The Universe Exists for My Amusement

Once upon a time, Jerry Jones might have been a capitalist in the truest terms. Now, he’s just another welfare queen. Let’s take a look at how he financed the new Cowboy stadium in Arlington, TX.

He convinced taxpayers in Arlington to put up $325 billion to finance the new stadium via referendum. In actuality, this will cost the taxpayers of Arlington far more than $325 billion, since the city issued bonds in order to fund its portion of the stadium costs. He also convinced the NFL to fork over $150 billion, though it is unclear to me if this is a loan or an outright grant. Most of the remainder of the funding is coming from “seat options”, basically, a (very) low interest loan from a ticket holder. He also had the city use its powers of eminent domain to obtain property on which to build the stadium.

Some capitalist, eh?

Some details on Jones’ deal with the City of Arlington, from Wikipedia.

City of Arlington uses eminent domain to get land to build the stadium:

Stadium eminent domain imminent for homeowners

The Arlington City Council is expected to authorize on Tuesday eminent domain proceedings against as many as 19 properties needed for a new Dallas Cowboys stadium and approve resolutions paving the way for 33 more condemnations in the coming weeks.

Mayor Robert Cluck said the properties are owned by individuals who are either unwilling to sell or are demanding an unreasonable price for their homes or lots. Some have not responded to the city’s offers, he said, and a few would not allow city negotiators on their property.

“If they can’t make reasonable counteroffers,” Dr. Cluck said, “we have to use this tool.”

City officials said they would continue to negotiate with property owners through Tuesday to try to avoid the need for condemnation. However, Dr. Cluck said, some homeowners are unlikely to settle without legal action.

City of Arlington issues bonds to fund stadium:

Arlington refinances much of its debt for Cowboys stadium

Including the new bonds, Arlington has issued more than $300 million in voter-approved bonds since 2005 to help finance construction of the $1.1 billion stadium. Of that, $134 million is financed at a fixed rate below 5 percent. Some revenue from the city’s hotel-occupancy, rental-car and sales taxes is used to pay down the bonds.

With the new financing, Yelverton said the city is projected to pay off the stadium debt by 2024 at a cost $502.9 million when interest payments are included.

That estimate is $44 million higher than the original 2005 estimate of $458.9 million.

Some details on ticket pricing and “seat options”:

Cowboys Unveil New Stadium Reserved Seat Pricing

There had been growing ticket-price anxiety ever since the Cowboys had announced the pricing of the 15,000 club seats – 7,500 on each sideline of the stadium – earlier in the year, the ones priced at $340 a game, along with seat licenses ranging from $16,000 to $150,000 per seat.

The per-game ticket prices in the new stadium for reserved seats will range from $59 a game to $125 ($590 to $1,250 for a 10-game season ticket), fairly comparable in price to the Texas Stadium range of $50 to $129 for the coming season. The major difference, though, will be location, since the majority of those $129 seats at Texas Stadium are sideline seats between the goal lines.

One of the largest jumps in ticket prices will occur in the end zones, where currently lower level tickets at Texas Stadium cost $75 and the uppers range between $60 and $75. The end zone seats at the new stadium, comprising the first two bowls and then the fourth bowl above the open plazas, will cost $89 a game across the board, or $890 for a season ticket.

“We believe we have a ticket plan that provides exceptional opportunities for our fans to be a part of the Dallas Cowboys experience,” said Brett Daniels, director of client services for the Cowboys. “Texas Stadium is sold out for the 2008 season, and every one of those ticketholders will have the right of first refusal on their allocated seats in the new stadium.”

Now, as anticipated, all but 16,000 of the 50,000 reserved seats will require the one-time purchase of seat options, which give the owner the right to purchase tickets to those seats for 30 years. The seat options will range between $2,000 and $5,000 per seat, and will require at least a 25-percent down payment.

For example (see color-coded chart below), the stadium’s corner seats in the first three bowls, along with some of the sideline seats on the highest level of the stadium, will require a $5,000 seat option. The majority of the end-zone seating, from the first bowl to the upper bowl, will require a $4,000 seat option.

Only the corner seats in the upper bowl will not require the purchase of a seat option, and those tickets will sell for $59 a game, or $590 for a season tickets.

As an afterword, the old Cowboy stadium was funded entirely by the Cowboys without welfare from the city of Irving, TX. (There was undoubtedly some improvements that the city made to build roads to the stadium.) The Cowboys required season ticket holders to buy $250 bonds for each seat, and interestingly enough, the Cowboys are now paying back those bonds. They earned the equivalent of about 0.5% simple interest per year.

Texas Stadium bonds to begin paying off for Dallas Cowboys fans on Friday.

“I got them right away,” Eugene Campbell of Dallas said of the two stadium bonds he bought for $500.

Bond holders will get about $300 for each bond — meaning they profit about $50 after more than 40 years. Mr. Campbell said that’s not much of a return, but he’ll be happy to collect anyway.

“They served their purpose and I’ll get my money,” he said.

Thousands of Dallas Cowboys faithful, some of them begrudgingly, bought the bonds in the late 1960s and early 1970s. The instruments secured fans the right to buy season tickets, funded a new stadium for the Cowboys and brought a professional football team to Irving without the use of taxpayer money.

The bond sales raised about $31 million. The stadium cost about $35 million. When the team vacates next year, the city will retain the land and the stadium. The fact that tax monies weren’t used on either is something that still delights city officials who helped bring the team to Irving in the first place.