tv Inside Story Al Jazeera April 27, 2015 5:30am-6:01am EDT
everyday they come back again. harry faucet al jazeera, okinawa, japan. remember if you want to get more information on all of these stories particularly what is happening in nepal you can log on to our website and it will be here in a minute the address al jazeera.com. night. hello, i'm ray suarez, good news, a local billionaire wants to keep your sports franchise in town. there's a hitch - he wants you and your neighbours to find the bill for the shiny new luxury boxes and expressway exit and doesn't want to pay much rent. may not sound like a great deal, but over and over cities are muscled into municipally funded sports facilities over threat of leaving town, or promising a new team.
do the numbers add up. you may get the job for a few dozen millionaires or scores of part time. maybe you wouldn't think it's a good deal until your team leaves for greener pastures, with a threat from the president to end tax breaks for their construction - it's time to play hard ball over stadiums and arenas and it's "inside story". in the poorest county in new york state, one of the most valuable sports franchises on planet earth want a place to play their games. when it came time to play for the yank e the principal owners knew they want have to use their
own money for or own money, it taxpayers. more than half a billion in subsidies, hundreds of millions in bonds. would the yankees have left if office workers waitresses and bus drivers didn't pay up? we will never no. atlanta is watching the braves pull up, and move to where a stadium will be sub sidized. the atlanta mayor will be left with 18-year-old turner field. not much you can do with a baseball stadium, beside playing baseball. it will be demolished in st. louis, milwaukee and memphis, the skeleton the same. owners of major league sport franchises demand subsidies to operate in town. unlike a factory or office the
n.b.a. team or n.f.l. team gives them a sense of itself. we are asking does to make economic sense. michael eaves is with me in washington, along with dennis zimmerman. great to have you here. by threatening to take away the federal tax-free nature of bonds used to pay for these things, are we really changing the shape of these deals. do they become different once you take away the federal subsidy? >> well, the tax exempt bonds means the tax payer pace 25% of interest costs, which is about an i think of the total capital costs that the teams would incur between the principal and the interest. it will make a difference in whether the stadiums are there, whether the teams exist, and no, it will not. these are purely economic rents extracted from the state and
local sector, and the federal taxpayer that go into the players. >> michael eaves, are there cities now that are on the bubble, in the middle of tough conversations about whether to do what is necessary to make a team stay? >> absolutely, one is st. louis. owned by stan kronky. he's been a successful real estate developer. he has a lot of money, but doesn't want to spend it all in st. louis. voters will have to decide whether to use public funds to renovate or give them a real stadium. what he wants to do now is what mr zimmerman wants more openers to do, use his own money to build a stadium in los angeles, on land that he purchased. that's what he wants to do, but not in st. louis, but los angeles. number 2 market in the country.
he can reap more benefits there than st. louis. st. louis is trying to give him something new and shiny so he'll stay as opposed to spending his own money in another community. >> by coming out foursquare does it send a signal to the federal government on these finances. >> it brings sanity to the issue of what is a public and private enterprise. teaches and bonds are subsidised, some of the benefits going to people down river, and, therefore, you need to provide some subsidy to get the local government to make a plant big enough to provide benefits to those folks. >> part of it is whether or not it's a public use. we can't say if a private business is a public use. >> it's hard to find collective
consumption, public good aspects to this. you sell tickets, pay a fee, watch the game. the money goes into the pockets of the business, the typical way to do things. in most businesses the capital costs are paid for by the business. in this instance, because they organised the cartels that restrict entry into the industry and franchises, giving them the market power to insist the local government, if they want a team, pay the capital costs. that's why los angeles is so valuable to the n.f.l. it is out there as a threat against every other franchise and city. it's more valuable to the n.f.l. without a franchise than if it had a franchise. >> the charters and the raiders, two rivals on the field went
together on an effort to build a stadium, that they would share and basically what they are trying to do is get better deals. so to mr zimmerman's point. that is what los angeles prevents. jacksonville did it in the past. now they are trying to get back there and do it on their own. it's a good point, how the teams use other cities against one possible. >> using other cities as liver rim, it makes sense. is there a dimension of this because of the car tell power mentioned, that small cities game. >> yes. >> than big markets. >> yes, that can draw teams in. >> san antonio is one of the smaller markets. they are the only game in town. they do it smartly. it works there.
