Alex EspositoCritical Issues in Sports Media

Selling Us Short

Sports have long stood as a pillar of our society. From the recreational games we play

growing up, to the collegiate and professional games we watch on television or attend in person,

few things are more deeply intertwined in our culture's fabric than sport. Specifically, the sta-

dium experience is one of the great sporting traditions our nation has to offer. Nothing can top

the feeling of seeing your favorite team trot out on the field for kickoff or first pitch, or sharing

the thrill of victory with thousands of fellow fans. While certain stadiums transcend the test of

time and commercialization, such as Boston's Fenway Park or Chicago's Wrigley Field, the stadi-

ums of today cater to those expecting the highest-quality fan experience. New stadiums sprout

left and right, and as more and more of these modern-day coliseums rise, so does the price of the

fan experience. These experiences, despite the joy and excitement they may bring us, come at a

cost. You might be thinking of the exorbitant beer prices, or why an upper-deck ticket at MetLife

Stadium goes for well over a hundred dollars. But truthfully, that's not the real scam. It is long

before gameday and well after the clock strikes zero that our wallets feel the burn. Team owners

leverage local and state governments into providing funding for construction of these new stadi-

ums under the guise of terms such as "economic growth", or "a necessary means of improving

our city". While there may be ostensible economic benefits to publicly funding a stadium, doing

so does not keep the best interests of society in mind.

When an owner seeks to build a new venue for his or her franchise to play in, the first

thing that likely goes through their mind is how they will fund such an operation. Constructing a

stadium entirely with their own multimillion or multibillion dollar net worths is certainly an op-

tion, but after all, sports is a business, so any such thoughts are cast aside in favor of a much

more profitable one: subsidization. In its most basic terms, subsidization is when a monetary sum

is paid by one organization, often a government, to another organization, often an industrial un-

dertaking, in the efforts to secure a sort of service or payment in return down the road1. Time and

time again, owners will offer the same rationale for the economic necessity of subsidization.

Construction jobs will be created. More spending by people attending games or working for the

team will pump more money into the economy. Having a franchise in town will attract tourism

and new investment. However, these supposed benefits are overstated, and often come with

many hidden drawbacks. Take the construction of Baltimore's Camden Yards, home of the Ori-

oles, for example. With $200 million of funding given to the team by the public2, it seemed cer-

tain that the city would get a great return on its investment. Promises were made but not kept.

Within its first five years of operation, the net gain Camden Yards brought to the Baltimore

economy was only $3 million 3, estimated in terms of new jobs and tax revenues. Certainly not a

worthy return on the initial investment, the net economic impact was far less than what was

promised. This was the case for several reasons, notably because of confusion between net and

gross economic effects, according to economics professors Roger Noll and Andrew Zimbalist.

They say building a stadium is good for the economy only if "it is the most productive means of

investment for a city 4." The problem is, it is never the most productive means of investment.

When consumers go to the stadium, they are substituting their spending on other recreational ac-

tivities in favor of tickets, merchandise, food and the like. Other entertainment and recreational

businesses, such as cinemas, bowling alleys, retail stores and restaurants see a decline in their

profits as a result. As the professors argue, this concentrates all the income to one spot and puts

1 dictionary.reference.com2 Noll and Zimbalist, 1997.3 Noll and Zimbalist, 1997.4 Noll and Zimbalist, 1997.

more money into the pockets of those who don't necessarily need it as badly. Now, who would

be hurt more by losing a single customer? A local neighborhood deli or the Orioles? No data

studies need to be done to figure that one out. The rich get richer, and the middle-class busi-

nesses that really make the economy flourish lose out on valuable opportunities. It is a free mar-

ket, but indeed not a level playing field.

The issue of economic impact is not the only concern the average fan, and American citi-

zen should worry about. What must be brought into question is the interests of those in power,

when deals to fund stadiums with public money are brokered. But elected officials aren't the only

ones who can sway public interest when it comes to new stadiums. The business elite certainly

have plenty of chips at the table when it comes to this issue. The Titans of Columbus, Ohio, who

are a collection of successful families and leaders in the city's business circles, have controlling

interests in local media, manufacturing, and banking. With control over the Columbus Dispatch5,

the city's lone daily newspaper, as well as several local tv and radio stations, these Titans can

stand as some of the most powerful decision makers in the community, despite not holding any

sort of public office. In the late 1990's, a golden opportunity for them arose when the Columbus

Crew, an MLS expansion, came to town. In their early years of existence, they played their

games at Ohio State University's football stadium. But their owner, Lamar Hunt, wanted a sta-

dium of his own for the franchise, and was adamant that it came with a heavy public subsidy 6. It

would not be the only investment Hunt, who also owned the NFL's Kansas City Chiefs, had his

eye on. Around the same time of Hunt's pursuit of a new soccer stadium, the National Hockey

