Thursday, December 23, 2010

No to Publicly Funded Stadiums

The NBA recently took collective ownership of the New Orleans Hornets. It seems likely that the Hornets will be able to opt out of their lease in New Orleans at the end of this season.  All parties involved insist they want to keep the Hornets in New Orleans, but they are ripe for a move.  The last major American sports franchise to move, the Seattle SuperSonics, did so because Seattle wisely refused to use taxpayer dollars to build a new arena.  Home to an exceedingly wealthy basketball fan and potential owner (Microsoft's Steve Ballmer), Seattle is first among whispered potential destinations should the Hornets move.  Seattle mayor Mike McGinn recently expressed both openness and skepticism when asked about the NBA's potential return: "We'd put any option on the table if someone came to talk to us...But we do have to look at, how much, and what's the return to us." While it seems a solid majority of Seattle citizens are still opposed to using tax dollars on a new arena, it bears reiterating what a truly crappy deal publicly financed stadiums are for the general public.

New York City has two iconic parks.  They are, perhaps, the two most renowned parks of their kind in the world.  One of them is always free and open to the public and hosts 25 million visitors per year. The other is private and charges admission to every visitor--as much as $1,250 for a few hours--and hosts under four million visitors per year.   Both are funded by a combination of public and private money.  The public park must rely on private donors for 85% of its funding.  New York City contributes about $3.5 million annually for its upkeep.  The second park was finished only two years ago.  It replaced a very similar, slightly larger park, which, if perhaps a little outdated, was still a much beloved historical gem.  To create this private park, 24 acres of public parkland were destroyed.  This second park cost $2.3 billion to build, $1.2 billion of which came at taxpayer expense.

The parks are Central Park and Yankee Stadium.  The dollars that taxpayers (local, state, and federal) contributed to Yankee Stadium could have covered the city's obligations towards Central Park for the next 338 years.  Instead of boosting funding for the world's greatest urban park (or for schools, or roads, or libraries, or subways, or hospitals, etc.) New York gave a playground to a billionaire to stage games between millionaires for the amusement of other millionaires. 

And that's who professional sports are played for these days: millionaires.  New Yankee Stadium has 6,000 fewer seats than the old stadium, but it has 450 more luxury suites, to be sold for top dollar.  Stadiums are always eager to sacrifice average seats that fetch average prices if it means they can add a few more suites that fetch outlandish prices.  After laudably lowering ticket prices, Dallas Mavericks owner Mark Cuban freely admitted that, "The upper bowl is becoming a smaller and smaller part of our revenue."  That is, teams don't make money selling cheap seats to common fans, they make money by selling luxury boxes to corporations.  This is why the NBA left Seattle in the first place.  No less an authority than David Stern called Seattle's KeyArena an intimate venue with great sight lines.  Unfortunately, KeyArena is lacking in luxury boxes which, despite its various charms, disqualifies it as a viable venue for modern professional sports.

Bringing the Sonics back to Seattle would be a boon to basketball fans and civic pride, but at what price?  A new arena would cost around $300 million.  Yes, it would bring jobs with it, but the vast majority of them would be seasonal, part time, and low paying.  A new arena wouldn't promote economic activity so much as it would funnel existing economic activity from a broad range of beneficiaries to one already wealthy monolith.  People's budgets for entertainment are not unlimited.  Money spent on a basketball ticket, a stadium hot dog, and a beer; is money not spent at a movie theater, or a concert, or a restaurant, or a bar.  It may not be a strict zero sum game, but basketball's gain is almost certainly someone else's loss.

In return for its mammoth investment, has New York City seen a single tangible benefit from new Yankee Stadium that it didn't get from the old one?  Has the economic activity created by new Yankee Stadium revitalized the South Bronx?  Using public funds to build stadiums doesn't benefit the community, it benefits team owners.  The Hornets have only been in New Orleans for nine years.  If they can't make it there, by all means, let them come to Seattle.  Just don't make taxpayers bribe a billionaire to bring them here.


  1. forlanito is the robin hood of the sports journalism world. stop being so sad! make merry!

  2. perhaps one exception worth considering for public stadium is green bay where the city owns the team as well.