Luring Teams Doesn't Pay

October 24, 1993|By CHARLES C. EUCHNER

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.

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