Stadium Deals

Capitalism: Privatizing the Commons

• In Europe (roughly), the transition out of feudalism and into capitalism involved the “enclosure” of “common land” – instead of all farmers in a village with commons having equal right to grazing animals, raising crops, drawing water, and foraging in the forest on certain parcels of land, that land was subdivided and given to private owners.

– In general, farmers who had better plots of land began to be more successful, and bought up the less successful farmers

• It concentrated wealth in the hands of a few, as opposed to letting everyone have a share of a diverse landscape.

• This made poor rural people poorer

– In the US, after being taken from Native Americans, almost all land (that was not government land) was privately owned so we never had a commons.

Keynesianism: Creating the Public

• As more and more farmers were driven off their land, and more and more people showed up in cities looking for work, governments eventually figured out (around the turn of the 20^th century) that there had to be infrastructure, institutions and services everyone could access just by the right of being a citizen – in other words, create a new commons through institutions. As an economic theory, comes eventually to be known as Keynesianism, after economist John Maynard Keynes

– In the early to mid-20^th century, this list of rights grew in North America, Europe, Oceania, parts of Eastern Asia and the Arab States of the Persian Gulf.

• Different countries did it differently, but most agree that at least a high school education, old age pension, some level of health care, parks, streets, police protection and fire protection should be (at least theoretically) accessible to everyone.

– This was (generally) paid for by some combination of income tax, business tax, retail sales tax, property tax, investment tax, inheritance tax, and usage fees.

• Many countries choose a progressive style of taxation, that made the burden higher on those with more wealth.

• A few countries (Norway, those of the Gulf) had oil revenues to support their systems, otherwise you tend to need higher taxes the more services you offer.

Neoliberalism: Privatizing the Public

• One of the major tenets of neoliberalism is the privatization of publicly funded/consumed goods. Harvey calls this “accumulation by dispossession”

– For example, state governments provide ever smaller amounts of support for universities, forcing students to pay ever greater amounts

• Which are covered by loans taken by the student.

– This is part of a general pattern of making everyone take individual risk in place of collective security

» Hot tip: if you ever invest your own money, check to make sure the management fees are really low.

• For most people, hard to beat a fund that is indexed to the S&P 500 (meaning, it is not managed at all).

– They also allow private companies to run charter schools, build roads and bridges, maintain parks, run prisons (so money still spent on some infrastructure, but either to support business or give business a bigger cut)

• In almost all of these cases, the workers get paid less and the managers/corporations get paid more, while also costing tax payers more

– There are also tax cuts, most of the benefit goes to the wealthy – and are thus regressive

• In Florida, they have cut taxes on businesses while increasing fees that most everyone has to pay, such as driver licenses and vehicle registration.

Eminent Domain: One way to dispossess

• This is the right of the government to take property (in particular land) for a “public use” provided that they pay “fair compensation”.

– It is enshrined in the U.S. constitution, and allows the building of roads, water works, schools, etc…

• A big turning point in the US is Berman v. Parker, which allowed governments to seize “blighted” property, and then resell it to private developers if it would benefit the public.

– This could happen even if one parcel in the package is not in fact blighted.

• In 2005’s Kelo v New London, in a very close decision, Supreme Court said that this could happen even for non-blighted property, just to increase city revenue.

– This is how various levels of government, despite the era, accomplish big policy shifts.

Camden Yards

• This is the project that put sports as urban redevelopment on the map and started this whole idea that taxpayers should pay for professional sports stadiums

– From 1950 up until Camden yards, the idea with most stadium locations was “how close can I put it to freeways”. They were treated as traffic problems.

• So you had a whole bunch of suburban facilities built in the beginning in the 1960s: RFK Stadium (Washington NFL Team), Inglewood Forum (LA Lakers), Giants Stadium in the Meadowlands (NY Giants and Jets), Pontiac Silverdome (Detroit Lions), Palace of Auburn Hills (Detroit Pistons), Richfield Coliseum (Cleveland Cavaliers)

– Joe Robbie Stadium (aka Sun Life) in 1989 and Broward County Civic Arena (BB&T Center) in 1998 among the last suburban facilities built.

Camden Yards (cont.)

• Baltimore had lost the Baltimore Colts NFL team to Indianapolis in 1984, partly because they wouldn’t pay for an upgrade to the municipally owned stadium.

– The Orioles played in that same (truly out of date) stadium, in 1989 it was decided a new baseball-only ballpark would be built to give Baltimore’s last pro team no reason to leave.