i used to work in memphis tennessee at the time when the grizzlies moved to memphis. there was a lot of talk about how the city funded the team. that's what they demanded. fed ex is headquartered. there has been a lot of pressure on city officials to make it a better place for employees. the employees said we kept losing our employees, because there's nothing from a social standpoint. they felt pressure from fed ex to spin the money, giving the team a place to play, because of what it means to businesses and industries is that 40 nights a week or year? >> yes. what is crazy that the average family doesn't understand, it's publicly funded stadiums and arenas, the private teams run them. so in addition to the 41 home base, they can schedule concerts.
the revenue going to the teams, not the city. >> do the teams have the clout or have cities surrendered the clout that they have to strike a better deal. hand? >> the cities don't have clout because the supplier franchise is controlled by the leagues. there's a more fundamental problem here. all this may be true about memphis and whatnot. if the citizens decide it's important enough to them to get the benefits of having a team, and their taxpayers are willing to pay for it, that's fine. why would the federal taxpayer want to contribute to this? that is the issue with president obama's proposal. he's saying - he's not imposing on what they can do, he's saying "if you want to support it, go and support it. don't expect the federal taxpayer to contribute to it.
why should a taxpayer in new york or green bay or wherever, contribute to the subsidies to keep a team in atlanta. >> at least a new yorker or green bay it can get to a game. if you are subsidizing a stadium in carson, california, not a great deal. >> i learnt about this back in the 1990s, while working at the congressional research service. the senator from north carolina was at a hearing on housing subsidies in the federal government. near the end of the hearing they've been cut. as far as i'm concerned, the only viable housing subsidy is for the owners of professional sports teams. i thought it's an interesting thought. let me look into that. that's what is started recently deciding not to run for re-election.
heading to addison, where there was lots of land or sun coast in santa st. pete which broke ground but didn't have a team. sox players modelled a jersey with st. petersburg across the chest. with an assist from the mayor, the some were kept, a new stadium built. the some paid token rent until 1.9 million see the team, and only a shall amount after that. taxpayers pay the interest on the construction zone. a deal like that has not stopped cities making similar agreements in new york, miami and philadelphia. joining me now is timothy, president of the metropolitan milwaukee commerce association and rusty hicks, treasurer of the los angeles county federation of labour.
tim, take me inside the associations, inside the accounting conversations. how do you figure out how much money it's worth to milwaukee to keep the bucs? >> well, it's a great question. i look at to this way. cities, like businesses have balance sheets. they have assets and liabilities. we have determined that having professional sports is an asset, part of the balance sheet. the question is what is the appropriate investment. from our perspective in terms of building a new arena, we look at bottom line, the 10 million in revenue flowing to the state off the income taxes of the players. the goal is to keep the $10 million, utilizing the increase in player salaries to fund the ponds for a new arena. we believe the economics are
substantial and that there's a benefit to milwaukee to having an n.b.a. franchise driving a one half billion investment in downtown milwaukee. >> if you float bonds of a similar dollar denomination to build a text start-up hub, or a new campus for the wisconsin state university system, or a middle size factory, wouldn't you make just as much money over just as long a time. >> this is not an either/or situation. big cities can walk and chew gun or say they need to appropriately invest. we need to invest, and we should. this is an investment in our quality of place. this helps make milwaukee attractive to companies that do business on a global basis, that
are located and can attract and retain the talent they do. it's not a question of investing in other things, we believe it is appropriate to help to competitiveness. >> rusty, as you look at plans that have been floated, to house n.f.l. franchises, do you assess those based on which ones make the most jobs for your members? >> i think what we look to is what is the project that will have the most good quality jobs. it goes beyond the balance sheet of the city. it's about an idea of shared prosperity, that the community can benefit. we have had, you know, nearly four possible projects in the past four or five years in southern california. we hope football returns to
southern california. we want to ensure that they are attached to the construction of the prospects, and the ongoing operations of them. >> hasn't the confederation of labour made their opinions known, based on how many jobs are set aside for union workers? >> in order to about any projects, it takes tens of thousands of workers to build these types of facilities and to operate these facilities. we made it known that we are supportive of any project, any facility, any sports complex that brings in good middle class jobs. >> and is the union kind of agnostic on public subsidies when it comes to creating the jobs? >> i don't think there's
categorical opposition. but if there is - if the taxpayers have to put forward and make an investment in a project like this, they should get something in return. we see many promises of funding coming into a city. but we see many cases of funding going out of a city as a result of a project like this. so we want assurances up front that they are going to be solid quality jobs attached to where it is or how it's funded. >> tim, one of the richest men in the state of milwaukee is the principal owner of the bucs. arena? >> well, i think he is building an arena, and the team is putting $250 million into a new arena. just as importantly for us, they are also, in the process of scoping out half a billion of
