Luring Teams Doesn't Pay

THE BALTIMORE SUN

A "willing suspension of disbelief," Samuel Taylor Coleridgewrote, is necessary for an audience's imagination to take flight. To profit from fantastical literary concoctions, the audience must set aside standards of literal truth. Accept delusion, and the rest will follow.

In politics, suspension of disbelief is the way to outlandish schemes. Supply-side economics and "star wars" are two good examples of the triumph of self-delusion over hard evidence. Lotteries are the state equivalent. Professional sports is the municipal equivalent. Build a stadium and get a team, promoters say, and cities will turn themselves around.

Baltimore and four other cities -- St. Louis, Jacksonville, Charlotte and Memphis -- are awaiting word about their bids for entry into the National Football League's exclusive ranks. Two of those cities will win the right to a new franchise.

In recent years, dozens of other cities have sought to keep or attract existing teams. Franchises brazenly blackmail cities to get lavish benefits, such as new or renovated stadiums, real estate deals, tax breaks, lines of credit and even guaranteed profits. Teams of glory and ignominy alike play the game. The New York Yankees have Gov. Mario Cuomo quivering in fear, offering a $500 million stadium project. Boston is bidding against Hartford for one of the worst teams in sports, the New England Patriots.

The NFL's Colts and Cardinals got good deals to move, and baseball's White Sox, Orioles, Rangers, Indians and the NFL's Redskins have gotten lavish new stadiums to keep them where they were. Still others have negotiated sweeter deals for the stadiums where they already played. All told, cities spend $500 million a year to finance sports facilities.

In each of the competing cities, public officials and civic boosters surrender their minds to fantasy. They get in a fever talking about the fantastic things that having professional sports franchises will do for their cities. The self-induced delusion is that sports offers a financial bonanza to cities. The thinking goes like this: Sports can revive whole sections of the city -- nay, the whole city. It puts cities on the map. It makes firms want to relocate to the city. It lifts the spirit of beleaguered residents. It ameliorates racial and ethnic strife.

A developer who tried to get the Los Angeles Raiders to move to Sacramento said the move would be "an event the magnitude of the Gold Rush."

Boosters cite all kinds of improbable evidence to justify lavish public subsidies. The main argument is that fans spend money that "multiplies" several times in the rest of the economy. After the game, fans seek out pubs and restaurants and hotels and spend, spend, spend. A secondary argument is that sports advertises a city's name, giving it prestige that attracts businesses and new residents.

But stadiums cost so much -- from $200 million to $500 million -- that they cannot hope to even recover construction costs. Football stadiums operate eight days, and baseball stadiums operate 81 days a year. Increasingly, teams negotiate deals that restrict or ban other activities at the stadium.

Even when other events are allowed, there aren't enough to cover costs. One economist suggests that for every $1 million in debt, the stadium needs two big-crowd stadium events. A $200 million facility would need 400 dates a year to break even. Good luck.

Sports-related revenues do not multiply in the city limits the way boosters claim. Fans and businesses use the facility and take their money elsewhere. The money generated by the team goes to players who earn multi-million-dollar salaries and live outside the city. Other jobs are piddling -- concessionaires, parking attendants, clerical staff. General economic studies have shown that more than half of a city's service-sector jobs are held by outsiders.

Land and money spent on stadiums -- public structures that do not pay taxes -- are not available for other purposes. In a time of perpetual fiscal crisis and the severe decay of infrastructure, these "opportunity costs" are extra steep.

To build local economies, cities need to concentrate on developing a base. To attract business, cities need roads and bridges, airports and water ports, long-distance and commuter rail lines, well-trained workers, sources of capital for big and small firms and adequate housing. Low taxes, a favorable labor climate and reliable bureaucracy help, too.

As for the "quality of life" issue, good schools, safe streets, parks, neighborhood organizations, unions, libraries, theaters and the like are important. Unlike sports teams, these institutions engage people in the life of the community. They are not just arenas for passively watching other people do things.

But these are just the kinds of investments that cities neglect when they turn their government into a racket for sports leagues. At the same time Jacksonville committed $120 million to renovate the Gator Bowl -- doubtless millions more after financing charges and inevitable cost over runs -- city officials postponed action on renovation of a port where jobs start at $19 an hour.

Why do mayors and other boosters rush to court the franchises? The politics of cities and professional sports turns on two separate but entwined logics.

The first logic is supply and demand. The leagues enjoy a monopoly over top-flight competition. This enables the leagues to restrict the supply of teams. At the same time, the leagues goose demand for teams by expanding the possible sites for teams. Once upon a time, teams only located in inner-city areas. Now, virtually any site accessible to transportation networks and part of a major media market is a potential site for a stadium. Irwindale, Calif., population 500, made a serious bid for the Raiders a few years ago.

As any Economics 100 student knows, high demand and low supply equals high cost. Cities wishing to have teams must offer stadiums, practice facilities, real estate and other benefits worth hundreds of millions of dollars. If a city is unwilling to go along, it loses its chance for a team. Other cities beckon.

The second logic is the "ungovernability" of cities. Municipal officials face every conceivable social problem -- poverty, health crises from AIDS to TB, housing delapidation, street crime, bad transit systems, capital flight, entrenched bureaucracies. They are cut off from fiscal resources and buffetted by warring factions.

In such an environment, election-minded officials lurch toward the big and bold gesture, the dramatic action that symbolizes commitment to reviving the city. That's where sports come in.

The history of American cities is the history of dramatic gestures. Bridges, highways, urban renewal, tourist malls, convention centers and flashy subway systems are ribbon-cutting heaven. They show a city on the move, brazen against the odds, unwilling tosettle for mediocrity. These projects might fall on hard times later, but seem to offer unlimited potential at first.

Large-scale projects offer not only a PR bonanza but also booty for organized interest groups. Real-estate speculators, banks, bond underwriters, builders, construction unions and media outlets all stand to benefit from large-scale projects. That is why they organize such a full-court press for sports projects.

While urban-growth elites champion megaprojects, opponents usually struggle to organize. Unlike sports boosters, opponents of stadiums and other giveaways are dispersed, unorganized, underfinanced. They are also less intense. They tend to concentrate more on the kinds of survival issues neglected in the rush for sports teams.

Building stadiums and attracting teams is especially costly because of the way teams play cities off against each other. One city makes an offer, and the second city matches and raises the offer. The league and its franchises break up negotiations into pieces, then jack up offers piece by piece. By the time the drawn-out process is complete, cities resemble the stubble-faced gambler in Vegas who knows, just knows, that he's going to finally win the big one, but ends up coming home broke.

The five expansion hopefuls have upped the ante ever since the NFL pronounced them front-runners. Baltimore offered NFL clubs a minimum of $1.03 million every time they visit the new football stadium. Jacksonville topped them with $1.1 million. Other bidding ratcheted up the deals on luxury seating, parking and concessions revenues, scoreboard advertising and so on.

Once cities decide to seek a team, they can't stop themselves. The jolt to reality -- in the form of operating deficits and the aggravation of other urban problems -- occurs too late.

Fantasy can be exhilarating for a while, but it always carries a heavy cost.

Charles Euchner, a political scientist at Holy Cross College, is author of "Playing the Field: Why Sports Teams Move and Cities Fight to Keep Them."

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