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Raptors banquet

The Falcons and the NFL close in for a taxpayer kill


The Atlanta Falcons' goose was again cooked by a 7-9 season, a series of drubbings typical of almost four decades of civic embarrassment on the gridiron.

The fallout can be measured in other ways -- only about 55,000 tickets were sold to each of the team's eight home games at the 71,000-seat Georgia Dome. Even worse, actual attendance was probably in the neighborhood of 43,000, according to Bill Miller, director of administration for the Georgia World Congress Center Authority, the Falcons' landlord.

Think about that for a minute. If no one attended more than one Falcons game and if every single person buying a ticket was a resident of the metro area, then only about 8 percent of all Atlantans saw a game during the last season.

Even if all seats had been filled every game, and no fan attended more than one game, only about 13 percent of the city's population could have seen the repeated humiliations on the field.

In reality, of course, even the sad-sack Falcons have diehard fans who indulge in serial masochism and attend several, maybe all, of the games in the Georgia Dome. NFL analysts generally peg the number of individuals who attend a team's home games at about 100,000 over the course of a season. Here that would equate to about 2.4 percent of metro Atlanta's denizens.

What's my point? In order to provide entertainment for a teensy-weensy minority of people living in the metro area, all of us in Atlanta and maybe the state, soon will start paying much more of the Falcons' tab. Since the new Big Bird, Arthur Blank, has vowed to improve the team by pushing the NFL salary cap, we can expect the bill sooner rather than later.

Those who attend games tend to be that most hallowed of all creatures -- "upscale." Ticket prices among the NFL teams have jumped 51 percent in the last decade, from $25.21 to $38.08.

That increase is nothing compared to the stratospheric rise in player salaries -- 1,356 percent since 1981, or in dollars, from $82,400 to more than $1.2 million per player.

There's nothing wrong with the state of richness. However, a trait common to the financially blessed is that they are quite clever at extracting their wealth from the masses. The wealthy fans in the luxury suites are subsidized by public money. On a larger scale, the NFL is a contender for the Super Bowl of Corporate Welfare.

The NFL is nothing more than a cartel, a monopoly. It's like the ethically similar Medellin drug cartel, except that the rival Cali cartel helped keep cocaine prices down. There is no competition to the NFL.

Bottom line is that the league grossed $2.95 billion last year, and made profits of $385 million. The profits were really much higher -- the owners of the 31 teams score big touchdowns with end runs around the tax laws.

Noteworthy, even the least valuable, lousiest team in the NFL -- our very own Falcons -- made $5 million last year for the owning Smith family. The reason no one loses is because of huge guarantees -- notably $69 million each team got last year from the NFL's television contract.

The other big guarantee has come from taxpayers. Billions of tax dollars have been spent on stadiums across the nation in recent years -- squandering meager public resources and benefiting only the elite owners (a third of whom are billionaires) and a handful of players (545 NFLers have $1 million-plus incomes).

In the decade since the team began playing in the publicly owned Georgia Dome, the Falcons collected about $61 million in money that belongs to the taxpayers -- $8 million last year.

More than that, Georgia provides the stadium and pays the mortgage -- roughly $11 million a year. You get that sort of deal from your landlord? Rent-free digs and mad money to boot?

I would be downright dastardly not to point out that all of the cash the state bundles up and hands to the Falcons comes from money generated at the stadium itself. Last year, the Georgia Dome's Falcon-related revenues totaled $23 million, and events such as tractor-pulls added another $5 million. The team payments and the stadium's debt service were about $19 million.

It's really amazing when you think about it. We live in a state that's so incompetent it can't even issue drivers' licenses without keeping applicants in lines for hours and hours and hours -- and in a city that has been so badly mismanaged that while mayoral cronies grow filthy rich the streets sprout more craters than the moon.

Yet, the Georgia Dome and its parent state agency, the Georgia World Congress Center Authority, actually turn a profit and, by all accounts, do a right dandy job.

Nonetheless, the money generated by the Dome belongs to taxpayers. It's the public's moolah. Put another way, the public has much more invested in the Falcons -- that $61 million I mentioned -- than the team's original owner, Rankin Smith, anted in 1965, a piddlin' $8.5 million.

Enter the new Falconer, Blank, another well-heeled guy who just can't stand not being a member of the very exclusive club of pro sports team owners. I'm sort of perplexed why he'd want to belong. Blank seems to be a rather noble and occasionally generous soul -- yet he wants to hang out with guys whose ranks include more convicted felons, liars and cheats per capita than many inner-city streets at 3 in the morning.

No explaining taste, I guess.

Whatever. As I wrote two months ago, Blank is going to need our help. He bellied up to the NFL table and unfolded $545 million for a team that Forbes magazine said last year was worth only $338 million -- the lowest value of any NFL franchise.

Now, even an Enron accountant could figure out that if a team is making only $5 million a year with no debt, and a new owner invests more than half-a-billion buckaroos, and promises to upgrade the team (thereby jacking up salaries), then there's going to be red ink.

If Blank didn't put another dime into the team, at its current profit margin, it would take 109 years to earn back his investment. That isn't going to happen. Remember, however, that even the operating profit is not the real holy grail. The owners invest knowing that taxpayer subsidies will ensure skyrocketing team values -- Malcolm Glazer bought the Tampa Bay Buccaneers in 1995 for $192 million, strong-armed a new stadium from the community, and now has a team worth $582 million.

The key is the current stadium deal. "It's really lousy," says Smith College economist Andrew Zimbalist, one of the nation's leading experts on sports franchises and stadiums. "While the Falcons get only $5 million or $6 million a year from the Georgia Dome, other teams are looking at $30 million, $50 million, even more."

According to Zimbalist, plus NFL stadium consultant Marc Ganis of Chicago, there are only two options -- neither good for most of us:

  • A renegotiated contract on the Georgia Dome -- in other words a direct subsidy of tens of millions of dollars a year to the Falcons. That would end the days of the Georgia World Congress Center Authority as a profitable government agency.

  • A new stadium in which the public would not only eat the maybe $500 million cost of the facility but also the $186 million remaining on bond payments for the Georgia Dome.

    The sneak play won't happen until Blank has added a few big-buck players to the team, and maybe had a winning season or two. If the city and/or state balk at his demands, there's no reason to believe Blank won't follow the tried-and-true game plan of other NFL owners -- he'll threaten to move the team.

    CL has requested information from Blank on plans for a new stadium or to revise the current lease on the Dome. Blank's spokeswoman, Kim Shreckengost, responded that the purchase deal contains no provision about a new stadium. That, of course, goes without saying. Blank couldn't make his deal to buy the team contingent on an event years down the road. Nor could he require the Smith family -- which just wants to get its hands on the dollars -- to deliver a stadium.

    It will be up to Blank to threaten, seduce, intimidate and make those real juicy campaign contributions in order to extort hundreds of millions of dollars from you and me.

    Senior Editor John Sugg, who challenges the AJC to back up with proof or logic its claims that Art Blank would never, ever stick his bill to the taxpayers, can be reached at 404-614-1241.

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