I guess the joke finally has run its course upon the Louisiana Superdome finally getting naming rights sold, sparing the state and the Gov. Bobby Jindal Administration some small embarrassment and enriching taxpayers.
Some years ago I wrote a satirical piece on the issue. For many years, the state had been trying to sell the naming rights to the facility for some extra revenue. Throughout this period, the state also was paying a subsidy to the New Orleans Saints essentially to keep them in town by defraying operating losses. In that post, I imagined that the state was going to rename the Superdome the Super Bowl, which would bring in extra tax revenues because the National Football League would have to hold the genuine Super Bowl game there every year and invite the Saints. As I observed then, “it’s probably the only way [the Saints] ever will play in the Super Bowl.”
But about the time the real-life Saints cancelled that statement by their win in Super Bowl XLIV, the Jindal Administration was renegotiating the long-standing subsidy deal that had been costing at its conclusion $23 million a year.The state had refurbished the Superdome with largely federal taxpayer dollars courtesy of disaster relief, giving the Saints increased ability to derive revenue from game-related activities, and a deal was worked out where Saints owner Tom Benson could buy a nearby building, then get instant occupancy with state offices relocating to it paying rates that while not generous represented a premium over existing rents paid by the state.
Doing the math, the premium still meant the state, in a sense, subsidized the owner, although one could argue the higher rate included value added to having the state collect many agencies in one place and avoid having to build to do that. Even so, the state still had to fork over a direct subsidy potentially through the life of the entire deal, through 2024.
However, another provision allowed the Saints, as opposed to some arm of the state, to shop around naming rights which had been on the market for over a decade. The move to the private sector paid off as it now seems in the near future the building will be known as the Mercedes-Benz Superdome for at least the next ten years. And, to the relief of state taxpayers everywhere, the deal’s new revenue stream to the team allows the state to withdraw public support.
While Jindal’s efforts improved the situation, it still rankled because it continued, albeit at a lower level, corporate welfare, much less during a time of state fiscal stress. With this, Jindal and the Legislature that approved the spending finally can remove this target of criticism from themselves, although other subsidies of this kind continue. Even if the Saints cannot repeat their success of two years ago, this deal regardless has made state taxpayers big winners.
Posted by Jeff Sadow at 12:00