By Daniel J. McGraw
Last week, the Coalition Against the Sin Tax (CAST) held a press conference to propose an alternative to the Cuyahoga County sin tax: a $3.25 facility fee on tickets. Since 60 percent of people who attend sporting events live outside Cuyahoga County, CAST argues their proposal is more equitable and less punishing to Cuyahoga County residents, as upkeep for the stadiums would be paid only by those who actually use the facilities.
CAST leaders, entrepreneur Alan Glazen and attorney Peter Pattakos, came up the $3.25 fee by doing basic math. The sin tax will raise an estimated $13 million a year if passed by voters May 6. The facilities draw a little more than 4 million patrons a year. So Pattakos and Glazan divided 4 into 13 and figured a fee of about $3.25 per ticket would fund new scoreboards and air-conditioning ducts and whatever else the teams say they need to keep the games going.
None of this was very controversial or even newsy. But the reaction by government officials, business leaders, and sports teams promoting the sin tax—“Keep Cleveland Strong” is their campaign name—was so fierce that you’d think Pattakos and Glazen had suggested that the Browns move to another city and have professional soccer replace football at First Energy Stadium.
According to Keep Cleveland Strong, the facility fee “is simply the latest in a steady stream of wobbly ideas this group has trotted out in a misguided attempt to replace the existing tax on cigarettes and alcohol,” said Cuyahoga County Council member Dan Brady in a retaliatory press release following the CAST proposal.
Brady’s comment is a head scratcher. CAST hasn’t put out a “steady stream of wobbly ideas,”—in fact, the facility fee has been their main alternative from the beginning. The media has explained the facility fee alternative for many weeks now, including stories in Belt and The Plain Dealer.
[blocktext align=”left”]If that family of four were to attend five each of the baseball, basketball, and football games, their cost under the Fan Cost Index would be $3,888.90. [/blocktext]Beyond misrepresenting CAST, the Keep Cleveland Strong press release outrageously claims a facility fee would “punish families” and cause unemployment. District 8 County Cuyahoga Council member Pernel Jones, Jr. said “By pricing families out of games, this would result in smaller crowds—which means less business for those businesses that depend upon fans. That puts jobs at risk.” County Council President C. Ellen Connally added “it’s confusing that they now want to enact a new, large tax that hits families the hardest.”
The logic of Keep Cleveland Strong is terminally flawed. They state that families will not be able to afford Browns tickets if prices were raised $3.25. But the fact is that most already can’t afford to go to games—because the tickets are already incredibly expensive.
It’s like someone arguing that people will stop going to a fancy steak place if the restaurant started charging $5 for a baked potato a la carte. Truth is, most people don’t ever go to fancy steak places because they can’t afford $50 steaks, not because they don’t want to pay for the $5 baked potato. And those who can afford a $50 steak are unlikely to notice those five extra bucks.
Keep Cleveland Strong claims “if a mother and father take their two children to a game, it would cost them an additional $13 for one game. To generate the same amount of revenues under the existing tax plan, they would have to drink 866 beers or consume 289 packs of cigarettes. Imagine what those numbers would be if that family went to
five or 10 games a year.”
No need to imagine! I can do math, too. Here is how the numbers break down. According to Team Marketing Report, a publisher of sports business data, if a family buys four tickets, four hot dogs, four sodas, two beers and a few small souvenirs, it will cost them $162.24 for a Cleveland Indians game, $271.74 to attend a Cavaliers game, and a $343.80 for a Browns’ game.
If that family of four were to attend five each of the baseball, basketball, and football games, their cost under the Fan Cost Index would be $3,888.90. The facility fee proposal would tack on only $195 to that very upper-middle class bill, or about a five percent increase.
So the issue is not that adding $3.25 per ticket will harm families and cause Mom to be laid off and force the cool restaurants on E. 4th Street to shut down. That’s slippery slope logic from the powers that be. The issue is this: who can afford $4,000 per year to go to sporting events?
The average Ohio household annual income in 2012 was about $44,000. A family of four would be spending about one-tenth of their annual income if they went to 15 games a year. It gets worse if you only include Cuyahoga County residents. Pernel Jones, Jr., who argued that families would not being able to go to games if the facilities fee was implemented, represents District 8, where the medium household income is $30,740.
