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October 31, 2011
Trib columnist: Wrigley needs "lessened burden," not subsidies
Chicago Tribune columnist David Haugh weighed in on the Wrigley Field renovation controversy yesterday, with a slightly strange column calling for the city to find ways to let Cubs owner Tom Ricketts get more money out of his 97-year-old landmarked ballpark.
Why strange? For starters, there was the headline, which insisted that it is "Time for government to get out of Cubs' way" on renovations and also that the club "needs [a] helping hand" from government. Hough then issued a list of complaints about Wrigley Field and the way the city stymies the Cubs from earning money on it:
- Because Wrigley is landmarked, the Cubs are limited in what changes they can make to the structure, or what ads they can hang on its sides.
- City officials wouldn't let the team take over adjacent Sheffield Avenue to turn into an outdoor mall on busy game days, as the Boston Red Sox do with Yawkey Way.
- The White Sox got a free restaurant. And, um, the Cubs didn't.
- City ordinances limit the number of night games the Cubs can play.
- Chicago collects a 12% amusement tax on each Cubs ticket sold, even though the stadium is privately owned.
Concludes Haugh: "If the Cubs were permitted to lift landmark status to allow signage, increase the number of night games and redirect some of the revenue the amusement tax generates, it would considerably lessen the burden on the Cubs for the proposed $400 million Wrigley renovation."
Makes sense, right? All the city needs to do is to lift some of those nasty regulations that other teams don't have to follow, and Ricketts could have enough money to pay for a renovation of Wrigley in order to bring in more money to make up for the fact that nasty city regulations prohibit him from... waitaminnit...
The fact is, though things like rent breaks and additional ad signage sound less like subsidies than the straight-out cash transfers that Ricketts has been gunning for, they're just the same thing under a different name. In particular, exempting the Cubs from the city's amusement tax — something that, regardless of whether the Boston Red Sox don't pay one as Haugh complains, is applied to everything from cable TV to pleasure boat rides — would be a massive kickback of city funds, not to mention exactly what Ricketts has demanded (though Haugh never mentioned this).
Even more to the point, all those terrible city ordinances were in place when Ricketts bought the team in 2009, something that was no doubt taken into account in the $900 million sale price. Yes, the Cubs aren't the money-making machine that the Red Sox are — but then, you almost certainly couldn't buy the Red Sox today for $900 million. If Ricketts didn't notice the fine print about the city amusement tax or the ban on billboards on his landmarked stadium — one that, incidentally, allows him to charge sky-high ticket prices even when the team playing in it is dismal, as is often the case — then it's a bit disingenuous for him, or his supporters in the media, to be griping about how gummint regulation is strangling his ability to find a half-decent center fielder.
You justify an improper tax because other people have to pay it too? Increased signage is a subsidy?
Increased signage is just a company exercising the freedom the should have. It's their property.
that fact that these bad restriction existed before the Ricketts owned the Cubs is not justification for bad restriction.
An entertainment tax may make sense for government facilities but it makes no sense for any privately own facility.
Haugh right. Stop charging the entertainment tax at Wrigley and allow the Cubs owners to be free to renovate their own ballpark in they way they need. Remove the landmark status. The status was never put there to protect the building. it was put there to exert control over the Cubs owners. Americans should be free from this tyranny.
Being specially exempted from a generally applicable tax is indeed a subsidy. I'm not an especially big fan of the sales tax, but if President Obama sent me a special "Get Out of Sales Tax Free" card for services to the blogosphere, I'd consider it more an unwarranted gift than a respite from tyranny.
The signage is a trickier issue, and if that's really all that's holding Ricketts back from doing a Fenway-style restoration of Wrigley, then I'd probably be inclined to allow it. (If Rahm Emanuel sent me a special "Cast Your Vote on the Chicago Board of Aldermen Despite Living in Brooklyn" card, that is.) Still, even if it wouldn't cost Chicagoans anything but their eyeballs, it'd still represent a gift of value to Ricketts, so it's not something to be thrown in lightly, without ensuring that fans and taxpayers get something in return.
Posted by Neil deMause on October 31, 2011 11:19 AM
If being relieved of a tax burden that all my competitors in any given market still have to pay is tyranny, sign me up.
If the 'entertainment' tax at Wrigley goes, you can bet it will soon be lost elsewhere. And if that happens, trust me, the Chicago gov't will not be taking the haircut on operations... that burden will simply be transferred to the already heavily burdened general ratepayer base.
As with Sternberg in Tampa, if Ricketts doesn't like the business he bought now that he knows a little more about it (untrue, his lawyers would have told him all the details before purchase), he should sell the Cubs and buy another team.
