OPINION: Level the Playing Field

By Sen. Tony Guglielmo

The announcement this week from Bristol based ESPN that they were laying off hundreds of employees is jarring. They are the global leader in sports entertainment. I’m sure workers who reportedly on the job at the time must have been devastated.

The cutting of this many jobs – ESPN says is a direct reaction to the shifting ways that sports are consumed.

All in all the sports network has about 8,000 employees. Two years ago ESPN cut 400 jobs while at the same time continuing to hire. In 2009, ESPN laid off approximately 200 employees and now 300 more jobs lost this week. Adding those up, ESPN will have shed about 900 employees in the last 6 years.

A private company like this certainly has the right to make these decisions, but I am concerned because ESPN, like so many big companies, have been given taxpayer dollars to create jobs in Connecticut through the governor’s program called the “First Five”.

The New York Times reports as of 2013 Connecticut has given $260 million in state tax breaks and credits over the past 12 years to ESPN. That includes $84.7 million in development tax credits because of a film and digital media program, as well as savings of about $15 million a year since the network successfully lobbied the state for a tax code change in 2000. [Sports For ESPN, Millions to Remain in Connecticut, By STEVE EDER DEC. 26, 2013]

This amount does not include the $10 million dollar payment that will be provided to ESPN by the State of Connecticut over the next 6 years beginning in 2016.

According to published reports, even with the latest round of layoffs ESPN is still following its part of a deal with the state. ESPN had to spend at least $175 million on its Digital Center 2, where SportsCenter is broadcast, and add at least 200 jobs for a total of an estimated 4,000 jobs.

The state is not in position to verify that because the audits and payouts have not yet started, Catherine Smith, the state economic development commissioner, told reporters this week adding, “It’s really a carrot rather than a stick. It does provide them incentives going forward.”

However, at what cost to the state which is in serious debt?

Richard Pomp a law professor at the University of Connecticut said it would make more sense to clean up the tax base and level the playing field instead of giving out tax credits to large corporations.

“Don’t try to anticipate where tomorrow’s growth will come from,” Pomp said. “Simply have a level playing field and get out of the way of the tax system.”

He added the state should work to lower tax rates and housing costs and energy costs.

“Throwing money at a corporation is easy, a no-brainer,” he said. “The question is whether it is the best use of resources, and that is where the literature suggests, no, it is not the best use of resources.” [Malloy’s program creates 1,000 jobs, but critics say that’s not enough, The Day, Published, Feb.16, 2014]

I agree with him. Our resources in the state are scarce. It is really important for leaders in Hartford to pay attention to this ESPN saga. If the sports entertainment leader of the world is cutting back its operating costs to survive, maybe government should do the same. I would start with mothballing the “First Five”.

Photo credit: Ross Cidlowski via flickr creative commons