• It would be located just west of Baltimore’s “Inner Harbor” retail/tourist development, and help extend its momentum

– Inner Harbor had already become the model for repurposing old ports

– Camden Yards was the first “retro” style MLB ballpark (MILB already had Pilot Park in Buffalo), utilizing odd dimensions like the old ballparks (Wrigley Field of the Cubs, Fenway Park of the Boston Redsox).

• Instead of knocking down an old brick warehouse next to the park, they kept it, which added “authenticity” and “nostalgia” to the experience

• It also had views of downtown skyline and, since it was baseball only, no oddly spaced seating to accommodate football.

– It was a huge, huge success – fans of other teams would travel to Baltimore to watch their team play the Orioles

• In urban development, once something worked, everyone tries it…

Camden Yards (cont.)

• Soon, other cities (like Cleveland) followed suit

– Crucially, these 1990s and later era stadiums all had many more “luxury boxes” than previous stadiums, better sound and video systems (improved again 10-15 years later), and better food options

• In other words, the stadiums were more profitable for owners, who amazingly get to keep all in-stadium revenues despite often not owning the stadium (the city does).

– While baseball parks can have odd dimensions and be charming, often only so much you can do with football field or basketball arena

• The initial years (generally) did bring waves of new retail/restaurant to the area surrounding the stadium (especially if paired with a new basketball/hockey arena), meaning there would be at least 110 events every year.

Problems

• The jobs were mostly retail oriented, and on the borderline of being full time.

– If the stadium is football, there is almost no positive effect at all, because a football stadium is used around 12-15 times a year.

• These should ALWAYS be located in suburban/low density areas where the giant stadium and even more giant parking lots can be accommodated on cheap land.

• Because people drove/rode in from the suburbs in most places, the ball parks had a small island effect of only a few blocks.

– In fact, in places with very small economic pies, it only shifted around the “night on the town” dollars to the stadium area while withdrawing them from somewhere else.

• Many of the restaurants moving nearby were chains, and thus profits escaped the region.

• They required taxes. Even if it is hotel taxes, sin taxes (on alcohol, cigarettes, and sugary drinks) that people do not have to pay, they take away that money from other possible usages

Problems (cont.)

• In the US, because leagues are cartels that monopolize their sport, owners can always use the threat of moving to a new city to get what they want.

– Will update

• What owners want is tax payer support, even though (in particular NFL owners) are billionaires who own a lucrative private business. Some even want taxpayers to pay the majority of costs.

– One of their favorite moves is to claim they are losing money (outside of hockey, nobody does) but refuse to show the city their books to prove it

• The Marlins did this.

Problems (cont.)

• The NFL as a whole is equally abusive to the Super Bowl host – in order to the host the Super Bowl, all NFL employees and businesses are exempt from paying local taxes, local police and fire protection must be free of charge, streets must be shut down and public parks must be provided for no fee.

– Despite the fact that Miami is one of the most loved Super Bowl destination, NFL did Dolphin’s owner Stephen Ross a favor by claiming they wouldn’t host anymore Super Bowls in Miami unless taxpayers paid some money to update Sun Life Stadium

• Of course, Miami hotels are completely full in February anyway, but whatever…

• And Miami Gardens has almost none of the hotels, but all of the traffic.

– The Olympics get similar benefits from host cities; FIU even gave them to Donald Trump’s beauty pageant.

Problems (cont.)

• All professional leagues, of course, rely on incredible amounts of public support in indirect ways

– High schools throughout the country provide the leagues with well-trained players and help fuel passion for the game

• Parents also pay all sorts of money to advance children’s sporting careers

– These players practice on high school fields and in public parks; rely on incredibly expensive roads/transportation systems (publically funded) to get fans in and out

• They also have pro practice facilities, often also at a reduced tax rate.

– Cable subscribers now are the major source of league revenue – particularly for basketball and baseball, it is local cable subscribers

• But because of national TV deals, no NFL, MLB, or NBA team is ever in danger of folding again unless the market for that league’s product dramatically changes.

– This does not make the owners feel any loyalty in return.

• Also, they are using facilities now for an average of only 20-some years now: so they keep going back again and again for money

– The Atlanta Braves got a quasi retro-style ball park in the 1990s, are now getting a brand new suburban ball park in the next couple of years (in which they ripped off suburban taxpayers and picked a horrible location).

Or, in a nice video

• https://www.youtube.com/watch?v=xcwJt4bcnXs

Quality of Life?

• As the article by the Federal Reserve notes, it is foolish to justify stadium expenditure in terms of jobs and development, since it falls short of even modest expectations

– “For example, Hamilton and Kahn measured the annual returns to Maryland residents from Baltimore’s NFL Ravens at approximately $1 million, compared to a $14 million annual public cost for their new stadium. Similarly, Baade (1997) measured the annual returns to Washington state residents from Seattle’s MLB Mariners at between $3.8 and $5.1 million, compared to a $28 million annual public cost for their new stadium.” (pg. 60)

• The only area it could possibly make up for it is in the area of “quality of life”.