League was looking to expand. But in order for the NHL to come to Columbus, a new venue for

5 Shwirian, Curry, and Woldoff, 2001.6 Shwirian, Curry, and Woldoff, 2001.

the expansion team to play in would have to be constructed. The business opportunity of a life-

time was suddenly there for the Titans. If they could rub elbows and get involved with a bigwig

like Hunt, one of the biggest entrepreneurs in American sport, then their business careers could

launch to new heights. The Titan-led coalition, with Hunt on board, called for a ballot initiative

on the upcoming election to fund a multimillion dollar sports complex that could house both the

Crew and an expansion NHL franchise. With a countywide sales tax increase of just under a half

percent 7, $270 million in tax revenue could be used to fund the complex. To garner support for

their plan, these coalitions talked up the issue as one of urban redevelopment, and when the vote

lost by a margin of approximately 13% 8, the city's leaders in both policy and opinion were dis-

heartened. In its weekly editorial section, The Columbus Dispatch wrote, "In the competition to

provide an attractive civic environment, Columbus will remain behind places like Cincinnati, In-

dianapolis, and Nashville, which all invest in this type of civic infrastructure9". Lamar Hunt said

it would be "impossible" for the NHL to come to Columbus. The city's mayor, Greg Lashutka,

called it "a huge lost opportunity". It turned out to be a lost opportunity for some, but not others.

Just several days after the issue was defeated at the ballots, the NHL awarded a franchise to the

city of Columbus. This was all possible thanks to the efforts of Nationwide Corporation, which

privately financed 90% of the $125 million that would go towards constructiing a brand new

hockey facility for the expansion team 10. The other 10% of the construction costs would be paid

for by the Columbus Dispatch Publishing Company, which was owned by the Titans. The public

wasn't completely off the hook, however. City council agreed to cover road improvements as

well as infrastructure costs. Lamar Hunt became the odd man out when he was dropped from the

expansion's ownership group; there was a falling out between him and several of the parties in

7 Shwirian, Curry, and Woldoff, 2001.8 Shwirian, Curry, and Woldoff, 2001.9 Shwirian, Curry, and Woldoff, 2001.10 Shwirian, Curry, and Woldoff, 2001.

the group because Hunt stood firm in his belief that the stadium should be publicly funded. Hunt

would fight for ownership of the team, but after a lengthy battle in court, sole ownership was

granted to John McConnell in 199911. But don't feel too sorry for Hunt; his ownership group

made a sweet deal with the Ohio Exposition Center Commission that would allow him to finally

build a soccer stadium. The Hunt Sports Group acquired over 12 acres of state fairground at a

rate of $50,000 a year for 25 years12. The lease, which was renewable for another 25 years after

its expiration, was highway robbery for a man as rich as Hunt. At a cost of $28.5 million, the

Hunt Sports Group became the sole funder of the new stadium 13. Sure, Hunt didn't get to be a

part of a new ownership group, but he got quite the consolation prize in that real-estate exchange.

But there was one more man who made out quite well in these deals. It was Mayor Greg

Lashutka. Before leaving office in 2000, he made sure to approve public funding of infrastruc-

ture improvements required by arena construction. This did leave an overrun in costs of about

$10 million 14, but it worked out just fine for him, as he had a nice corporate job waiting for him

after city hall. Just where did Greg Lashutka end up as a VP? Nationwide, the very company that

financed the downtown hockey complex, with help from City Hall, of course. The mayor's ulte-

rior motives can serve as a cautionary tale to those considering voting "yes" on a stadium initia-

tive ballot. Who exactly was Lashutka serving? Certainly not the people of Columbus. These du-

plicitous actions are not uncommon for politicians like Lashutka, and voters should think twice

before asking themselves who these people really work for. Owners, working hand in hand with

corporate and political leaders, leverage the taxpayer into saying yes to these deals, only to have

themselves gain something out of it.

11 McConnell v. Hunt Sports Enterprise, 2014.12 Curry, 2004.13 Shwirian, Curry, and Woldoff, 2001.14 Shwirian, Curry, and Woldoff, 2001.

The school district of Cobb County, Georgia, operating at a deficit of $86.4 million in

201315 , made one of its toughest decisions when it laid off 182 of its teachers and gave five fur-

lough days to those who remained. The teachers, and subsequently, the students, lost big time.

Somebody won, though, and won quite big. Set to open up a new stadium in 2017, the Atlanta

Braves made a deal with Cobb County to build the facility at a cost of $300 million over 30

years16. The deal, which only covers 45% of the stadium's total construction costs, will reallocate

just over $8.5 million per year in property tax revenue from Cobb County residents, a hotel and

motel tax in the county that will net $940,000 per year, and a rental car tax that will net $400,000

a year, all towards the funding of this new stadium 17. The county will also put forth $14,000,000

up front in transporation and infrastructure improvements 18. Just in case that wasn't enough,

Cobb County and the Braves also agreed to share the capital maintenance costs of the stadium.

