The worm turned on public financing of stadiums in '97

January 12, 1998|By Neal R. Peirce

MINNEAPOLIS -- Something snapped in 1997. The whistle was blown on the stadium extortion racket. Pro sports stopped being America's civic opiate.

Indeed, teams that go running off to other cities, looking for a better deal after their current towns refuse to pay hundreds of millions in stadium ransom, may be in for a rude surprise: equally irate, anti-subsidy forces waiting for them in the next city down Subsidy Boulevard.

Twin failure

Case in point: Reacting to a populace steaming with exasperation toward millionaire players and billionaire owners, the Minnesota legislature refused to guarantee $356 million in public payments for a new stadium for the Minnesota Twins -- even when owner Carl Pohlad, rebuffed in offers earlier in the year, said he'd eventually donate the team to a nonprofit foundation.

It didn't help, of course, when it was learned Mr. Pohlad's own net worth increased $300 million in the past year.

Minnesota State Sen. John Marty spoke for many: ''It's not that I don't want a world championship. I do, but I also want the best schools in the world, the smoothest roads in the world. I just don't know why you have to give these billionaires a public subsidy.''

So now Mr. Pohlad's trying to sell his team. He has an eager North Carolina buyer who wants to build a stadium for the Twins in North Carolina's Greensboro/Winston-Salem area.

But there's a fly in that ointment: Recent polls show 71 percent of residents of that region oppose new taxes to build a ballpark. A Charlotte Observer's poll shows six of 10 Mecklenburg County residents against using tax money to construct a stadium there. If prospective towns start saying no to sports moguls in search of public subsidies for their luxury-suited stadiums and sky-high player salaries, then the whole extortion bubble will bust and pro sports will descend to more reasonable, free market-set prices.

If that happens, mark down 1997 as the year the worm turned. Why? Civically, for once, we did our jobs:

Academia weighed in with hard analysis showing that the projections of big local economic gains from stadiums, provided by self-interested promoters and their hired economists, tend to be so much baloney. Indiana University's Mark Rosentraub built the base in a February book, ''Major League Losers.'' Brookings Institution scholars Roger Noll and Andrew Zimbalist proved it in their October report, ''Sports, Jobs & Taxes.''

The studies' bottom line: Most new stadiums and arenas bring only about 100 full-time jobs, create negligible new economic activity and undercut existing entertainment venues in an area. Most of the revenue from the new structures flows to a handful of wealthy team owners and players.

Indeed, so much wealth gets sucked out of a community (instead of circulating from one local business to another) that regions may actually lose income. A new baseball stadium, for example, is typically associated with a $100 loss in the metropolitan area's per capita income, according to an analysis of income trends in 27 metro areas over 26 years, made by University of Maryland economists Dennis Coates and Brad Humphreys.

Press inquiry

1997 was the year the press started focusing in on the stadium-building racket. Investor's Business Daily (on ''Stadium Madness''), the Wall Street Journal, USA Today, Newsweek and Reader's Digest all burrowed in on the subject. They were joined by such scrappy newspaper columnists as the San Diego Union's Don Bauder and Buffalo News' Donn Esmonde.

Congressional focus on the abuses mounted. Rep. Earl Blumenauer, D-Ore., has 23 co-sponsors for his ''Give Fans A Chance Act'' to force departing owners to offer teams to hometowns. Another bill, by Rep. David Minge, D-Minn., would take the wheels off teams by levying a 35 percent federal excise tax on public payments made to lure a team (or any industry) from one state to another.

Given the political weight of the big league teams, neither measure has much chance of early passage. But as resentment against profiteering teams mounts, watch out.

Narrow victory

Finally, in 1997, folks got just plain mad. Their anger wasn't quite enough to stop Washington state voters' 51-to-49 percent approval of $300 million in bonds to finance a new stadium for the NFL's Seattle Seahawks. And by a hairline measure, San Francisco voters OK'd a $525 million stadium and entertainment-shopping complex at Candlestick Point, averting a threatened departure by the 49ers football team.

But the narrowness of the West Coast votes indicates future trouble. And in western Pennsylvania, voters thunderously rejected a half-cent sales tax to help -- in part -- the Pirates and Steelers build the new stadiums they're demanding.

Minnesota legislators found their switchboard swamped by a totally unprecedented 150,000 calls on the Twins issue.

The stadium wars aren't over. But after 1997, owners know they face a spirited fight anytime they reach for the public purse.

Neal R. Peirce writes a column on state and urban affairs.

Pub Date: 1/12/98

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