Pro sports leagues increasingly find their teams on the run, with major consequences for counties across the country.
In some cases, counties may gain financial and cultural yardage while others are left holding the ball, i.e. an abandoned stadium.
In most areas where a major sports league is located, public stadiums are funded primarily by public dollars, with zero to 25 percent financed by private sources.
Some counties find that keeping a team happy can put a strain on their budgets, since pro teams these days demand either new or renovated stadiums that might include maximum seating, “luxury boxes” and the latest in electronic scoreboards.
At press time, county commissioners in Hillsborough County (Tampa), Fla. were attempting to decide whether the county should hold a referendum in September to raise a 1/2-cent sales tax to fund a new stadium for the Tampa Bay Buccaneers football team. A county spokeswoman said the commissioners are faced with making that decision after the Florida legislature adjourned May 3 without passing a rental car or restaurant tax that would have funded a new stadium.
The owners of the Buccaneers want a new $168 million stadium, with 75 luxury sky boxes and 10,000 club seats. Meanwhile, rumors are swirling that the team is getting offers to move to Los Angeles or Cleveland.
The race to keep or attract sports teams can become very crowded. A recent article in The Wall Street Journal noted that three sports arenas, total cost $400 million, will soon sit on a 30-mile stretch of I-95 near Miami in Broward and Dade counties. That’s because Broward County is building a $212 million arena for the NHL’s Florida Panthers and Dade County is building the NBA’s Miami Heat a $165 million arena, leaving their former home, the eight-year old Miami Arena, abandoned.
But not all moves are within the same region.
On April 30, the National Football League voted to allow the Houston Oilers football team to move to Davidson County (Nashville), Tenn., where county and city government are consolidated.
The Oilers still have two years left on their lease at the Astrodome, so they probably won’t move until 1998. It’s the fourth NFL team in the last two years to switch communities. Meanwhile, Houston is trying to figure out how it can get another football team to replace the Oilers.
A Peat Marwick study showed the economic impact of a professional football team locating to the Davidson County area could bring in $65 million a year.
The study is similar to others performed around the country. For instance, before citizens of Hamilton County (Cincinnati), Ohio approved a 1/2-cent county sales tax increase in March to fund two new stadiums (baseball and football), studies were touted showing that $133 million a year would be generated in hotel and restaurant business.
Local officials and residents were banking on the new stadiums keeping the Cincinnati Bengals football team and the Cincinnati Reds baseball team. There were rumors that the Bengals might move to Los Angeles, which has lost two pro football teams, or to Cleveland, which had lost its team to Baltimore, but has been promised an expansion team by the NFL.
In an attempt to educate the public about what they saw as a need for the teams, a group called Citizens for a Major League Future put together a list of answers to “concerns” of skeptical citizens.
One of the questions: “The public sector should not support private enterprises that can’t compete.”
The answer: “There are certain actions the public sector takes to insure that important components of our community stay in our community. those interests include quality retail, the arts, education, and professional sports. This is no different than the city giving financial assistance to the owners of Saks Fifth Avenue or McAlpin’s to make certain the store remains open in the downtown area.”
But Andrew Zimbalist, an economics professor at Smith College in Northhampton, Mass., who is working on a book about the issue, says sometimes “supporters get over zealous” about the economic impact that a pro sports team can bring to an area. He said such studies are done mainly as a promotional tool to convince the public that spending their tax dollars on pro sports is a good idea.
“All of the evidence we have from noninterested investigators shows that it doesn’t bring a significant amount of money into an area,” he said. However, he noted that a “moderate” economic impact can be made if a county has a “reasonable lease” and has not made plans “in a rush or under threats.”
Zimbalist said an imbalance in the number of pro teams versus the number of counties and cities that want them “exacerbates the imbalance between supply of and demand for sports franchises.”
This leads to cities and counties offering “the kitchen sink in their effort to retain existing or to attract new teams.”
“The cities then build new stadiums costing in excess of $200 million, plus infrastructural expenditures and debt service obligations that often double the cost of the project.”
Zimbalist points out that often a city or county is left unable to cover its debt service with rent or other stadium revenues, “only to generate millions of extra revenue that inevitably is divided between higher player salaries and ownership profits.”
Some of the counties involved in attracting or keeping pro sports in their area include Davidson County, which held a referendum May 7, to approve $80 million in bonds needed to complete a $292 million, 76,000-seat, open-air stadium for the Oilers. A contract with the team includes several conditions, including the sale of luxury boxes and “personal seat licenses,” or PSLs. Selling PSLs is a new way of raising money to fund a stadium.
The metro government negotiated a tough lease with Oilers owner Bud Adams that leaves no “wiggle room,” said Beth Winstead, chief lobbyist for the consolidated government.
