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Are Pro Sports Conning Our Cities?

Are Pro Sports Conning Our Cities?


The Real Cost of Sports and Who's Paying for It

By Mark S. Rosentraub

Basic Books 513pp $27.50

Jack Kent Cooke was getting desperate. Already spurned three times by various cities and counties around Washington, D.C., Cooke was urgently casting about for a site on which to build a new football stadium for his Washington Redskins. In the spring of 1995, he focused with renewed vengeance upon suburban Maryland.

As part of a campaign to secure funding for new roads around one possible location, Cooke's deputies released a torrent of documents claiming that the team would bring both fame and economic growth to Prince Georges County. If the stadium were built, they said, the county would be cited 8.9 billion times each year in U.S. newspapers. Each U.S. citizen, on average, would read about it 35 times a year.

It was an absurd claim--both irrelevant to economic growth and wildly exaggerated. But it was the type of hyperbole that sports-team owners have increasingly used as they have embarked on a nationwide construction binge during the 1990s, uprooting established teams and demanding sweetheart deals from local governments. Now comes a return salvo, in the form of Mark S. Rosentraub's manifesto, Major League Losers.

An urban policy professor at Indiana University, Rosentraub says pro sports teams are hoodwinking local governments into handing over tens of millions of dollars to get each new stadium built. He claims that team owners inflated the economic importance of sports, underestimate the cost of their projects, and play on voters' emotional ties to favorite teams. The result, he says, are lopsided agreements that have survived even in a time of government frugality. "A welfare system exists in this country that transfers hundreds of millions of dollars from taxpayers to wealthy investors and their extraordinarily well-paid employees," Rosentraub writes.

Major League Losers could hardly arrive at a more important time. With owners seeking new revenues to offset soaring player salaries, Boston, Detroit, Pittsburgh, and San Francisco will all likely see new stadiums built over the next decade. A key rationale for the new facilities: All will have luxury suites that rent for as much as $250,000 a year and provide profits that owners usually do not have to share with the leagues.

Rosentraub's central argument is that pro sports teams are small businesses that don't deserve the subsidies they get. The industry never accounts for more than 0.5% of jobs or salaries in any region. (By contrast, in the average metropolitan area, restaurants provide nearly 7% of jobs.) Its most successful teams, such as the New York Yankees and Dallas Cowboys, bring in only around $100 million in annual revenue. The business does not provide local economies with any noticeable growth, Rosentraub writes. Yet Cleveland, for example, is spending about $1 billion over a 25-year period for three pro sports franchises.

Why? Sports leagues enjoy an almost unique legal status that allows them to control the number of teams, depressing supply and inflating demand among cities. "Just as the oil-producing nations held the oil-consuming nations hostage to high prices," he says, "the sports leagues and their players are holding cities and their taxpayers hostage today." Here, the author swings wildly for the bleachers, arguing that anyone with the cash to start a team should be able to do so. The market for Major League Baseball can support 35 teams (or 7 more than currently), he estimates, while pro football could absorb 42 (a jump of 12). Surely, though, his solution would bring scheduling nightmares and a diluted talent pool--and even more chaos than exists now.

The real answer is for cities and states to better evaluate the costs and revenues that teams bring. Here, Rosentraub shines. He notes that owners--along with the consultants they hire and the politicians they woo--overestimate teams' economic impact, sometimes by as much as tenfold. They fail to say that most of the money spent at the arena would still have been spent--say, at the movies--had the team not existed. And they don't mention that players spend about half of their salaries outside the region where they play.

Major League Losers is an important, if flawed, book. Its best chapters should be required reading for anybody who lives in a city that is negotiating to build a new arena. It's also a good reality check for sports fans whose enthusiasm can overwhelm their good sense. Unfortunately, many readers will get bogged down in Rosentraub's turgid prose. With its many lists and rhetorical questions--and dearth of compelling anecdotes--the book often reads like an academic paper. And at more than 500 pages, Major League Losers would have been improved by being cut in half. Indeed, most readers might do well to concentrate on the two sections that critique team owners' economic projections and on one of the five case studies that occupy the book's second half.

Whatever its problems, Major League Losers' central point is certainly valid, and Rosentraub lays it out better than anybody else to date. Politicians and voters may ultimately decide a franchise warrants the expenditure of big bucks. But they should know how many millions they'll actually need to spend--and which numbers, like Jack Kent Cooke's 8.9 billion newspaper citations, are nothing more than a figment of an owner's imagination.