By Megan Poinski, Megan@MarylandReporter.com
(June 22, 2011)—If negotiations between the NFL Players’ Association and team owners are unsuccessful in ending the current lockout, Maryland stands to miss out on as much as $42 million in revenues from the lost football season, according to a study done by Comptroller Peter Franchot and the Bureau of Revenue Estimates.
Maryland, which is home to the Baltimore Ravens and the stadium where the Washington Redskins play, receives millions annually in professional football-related income taxes, admission and amusement taxes, and revenues from businesses boosted by football.
Putting football fanaticism aside, Franchot decided Maryland should take a look at just how much the state would lose if there is no 2011-12 season. Joseph Shapiro, a spokesman for Franchot, said that the comptroller is ultimately responsible for estimating the state’s revenues.
“The next report is in September, and by then, we’ll know if we’re going to have a season or not,” Shapiro said. “We want to be prepared.”
The study, which is the first in the nation looking at the economic impact of a cancelled NFL season, goes through estimates of different revenues the state makes through professional football games. Shapiro said that the numbers are inexact, depending on things like how much players make and where they live, and how many people may go to a neighborhood bar to watch the game. According to the estimates, the most Maryland would lose is $42 million. The lower estimate is $37.6 million.
Income taxes for players, coaches, staff and owners makes up the biggest part of potential lost revenues – an estimated $20 million or so to state and local governments. This only accounts for players and staff living in Maryland. Because of reciprocal agreements with Washington, D.C., Virginia, West Virginia and Pennsylvania, income taxes for people who live in one state and work in another – like Redskins players who live in Virginia, but play in Maryland — only pay income taxes to the state where they reside.
However, personnel with teams who travel to Maryland to play pay Maryland income taxes while they are in town (except for the Philadelphia Eagles and Pittsburgh Steelers, who are exempted because of the reciprocal agreement).
“We would make more revenues when the Redskins are hosting the Cowboys,” Shapiro said.
The state also could lose up to more than $12 million in state and local revenues from admission and amusement taxes, paid on ticket sales. All of the taxes collected at Redskins games go to Prince George’s County’s coffers, while 80% of the taxes on Ravens tickets go to the Maryland Stadium Authority. The remaining 20% of the Ravens tax revenues go to Baltimore City.
The study also delves into indirect revenues – profits at bars, liquor stores, and retail stores that are boosted because of football. Shapiro said this was tricky to estimate, and was done by comparing revenues between seasons. The study states that between $3.26 and $3.5 million in state and local revenues could be lost.
Of course, Shapiro notes, there is no good precedent to look at; there has not been a disrupted NFL season since a brief players’ strike in 1987. Twenty-four years ago, Maryland had no NFL teams calling it home.