NFL rolls into town - taxpayers roll out red carpet helping pay for UNBELIEV-A-BOWL
HOUSTON (KTRK) -- With the cheapest Super Bowl ticket now holding steady close to $3,000 a piece, most tickets are well out of reach for the average Houstonian. But the people you've elected to serve the city will get them for free.
DOZENS OF TOUGH TO GET SUPER BOWL TICKETS DESTINED FOR HOUSTON CITY OFFICIALS
An ABC13 Investigation turned up a city agreement with the Houston Super Bowl Host Committee. Most of the agreement deals with city obligations for park space, meeting facilities and a multi-million dollar reimbursement for public safety costs. It also grants the city 34 tickets to Sunday's game.
The tickets are destined for each Houston City Council member and the city controller. Each was offered a pair of tickets valued at $4,200. The tickets are free to the city officials, but must be reported on future ethics filings.
Dwight Boykins, refused the tickets. Boykins tells ABC13 he is hosting his own Super Bowl party. City Controller Chris Brown refused the tickets from the City of Houston. His office told ABC13 he will not attend the game. (The original version of this report indicated Brown received tickets.)
City of Houston officials familiar with the agreement suggest the council members are expected to act as city ambassadors at the game - not simply fans.
Houston Mayor Sylvester Turner will also attend. He is reportedly a guest of Texans owner Bob McNair.
Houston's city council members are not the only city officials enjoying the game thanks to public funds. Houston First, the city's tourism agency, is a sponsor of Super Bowl 51. The deal, paid for with public money, gives the group an entire NRG Stadium suite at Sunday's game.
For weeks Houston First turned down several requests to tell ABC13 Investigates how they were using it. Houston First refused, saying the guests were potential customers who could bring convention business to the city. According to the group, releasing any names would harm Houston's competitive edge.
Hours before our deadline and as time was running out on a Texas Public Information Act request, Houston First changed its tune releasing a lengthy statement about Sunday's suite. Houston First tells ABC13 it "strategically extend(ed) invitations to potential clients representing potential business of almost $300 million."
Those invitations went to 35 meeting planners and their guests. The names were not disclosed. Three Houston First executives, four board members and several partners will also enjoy the game from the suite that public money paid for.
Read their statement here:
In exchange for its sponsorship agreement with the Houston Super Bowl Host Committee, Houston First received a suite for the Game. Since that time, we have put concentrated thought into strategically extending invitations to potential clients primarily in the area of convention sales. We will use the suite to host a total of 35 meeting planners and their guests representing business potential of almost $300 million. Sixty-five percent of those folks have never booked Houston before. In addition, we will entertain four members of the travel media.
We have also carefully selected hospitable Houston ambassadors who can answer meeting planner questions and have expansive knowledge of Houston and our meeting products. From the HFC staff, our hosts will be Mike Waterman, John Solis and Luther Villagomez. We have also included four members of the HFC Board (and a guest) including Gerald Womack, Alex Brennan-Martin, Paul Puente and Bobby Singh. And, finally, we have invited several partners from the local hotel community to assist in this work including Nick Massad, Vicki Massad, Jacques D'Rovencourt, Scot Cotton, Stephanie Haynes and Doug Horn.
We've lined up our best to make this pitch because we know from experience that seeing our City in person is key to convincing folks to consider Houston. What better time to do so -- we have never looked better! I know you have seen it and I hope you agree that Houston has much to be proud of.
Last year the group brought a large contingent of employees and guests to Super Bowl 50 in the San Francisco area. During our coverage then, city council members questioned the size and expense of the taxpayer-funded trip.
UPDATE: City Controller Chris Brown refused the tickets from the City of Houston. His office told ABC13 he will not attend the game. The original version of this report (and the video above) indicate he received tickets.
NON-PROFIT SUPER BOWL? NFL SAVES MILLIONS IN SALES TAXES BY LABELING GAME AS NON-PROFIT
An ABC13 Investigation reveals that the NFL avoids paying Texas sales tax on tens of thousands of game tickets.
The legal arrangement keeps Texas from collecting millions in taxes from the sale of some of the most expensive tickets in the sporting world.
The Super Bowl is of course a celebration of the best football in the world, but it is also a hugely commercial event. Sponsors are expected to pay $5 million for a 30 second ad, according to Superbowl-ads.com. Others paid dearly for agreements to be a part of the local celebration. The NFL charges hundreds, more often thousands, for every ticket to Sunday's game.
