(The Center Square) – North Carolina’s NFL owner, estimated to be the 94th-richest person on the planet at a net worth better than $20 billion, has proposed the city of Charlotte help pay for upgrades to the stadium he owns.
Taxpayers would foot $650 million, a fixed investment according to the Carolina Panthers’ release on Monday, while Tepper Sports & Entertainment would invest more than $688 million.
David Tepper, who bought the franchise and stadium in July 2018 for $2.2 billion, was on Forbes’ 2024 list of the world’s wealthiest at No. 94 at a net worth of $20.6 billion.
The team, in the playoffs four of the five seasons prior to his purchase, has had a losing season each year since, with 10 or more losses in all but one of the six seasons. Tepper made his fortune managing the hedge fund company Appaloosa Management he founded in 1993.
Hedge funds bring together private investors, usually wealthy, to pool money and use strategies with higher risk that can outperform average market returns. The Panthers, at Labor Day last year, were 26th of 32 teams valued at $4.1 billion and about $1 billion below the NFL average.
Doing the deal would keep the team in Charlotte for 20 years. The Panthers say “the city’s investment does not require any new or increased taxes. It will be funded by existing hospitality and tourism tax resources, which are legally required by the state to be spent on projects to support the city’s tourism economy.”
The funds come from a 1% prepared food and drink tax in the Charlotte and Mecklenburg County area that was created to pay off bonds on the city’s convention center but also is available to fund renovations at the stadium.
While advocates tout a restaurant tax as a tax on tourism, economists believe that all taxes are similar and impact regular taxpayers since, without the tax capture for the stadium and convention center, that funding would go to the city, state or county general fund.
“Those revenue sources are unconnected to the stadium and have no business being taxed to pay for a private venture that generates revenue for one of wealthiest individuals in town,” Economist J.C. Bradbury of Kennesaw State University in Georgia told The Center Square when the funding was first discussed.
Tepper’s share includes investments already exceeding $117 million; $150 million toward renovation plus potential overages; and $421 million in capital improvements.
The release says 40 ticketed events are at the stadium annually, “driving $1.1 billion in economic impact to Charlotte in 2023.” That’s an average of $27.5 million each.
Economists, however, have shown that economic impact numbers related to sports stadiums are inflated, used to convince the public and politicians to spend tax funds on a project.
Economists who have studied publicly funded sports stadiums have shown the public does not receive the desired return on their spending. The largest beneficiary of that public spending, instead, is team owners who see increased annual revenue and an increase in team value due to the public funding.
“Ideally, state and local governments should not subsidize professional sports venues, because they generate limited economic benefits and largely transfer taxpayer dollars to wealthy owners of private businesses,” a paper on the public policy of publicly funded sports stadiums written by Bradbury, Maryland-Baltimore County’s Dennis Coates and West Virginia’s Brad Humphreys says.
The Panthers, who share the stadium with the Tepper-owned Charlotte FC of Major League Soccer, say new seats will be put into the lower bowl of the 74,867-seat stadium. A number of changes for gathering spaces outside and inside the venue are planned. Infrastructure for the facility that opened in 1996 will upgrade mechanical, plumbing and heating and air conditioning.
“David Tepper has a net worth of $20.6 billion,” Bradbury wrote on Monday. “He bought the team from an entrepreneur who self-funded the stadium. Why do he and other owners think it’s appropriate to expect taxpayers to spend $650 million to renovate a play palace for the rich?”
