Big contracts getting signed. Free agents wrangling with owners. Preseason games just over the horizon. Pro football, the most popular of all of America’s homegrown religious faiths, is revving up again. Last weekend, Brit immigrant John Oliver devoted a long segment of Last Week Tonight to the ways the owners of professional sports teams finagle sweetheart stadium deals from their host cities, or rather, their host taxpayers. How did we go from cement and iron edifices barely beyond the stadia “enjoyed” by Romans to, as Oliver observed, stadia that “look like they were designed by a coked-up Willie Wonka”?
In his recent UIP book NFL Football, Richard C. Crepeau delves into how a pro football franchise can transform an ordinary municipality into a “Major League City.” Anyone who has been to both Portland (no NFL franchise) and Buffalo (NFL franchise) might question this myth, as well as the oft-told tale that pro sports brings with it a boom in tax revenue.
But, as Crepeau shows, these fables carry weight in the real world. Furthermore, billionaire owners have successfully leveraged them into revenue generators, albeit for themselves, for decades:
For sports leagues a delicate balance needed to be maintained between supply and demand, so that becoming “major league” was possible but not too easy. As an added benefit, limiting franchises gave NFL owners the leverage they needed to extort their communities by threatening to leave for greener pastures. That there is very little evidence that being “major league” has any real or measurable value seems to matter not one bit. One study of metro areas between 1958 and 1987 found no significant difference in per capita personal income between those cities that had or did not have a major league team. There is no evidence that a major league franchise makes a city more desirable or attracts new businesses, or in any way alters the economic status of a city. Many studies indicate that per capita income falls when sports franchises come to a city. The Kansas City Federal Reserve found that the value of new jobs and tax benefits of an NFL franchise for a city is about $40.3 million per year. This falls well short of covering the costs to a city that run to $100 million per year. Jobs gained versus jobs lost tend to cancel each other, and in most cases a stadium does not offer optimum land use. As for fans coming and spending money in a city drawn specifically by a sports team, this is generally not the case. Game attendance is generally tangential to the main motive to come visit a city.
And you might not even go to a city:
Dallas owner Clint Murchison was a pioneer. He was the first to play the suburbs off against the city. When Dallas officials did not give him the new stadium he wanted, Murchison talked with Irving politicians, where he owned a piece of land, and got what he wanted. Irving provided financing of the $25 million project by issuing thirty-five-year bonds. The construction contract was awarded to the Murchison-owned J.W. Bateson Co. Stadium management was awarded to Texas Stadium Corporation, a subsidiary of the Dallas Cowboys; concessions went to another Cowboys subsidiary; and the exclusive right to sell liquor went to the Cowboy’s Stadium Club. Insurance was purchased from Kenneth Murchison Co., which had been founded by Clint Murchison’s late uncle and in which Clint owned an 8 percent stake.