangible jobs. The free market works both ways and we should accept that. You can't on the one-hand argue for states competing with each other for businesses and then turnaround that throw millions of dollars at a sports franchise that is wetted to this area by its very name. The Skins, in the past, have had training camp both in Carlise PA and in Frostburg MD and I don't think it broke Virginia. Like Hinkle said, justifying tax subsidies to generate more tax revenue seems backwards in thinking.
This is probably an unpopular position but I am 1,000% against this. The Redskins don't need our money, they have plenty. The Washington Redskins would not break the economy of Virginia if training camp went somewhere else. And if they leave Redskins Park because citizens wouldn't fork over millions to an entity worth billions and growing, well that's how the market works. Virginia has been played by Dan Snyder, and played beautifully. Its hard to drive on the roads I drive on everyday and justify to myself the Governor sending millions to Daniel Snyder.
I hope someone, anyone, in the General Assembly stand up to this . . . I have to say it . . . crony capitalism.
"If government wants job creation, it would simplify regulations and cut taxes across the board. They wouldn't single out certain companies for special treatment. Why should there be favoritism?
Because politicians like it. Big, complicated government gives them opportunities to do favors for their friends." ~John Stossel "No They Can't"
I just moved to Texas. I was elated to find out that I will pay no personal property taxes on my cars. None. Just a registration fee that is around $65 a year. That's it. The fee is not based on the car's value, or mileage. The rather small fee pays for tags and license. The way I see it, that's less money of mine the government has to give to Jerry Jones to build a stadium for the Cowboys to play in, and more money for me to pay for things I want.
I like football but at the end of the day, if the Cowboys win the Superbowl it just doesn't affect me in any way, except for the entertainment value. And it doesn't pay my bills.
Too cozy relationships between government and business is in no way supported by free-market theory. I don't get how conservatives can support it with a straight face.
Great post, Chris.
Posted by: Sara | June 19, 2012 at 10:31 AM
Much of economic development is a slippery slope. If one concedes that government is a revenue maximizer, well, the gates are open for all manner of crazy (depending upon the observer) schemes such as this. Having looked quite closely at it in the past, there is no law out there that says government can't act to maximize it's revenues. This is a very troublesome area that is highlighted by grants such as this, and the political attractiveness of it makes it all that much more troublesome.
Posted by: Steve | June 22, 2012 at 07:55 PM
And by the way, Kelo featured a government acting as a revenue maximizer. Look at all the travail that has been caused by that stupidity, and all of the consequent cost that falls upon any government condemnor.
Posted by: Steve | June 22, 2012 at 08:03 PM
Your article about "Washington Redskins: When The Free Market Turns To Subsidies" is a great post and i am really pleased read your article. I hope you write this kind of post again and again.
Thank You
Posted by: Washington Redskins | November 03, 2012 at 01:58 PM