by Neil deMause
Steinbrenner was happy with his new stadium until the early ’80s, at which point he dusted off the old New Jersey threat and demanded further renovations. Although New Jersey voters showed little enthusiasm for building him a stadium, Steinbrenner’s demands steadily escalated from minor renovations, to a complete “old-time” reconstruction of Yankee Stadium—with such publicly funded amenities as a new commuter rail station, an additional bridge across the Harlem River to Manhattan, and a new parking lot built by paving a nearby public park—to a brand-new ballpark in midtown Manhattan that would cost $1 billion or more.
If anything tarnishes Steinbrenner’s record, it’s that he has yet to get his dream stadium for his efforts. Before the start of the 1996 season, he declared that he would make a decision on where to move the team by Opening Day; he repeated these words before the start of the 1997 season, then leaked word to the press that negotiations would be put on hold until after the mayoral election, in which Mayor Rudolph Giuliani, a supporter of the $1 billion Manhattan plan, was expected to face one of two staunch stadium opponents.1
Unspecified threats can prime the pump of public spending, but when it comes time to win an important vote, owners invariably bring in the big guns: the sports league presidents and commissioners, who are pressed into service to warn of the consequences of a no vote. When then baseball commissioner Fay Vincent made his trip to Cleveland to warn that a no vote on the Indians stadium would mean no Indians for Cleveland, it was just one in a long string of last-minute appearances by league executives to try to pull victory from the jaws of defeat. In Houston it was National League president Leonard Coleman who delivered the dire warnings during talks on a new stadium for the Astros in 1996: “We want to do all we can to first keep a team in Houston,” Coleman told reporters. “However, if we cannot strike some kind of agreement with regards to stadiums… I don’t think we would ask a businessman to lose millions of dollars each year.” Bud Selig, the Milwaukee Brewers owner who became “permanent acting commissioner” when Vincent was fired by the baseball owners, got to deliver the threat in Minnesota three weeks before that state’s legislature decided whether or not to fund a new baseball stadium, declaring that “if there isn’t anything on the horizon to change the economics, baseball will allow that club to move. We’ll have no alternative.” A week after Selig’s visit to Minneapolis, American League president Gene Budig announced his support for a new stadium for the Boston Red Sox, saying, “No one is anxious to leave Fenway Park, [but] it is important here that we be realistic in terms of economics and the long-term viability of the Boston Red Sox.”
Threats, of course, are easy. But the obvious question then is, will the teams really follow through if a city says no? Details are sketchy—in part because so few cities have called their teams’ bluffs—but there are indications that some sports franchises’ threats to hit the road may be more idle than they would have voters believe. Both the Detroit Tigers and San Diego Chargers played the threat card while in the middle of long leases that would have been difficult if not impossible to break. The Houston Astros successfully threatened a move to Northern Virginia in 1996, even though no stadium funding was forthcoming in that state, and Baltimore Orioles owner Peter Angelos was reportedly preparing to file suit against any team that tried to relocate on his doorstep.
Finding a prospective suitor, in fact, has become more and more difficult in recent years for teams looking to create leverage for a new facility at home. For years, for example, baseball owners’ favorite tease was Tampa Bay, a relatively large metro area (twentieth largest in the United States) with a stadium (the publicly financed Florida Suncoast Dome, since renamed Tropicana Field in a naming-rights deal) but no major-league team. Over the years, the San Francisco Giants, Chicago White Sox, Texas Rangers, Cleveland Indians, and Baltimore Orioles had all threatened to move to Tampa if they didn’t get their way; all but the Giants ultimately won new stadiums from their current hometowns.
But it is the nature of modern sports leagues to expand (thanks to the $100 million–plus fees that expansion-team owners must pony up to the existing teams to gain entrance to the major leagues), and in 1995 Major League Baseball granted Tampa Bay an expansion franchise—the Devil Rays—to begin play in 1998. With Tampa no longer on the horizon to bully their cities with, teams had to resort to such new locales as Charlotte, Sacramento, Portland, Oregon, and the Virginia suburbs of Washington DC. No one dared mention that some of these cities were not even considered worthy candidates for expansion by the leagues.
