Taking aim at stadium extortion

SUN JOURNAL

Legislation: Sen. Arlen Specter of Pennsylvania wants to keep taxpayers from being held hostage by professional baseball and football teams, but he's fighting long odds.

July 24, 1999

Sen. Arlen Specter, a Pennsylvania Republican, is the latest lawmaker to try to prevent sports teams from jilting cities and demanding tax dollars for stadiums.

A bill he introduced would shield the National Football League from antitrust lawsuits when it blocks a team move -- protection Major League Baseball already has. While the NFL has sought this in the past, the rest of the bill is something it and baseball oppose: requirements that the leagues pay for their stadiums.

It would require the two leagues to put into a trust fund 10 percent of their network TV revenues each year. The leagues then would be required to use the money to pay at least half the costs of all new stadiums. Teams would have to pay 25 percent and local governments the remaining 25 percent.

The next hearing on the bill is scheduled for Sept. 13 in Philadelphia. Jon Morgan, who covers the news and business of sports for The Sun, spoke with the senator:

Q: Your bill would change in a fairly fundamental way the traditional financial relationship between teams and their host cities. Why do this?

A: I think it would eliminate the blackmail and extortion and also the thievery. It would stop teams from moving. You couldn't have [late Colts owner Bob] Irsay leaving in the middle of the night or [Ravens owner Art] Modell blackmailing Cleveland to build a new stadium and extorting money from Baltimore to build him a new stadium.

Q: If you take the authority to move from the individual franchises and give it to the leagues, won't the leagues pursue the same policy of playing one city off against another?

A: I think they would not, because the leagues would not have the same motivation to have a team in Baltimore as opposed to Cleveland. If the league had control of it, they would have left the Raiders in Oakland and they would have left the Browns in Cleveland and the Colts in Baltimore and they would have tried to accommodate Indianapolis with a team.

Q: Baseball has enjoyed an antitrust exemption for years, but recent history has shown it is not above threatening to desert a city if it doesn't get a stadium. Illinois built a stadium for the White Sox and Cleveland one for the Indians after the league bluntly threatened to leave. Would you impose criteria defining a permissible move?

A: None now. I put in a bill about a decade ago that had criteria [but did not pass]. I think we might put that in, in the final analysis.

Q: The bulk of your bill specifies a new funding mechanism for stadiums. Requiring the teams and leagues to pay for three-quarters of stadium costs prompts the question: Should the public pay anything?

A: One senator refused to join me because there was still public money. I would say a modest amount would be appropriate, but every one of these items is a judgment call. I just talked to a lot of people and talked to a lot of my colleagues and came up with the 25 percent figure.

Q: A few teams in recent years have paid for most of the costs of their stadiums -- the Redskins, Charlotte Panthers, San Francisco Giants. Would your bill diminish the chances of other teams doing this?

A: I think it would, because if you have a requirement for the league to pay 50 percent, that's that. But the privately funded stadiums are such a minority.

Q: Why just football and baseball? Many basketball and hockey teams have demanded and received publicly funded arenas.

A: Those folks haven't really dug into the public trough on the stadium construction, and I really didn't want to take more of a bite than I can chew. Football is the major culprit because they have a $17.6 billion, multiyear TV contract by virtue of the antitrust exemption. I thought I could not do football without baseball, but they are in a league of their own, very far different from basketball or hockey.

Q: How about minor league baseball? Many communities are being asked to finance stadiums upon the threat of losing their teams.

A: That's true, but I just haven't taken that up, either.

Q: Are Baltimore and Cleveland and Philadelphia mistaken in spending their money on sports teams? Is it a bad policy?

A: I would not say that. I think a sports team is very important for a city to retain its big-league status. I fought to keep the Pirates in Pittsburgh. I'm not going to say that they shouldn't respond to the extortion, but I want to figure out a way to keep the Pirates there without the necessity for extortion.

Q: There was a commission a few years ago in Pennsylvania that proposed a series of reforms. One was essentially a windfall-profits tax: If a team gets a publicly funded stadium and its value goes up as a result -- as we've seen in Baltimore -- and the team is sold for a profit, the taxpayers get a piece. Is that an appealing notion to you?

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