May 8, 2018

Holding the Raiders’ Roads Hostage

Michael Farren

Research Fellow, Study of American Capitalism

Anne Philpot

Research Assistant

The most expensive stadium in the world is on track to open in 2020, but if one man gets his way, no one will be able to use it.

This week, Nevada gubernatorial candidate and current State Treasurer Dan Schwartz announced a drastic measure to claw back the $750 million in subsidies given for the Las Vegas Raiders $1.9 billion stadium —by refusing to build state roadways accessing the stadium. Although a governor cannot rescind the existing contracts, if elected Schwartz would have control over future road construction. By holding the roads hostage, he wants to force the Raiders back to the bargaining table so that the subsidies can be redirected to benefit Nevada’s struggling schools.

Schwartz has long criticized the state’s priorities, questioning why professional football deserved tax dollars that could be better spent on teacher salaries and education savings accounts. In fact, with the $750 million the state offered to the Raiders, it could have fully funded a year of education for almost 100,000 students in Clark County. Alternately, the money could have built 200 miles of brand new four-lane highway, spanning half the distance from Las Vegas to Carson City. Or the $44 million in additional hotel taxes each year that fund the subsidy could instead have been used to increase the size of the Las Vegas Metropolitan Police Department by 385 officers—a 14 percent increase.

But even worse than the public funding tradeoffs these corporate subsidies cause, the vast majority of economists agree that the stadium won’t attract the jobs and tourism dollars that policymakers and team officials promised Las Vegas residents.

Our own research illustrates the hidden costs of stadium subsidies and how these policies actually harm local businesses. City leaders’ grand visions of “economic development” fail to materialize because locals and tourists simply shift their spending from one form of entertainment to another. Local bars, restaurants, and entertainment venues suffer a loss of customers thanks to competition from the new stadium that—adding insult to injury—their taxes helped fund.

Whatever you think of Schwartz’s proposal, it’s a fascinating idea to regain control over a system that allows sports franchises to exploit fan loyalty and transfers billions of taxpayer dollars every year to wealthy team owners.

In the meantime, how should fans plan on getting to the new stadium?

“On roller skates,” Schwartz suggests. “Because I ain’t building any roads.”