“We make fun of these ‘free-agent franchises,’” says economist Rodney Fort. “Well, if there really were such things, all of the league owners know that that’s bad for business. You’ve got to cultivate that long-standing relationship with fans and the identity and the tradition and all that jazz.” Not to mention wanting to hedge your own bets. As University of Illinois law professor Stephen Ross observed when Minnesota Twins owner Carl Pohlad was threatening to move his team, “If you’re an owner and thinking, ‘What are my options?’ you don’t want [Pohlad to move to North Carolina] because then you can’t threaten to move there.”
How the different leagues handle this tension between the desire to play the move threat and the need for stability has varied, Fort notes. Ever since Al Davis survived an NFL lawsuit and moved the Raiders to Los Angeles in 1982, the football league has approved all proposed franchise shifts without a challenge. (The league did make the Rams pay a $65 million fine for moving from a more lucrative TV market in Los Angeles to a smaller one in St. Louis, but then approved the move without a vote—and the city of St. Louis wound up paying the fee, in any case.)
“Then you look at baseball,” continues Fort. “There hasn’t been a move, although there have been lots of threatened moves, since 1972, when the [Texas] Rangers opened up shop.2 I think there’s two differences. One is, there’s a lot more cities out there willing to host a football team. The NFL for some reason hasn’t been quite as good at expanding into those places that are real viable threats to existing team hosts. Either [baseball has] been much better at it, or the owner group is so cohesive that they’ve watched the Al Davis episode, and they have some blood-brother agreement in there that they’re just not going to do that to themselves.”
Fort and his colleague James Quirk recently looked at how well leagues did at saturating the top thirty U.S. population centers with teams; baseball, Fort says, was the hands-down winner. “So part of the story then, we think, is [that baseball is] just better at keeping a few cities around to use as this ploy so that they do have some viable alternatives out there to use as leverage against existing franchise hosts. But not so many that an individual owner is going to look around, and the payoff is going to be so large that they’ll bolt.”
In the end, says Fort, each league’s strategy may prove successful. “Major League Baseball chooses to expand, keep the number of cities at a manageable level so that they still have some threat. The NFL chooses not to expand as much, given the pressure for teams, let the teams move around a little more, and then expand and fill in behind them—which is doubtless going to happen in L.A. and Cleveland. Maybe after the fact, in terms of league revenues, either of those strategies works okay.” But in either case, one constant remains: Although leagues will allow teams to use cities for leverage all they want, there’s no way they’ll abandon a lucrative market outright.
Step 3: Leveling the Playing Field
If voters aren’t swayed by fears of falling girders or fleeing ballclubs, your next step is to plead fairness: The team simply can’t be competitive in the existing stadium. Virtually every owner in every sport has used this appeal, but as Rashid points out, they’re seldom clear on exactly what it means—“competitive on the field, or the business is competitive, or what. But it suffices, because nobody asks what they mean by it. There’s never a follow-up question.”
“The economics of professional sports today is that, without a facility, you really can’t compete,” Pho
enix baseball, basketball, and hockey owner Jerry Colangelo told a reporter in 1997. “And if you can’t compete, you can’t get support. And if you can’t get support, you go out of business.” Not literally, of course—in fact, despite recurrent warnings of impending doom by sports owners, no major-league team has folded in more than thirty years. Yet the mere threat of a team’s falling into second-class status has been enough to strike fear into the hearts of politicians and fans alike.
This is where the owners’ cooked books really come in handy. One favorite gambit of owners is to release an “audit” of team finances that purports to show massive yearly losses. In November 1996, Orioles owner Angelos released a report claiming $6 million in yearly losses, despite the team’s league-high attendance and sweetheart lease. Earlier that same year, the stadium-hungry Astros released an audit that claimed the team was losing more than $20 million a year. But since Major League Baseball prohibits teams from opening their books publicly—and privately held corporations have no obligation to make their tax records public—there’s no way to verify the numbers. Owners thus have the best of both worlds—they get to parade losses before the media, while claiming that league rules prevent them from providing any hard details.
