The Eagles Owe The City A Championship — And $8 Million


January 9, 2007

Tags: budget | fiscal policy

The Eagles are flying high this week after a playoff victory. As a fan, that makes me happy. But as someone who cares about the city budget, I continue to be frustrated that the Eagles have not paid the city money the team has owed for more than five years — and I continue to be frustrated by the city’s less-than-tenacious approach to making the football team pay.

The Philadelphia Eagles have owed the city more than $8 million since 2001 as part of the deal to create luxury boxes at Veterans Stadium. Fans who lived through leaner years when the birds were pushovers instead of NFC Champions may remember that the Eagles, under a previous owner (Leonard Tose), actually threatened to move the team to Phoenix. Citizens who lived through leaner years when the city was facing bankruptcy instead of expanding surpluses may remember that the city, under a previous mayor (Wilson Goode), actually agreed to build new luxury boxes at city-owned Veterans Stadium to keep the team in town.

The deal called for the team to receive all the revenues from renting those city-funded luxury boxes until 2001, when the team would finally share some of the revenue with the city. Of course, 2001 has come and gone and the Eagles have never paid the city a dime of this obligation (conservatively estimated as at least $8 million). This is after the city agreed to help fund a new stadium for the Eagles that has dramatically increased team revenues. In fact, as part of the deal to build the new stadium for the Eagles, the city agreed to make an annual payment to the team of nearly $7 million for operating and maintaining the facility even though the city does not receive any stadium-generated revenues. The city has dutifully made its payment each year while the team continues to balk at making good on its obligation. (That maintenance payment is part of the whole stadium deal including the Eagles stadium and the Phillies ballpark, which costs the city more than $30 million in total each year).

Later this month, the Mayor will unveil his budget for the next fiscal year and many are wondering just what he will put in that budget. One revenue source that he will count on to help balance the books will be the $8 million payment from the Philadelphia Eagles. Unfortunately, much like a Super Bowl victory, receiving the money seems to always be something that will have to wait until next year.

To be fair, the city has initiated legal proceedings against the team in an attempt to make the team pay, but the Eagles have refused, claiming that they are owed money from the city because of a snafu involving the artificial turf at Veterans Stadium that led to the cancellation of an Eagles pre-season game. Still, the city has never used the leverage of refusing to make the annual operating/maintenance payment to force the issue, nor has the city ever moved to place any public pressure on the home team to encourage payment.

It has become almost comical to see the line item in the budget each year, hoping for the $8 million payment like a face-painted fan crossing his fingers to will a “hail Mary” pass into the hands of a receiver. Each year, some budget-watchers (including the city’s state-appointed fiscal watchdog, the Pennsylvania Intergovernmental Cooperation Authority) point out the risk presented to the budget by the likelihood that the Eagles will not make the payment, but each year it continues to be included in the revenue sources the city administration says will on to fund its operations.

It would be nice if this were the only assumption included in the budget (or in the city’s Five-Year Financial Plan), but the phantom Eagles payment is just one of a number of spurious assumptions that are winked and smiled at each year. For years, the city routinely included a fudge-factor called "Future Government Efficiencies" that estimated that somehow the city would generate dozens of millions in future savings with no further explanation. Similarly, in 2000, the city loaned the struggling Philadelphia Gas Works $45 million, but we continue to push back the repayment date.

All of these shenanigans create unnecessary confusion about the city budget. If we are owed money, we should collect it. If we know how to save money in the future, we should say so and budget for the savings accordingly. There is some logic to keeping obligations to the city “on the books,” so as to show the world that we are not forgetting that we are owed the money. But the obligations are becoming meaningless novelties like those printed-but-never-distributed “EAGLES SUPER BOWL CHAMPS” t-shirts.

In a city with so many needs, $8 million can put police officers on the street, expand library hours, and place computers in classrooms. I don’t know what it will take to field a championship football team, but surely the Eagles brass can write the $8 million check. If the team persists in repeating the ridiculous tit-for-tat explanation that it will not pay the luxury-box revenues until the matter of the cancelled pre-season game is resolved, the city should refuse to make its annual operating/maintenance payment, which will quickly bring the dispute to a speedy resolution.

As a fan, I’ll still be rooting for the team through the playoffs, but as a budget watcher, I will be hoping that Philadelphians who can think of ways to improve the city with $8 million will generate some momentum.