Or he could start beating the drum for a new stadium elsewhere... hey, why not Schaumburg? That worked so well in the 80's... but then, he'd have to hold a lot of bake sales and 'have a catch' days at the old park to make up for lost MLB revenues. I doubt he'd be able to auction off seats on the CBOE the way he does now, either.
Yes, poor Mr. Ricketts. It must be tough being a billionaire & victim.
Posted by John Bladen on October 31, 2011 12:27 PM
"Americans should be free from this tyranny."
Yes, we should. We should be free from having to pay for any of this stuff in any way, shape or form (including tax breaks that other businesses don't get). Time for Congress to exercise that "commerce clause" in the Constitution and outlaw all forms of corporate welfare - all of which interfere with the free flow of interstate commerce.
Fringe benefit: $billions instantly saved by states and communities all over the country.
Posted by Keith on October 31, 2011 12:59 PM
Keith;
I'd vote for that... not that I get a vote, of course...
Count me among those who believe Adam Smith would be horrified by what passes for capitalism these days.
Posted by John Bladen on October 31, 2011 03:40 PM
While we're up (not) voting, I'd cast mine for an end to sports tickets as an entertainment writeoff on income tax returns. For the most part, I think those are bogus.
That would have a dramatic effect nationwide on the demand for sports tickets. Entire lower-bowls in some arenas would empty.
Posted by MikeM on October 31, 2011 05:09 PM
@MikeM:
Agreed. I don't know what doing such a thing would entail, but I'm all for both Canada and the US doing this. What would happen is ticket demand drops and the price follows. Ticket demand will stay as high as it is today IF teams price their tickets in the range of what their fans are currently really paying after their tax write-off.
Posted by Andrew T on October 31, 2011 07:15 PM
Bill Clinton limited the deductibility of luxury boxes, but I'm pretty sure he left tickets themselves alone - which is, no doubt, why we've seen stadiums with fewer suites and an explosion of high-priced club seats since then. It'd be very interesting to see what would happen if the business-entertainment deduction were even trimmed - somebody call the deficit reduction committee and suggest it...
Posted by Neil deMause on November 1, 2011 06:33 AM
Darrell-
"Increased signage is just a company exercising the freedom the should have. It's their property."
This is a completely juvenile and naive understanding of society, property rights, or even "freedom". Your fundamentalist approach to libertarianism is showing, and frankly fundementalist libertarianism is the worst kind of crazy.
City's have zoning and usage regulations for an extremely good reason.
Let us take an ideal libertarian settlement. They are sick of the big city and its rules and decide to set up a community on a scenic lake. A bunch of people build houses on their own property around this lake. With no rules each can build their house however they want, some in hovels with faulty wiring, some in fortresses with booby traps near the property line. Everyone is more or less happy.
Then one of them decides they want to sell their land to someone who is going to build a tannery. There will be semi trucks going up and down the road, toxic chemicals dumped into the lake, horrible stench spreading everywhere. Basically the entire investment in the residences of the communtiy will be ruined.
One land owner says "Hey you cannot do that it will destroy the value of my property!". But the seller says "I am just exercising the freedom I should have over MY property."
So what do you think after this experience the FIRST thing future little groups of libertarians will do when making little libertarian communities?
Adopt zoning and use regulations!!!
I really really wish that some of the libertarian community projects get started, because it will quickly become obvious to them that 60% of the "tyranny" committed against them is actually a good idea.
I fully admit that putting a tannery in a neighborhood is a long way from not allowing someone to stick signs on the side of a ballpark. But the fact is that we live in a society where there is a method for determining zoning and use of land, and it mostly works pretty well.
Of course it seems oppressive when it runs counter to your interests, but it is there for a reason and if one day it all magically went away people would be begging to reinstate it immediately.
The Cub's knew the rules of the community when they bought the club, they need to live with them, or convince the community to change them (which sadly is all too easy for people with their kind of money).
Now before you cry "communist"! I would like to point out that I in some ways consider myself an actual libertarian. One who understands Betham, Mill, Hayek, et cetera, and one who understands how a increased respect for personal liberty is not consistent with insane comments like calling amusement taxes or zoning regulations "tyranny".
Posted by Joshua Northey on November 1, 2011 12:48 PM
Entertainment taxes are a legitimate strategy for big cities to collective revenue to pay for services. People visit cities from the suburbs or further away and go to games, museums, shows, etc.. , and they expect and need adequate policing, roads, parks, and other services. Tyranny is Mexico, where the government is underfunded and drug gangs exhort bribes or chop your head off.
If entertainment taxes help keep general sales taxes a little lower, that is good for the city residents. Having said that, 12% sounds a little steep.
Posted by Tom on November 2, 2011 12:36 PM