By partnering with the non-profit Houston Super Bowl Host Committee, the NFL avoids paying any sales tax on any of the tickets. An ABC13 analysis of ticket sales and host committee sources suggest it's an Unbeliev-a-bowl deal that saves the NFL anywhere from $5.5 to $8 million.
If it was paid, that money would go directly in to city, county and state budgets.
National Football League Senior Vice-President Peter O'Reilly said it saves fans money.
"For a fan there's a fan benefit to exempting sales tax," he said.
When asked if there was any way he would consider the Super Bowl a non-profit event, sports economist Victor Matheson laughed out loud.
"Certainly not," he told ABC13 from his office at the College of the Holy Cross in Worcester, MA.
Matheson has studied the economics of large sporting events all over the world.
"This (the Super Bowl) is an event that generates quite a bit in the way of costs and if the event is not paying its way, that's certainly grossly unfair. When you host an event, everyone should pay their way and the Super Bowl certainly doesn't."
The no-tax deal is part of Texas law. It was in the law in 2004 when the game was last in Houston and in 2011 when it was played in Arlington, TX.
The Houston Super Bowl Host Committee, the non-profit the NFL is partnering with, told ABC13 it is fully complying with the law.
Committee chairman Ric Campo told ABC13's Ted Oberg, "If the legislature says it is a good thing, and they agreed to it and passed it and they've had it for 15 years, they must think it's a good thing."
AN UNBELIEV-A-BOWL HOTEL DEAL PAYS TAX DOLLARS FOR SUPER BOWL TEAM HOTELS
Every member of the NFL's Atlanta Falcons and New England Patriots checked-in this week to a hotel room paid for by the Houston Super Bowl Host Committee. Forty-two percent of the committee's budget comes from tax dollars - and that's your money.
It's not just super stars; it's every member of the team from the long snapper, to the quarterback, to the assistant who coils headset cable behind the coaches. Forbes magazine reported the average NFL team makes $91 million every year. But here in Houston, neither the teams, nor the billionaire owners, nor the National Football League paid for the hotel rooms.
It will cost taxpayers $609,000 Texas tax dollars.
It's part of the deal with the NFL to bring the game here. It's the same at every Super Bowl and if the host city doesn't agree to do it - you likely don't get the game. This year, 42 percent of the host committee budget comes from Texas taxpayers.
"No one turns down free stuff even if you are a millionaire player," Victor Matheson, a Sports Economist at the College of the Holy Cross in Worcester, MA told ABC13. "The (NFL) gets away with it because they can, not because there is an economic argument or a fairness argument for it."
Matheson has studied large sporting events for years, questioning the massive economic impact figures the league and its boosters put forth.
This year, the Houston Super Bowl Host Committee suggests $350 million in Super Bowl related spending will outweigh any taxpayer supported incentives.
YOUR LAND, THEIR CASH, AN UNBELIEV-A-BOWL PARKING DEAL FOR THE NFL
When tens of thousands of Super Bowl fans head towards Houston's NRG Stadium for Super Bowl 51, they'll need a place to park. NRG Park has space for 11,000 of them on Sunday.
The Harris County-owned stadium sits on Harris County-owned land, but for three weeks surrounding the Super Bowl it is entirely controlled by the National Football League. That includes the nearly 30,000 parking spaces throughout the complex. After security, media and hospitality requirements, just 11,000 remain for parking.
As part of the agreement to bring Super Bowl 51 to Houston, the NFL gets all those spaces rent free. They're not free to you though. The NFL will sell 11,000 of those spaces to ticket-holders for $100 each. It will generate $1.1 million in revenue for the NFL. The only thing the league pays is wages for people working in the lot. Taxpayers who own the land get no money as part of the deal.
The NFL also gets the use of NRG Stadium rent-free. The stadium rent is listed at $25,000 per day.
Together the NFL avoids $1.5 million in fees.
"It's greedy," Victor Matheson said.
Matheson is a sports economist at the College of the Holy Cross and has studied the impact of large sporting events for years. Matheson told ABC13 cities have little choice but to agree to NFL deals if they want the game, "The question is whether cities should give in to these sorts of demands and whether highly successful events shouldn't do their part to the local economies in which they take place."
