The Department of Sports: Who should foot the bill

The Department of Sports: Who should foot the bill

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Photo courtesy of: http://www.cbssports.com/nfl/eye-on-football/25450768/look-rams-dump-st-louis-logo-unveil-new-one-for-los-angeles

Last month, St. Louis lost a football team when the Rams and owner Stan Kroenke were given the green light to move back to Los Angeles. This is the second NFL team to leave in recent memory, the other being the now Arizona Cardinals (not to be confused with the wildly popular baseball team) in 1988, and reasons behind the two departures are alarmingly similar: decline.

Mediocre play by the Cardinals in a worn out Busch Memorial Stadium would later mirror the slow, painful fall of the Rams as their home, the Edward Jones Dome, aged. The city of St. Louis was required in their contract to provide a top-tier stadium, and as the once cutting-edge venue fell behind, Kroenke made plans to move. St. Louis’s attempt to build a $985 million stadium, with a sizable chunk of funding coming from the city, was not enough to stop the team from leaving.

Let’s take a step back for a moment. St. Louis nearly bent over backwards to build a new stadium for a failing team, even though they and the State of Missouri are still paying for the first one. A similar situation is playing out in Wisconsin, where the mediocre Milwaukee Bucks received $250 million in public funds to build a new basketball stadium in a city where game attendance is poor.

Had the match to the owners’ $250 million input not been provided, a move out of the city was promised to follow. But why all the money for teams that, based on merit, do not deserve public funding and, based on economics, do not seem to turn a profit?

The common defense is twofold. Many espouse the idea that sports teams, and the stadiums that house them, are job-creators that spur the local economy, wherever that may be. Along with the economic benefits come the social benefits: city pride is bolstered when a team is present, or so it’s often said.

Unfortunately, such an argument is only half true. Hours of research has found no link between building a sports venue and economic development. A detailed case study involving Indianapolis, the home of two fantastic sports teams – the Colts and Pacers- and a relatively small market, also found no economic benefit, regardless of stadium location or team identity. The authors did find that the Pacers and Colts, along with the Indianapolis 500, an annual automobile race, were significant sources of pride in Indianapolis. Residents considered their sports teams more valuable than other sources of local entertainment like music or museums.

For the city of Green Bay, the historic and incredibly successful Packers football team is at the center of the city’s identity. It’s the birthplace of numerous notable NFL players, and the team’s consistently sold-out stadium holds more people than Green Bay itself. Even Green Bay’s seal has the Packers logo on it. The town and the team are inseparable, and the team’s unique management structure has arguably kept the titan franchise in a relatively tiny market, which could never hope to support a modern NFL team.

The Green Bay Packers are wholly owned by Green Bay Packers, Inc., a non-profit corporation with 360,584 stockholding owners. No individual or entity is allowed to hold more four percent of the total shares. Whenever new money is needed for example, a lavish $143 million renovation was recently completed at Lambeau Field—new shares are opened up that happen to sell in all 50 states and Canada faster than Justin Bieber tickets. This management structure has been grandfathered into NFL rules that outlaw such a practice.

Am I suggesting that every team become the Green Bay Packers? No, but more community ownership would be refreshing to see. Many teams, including the local Kansas City Chiefs and Royals, until Ewing Kauffman’s death in 1993, are family-owned and have long enjoyed good relationships with their city’s governments and their communities. Even through periods of rough performance and requests for renovation funds, the Chiefs have consistently enjoyed a strong fan base without having to hold the team ransom. Of course, this isn’t all attributable to ownership by the Hunts; Truman Sports Complex is owned by the government of Jackson County, and the purpose-built stadium style stood the test of time against awful, multi-use, “cookie-cutter” stadiums. Many cities are now paying the price for past decisions as teams urge their cities to pull them out of terrible, poorly designed venues.

Because expensive professional sports teams provide no economic benefit and are highly valued by their fans, is it fair to place significant financial burden on others in the city, especially when the team is losing? The “Packers model” is worth a try, but that would require rule changes at the top and either the creation of new teams or relinquishment by current owners, which certainly wouldn’t happen. The authors of the aforementioned Indianapolis study suggest plans like player, ticket, advertising and stadium fees. Among other suggestions are the creation of tax districts surrounding the stadiums and advertising fees based on the number of people listening or watching.

Not only would these new sources of revenue generate more cash for franchises that would otherwise source from city funds, but low viewership and support would be accurately reflected and emphasized by a drop in income. Unless someone owns the team who has deep pockets or a dedicated family that can continue their support, this would create a new incentive to improve a product in which fans would be more involved.

Partial public ownership could also be a solution. Remember how I said the Green Bay Packers raised several million dollars simply by offering a chance to own part of the team? Imagine the pandemonium in Kansas City if fans were offered a chance to own part of the Royals, Chiefs or Sporting. Since Royals fans will euphorically celebrate both a loss and win at the World Series, it’s reasonable to bet that an experiment in community team ownership would be worth a try in the City of Fountains, especially the next time Truman Sports Complex needs renovations.

Not every team has the same story, though. Placing the burden on fans would make it difficult to build the popularity of franchises. The Seattle Seahawks, for example, have seen a recent surge in playoff appearances and popularity that might’ve been prevented if the team relied financially on their once lackluster fan base.

The current practice of private and public funding doesn’t necessarily have to go—after all, even the community-owned Packers built Lambeau Field with an enormus sum of public money—but at some point we need to understand that, just like museums, theaters and parks, sports teams provide their return in culture.

Placing the financial burden directly on fans might have kept the Rams in St. Louis or, at the very least, legitimized their move in the eyes of those disappointed by it.

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