SB Nation

Tom Ziller | November 21, 2013

Pay to play

Why we gladly give franchises our money for new sporting venues, and how citizens for and against those projects can find common ground

Professional sports and incredible sums of money are, at this point, inextricably intertwined. At the highest levels, franchise values rival small nation GDPs. The NBA is a concern of $4 billion in annual revenue; its 30 franchises have an estimated combined value of $15 billion. A single Lakers courtside ticket for a single game runs equivalent to two months gross salary at California's minimum wage. Players themselves make salaries that'd make a Rockefeller jealous; Kobe Bryant is due $30 million this season, and NBA teams will pay out about $2 billion in total salaries to roughly 450 lucky athletes. The lowest-paid player in the league will make about $490,180.

The only limits on revenue are a lack of creativity and the cold hammer of the word no from the buying public.

This is a full-blown major industry. But leagues -- including the NBA -- rarely bask unconditionally in the glory of their solvency. There's always more money to be made. Expanding revenue streams is one path. That's why the NFL talks about expanding its already brutal schedule a week or two. That's why Major League Baseball adds a playoff game for each league. That's why we have NBA teams wearing nine different uniforms a season and, coming soon, ads front and center on those special jerseys. It's why there's football on Thursdays, outdoor hockey on New Year's and two months -- two months -- of NBA playoffs. Businessmen and businesswoman run these leagues. The only limits on revenue are a lack of creativity and the cold hammer of the word no from the buying public.

The other path to increased profits is reduced expenses. And the leagues have all flogged this one, too. Want to know why so many JDs contribute to sports websites? Because of all the damn lockouts. Within the past three years we've seen lockouts from three of the top four sports leagues plus two referee stoppages. (The NBA ref lockout was mercifully resolved before it touched the regular season. NFL fans were not so lucky.) Labor is the biggest expense for the leagues, without question. But it's not the only expense.

In fact, there's a real fat capital expense facing every single team in every league: the facility in which it plays. And there's one major way to reduce that expense. Unfortunately for us, playing in a 20-year-old building that cannot be touted as "state of the art" but gets the job done isn't the answer.

Arenas and stadiums are huge expenses for sports teams. If only there were someone to help pay for it ...

* * *

Public funding of sports arenas and stadiums brings out venom typically reserved for the most heated on-court rivalries. Pro-subsidy fans facing the potential loss of their team shout down opponents at every opportunity. Subsidy opponents bemoan the meathead charlatans and spit at every argument that a new arena is a good use of money. Economists-for-hire spin up fabulously false tales of grand regional benefit and a high return on the investment. Arena foes seethe out loud about the salary of the team's star compared to that of their kid's second-grade teacher. "You have no vision, no heart," says one side. "You have no soul, no brain," says the other.

They're both wrong, of course. And if the backers and detractors would get on the same page, better projects with better results and less heartburn would result.

The core fact that makes public funding of sports facilities possible is its popularity with voters. Some current NBA arenas funded in part by tax dollars have received explicit voter permission. The public portion funding the AT&T Center in San Antonio needed voter approval in 1999; 61 percent of Bexar County voters said yes. In 2008, an Oklahoma City initiative to assess 1 percent sales tax for improvements to then 6-year-old Ford Center was approved with 62 percent of the vote.

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In most cases, the public considers spending its collective money on arenas to be a fine idea.

More commonly, funding deals don't include direct tax increases on local residents. Bonds, land grants, loan guarantees, hotel and rental car tax or other sources may constitute the contribution, which means that final approval comes from a city council or county board instead of the electorate. But these almost always pass easily, and the biggest elected boosters find themselves retained by the voting public. Orlando mayor Buddy Dyer led the charge to help fund the Amway Center in 2007. In 2008, 61 percent of the vote kept him in office. Kevin Johnson pressed hard on public funding for a new Sacramento arena through 2011 and 2012. (A common complaint was that working to get a new Kings arena was the only thing Johnson did in his first term.) In a June 2012 primary, he won 58 percent of the vote in a four-person field to avoid a run-off.

