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Common Courage Press, Maine, 1998

Review by Tom Gallagher

From 1991 through the first half of 1996, the value of public bonds issued for construction of sports complexes exceeded that dedicated to new libraries and museums.

In 1996, Cleveland, Ohio committed itself to building a $220 million football-only facility the day after its school system “cut $52 million over two years, laying off up to 160 teachers and eliminating interscholastic athletics.” The stadium will house the new Cleveland Browns franchise; the old one—renamed the Ravens— moved to Baltimore when the owner decided that upcoming publicly funded repairs to the current stadium were too little, too late. Baltimore offered a $200 million new stadium with no rent for 30 years, plus a $50 million relocation fee.

Baltimore was abandoned in 1984 when Indianapolis offered the Baltimore Colts a low-rent deal in the domed stadium it had built in the hope of finding a team to fill it. Since the Ravens have replaced the Colts, the owners of the baseball Orioles now want free rent in Camden Yards, the park the state had built for them at a cost of nearly $500 million. It seems there's something in the fine print of their contract that guarantees them a deal as good as anyone else gets in Baltimore.

Cagan and deMause show how this Tale of Two Inner Cities is repeated across the nation. Economist Robert Baade compares the situation to Pascal's Wager: “The idea was somebody asked if [French philosopher Blaise Pascal] believed in God, and he said, ‘Yes, I believe in God because I can't take a chance that there isn't one' ... I think that people who make decisions about these things say to themselves that we believe there is an economic impact because we can't really take the chance that there isn't one.” Of course, some politicians have gone way beyond Pascal. According to Chicago White Sox owner Jerry Reinsdorf, Illinois Governor Jim Thompson once told him, “It'll never happen unless people think you are going to leave.” Reinsdorf obliged by very publicly flirting with St. Petersburg, Florida, in order to force a new publicly funded stadium in Chicago.

Maryland anti-public funding activist Bill Marker believes things have now moved even beyond the control of any individual team: “If it's not a personal toy of yours, if you are an owner and you have any fiduciary responsibility to anybody, and you don't demand a new facility, you're probably violating your fiduciary duty, given the way this stuff goes.” Not that there's any reason to worry about owners like the New York Yankees' George Steinbrenner, said to have paid himself a $25 million fee for negotiating the team's cable TV contract, or Minnesota Twins owner Carl Pohlad, whose family wealth exceeds $800 million, a nest egg that hasn't stopped him from arguing that the (admittedly hideous) 20-year-old Minneapolis Metrodome must be replaced at public expense. His threats to leave were only stopped by a recent North Carolina referendum decisively rejecting public funding.

On the low end, the managing partner of the Montreal Expos, with baseball's lowest payroll of $9,162,000 (the average player makes only $352,385 a season) states flatly, “We can't take on any debt service. This thing (a $180 million stadium to replace the Expodome built for the 1976 Olympics) has to be completely financed by the community.” On the upper end, the New York Yankees, whose $63,460,567 payroll ($2,440,791 a head) is second highest, are looking for a mid- Manhattan stadium with cost estimates running as high as $1 billion. A spokesperson said the team would contribute “Cash and other financial techniques,” part of which would come in the form of the right to name the stadium, an asset estimated to be worth $7 million to $10 million a year.

While it's not clear how the Yankees would hold naming rights to a primarily publicly funded stadium, it is clear that stadium- naming has become big business. A fan touring baseball's National League West Division could attend a game at Colorado's Coors Stadium (the brewing company owns the team), San Diego's Qualcomm Stadium, Arizona's Bank One Ballpark or San Francisco's 3Com Stadium. (This is actually the name of a software company rather than a typographical error. The former Candlestick Park will be replaced in a few years by Pacific Bell Stadium now under construction.) In fact, the only stadium with a normal name is Los Angeles' Dodger Stadium. But since Rupert Murdoch recently bought that team it could soon be playing in Fox Stadium.

(Universities have recently gotten into the act as well. Arizona State University has the Wells Fargo Arena; University of Washington, the Seafirst Arena; and the Value City Arena is home to Ohio State basketball. A West Palm Beach, Florida high school recently named its football stadium after a health care corporation, undaunted by the company's federal indictment for Medicare fraud.)

Then there's the luxury boxes that now figure so prominently in the financial calculations surrounding sports stadium construction. With 50 percent of their purchase price deductible as a business expense for the (mostly) corporations that buy them, the authors estimate that the roughly 7,000 or so luxury boxes currently in use reduce federal revenues by about $80 million annually. So, if you've been wondering who pays for those things, it's you. (Luxury boxes at university facilities carry even greater potential tax advantage as contributions to college athletic programs.)

In some ways “incentives” to professional sports teams merely represent an extension of the general trend of competitive city and state giveaways that has resulted in 21 states now footing part of the wage bill for new private sector jobs in their state. But sports economics has also broken new ground. Microsoft co-founder Paul Allen recently bought the Seattle Seahawks football team. Insisting that a $400 million new stadium was needed to replace the 20-year-old Kingdome, he asked the state to pick up $300 million of it. To smooth the way Allen paid the entire $4.2 million cost of the statewide referendum required to approve the taxes proposed for the project. Not only did he become the first private individual to literally buy an election, he bought it metaphorically as well—spending $5 million in a 6 week period in a successful effort for a “Yes” vote.

But the authors would not have us think that all is hopeless. While most of the campaigns against stadium giveaways that the book describes were not successful, there seems little question that they are having a cumulative effect of hardening the public's attitude and prompting federal proposals like Senator Daniel Moynihan's (D-NY) bill prohibiting the use of tax-exempt bonds for professional sports facilities.

Then there's municipal ownership. Currently four minor league baseball teams and the National Football League's Green Bay Packers are owned by large groups of local stockholders, making them effectively immune to threats to move. In the case of Green Bay, if a majority of shareholders were ever to agree to a sale the proceeds would go to the local American Legion Post. But in 1989 actual municipal ownership became a possibility when Joan Kroc, widow of McDonald's founder Ray Kroc and owner of the San Diego Padres baseball team, offered to give the team to the city along with a $100 million trust fund only to have the plan nixed by Major League Baseball's owners committee. As a spokesperson said at one point, “The consensus of the owners was that we were more comfortable with keeping the teams in the hands of smaller groups.” This was probably less a statement of class solidarity than a reaction to the fact that municipal ownership would bring public access to the game's books, possibly cramping the style of some poor-mouthing owners.

Fans who think that their city's team actually ought to be their city's team might wish to find out if their representative in Congress supports the bill filed by Earl Blumenauer (D-OR) that would remove the monopoly privileges that professional sports teams have enjoyed unless they both allow municipal ownership and grant the current city first rights to purchase a team before it can be moved.

If you want to know more about what the team owners are doing to you and what you might be able to do to them, this little volume is a fine place to start.   Z

Tom Gallagher is an activist and freelance writer living in California.