investment around the arena, commercial development, housing, retail space. there's a catalytic impact to an arena in terms of building out and developing downtown. that's an important way to measure the investment on the public dollars. >> have there been cases of buyers' remorse after the deals are done and calculations made. >> there are deals where cities thought they didn't get what they thought. if you look at the studies, the majority suggests that the economic boost is centered around the stadium. the metro region is about the restaurants and the bars around that place. if you take that team out of the city, the people are going to spend the money taking out the families to do things that are entertaining. is it new revenue or an economic boost. the study suggests that is not the case. sports is a passionate thing. oftentimes we let go of logic,
it's almost like love. we love the bucks in milwaukee, and the rams in st. louis. we'll do what it takes and believe what we believe. that's what happened in a majority of cities. responsible. >> who was to be the mayor. >> nobody. >> michael eaves, tim, rusty, great to talk to you all, thanks for joining me finally, there's a fully fledged legally launched presidential campaign, complete with a kick-off speech, cheering throngs. junior senator from texas, raphael ted cruz wants to be your next president. and michael eaves helps me gauge his strengths and weaknesses. that's still ahead on "inside story". >> al jazeera america brings you a first hand look at the environmental issues, and new understanding of our changing world. >> it's the very beginning
rumoured candidates, and now a declared real-life official campaign. ted cruz "16 kicked off at liberty university, virgin your, where he laid -- virginia, where he laid out his views of an america ready and able to rise to the challenges of this time. >> from the dawn of this country, at every stage america enjoyed god's providential blessing. over and over again when we faced impossible odds, the american people rose to the challenge. you know, compared to that, repealing affordable care act, and abolishing the i.r.s. ain't all that tough. >> al jazeera american political correspondent michael shure joins me, on the road in montgomery alabama. good to have you with us. >> nice to be with you. >> why did ted cruz make a point of
stealing a day's march on opponents, declare now rather than virginia, texas? >> i think a little bit of that is an imagery. he's at liberty university in virginia. that is a sort of the hallmark of ted cruz's political and campaign life. portraying liberty as his motto. it's only fitting that he would be there. he'll go on the road and do a little fundraising. he's going to new york and be over the country. he wanted to get an early start. a great place to get attention. a poll from republican voters put ted cruise behind the presumed republican candidate. let's do a little calculus. first going on the favour and what is working against him.
>> what has ted got going for him? >> what is going for him is rising name recognition. he doesn't have the recognition that some have. you remember huckabee won in iowa in 2008. he has a skill that is underrated and will be well seen, certainly in the primary season, which is ted cruz is a great debater, he debated david dewhurst in texas, wowing people in the debates, and he'll put his opponents on their heels when it comes to debating. that's what is going for him. against him is a stridensy that americans are tired of now. he is, as you heard now in the peace you ran, let's get rid of obama care. let's get rid of the i.r.s. he'll want to be strong on immigration, build the wall type of mentality on immigration. he is not someone that bends easily.
that works against you in the politics of - you know presidential campaign politics much the geography will help and hurt him. bringing him to iowa. new hampshire and south carolina is important for him. it's important he start in the south and remind people. >> he's a candidate that in in addition to wanting to repeal obama care, is steadfast in opposition to same-sex marriage, denying climate change, and poll nations appear to move in the other direction on questions like those. >> yes, indeed they do. you know politics well. his candidacy reminds me a little of pat robinson, trying to hang on to the issues that were dear to conservatives, past the time they were dear to the younger voters in the republican
party. there'll be a little bit of that as a challenge to ted cruz. social issues matter to voters. mike huckabee in 2008 won as a social values candidate. that is what ted cruz is going to try to bring to iowa. the other thing is the blueprint that joni ernst, a tea party candidate used, when she won her senate seat. that is a big part of what will get in in iowa. >> does it mean a limited pool of voters down the road? >> it does. you look at the voters. he will fight rick santorum. and as the campaign moves on, it will be a limited number. republicans have to decide whether they want electability. >>
michael shure covers politics for al jazeera. last week we told you about the star bucks campaigns, inviting baristas to strike up a conversation on race relations. they have pulled the plug, and baristas will merely go back to misspelling your name. you'll have to talk about race on your own time. flat white can be the name of a drink, rather than an observation about a boring caucasian. thanks for joining us on this edition of "inside story". get in touch on facebook, twitter. tomorrow - yemen - the u.s.'s strategically located alley on the brink of full-blown war. we'll talk about that next time. in the meantime, i'm ray suarez.
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