– Governments do pay for quality of life: they fund parks, zoos, arts, trails, accessibility, tree planting, sidewalk cleaning, street lighting, celebrations, bike trails etc…

• Basically, anything without a clear path to revenue generation that also doesn’t fall under the essentials of “public safety” (police, fire, water, sewer, etc…)

• In other words, it is the “non-representational” argument – there are activities whose benefits are more than can be quantified (even if supporters try to quantify them to become a part of development discourse)

– The thing is that many forms of government support for quality of life have gone way down over the last few decades – it is “unusual” that for professional sports have they actually gone up.

• They are most likely the most popular quality of life item (or only behind parks and cleanliness), but they are highly gendered and attendance is classed.

Conclusion

• Here is the thing: most major sports teams owners are already super rich and rely on other sources of income to stay that way.

– In fact, all of the new owners since 2000 in the NFL (and most in other leagues) are existing billionaires

• This means they own the team for fun – not because it provides tremendous yearly returns compared to other possible investments (in fact, most profit is made when they sell it)

– Thus, for most owners, this is a hobby (albeit a lucrative one)

• Professional sports have nothing to do with providing meaningful economic development for team cities – it is about fun

– The question becomes, how much can governments give to this one type of fun?

• It would be great if owners had some shame about receiving hundreds of millions of dollars to pursue their hobby, but it is unlikely to happen.

Stadium Deals

Capitalism: Privatizing the Commons

– In general, farmers who had better plots of land began to be more successful, and bought up the less successful farmers

• It concentrated wealth in the hands of a few, as opposed to letting everyone have a share of a diverse landscape.

• This made poor rural people poorer

– In the US, after being taken from Native Americans, almost all land (that was not government land) was privately owned so we never had a commons.

Keynesianism: Creating the Public

– In the early to mid-20th century, this list of rights grew in North America, Europe, Oceania, parts of Eastern Asia and the Arab States of the Persian Gulf.

• Different countries did it differently, but most agree that at least a high school education, old age pension, some level of health care, parks, streets, police protection and fire protection should be (at least theoretically) accessible to everyone.

– This was (generally) paid for by some combination of income tax, business tax, retail sales tax, property tax, investment tax, inheritance tax, and usage fees.

• Many countries choose a progressive style of taxation, that made the burden higher on those with more wealth.

• A few countries (Norway, those of the Gulf) had oil revenues to support their systems, otherwise you tend to need higher taxes the more services you offer.

Neoliberalism: Privatizing the Public

• One of the major tenets of neoliberalism is the privatization of publicly funded/consumed goods. Harvey calls this “accumulation by dispossession”

– For example, state governments provide ever smaller amounts of support for universities, forcing students to pay ever greater amounts

• Which are covered by loans taken by the student.

– This is part of a general pattern of making everyone take individual risk in place of collective security

» Hot tip: if you ever invest your own money, check to make sure the management fees are really low.

– They also allow private companies to run charter schools, build roads and bridges, maintain parks, run prisons (so money still spent on some infrastructure, but either to support business or give business a bigger cut)

• In almost all of these cases, the workers get paid less and the managers/corporations get paid more, while also costing tax payers more

– There are also tax cuts, most of the benefit goes to the wealthy – and are thus regressive

• In Florida, they have cut taxes on businesses while increasing fees that most everyone has to pay, such as driver licenses and vehicle registration.

Eminent Domain: One way to dispossess

• This is the right of the government to take property (in particular land) for a “public use” provided that they pay “fair compensation”.

– It is enshrined in the U.S. constitution, and allows the building of roads, water works, schools, etc…

• A big turning point in the US is Berman v. Parker, which allowed governments to seize “blighted” property, and then resell it to private developers if it would benefit the public.

– This could happen even if one parcel in the package is not in fact blighted.

• In 2005’s Kelo v New London, in a very close decision, Supreme Court said that this could happen even for non-blighted property, just to increase city revenue.

– This is how various levels of government, despite the era, accomplish big policy shifts.

Camden Yards

• This is the project that put sports as urban redevelopment on the map and started this whole idea that taxpayers should pay for professional sports stadiums

– From 1950 up until Camden yards, the idea with most stadium locations was “how close can I put it to freeways”. They were treated as traffic problems.

– Joe Robbie Stadium (aka Sun Life) in 1989 and Broward County Civic Arena (BB&T Center) in 1998 among the last suburban facilities built.

