According to Forbes, John J. Fisher, owner of the Oakland Athletics, is a billionaire. And not just one of those barely-there billionaires that dot the fruited plain of America, and for that matter much of the planet. Forbes pegs his net worth at $2.3 billion, ranking him No. 1,312 in the entire world. Fisher is from the wealthy family that founded The Gap retail chain. Were he living in Las Vegas rather than San Francisco, he would be the fifth-richest man hereabouts behind casino magnate Phil Ruffin, Panda Express co-founder Andrew Cherng, and mixed martial arts/casino owners Lorenzo Fertitta and Frank Fertitta III.
Yet Fisher is asking the state of Nevada in effect to give him nearly $400 million of taxpayer money toward constructing a $1.5 billion, 30,000-seat baseball stadium to move the As–one of the worst major league baseball teams in the entire world, including Japan–from Oakland to Las Vegas. By all accounts, the deal–the fine print of which hasn’t been spelled out, at least to the public–would give him all the upside should things work out while giving Nevada taxpayers zero upside, and plenty of downside if things head south. Forbes values the struggling team now at $1.18 billion, about half of Fisher’s net worth. The team value–and Fisher’s net worth–would surely increase dramatically in Las Vegas.
Using Other People’s Money, of course, is one way mere billionaires become multi-billionaires. (See Trump, Donald J. and bondholders, Atlantic City casinos.) For me the question here is why Nevada–a small-population state with crying unmet needs in education, healthcare and a bunch of other things–should even consider coughing up this kind of public loot.
I’d say the reason is that Fisher, 61, is counting on the pathological desire that cities have to be considered Big Time when it comes to sports. The A’s even alluded to this psychological concept yesterday when touting what it said was its own poll of Clark County voters showing overwhelming support for the stadium. Team president Dave Kaval was quoted as saying in a statement, “We look forward to delivering a world-class ballpark and all the benefits Major League Baseball brings, including … civic pride.”
Fisher is hitting up the government for loot not because he has to, but because he can. As I see it, it’s not unlike a drug dealer selling meth to an addict, who has a crying need. So what if the product isn’t top-notch? The addict is hooked!
The stunning MSG Sphere, a 17,500-seat state-of-the-art entertainment venue that already dominates a part of the Las Vegas skyline, is expected to open later this year at a cost of $2.3 billion. The owner, Sphere Entertainment Co., a spinoff of New York’s Madison Square Garden Entertainment Inc., did not get a tax subsidy from Nevada for this. The mistake was not claiming it would be used for sports.
Mark Davis got Nevada to pay about $750 million–apparently, a U.S. record amount–toward the $2 billion cost of Allegiant Stadium, to which he moved his Las Vegas Raiders NFL team in 2020, also from poor Oakland. The stated fig leaf for the public subsidy was that UNLV–not exactly a top college football program–would play its home games there. The $750 million was funded by an increase in the Las Vegas hotel tax, meaning that in theory it would be paid primarily by folks from other places. This followed the doctrine popularized by the late U.S. Senator Russell B. Long of Louisiana: “Don’t tax you, don’t tax me; tax that fellow behind the tree.”
There doesn’t look to be a very big tree in the A’s deal. The plan, which would require approval of the Legislature (which is being heavily lobbied) and Governor Joe Lombardo, seems to be to dedicate tax revenues–sales, property, excise, etc.–generated in the vicinity of the proposed stadium on the Las Vegas Strip at Tropicana Ave. toward stadium construction costs. In addition to construction jobs, proponents say an influx of new tourists will swell tax receipts and make this some kind of a win-win.
Really? When was the last time you jetted anywhere just for a routine baseball game? (Most of the American League teams the A’s would play against are toward the other side of the country, making it harder for their fans to travel to Vegas.) What about post-season, you say? In last place by far in the American League West with a current record of 10 wins and 35 losses, the A’s will only see the playoffs this year from the stands. I’m not even sure that in its current incarnation the team would be competitive at the Little League World Series in Williamsport, Pa. That’s in the state where the 122-year-old A’s franchise was founded as the Philadelphia Athletics in 1901–four years before creation of the city of Las Vegas.
In my view, a dedicated taxing district would siphon off a lot of tax money better used elsewhere.
Any number of studies in other markets have shown publicly subsidized stadiums rarely pay for themselves and are often sold to the public using exaggerated projections. In Seattle, where I lived before becoming New To Las Vegas, taxpayers kept paying the debt service on the Kingdome for 15 years after it was demolished.
Still, if hell froze over and Fisher somehow relocated the team purchased in 2005 for $180 million to Las Vegas without a stadium subsidy (he presumably has rich friends who could chip in), he’s still get a lot of breaks besides a federal tax law that allows him to generously write off the developmental costs of players and other interesting expenses. The tax burden on business here is a fraction of what it is in California. The cost of almost everything here is a lot less than California. Remember, the A’s are the team that invented Moneyball, the notion that close statistical analysis can provide a edge even when the bucks are missing.
As always, I welcome comments below on the issues I raise above.
Fisher and his family have been big political contributors to benefit elements of the Republican Party that see little merit in entitlements or welfare payments to the disadvantaged. I’ll put aside the issue of possible hypocrisy. Las Vegas is a gambling town. Maybe time to call Fisher’s bluff?