Baseball, in particular, has been the site of fierce debate over the gap between “have” and “have-not” franchises; with the freest free agency of any major sport (other leagues have salary caps imposed to prevent player contracts from being bid up too high), it is argued, it’s far too easy for a rich team like the Yankees ($133 million in yearly revenues in 1996) to buy up all the best players, whereas low-revenue teams like the Pittsburgh Pirates ($40 million in yearly revenues) must rely on younger, cheaper, less talented players. (Baseball owners rejected a plan to share more revenue between rich and poor teams in 1994, helping lead to that year’s disastrous player strike.) A new stadium is a way to level the playing field, teams like the Pirates have argued, and indeed, several teams (the Cleveland Indians being the prime example) have seen remarkable on-field improvement coinciding with the opening of a new stadium. In fact, the correlation often seems too coincidental: Several teams have started collecting higher-paid players in the years when stadiums are still under construction, leading to some speculation that small-market owners may keep their teams on a tight budget on purpose to help promote their argument that a new ballpark is necessary for the team to compete for a pennant.
What’s more, even when a team in genuinely dire economic straits cries for “competitiveness,” there’s a problem: What one team has, its rivals immediately want as well. So when a small-market team—say, the Baltimore Orioles—gets a lucrative new stadium, its big-market rivals like the New York Yankees demand an equally lush facility. Because the Yankees’ other revenue, primarily TV and radio contracts, dwarfs those of teams like the Orioles—and baseball’s relatively weak revenue-sharing plan means the Yankees owner can keep the bulk of this local income—the Orioles can once again cry for “competitiveness” and demand further concessions from their host city, beginning the cycle anew. In fact, those claiming that they need a new stadium to compete have included the owners of the richest franchises (Yankees owner Steinbrenner, whose team rakes in an estimated $24 million in profits per year) and some of the richest men in the world (Twins owner Carl Pohlad, whose family wealth is well over $800 million).
In the NFL, where revenue sharing is much stronger—in particular, TV contract money is shared across the whole league—the tactics used by teams have been somewhat different, notes Fort. “I haven’t seen an NFL team go to a local government and say, ‘I’m losing money.’ They go to the city and say, ‘In order to be competitive, I have to get more non-shared revenue sources. So if you want me to go to the Super Bowl, you’ve got to give me a new stadium, with gobs of luxury suites.’” Ironically, this may make football team owners even hungrier for new facilities, because unlike TV and ticket revenues, income from stadium-based revenue streams like luxury boxes and PSLs doesn’t have to be shared with their fellow owners, making a new stadium one of the few sure ways for owners to put money directly in their own pockets.
Step 4: Playing the Numbers
At this point, it’s time to pull out those consulting reports documenting the boundless benefits that will befall your city should it grant you a new stadium. If possible, get your friends in government to commission these reports—no point, after all, in paying for anything you don’t have to, and local governments have proven eager to fund studies justifying their desires to build new sports facilities.
Baltimore’s dual-stadium project alone spawned a mountain of supporting documentation; nearly every year saw another thick tome appear from some governmental study group. After hundreds of pages of minutiae on such items as population growth and sports-magazine circulation by region, each reached the same conclusion: Build something. By the time of the groundbreaking for the football stadium, Maryland governor Parris Glendening could declare confidently that the project would result in fourteen hundred new jobs and $123 million annually to Maryland’s economy, and know that somewhere in the amassed paperwork were figures claiming to confirm it.
The numbers themselves here almost don’t matter. Predictions of economic benefit, in fact, are all over the map—which should come as no surprise, given that they all amount to little more than guesswork. But even clearly specious numbers can serve an important public relations purpose. In every city in which team owners have won a public vote on a new stadium, a key factor has been the claim that the facility will cost taxpayers little or nothing—or that any cost will be made up for by the resulting boost to the local economy.
