Major League Losers: The Real Cost of Sports and Who's Paying for It. - book reviews

Reason, August-Sept, 1997 by Rick Henderson

In October 1995, one of my childhood dreams came true. Thanks to a friend in the Indians' ticket office, I attended my first post-season baseball games: game five of the American League Championship Series, pitting the Seattle Mariners against the Indians; and game five of the World Series, with the Indians facing the team I've rooted for since 1969, the Atlanta Braves. I had the time of my life.

Both series were played in the one-year-old Jacobs Field, one of baseball's new showplaces, along with the Ballpark in Arlington (Texas), Coors Field in Denver, Turner Field in Atlanta, and the stadium that started the 1990s run of "new traditionalist" ballparks, Baltimore's Oriole Park at Camden Yards. These new retro stadiums mix features of the turn-of-the-century parks (asymmetrical field designs, exposed structures, seating close to the field) with high-tech luxury boxes, ubiquitous TV monitors, concession areas with full-service restaurants that overlook the action, expansive pedestrian walkways circling the field, and abundant, clean rest-rooms. A few purists may complain that the distractions these new structures offer divert attention from the action on the field, but the soaring attendance levels - last year the Indians became the first Major League Baseball franchise to sell every regular-season ticket before the season opened - suggest that most fans don't mind.

One thing clearly not old-fashioned about these new structures is their price tags: Jacobs Field cost more than $176 million. Indeed, Cleveland's Gateway complex - the downtown area which houses Jacobs Field, Gund Arena (home of the NBA Cavaliers), and the forthcoming stadium for the NFL Browns - may eventually cost $1 billion, much of the money coming from taxpayers. Had I known the magnitude of the subsidies at the time, I still would have enjoyed the games (especially since the Braves won the Series). But that knowledge might have tempered my euphoria just a tad.

The story of the fiscal nightmare known as Gateway is but one juicy nugget served up by Mark S. Rosentraub, associate dean of the School of Public and Environmental Affairs at Indiana University at Indianapolis, in Major League Losers. In meticulous detail, Rosentraub exposes what may be the most extravagant corporate welfare system in the United States today: the placement and maintenance of professional sports franchises. He marshals a dazzling array of statistics outlining the many ways well-heeled team owners, millionaire athletes, and headline-hungry politicians rip off taxpayers. And he offers somewhat useful policy prescriptions that might cut off the subsidy flow.

The cost of obtaining professional sports franchises (or keeping them in place) is skyrocketing. Before the Ballpark in Arlington was constructed, for instance, the estimated value of the Rangers franchise was $101 million, the 16th most valuable Major League Baseball team. After the new stadium opened in 1994 - even though the Rangers had never played a postseason game - the team's value had jumped to $157 million, making it even more valuable than the storied Los Angeles Dodgers.

Politicians have an uncontrollable urge to throw taxpayer money at sports franchises. "At least five communities now provide or have proposed providing at least $250 million in subsidies for professional sports: Baltimore (and Maryland), Cincinnati, Cleveland, St. Louis (city and county partnership with the state of Missouri), and Nashville," Rosentraub writes. "Between eighteen and twenty-four state and local governments have provided or have proposed to provide at least $100 million in subsidies to professional sports teams, and several of these subsidies will amount to almost $200 million." And this list did not include Raleigh, North Carolina, which will spend $120 million on an arena to house the NHL's former Hartford Whalers; nearby Alamance, Guilford, and Forsyth counties in North Carolina, which are battling to build a $210 million stadium that would house a Major League Baseball franchise which doesn't yet exist; and Minneapolis, where the Minnesota Twins are threatening to leave unless the city builds a $400 million, retractable-roof stadium, even though the Metrodome is only about 15 years old.

Franchise owners and their political allies often justify subsidies by crying poverty and by claiming that their teams have a major impact on the local economy. Teams are in fact doing quite well; the sweetheart deals owners have made with local officials, along with media revenue, contribute much to their success. In the 1994 and 1995 seasons, for instance, the Dallas Cowboys earned more than $75 million from ticket sales and luxury-seating revenue at Texas Stadium alone. The New York Yankees get more than $50 million a year from broadcast, cable, and other media sources. And in the 1994 season, the Indianapolis Colts reported the lowest media income of any NFL franchise - $37.2 million. At press time, Los Angeles Dodgers owner Peter O'Malley is negotiating the sale of his team to media mogul Rupert Murdoch, who may pay as much as $400 million for the Dodgers and Dodger Stadium. It's little wonder the potential owners of professional expansion teams must fork over upwards of $100 million in franchise fees to put an untested product on the field. Hardly the sign of a dying industry.