Camden Yards (cont.)

• Baltimore had lost the Baltimore Colts NFL team to Indianapolis in 1984, partly because they wouldn’t pay for an upgrade to the municipally owned stadium.

– The Orioles played in that same (truly out of date) stadium, in 1989 it was decided a new baseball-only ballpark would be built to give Baltimore’s last pro team no reason to leave.

• It would be located just west of Baltimore’s “Inner Harbor” retail/tourist development, and help extend its momentum

– Inner Harbor had already become the model for repurposing old ports

– Camden Yards was the first “retro” style MLB ballpark (MILB already had Pilot Park in Buffalo), utilizing odd dimensions like the old ballparks (Wrigley Field of the Cubs, Fenway Park of the Boston Redsox).

• Instead of knocking down an old brick warehouse next to the park, they kept it, which added “authenticity” and “nostalgia” to the experience

• It also had views of downtown skyline and, since it was baseball only, no oddly spaced seating to accommodate football.

– It was a huge, huge success – fans of other teams would travel to Baltimore to watch their team play the Orioles

• In urban development, once something worked, everyone tries it…

Camden Yards (cont.)

• Soon, other cities (like Cleveland) followed suit

– Crucially, these 1990s and later era stadiums all had many more “luxury boxes” than previous stadiums, better sound and video systems (improved again 10-15 years later), and better food options

• In other words, the stadiums were more profitable for owners, who amazingly get to keep all in-stadium revenues despite often not owning the stadium (the city does).

– While baseball parks can have odd dimensions and be charming, often only so much you can do with football field or basketball arena

• The initial years (generally) did bring waves of new retail/restaurant to the area surrounding the stadium (especially if paired with a new basketball/hockey arena), meaning there would be at least 110 events every year.

Problems

• The jobs were mostly retail oriented, and on the borderline of being full time.

– If the stadium is football, there is almost no positive effect at all, because a football stadium is used around 12-15 times a year.

• These should ALWAYS be located in suburban/low density areas where the giant stadium and even more giant parking lots can be accommodated on cheap land.

• Because people drove/rode in from the suburbs in most places, the ball parks had a small island effect of only a few blocks.

– In fact, in places with very small economic pies, it only shifted around the “night on the town” dollars to the stadium area while withdrawing them from somewhere else.

• Many of the restaurants moving nearby were chains, and thus profits escaped the region.

• They required taxes. Even if it is hotel taxes, sin taxes (on alcohol, cigarettes, and sugary drinks) that people do not have to pay, they take away that money from other possible usages

Problems (cont.)

• In the US, because leagues are cartels that monopolize their sport, owners can always use the threat of moving to a new city to get what they want.

– Will update

• What owners want is tax payer support, even though (in particular NFL owners) are billionaires who own a lucrative private business. Some even want taxpayers to pay the majority of costs.

– One of their favorite moves is to claim they are losing money (outside of hockey, nobody does) but refuse to show the city their books to prove it

• The Marlins did this.

Problems (cont.)

– Despite the fact that Miami is one of the most loved Super Bowl destination, NFL did Dolphin’s owner Stephen Ross a favor by claiming they wouldn’t host anymore Super Bowls in Miami unless taxpayers paid some money to update Sun Life Stadium

• Of course, Miami hotels are completely full in February anyway, but whatever…

• And Miami Gardens has almost none of the hotels, but all of the traffic.

– The Olympics get similar benefits from host cities; FIU even gave them to Donald Trump’s beauty pageant.

Problems (cont.)

• All professional leagues, of course, rely on incredible amounts of public support in indirect ways

– High schools throughout the country provide the leagues with well-trained players and help fuel passion for the game

• Parents also pay all sorts of money to advance children’s sporting careers

– These players practice on high school fields and in public parks; rely on incredibly expensive roads/transportation systems (publically funded) to get fans in and out

• They also have pro practice facilities, often also at a reduced tax rate.

– Cable subscribers now are the major source of league revenue – particularly for basketball and baseball, it is local cable subscribers

• But because of national TV deals, no NFL, MLB, or NBA team is ever in danger of folding again unless the market for that league’s product dramatically changes.

– This does not make the owners feel any loyalty in return.

• Also, they are using facilities now for an average of only 20-some years now: so they keep going back again and again for money

– The Atlanta Braves got a quasi retro-style ball park in the 1990s, are now getting a brand new suburban ball park in the next couple of years (in which they ripped off suburban taxpayers and picked a horrible location).

Or, in a nice video

– In the early to mid-20^th century, this list of rights grew in North America, Europe, Oceania, parts of Eastern Asia and the Arab States of the Persian Gulf.