By Alex Pearlstein, Principal, Vice President
Americans are famous for wanting things but not wanting to pay for them. New roads, world-class healthcare, online news, a handful of chocolate-covered peanuts in a supermarket bulk bin. I’d argue that you could add professional sports franchises to the list. Most local stakeholders love the idea of having a major league team in their community but balk at any public money being used to finance a new or upgraded stadium. There are exceptions, but recent history shows that voters time and again will reject proposals to bolster the fortunes of billionaires by building them free or heavily subsidized facilities.
Ironically, as soon as a franchise leaves for greener publically-funded pastures, it’s not long before the city is feverishly strategizing how to attract a new team to the market. Such is the case in Seattle, which lost the NBA’s Supersonics and now feels the stinging pain of that team’s success in Oklahoma City. Recent attempts to pursue a new stadium for a presumptive NBA franchise were shot down in flames by the Seattle City Council. Lesson being, it’s easier to keep a team than get a team, which is why “creative financing” and book-cooking is often used to finance new stadiums, as in recent successful efforts to fund facilities for the Minnesota Vikings, Los Angeles Rams, Milwaukee Bucks, and others.
The specter of a franchise relocation is often used as motivation for communities to fast-track new stadium proposals, rally the troops to resource them, and put them to a public vote (although to be avoided at all costs). St. Louis’ last-ditch attempt to keep the Rams and San Diego’s Sword-of-Damocles one year deadline to finance a new facility for the Chargers are two examples.
The bottom line question that’s always raised in discussions of the pros and cons of public financing for major league sports facilities is, “Are they worth it?” Ultimately, this is a subjective assessment because fiscal impacts rarely point to a positive outcome for communities either directly financing stadiums or on the hook for bond shortfalls. Certainly, the lack of a major league franchise doesn’t make or break local economic success. Austin, Texas is the largest U.S. city without a professional sports team, and they’ve done okay recently (read: top metro economy in the U.S. over the past decade). Of course, they also have putative pro teams at the University of Texas.
What potentially holds the most value for major league communities is perception – the internal and external validation that comes from being a “big league” town. Shared passions are cultivated among current residents and expats alike. A Buffalo-expat friend of mine still invests a seemingly bottomless well of emotional currency in the Bills and Sabres; his teams serve as a real and imagined link back to the city that helped define him. The sheer number of “expat bars” showing NFL games in Sun Belt metros across the country attests to the powerful bonds between people and their hometown teams (mostly, unfortunately, from Rust Belt metros like Cleveland, Pittsburgh, Detroit, and Buffalo). The brief rumored flirtation the Bills had with Toronto before committing to Buffalo under new ownership felt like a nail-in-the-coffin moment for many city boosters. “If we lose our pro franchise, we’re officially no longer relevant.”
In many of Market Street’s mid-sized client communities, when you ask stakeholders what – if money was no object – would take them to the next level of success, a surprising number of people say, “Getting an NFL team.” There just seems to be a confirmation of “arrival” of a city when it gets its first pro franchise. With global audiences in the tens and hundreds of millions routinely watching NFL, NBA, NHL, and MLB games, there’s an incalculable promotional benefit accrued to communities with pro teams. How many people in Latvia would know about Green Bay, Wisconsin if there wasn’t an NFL franchise there? Awareness might lead to interest, which might lead to investment.
So, as you can probably tell, my bias is that major league stadiums are worth public investment, within reason. That said, I’m a sports fan; ask someone whose life’s passion is the arts, and they might say using public money for a Sidney Opera House in Community X is a transformational move.
But every time I see the wellspring of immeasurable pride, passion, energy, and shared community that comes from a winning team – experiences that more than anything else seem to bind places together across racial, ethnic, age, and gender lines – I am convinced that you can’t put a price tag on it. Even losing teams connect people through shared misery (see Cleveland Browns). The below picture is from the Kansas City Royals’ public victory party after winning the World Series. ‘Nuff said.