In most cases, the public considers spending its collective money on arenas to be a fine idea. What exactly is the problem?

Subsidy opponents have few recent victories at hand, and this core issue is the culprit. No matter how much a subset of the population dislikes the model, they are outnumbered. In democracies, that's a losing formula. From my experience, arena subsidy opponents come from a range of disparate groups: neighborhood activists, social welfare proponents, anti-tax crusaders, anti-corporation liberals. Three of those four categories aren't exactly renowned for their fundraising ability. The one exception -- anti-tax folks -- have only recently been stoked with cash, and it's more likely to be used beating back Democratic politicians and policies than development deals.

Who backs arena subsidies? Well, the teams and leagues, obviously. As we've established, they have plenty of money to fund favorable research, conduct expensive and time-consuming outreach and, when push comes to shove, buy campaign ads. The business community tends to support these endeavors, too; Seattle and Sacramento each benefited from huge assistance from locally-based corporations in recent subsidy efforts. Labor groups are on board if brought on board; builders of all stripes like the work, too. More recently those who support "smart growth" policies are more likely to be strong backers of arena and stadium projects if downtown revitalization is a piece of the puzzle; these interests add some additional, traditionally liberal punch to the equation.

But those supporter groups can only buy attention and arguments, and that doesn't necessarily win elections. You need votes, whether at the ballot box or at the council dais. (Votes at the ballot box eventually shape votes at the dais, of course.) In pulling their fans into the battle, they buy the ballot box support, which is all that matters in the end.

This is the trump card subsidy opponents can't defeat. Sports fans aren't just individual voters: they are passionate advocates for the brand and, by extension, the brand's cause. Wearing team colors is a political statement. Have you ever seen a non-politician wear a jersey with a politician's name on the back? You can buy a lot of things in politics -- access, favors, forgiveness, votes. But you can't buy the kind of loyalty that comes with a sports logo.

That's a powerful weapon in favor of subsidies, and bemoaning it won't ever help opponents. It'll only strengthen the resolve of those fans who just want to keep their team. So if anti-subsidy residents and groups want to actually improve the situation, a different tact is needed.

Most importantly, though, the opponents need to understand that demonizing pro sports is not ever going to work. You might as well spit into the wind.

***

Bravesstadium_mediumRendering of the new Braves stadium in Cobb County, Georgia. (Via Home of the Braves)

Why is the public comfortable spending its collective money on sports facilities? Because the public has become comfortable spending its individual money -- and lots of it -- on sports. American sports leagues have become some of the most important cultural pillars of our society, for better or worse. I bet you know more neighbors' NFL allegiances than religious denominations. The Crocker Art Museum in Sacramento is a really fantastic institution with a good annual program and strong permanent collection. It's dirt cheap, too, and open about 310 days a year. It drew 250,000 attendees in 2011-12, according its most recent annual report. The Sacramento Kings, a horrid basketball team then suffering under extreme mismanagement, featuring relatively high prices and a fraction of the convenience of a typical museum visit, welcome almost 500,000 paying customers in 2011-12 on 33 nights of action. A bad team in an unstable situation brought in twice the number of customers than the local excellent museum in about 11 percent of the available dates. This says nothing about the Crocker or the Kings: this says everything about sports.

The cost of being a sports fan has never been higher. Each league has premium packages that ensure the fan can see every game on every type of device every day. Broadcast deals are exploding, and fans happily fork over the increased cable fees. (If a la carte TV was a real thing instead of a fever dream of wishful cord-cutter, we'd pay out the nose for several ESPNs, TNT, Fox Sports and NBC Sports. Yes, even NBC Sports. It has hockey, soccer and the Olympics.) We pay huge sums to procure tickets to sporting events, to park at arenas, to eat and drink at arenas. Personal seat licenses were actually made viable by fans, and not laughed out of existence.

The market for our eyeballs, our subconscious minds, our eventual consumer dollars -- it's a rich one.

