Giving public money to billionaires to fund their sports arenas is almost always a bad economic idea, as John Oliver masterfully explained.
A common argument is supply-and-demand. There are only 30 NBA teams, and if one jurisdiction won’t subsidize an arena, the team will move to one that will. There are no shortage of places that will.
Again, why is that? Why are so many governments willing to funnel public money to billionaires when reliable study after reliable study has shown new arenas rarely increase economic activity? At best, the arenas just shuffle money from other entertainment sources.
Perhaps, because politicians don’t always represent their constituents en masse as well as they represent a select few.
In the year leading up to the announcement of his presidential campaign, Wisconsin Gov. Scott Walker championed a high-profile proposal to spend a quarter of a billion dollars of taxpayer money to help finance a new Milwaukee Bucks arena — all while pushing to slash roughly the same amount from state funding for higher education. One of those who stands to benefit from the controversial initiative is a longtime Walker donor and Republican financier who has just been appointed by the governor to head his presidential fundraising operation.
Real estate mogul Jon Hammes, who has donated hundreds of thousands of dollars to Republican candidates and causes, is a prominent member of the investor group that owns Milwaukee’s NBA team. Last week CNN reported that he also will serve as the Walker campaign’s national finance co-chairman. Days after that appointment, Walker’s Republican allies in the Wisconsin state Senate backed the governor’s proposal to spend public funds on a new arena for the Bucks.
Hammes’ financial interest in Walker’s arena subsidy package may not be limited to just his stake in the team. According to local news reports, his real estate firm also also bought parcels of downtown land near the location of the proposed new arena. Hammes’ firm also was contracted by the local chamber of commerce to evaluate new stadium proposals.
The Bucks arena deal seems bad for Wisconsin (and good for Hammes and the other Bucks owners). That Wisconsin politicians support the deal is not enough to convince me otherwise.