[blocktext align=”left”]It used to be that going to a sporting event was a spontaneous decision, sort of like going to a movie or out to eat at a mid-priced restaurant with friends. But that is no longer the case.[/blocktext]District 8, which runs from the Cedar/Central neighborhood just southeast of downtown Cleveland out to Maple Heights, and comprises 100,000 or so residents, has a lower median income than the average for Cuyahoga County, which is $43,603. That district also has 28.2% of all persons below the poverty level, about double the county rate. A total of 36.2% of families in District 8 with children under age 18 had incomes that were below the poverty level in comparison to the countywide rate of 19.9%. How many families of four in Jones’ district do you think are spending $400 to see the Browns lose?
The Keep Cleveland Strong folks fail to grasp basic economics. They think Cleveland is full of people who go to games and make make lots of money, and that the city a big-time market, not one of the five poorest cities in the country. Those who can afford just one nosebleed ticket to one game a year are the select few—if not the one percent, the ten percent, maybe.
Yes, it used to be different. It used to be that going to a sporting event was a spontaneous decision, sort of like going to a movie or out to eat at a mid-priced restaurant with friends. But that is no longer the case. The teams decided to price most Americans out of going to games, so the high cost has now shifted pro games to a planned event for the most part, usually a business-related gathering or a special family function. Since most people don’t go out and
spend four hundred bucks to take the kids to the game on a whim, a small fee on tickets isn’t going to sneak up on people and prevent them from attending.
Why is Keep Cleveland Strong trotting out this aggressive, arrogant retort to a reasonable alternative to the sin tax? Maybe because the polls show they are losing. When one side dismisses their opponent as a generator of “wobbly ideas,” it usually means things aren’t looking too good. You keep quiet when you are ahead, and you make noise when you are behind. But this noise makes no sense, because they are telling people they can choose to pay more for beer or more for their sporting event tickets. That choice is easy for most people, because they are able to buy one, but they can’t buy the other.
Daniel J. McGraw is Senior Writer at Belt.
Great article!
A sports team isn’t going to make “stay-or-leave” decisions based on the relatively miniscule amount of money generated from a sin tax. They make these decisions based on the market; so if you want them to stay…….just go to a game.
This article is beyond misleading.
There are $10 tickets at these venues, dollar dog nights and great opportunities for families to go on the cheap to see their teams. When you look at and reference The Q for example, you talk specifically about the Cavs. What about the Monsters or Gladiators who both play in the arena and routinely provide family-friendly options?
The Cavs for instance provide a family four pack starting at $59 that includes 4 tickets, 4 hots dogs and 4 sodas (http://www.nba.com/cavaliers/tickets/offers/index.html). Is that reasonable? The Monsters provide a similar package that includes 4 lower level seats, $20 in free food and beverage and a digital family picture (http://lakeeriemonsters.com/tickets/family/). If a family wants to go to sporting events and are tight on budget, there are real, viable options.
Most people on the fence with this issue do not understand that there already is an 8 PERCENT admissions tax applied to every ticket sold at these venues. That’s already one of the highest in the country. Adding a NEW TAX would continue to cripple these venues – specifically The Q – from attracting shows and events. Cleveland is in the middle of a very competitive territory for events and concerts. Artists can choose from Detroit, Pittsburgh, Columbus, Cincinnati, Indianapolis, etc. Adding a NEW TAX, puts the artists profit margin at risk, hence making it less enticing to land in Cleveland. Less acts/events that come to Cleveland, less people through the turn styles which equates to less tax revenue generated for the city and county.
The proposed solution is to extend the Sin Tax which DOES NOT INCREASE taxes. CAST’s solution creates yet another tax that will directly impact the general fund. Less people coming to these venues means less tax generated for critical city and county services.
First, the previous commenter conveniently omit the fact that these package deals “start at…” the low low prices he’s touting. Furthermore, they’re limited to 17 games in the season (referring to the Cavs), and don’t take into account additional expenses such as parking. Way to try and pull off the FUD there.
I would consider your argument that the facility fee would “cripple” the venues, but since none of the tenants are willing to open their financials for inspection, your assertion is disingenuous at best.