The Houston Super Bowl Host Committee helped negotiate the deal as part of the bid to bring the game here. Neither the host committee nor the league will allow ABC13 to see the actual bid document - claiming it is a trade-secret. People familiar with the deal confirmed the parking and stadium details to ABC13 Investigates.
The Host Committee suggests the revenue turned over to the NFL is offset by an estimated $350 million in Super Bowl related spending. The NFL reminded ABC13 that numerous cities bid for the game every year. NFL Senior Vice President Peter O'Reilly's told ABC13, "at the end of the day, cities and the state see the economic impact of a Super Bowl."
HOW MANY TAX DOLLARS FOR THIS?
It was all smiles Monday morning in downtown Houston as the NFL, Houston Mayor Sylvester Turner and the Houston Super Bowl Host Committee kicked off Super Bowl Week in Houston. "We want to give (Super Bowl visitors) big southern hospitality," Mayor Turner offered excitedly, predicting a great week in Houston.
But it's not just hospitality the NFL is looking for. An ABC13 Investigation reveals that Texas taxpayers are giving tens of millions of tax dollars to Super Bowl organizers in the run-up to Sunday's big game. The tax spending picks up the tab for items as varied as Houston Police overtime, new turf for practice fields, catering, buses, players' hotel rooms and more. It is a checklist of lengthy items the NFL expects cities to pick up at Super Bowls every year.
The NFL partners with a local host committee to produce the week-long celebration. This year the Houston Super Bowl Host Committee raised $63.6 million for the game - the majority from corporate sponsors including some of Houston's biggest companies.
The rest is from you. Host committee documents show 42 percent of the budget is either Houston or Texas tax dollars. The biggest chunk is $25.4 million from Texas' Major Events Reimbursement Program. Another $1 million is from a sponsorship with Houston's Convention and Visitor's Bureau (now known as Visit Houston.)
Public financing - even partial public financing - has its critics. Victor Matheson is a sports economist at the College of the Hoy Cross in Worcester, MA. He's studied major sporting events extensively. Matheson told ABC13, "When you host an event, everyone should pay their way, and the Super Bowl certainly doesn't.
Ric Campo, the chairman of the Houston Super Bowl Host Committee, had a hand in negotiating Houston's winning bid for the game. He told ABC13, "To me it's about putting a zip in Houstonians' step and having people in Houston think this is a world-class city to live, work and play." Asked about the deals to help the NFL produce the game, Campo reminded us, "The NFL is a business and the NFL is trying to do what most businesses do, which is maximize their revenue."
According to reports in Forbes Magazine, the NFL is doing a pretty good job of that - bringing in more than $13 billion in revenue last year. That is nearly six times the annual budget of the City of Houston.
To the NFL, 'maximizing revenue' means pitting NFL cities against one another for the right to host the game. Campo says Houston went above the NFL's minimum standards to secure its spot.
Peter O'Reilly, the NFL's Senior Vice President of Events, doesn't deny the NFL looks for a good deal coming to Super Bowl cities. He reminds ABC13 cities bid for the honor of hosting the game. "At the end of the day, cities and the states see the economic impact of a Super Bowl."
The list of Host Committee to-do items includes paying for the week-long NFL Super Bowl Live event at Discovery Green ($11 million) paying the rent on Minute Maid Park for Monday's Opening Night party and securing the George R Brown Convention Center. Forty-two cents of every one of those dollars is public money. The NFL collects all the ticket revenue for the thousands of tickets sold to each of those events.
The Host Committee is also pre-paying the City of Houston Police Department's over time budget ($5.5 million).
The costs are off-set, Campo says, by the dollars Super Bowl visitors will spend this week in Houston. Experts hired by the Host Committee estimated $350 million in spending - close to the average of the last several Super Bowls according to the Host Committee Report.
Figures like this can be inflated and experts suggest may not always hold up.
"We do have some evidence that (hosting the Super Bowl is) fun and makes people happy," Matheson told ABC13. "We do not have a lot of evidence it makes people rich."
Matheson has routinely questioned the public spending on major sporting events, especially when coupled with stadium construction deals. Matheson said Houston is "lucky" to get a second Super Bowl at NRG Stadium without having to make major renovations. The host committee did pay $750,000 for Wi-Fi upgrades at NRG but avoided major costs on the publicly-owned stadium.
All week ABC13 Investigates will reveal some of the deals the NFL made with the host committee and State of Texas to put on the game. #SuperBowl or #Unbelievabowl - you make the call!
