We all inherently associate a sports team with the city they play in. They tend to move beyond their basic status as a source of entertainment into a role that significantly impacts their city. In essence, they come to define a city. For me, the image to the right is equally, if not more, recognizable than the actual Philadelphia
sky-line. Those four monuments to Philadelphia sports represent a huge part of my identity and where I’m from. However, and as a sports fan it pains me to say this, all of this noise and glamour is really a distraction that masks the fact that sports franchises, in reality, are businesses. And what does every business need? A headquarters. A stadium.
Professional stadiums, which are increasingly becoming more and more elaborate and luxurious, cost a lot of money. Additionally, every so often, teams need or choose to build new stadiums for many various reasons. The problem arises because professional teams of the four major American sports (Football, Baseball, Basketball, Hockey) are in rather unique positions as businesses. Their intimate relationships with their cities and their fans, as well as their supposed contributions to their local economies (which we’ll talk about later), allow them to extort a rather large degree of influence over the cities. And many of them use this influence to acquire public funds, taxpayer dollars, in order to fund their new stadiums. To my knowledge (and the knowledge of many journalists who have written on this subject), no other business in America has been able to successfully lobby local governments for funds to build or maintain their headquarters. This is a problem.
Analyzing the Issue
From here on out I am going to focus specifically on NFL stadiums because they generally cost the most money and they tend to acquire the most public subsidies. From 2000-2015, nearly $12 billion in taxpayer money was spent on football stadiums, and many times the teams put pressure on the cities, which were initially reluctant to provide any money. Teams often put immense pressure on the local government and routinely threaten the city with relocation in order to get their way. In 1994, the Rams left Los Angeles for St. Louis because the mayor had refused to pay for a new stadium, and just this past year the left St. Louis for Los Angeles for the same exact reason. In addition, the San Diego Chargers have now become the Los Angeles Chargers, and the Oakland Raiders will soon become the Las Vegas Raiders. Nearly every move in NFL history has occurred because the teams were frustrated with not getting any or “enough” money to build a new stadium, and they were able to create a bidding war with other cities who were willing to pay.
And, as if to make matters worse, the cities that do end up securing an NFL team rarely reap the advertised economic benefits. Although they are recent, the many studies that have been done on cities that subsidize new stadiums have shown no association between the new stadium and an economic boost. In fact, a great majority of the studies show that cities who spend money to attract or retain pro teams generally turn out worse economically than those that do not pursue them. In general, many economists agree that the potential benefits of spending public funds on stadiums for sports teams is not worth the risk. The team owners and the leagues reap most of the rewards while the public bears the bulk of the risk. Additionally, although the stadium projects initially create any jobs for construction, once it is complete these jobs go away. In their place are many temp jobs as vendors and other workers who are paid somewhere around minimum wage. Also, we have to remember that a football stadium is generally only open for about 8-12 games a year, maybe closer to 20 if it is shared with a college team. Other than those days it only opens for a select few concerts or events of that nature. The fact is, for most of the year the stadium is not in use.
I feel I must point out here that not every NFL team is owned by greedy billionaires. There are, in fact, a great many players and owners who make it a point of theirs to give back to the communities they represent through charity. Atlanta Falcons’ owner Arthur Blank, for example, has focused his charity work on
revitalizing English Avenue and Vine City, two of the poorest neighborhoods in the country, both of which lie only a few blocks from the Georgia Dome and Mercedes-Benz Stadium. However, for each hope-inspiring case such as this, there is another that is equally uninspiring. Take, for example, the case of U.S. Bank Stadium, the new home for the Minnesota Vikings. Initially, the building of the stadium required a public referendum on the issue of public subsidies; however, a “stadium authority” was created to surpass this referendum and allocate the $498 million requested without taxpayer consent.
Actions like this make me wonder how and why it came to be this way. It may not be a huge deal in, say, Los Angeles, with 4 million taxpayers; however, it would be a much larger deal in, say, St. Louis with its 300,000 taxpayers (aka why the Rams moved back to LA). As to how to deal with this, some have suggested legislation to protect local governments (or taxpayers), but anything short of federal action wouldn’t make much of a difference as there are 32 teams and a whole lot more cities that would be happy to take them in. It is true that the allure of a professional sports franchise, especially an NFL team, is very appealing. However, it is also true that we must protect the public from extortion from big businesses and something must be done.