Finally, this argument that “these are our facilities” is beyond insulting. It’s “belongs to us” as a technicality thanks to the incredibly lousy deals crammed down the city and county’s throats. Last time I checked, I can’t take advantage of these venues the same way I can of the Metroparks, or make practical use of them in the way I do when I commute to and from work. Again, it’s nothing but FUD from the KCS campaign. Sure, the money doesn’t go to the teams, but to Gateway for administration to the venues. Do you think they’re really going to scrutinize tenant requests and tell them “no?” I’d trust my money to Omni Consumer Products and their Delta City/New Detroit project long before I’d trust Gateway, GCP, or any other members of the cartel running the show behind the scenes.
This article was very insightful. One clarifying question – the anti-sinners plan to add $3.25 per ticket: is it just for Indians, Browns, Cavs – or is it for EVERY event at one of the three sports venues?
PB, thanks for reading and commenting. The answer is that yes, the $3.25 facility fee would be assessed on all the events at the three facilities under the CAST proposal. This would inlcude the concerts and events like the circus or ice skating shows at The Q. Of course, specific details (possible event excemptions for charitable events, for example) would have to be worked out if the county decided to go down that path. But the vast majority of the revenue from the facility fees would come from the professional sporting events, given the number of events and the attendance at those.
Thanks Dan. Keep up the great work.
I appreciate the logic of this suggestion…make the users pay. The users are the butts in the seats…but aren’t the users also the people who sit on their couch in their living room, drinking a Bud Lite while watching the Browns? Seems to me that the current sin tax captures the “users” imperfectly (especially leaving out the surrounding counties), but a $3.25 ticket fee has its own inherent flaws.
Add money to the cost of anything and you will get less of it. How much? Not clear. It probably differs greatly between the Browns, Indians, Cavs, rock concerts, circus, etc.
Question…do any cities comparable to Cleveland fund their sports arenas with a ticket fee like the one suggested by the anti crowd?
In a way, I agree that “users” are those watching the game at home or in a bar. But the experience isn’t really comparable. It’s like saying, isn’t watching music videos on MTV akin to going to a live concert? And most cable providers charge extra for sports channels.
While I can’t say much about funding continued maintenance, I lived in Pittsburgh when they tore down Three Rivers to build two new stadiums at taxpayers’ expense. I remember feeling pretty miffed about that. Sure, revenues might trickle down into the local economy, but if I could never afford to take advantage of the stadiums as “infrastructure,” I didn’t want to pay for it. Let that fall to those who had the extra cash to go to a game — I didn’t even have the cheap seats budget or time to set aside for the activity (truthfully, I’m not even a sports fan).
Practice Man, thanks for reading and commenting. It is difficult to compare deals in other cities, because you also have to determine what pocket the money if coming out of. For example, in many cities, the public entities are responsible for the maintenacne, but they charge much higher rent than they do in Cleveland to do that. In some city’s (like Tampa Bay), they have a combination of a share of naming rights and a small ticket fee to pay for maintenance. Trying to make comparative analysis between different deals is not easy to do, because there are so many funding buckets that coulde be (and often are not) in play. So the issue is a complicated one in some respects, but boils down to this: the public built the facilities, the teams are not being charged rent (or a very minimal amt.), they control all the venues dates and how much they charge, they get all the revenue from concessions and advertising, so who should pay for new scoreboards and plumbing and escalators etc. if the teams say they need them? Does the public pay for all, none, or a mix? Support Your Belt, Because Your Belt Supports You.
I saw a proposal that implied giving the buildings away to the team owners and have them take care of any maintenance could alleviate this issue.
Could this be a viable option?
Thanks for your interest Ricky G. Let’s see, yes it is an option, but no it is not viable at this time. And it is not viable because the teams would never go for it. Their current deal has them paying next to nothing and getting almost all of the revenue; owning the buildings would mean they would be responsible for mainteance which would cost them something. As far as I can tell, what those who are opposing the sin tax are saying is to vote “no” on May 6, then bring the teams to the table to renogotiate their lease with the government entities and have them put up a little, and then go before voters in November with a plan that has a little give and take from both sides. If you vote no on May 6 it doesn’t mean teams are leaving or government services are cut. It means the public and the sports teams have about six months to come up with a different mainteance/capital improvement funding option. Support Your Belt.
If the facilities fee was a slightly higher amount like $6 or $7, but was applied once per *purchase*, wouldn’t that mitigate the concern about taking a family of four the the ballgame?