The plan to build a new football stadium for the San Francisco 49ers provides a striking example of this. The $100 million in city money that would be required, the team explained, would help create ten thousand jobs in the neighboring community of Bayview–Hunters Point. And best of all, the stadium would come with an attached mall, which, it was claimed, would generate more than enough tax revenue to repay the city’s share of the costs.
Two separate economic-impact studies by city officials failed to confirm the team’s promises: One projected a near breakeven for the city; the other concluded that expenditure substitution from other shopping areas would cost the city $4.6 million a year in lost taxes. Yet the claims served their purpose: The team was able to promote its stadium as a boon not just for the football team but also for the surrounding neighborhoods and the city as a whole—a strategy that worked to perfection when the stadium referendum squeaked through on the strength of overwhelming support from Bayview–Hunters Point voters.
Step 5: The Two-Minute Warning
No matter how well you’ve played your cards to this point, there’s always the danger that the proceedings may threaten to drag on indefinitely as pesky voters demand referenda or legislative leaders hit gridlock in deciding on a funding plan. At this point you may want to declare a crisis: Proclaim that the window of opportunity on a new stadium will remain open only for so long, leaving unstated what disaster will befall the city if the window should be allowed to slam shut. Rashid calls it the “used car salesman” approach: Buy now because this offer won’t be good for long.
Not only can a false crisis jump-start a stalled stadium deal, it can also be repeated as necessary. Astros owner Drayton McLane’s stadium negotiations with Houston were a bizarre series of cascading deadlines, each one more “final” than the last. The ploy began with William Collins, a businessman from the Washington DC suburbs who was rumored to be interested in buying the club. “Mr. Collins has made it clear that he hopes to have baseball in the Virginia area by 1996,” Astros vice president Bob McClaren said in October 1995. “Common sense would say to us that in the next four to eight weeks, they would have to have something in place.” No new construction plans were in place in Houston by then, but neither were they in Virginia, where Collins had run into a wall of opposition for his own demands for a publicly built stadium. McLane b
ided his time for a while then issued a new deadline: August 1. When D-Day finally came—preceded by increasingly apprehensive media reports—McLane promptly granted another extension. The deadlines didn’t stop until mid-September, by which time the local government finally gave in to McLane’s demands.
There have even been crises that the participants later admitted to faking to boost public concern. When the Detroit Tigers, in 1991, gave Wayne County executive Michael Duggan an August 1 deadline, no one publicly questioned it. Only later did Duggan reveal that the deadline was his idea—he had, in effect, told the Tigers to blackmail him.
Five years later, Rashid recalls, the Wayne County Board of Commissioners was to decide whether or not to dedicate still more money for a new stadium for the Detroit Lions football team. Rashid and fellow activist Kim Stroud watched as Duggan presented the board with, in Rashid’s words, “hundreds of pages of stuff that they had to read in a matter of a few days and then make a judgment on. They were begging for more time. No matter how they felt about the project, they said, basically, we spend more time determining matters that involve tens of thousands of dollars—this is something that’s going to involve hundreds of millions of dollars. We don’t have time to study this.”
The board approved the money, only to watch as the stadium process dragged on for months more as city and teams haggled over the site and the financing. “There was no rush,” says Rashid. “The need for the rush was to avoid public scrutiny.”
Step 6: Moving the Goalposts
Once you have successfully gotten your stadium on the drawing board, your task is not over—far from it. As any owner knows, the deal struck with your local government on a new sports facility is only the opening gambit. Cost overruns are a certainty, especially if you have plans for technological novelties like a state-of-the-art retractable roof. In any case, since you have the upper hand in renegotiations—you can always change your mind and leave in the middle, after all, but a city can’t do much with a half-built stadium—you are free to renegotiate the terms of the deal again and again if you like.