Most of all, we pay in exorbitant amounts of our precious attention. Our sports win our attention for the magic moments they give us. In breaks in the action, the sports leagues sell that attention to the highest bidder. I will likely never fly Emirates, but I sure as heck know they exist. (Thanks, Arsenal!) I've been sold cheap tacos by Charles Barkley, cheap credit by Yao Ming and cheap cars by Blake Griffin (in the middle of an official NBA event). Those exploding broadcast deals are made possible by the aversion to time-delayed viewed sports fans hold. Fewer TV programs are watched live these days; sports are No. 1 with a bullet. The leagues, networks and advertisers know we'll see those finely crafted commercials. The market for our eyeballs, our subconscious minds, our eventual consumer dollars -- it's a rich one.

We pay a ton to be sports fans. What's another couple of bucks when my team asks for a public subsidy?

That's an overly simple view of the common fan's outlook on public subsidies. But it's really hard to compare mostly invisible "taxpayer dollars" to the coin we actually spend and come out with a real sense of understanding. And because we have so much already invested in our favorite teams, the case of the public subsidy is much easier to make than most of the alternates. Compare these calls to action.

"If we don't come up with $100 million, our team is going to move."

"If we don't come up with $100 million, we will have to continue with a conservative budget leading underfunded social programs, austere infrastructure upgrade plans and status quo public safety."

All of those things in the second threat would apply to every resident every day. But it's really hard to beat the emotional pull, immediacy and simplicity of the relocation threat.

***

being the city that says "no!' gets you two things: angry voters and a vacant stadium.

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Teams and leagues will continue to ask for help as long as help is given. But being the city that says "no!' gets you two things: angry voters and a vacant stadium. The nation's most lucrative league has left the nation's second biggest market abandoned for 18 years now. The leagues will leave any city that doesn't play ball. If you annoy the commissioner just enough, they'll even seek to make an example out of you. Ask Seattle.

The cycle of public funding for sports arenas and stadiums won't be broken by some heroic mayor standing up to a team owner. It won't be broken, period. If Cobb County has taught us anything in the week since it announced it plans to pay a premium to take the Braves from Atlanta proper, it's that there will always be another mayor or county executive or governor with open arms and an open checkbook. There will always be fans to offer cold cash and warm loyalty. Pro sports are the dominant force in our current cultural landscape, and there are enough of us who refuse to be without a team to call our own.

What can improve the current public sports funding paradigm is more open-minded civic ownership from fans and more effective advocacy by non-fans. Improved social programs, infrastructure and public safety is in everyone's interest; the majority of sports fans are smart. We can chew gum and chant, "de-fense!" at the same time. So we should work to ensure deals coming down the pike are actually responsible and protect investments in the public interest. We should not just listen to critiques of funding plans -- we should try to make sure we're getting a good deal as citizens. We need to admit that some deals just suck. We need to vote and speak as well-rounded members of society, not single-issue partisans.

To affect positive change, opponents of public sports subsidies need to convince fans to take a comprehensive look at the costs and risks of individual plans. If you oppose every arena plan that comes down the pike, you're going to get tuned out. Work to improve individual projects, and not by porking up the prospectuses with additional beneficiaries. Lawsuits almost always make things worse, and know that you will likely lose at the ballot box if you choose that route. Once things go partisan, you've lost the audience you need. (For this reason, ideas like Seattle's Initiative 91 -- a voter-approved measure to create parameters to be met for any future public subsidies for sports facilities -- are good to pursue as long as the process is transparent and the actual policy is good. There are some issues with I-91 in particular that hinder its effectiveness.)

Teams will stop pitching bad projects when fans, the public at large and the officials they elect into office show a consistent ability to support only the good ones. Fans should join in and fight boondoggles. Non-fans should lend support to good, responsible pitches. If the two sides don't work together, teams will continue to take as much as they can get, and they'll do it by dividing the public into us and them factions that, in the end, hardly serve the community. We owe it ourselves and each other to work together.

If we still disagree at the end of the day, that's okay. That's why we have elections.

Producer: Chris Mottram | Photos: Getty Images

About the Author

Ziller

I write about the NBA for SBNation.com and the Kings for Sactown Royalty. I live in Sacramento, love freedom and wish that taco truck would just get here already.

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