The answer is quite obvious as to where all of this money could have went; it is clear that educa-

tion is not a top priority in Cobb County. Liberty Media, a multinational mass media corporation

that owns the Braves, has total assets amounting to over $34 billion19. The county's willingness to

subsidize the operation is corporate welfare at its finest. There is no excuse for the government to

be giving a single penny to a corporation that rich, but in this political climate, it should come as

no surprise.

Before leaving office in the early months of 2002, Mayor Rudolph Giuliani entered into a

nonbinding agreement that would build new stadiums for both the Mets and Yankees, at a total

cost of $1.6 billion dollars20. Bear in mind, the city of New York was less than a year removed

15 Atlanta Journal-Constitution, 2013.16 Deadspin, 2014.17 Deadspin, 2014.18 Deadspin, 2014.19 Liberty Media, 201420 New York Times, 2002.

from the devastating terrorist attacks of September 11th, and was suffering economically. The

plan would be financed by $800 million in tax-exempt municipal bonds, with the city pitching in

$390 million for public transporation and other infrastructure improvements 19. Thankfully for the

citizens of New York, Giuliani's successor, Michael Bloomberg, would nix that plan just days af-

ter his inauguration, citing that they were too expensive during a recession. However, just three

years later, Mayor Bloomberg announced a plan for two new stadiums that would be of "rela-

tively small" cost to taxpayers, with great benefits to the city. "We don't do subsidies21," said the

mayor. "The city is getting paid back at a profit." As it turns out, the Wilpons weren't the only

guys in town to make false promises. The projects cost the city about $458 million in infrastruc-

ture improvements including parks, garages, and transit, and according to the city's Independent

Budget Office, the projected revenue losses in the public sector amounted to about $480 million

22. Nearly half a billion dollars in tax breaks to two of the wealthiest franchises in sports. It

should also be mentioned that the city would be responsible for demolishing the old stadiums,

which costs ran into the millions. But at least jobs were created, right? Randy Levine, president

of the Yankees, said that about a thousand jobs would be generated with the construction of a

new stadium in the Bronx. But what Mr. Levine conveniently left out was the team's application

for tax-exempt bond financing. This application indicated that the number of full-time positions

would rise only 20 spots, from 120 to 140, and part-time positions would only rise from 879 to

950 23, which was not even close to the lofty expectations set forth by Levine. At the end of the

day, the people of New York got what they wanted, two brand-new, state-of-the-art baseball sta-

diums, but at a price far too great.

21 Bagli, New York Times, 2008.22 Bagli, New York Times, 2008.23 Bagli, New York Times, 2008.

Perhaps the most disconcerting takeaway from all of these cases is not these owners' de-

sires to exploit the taxpayers in order to get their new stadiums built, but the government's, and

in various cases, the voter's willingness to fork over the money for these lavish projects. Owners,

governments, and other corporate leaders manipulate the public time and time again, under the

facade of growth and development. A precedent has been set in places like Georgia and New

York, and it is up to the people to stop it. This current dilemma in sports is analogous of the ever-

growing income discrepancy that exists in our country today. More and more money is handed

out to those who do not need it, while the average, taxpaying American takes the hardest hit. The

wealth gap, this time between owner and fan, continues to grow. What could be more American

than that?

Works Cited

1. Sports, Jobs, Taxes: Are New Stadiums Worth the Cost?

Roger G. Noll and Andrew Zimbalist

The Brookings Review, Vol. 15, No. 3 (Summer, 1997)

2. Curry, Timothy. High Stakes: Big Time Sports and Downtown Redevelop-

ment. Columbus: Ohio State University Press, 2004. Print. (page 95)

3. McConnell v. Hunt Sports Ent. Casebriefs.Casebriefs.com

Web. Oct. 2014.

4. Community Conflict over Arena and Stadium Funding: Competitive Framing, Social Ac-

tion, and the Socio-spatial Perspective

Kent P. Schwirian, Timothy J. Curry and Rachael A. Woldoff

Sociological Focus, Vol. 34, No. 1 (February 2001)

5. "Here's How Cobb County Will Pay For The Braves' Ballpark." Deadspin.deadspin.com. Web. Oct. 2014.

6. "Cobb Schools' 2013-14 Budget to Mean Furloughs, Fewer Teachers."AJC.com: Atlanta News, Sports, Weather, Business.Web. Oct 2014.

7. "Bonus Season for Baseball." The New York Times. The New York Times.16 Jan. 2002. Web. Oct 2014. (source for $ figures)

8. Bagli, Charles V. "As Stadiums Rise, So Do Costs to Taxpayers." The New York Times. The New York Times, 4 Nov 2008. Web. Oct 2014.

9. My mind