“We want to be sure we don’t get left holding the bag,” she said. “I know some of these states, cities and counties are getting tired of seeing their teams leave. ... I feel for them [Harris County, Texas]. ... We’re just glad for the opportunity that is here for Nashville.”
In addition to the economic impact on area businesses, Winstead noted there’s additional value from TV viewers seeing the city on “Monday Night Football.”
“You see the skyline of the city — that’s an advertisement you can’t put a price on,” she said.
In Maricopa County (Phoenix), Ariz., they’re building a $148 million baseball stadium called Bank One Ballpark. The Western U.S. Division of Perini Corporation was awarded the contract by the Maricopa County Stadium District for the general construction of the 48,500-seat major league baseball stadium for the Arizona Diamondbacks. The work will include a retractable roof, concessions, locker rooms, offices, and scoreboard. Construction will begin immediately with completion scheduled for spring 1998.
The stadium will include a pool in the right field stands which can be rented out by groups on a game-by-game basis.
In Milwaukee (Milwaukee) County, Wis., the state legislature last year approved a 1/10 of one percent, five-county sales tax to raise $160 million to help finance a new stadium for the Milwaukee Brewers baseball team. The state senator who changed his vote, allowing the measure to pass, is now facing a recall election.
Brewers owner Bud Selig has promised to come up with an additional $90 million in financing for the proposed $250 million stadium. The new stadium is expected to have luxury boxes and a domed ceiling. “We need an edge, some way to attract fans,” said Milwaukee County Supervisor Jim McGuigan. “We had snow on some of the seats a few days ago. We need additional revenues with the luxury boxes.”
Alameda County (Oakland) Calif., is renovating its Oakland-Alameda County Coliseum Stadium for $100 million, including adding 24-foot-high video boards costing $8 million. The deal is being financed by selling 10-year “licenses” to seats. “We’re renovating the stadium to keep our teams here,” said Alameda County Supervisor Edward Campbell.
Last year, the Raiders football team returned to the area from Los Angeles after a 15-year absence. The Oakland A’s baseball team also plays at the stadium.
Campbell said the county “doesn’t get a lot” directly from the teams and stadium being there. “We go along — if Oakland does well, then people in our social services system are doing better and we have less problems,” he said, noting jobs created by the stadium, and area restaurants and hotels.
Prince George’s County, Md. has reached an agreement with the state government and Washington Redskins owner Jack Kent Cooke to build a new $170 million, 78,600-seat stadium, about five miles away from the Redskins’ current home, the Robert F. Kennedy, or RFK Stadium in Washington, D.C. Cooke will finance the stadium. The state of Maryland is kicking in $58 million for infrastructure.
Plans call for more than 280 luxury sky boxes and 15,000 club seats. The county estimates the economic impact at $69 million annually, a spokesman said.
The county council has approved the site plan and is selling 200 acres to Cooke for the site. The county will retain 80 acres surrounding the stadium, and is receiving about $1 million in extra road funds from the state and will spend it on new roads around the stadium.
Fairfax, Loudoun and Stafford counties in Virginia are all vying to build a baseball stadium in an attempt to lure a major league team. Arlington County may also be in the running.
King County (Seattle) Wash., has spent $108 million in improvements to the Kingdome since it was first built in 1976.
County Executive Gary Locke and others in King County successfully fought to keep the Seattle Seahawks football team from moving to Los Angeles.
“We simply cannot continue to pit one community against another in the seemingly endless pursuit by team owners of greener fields and more lucrative stadium contracts,” he told President Clinton in a recent letter.
“When teams feel free to leave communities that have invested emotionally and financially in those teams over decades, something is wrong,” Locke said recently in testimony before the House Judiciary Committee.
“If order is not restored, more local governments will be coerced into paying hundreds of millions of tax dollars out of fear of losing their teams,” he told the committee.
Last month, the House Judiciary Committee voted 24–6 to adopt the Fan Freedom and Community Protection Act. It was first introduced by Representative Martin Hoke (R-Ohio), after the Cleveland Browns left for Baltimore.
The legislation requires that teams notify cities or stadium authorities six months before they plan to move. The bill requires teams to base relocation decisions on such factors as fan loyalty, community support and whether legitimate offers were made to keep a team in its current city.
“The bottom line is that this legislation gives an insurance policy to every single [community] that makes big tax investments in pro sports,” Hoke said.
“It’s not insurance that they will always have a team, but it is insurance that they will always be dealt with fairly,” he said.
“If the bill passes, you’re gonna see movement in all of these leagues chill,” said committee member Ed Bryant (R-Tenn.).