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What to Keep in Mind When a Sports Team Asks for Government Help and Incentives

Any city, county or state which is asked to help fund a sports facility project should leave their jerseys at home bring sharp pencils. The numbers will sometimes work. Often they will not. 

Columns appearing on the service and this webpage represent the views of the authors, not of The University of Texas at Austin.

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The owners of professional sports teams have become very comfortable over the past 20 years in asking for government help and incentives as they plan the construction of their next stadiums or arenas. While the focus has increased during this time period on the requests for, and expectation of, such help by the teams, this is not a concept that has just popped up.

The Brooklyn Dodgers needed land for a new facility in the late 1950s to replace the aging Ebbets Field, their home since 1913, and hoped and expected that the borough of Brooklyn would contribute the land needed. Because the Dodgers were an integral part of the community and a source of jobs and economic activity, the Dodgers believed the borough should help to make this happen.

However, because of the efforts of Robert Moses, dubbed “the Power Broker” by author Robert Caro, the Dodgers were denied. The City of Los Angeles went on to became the first city to use its economic ability to woo a professional sports team away from another city with cash and incentives. The Dodgers moved to Los Angeles after the 1957 season and were quickly followed by the New York Giants (baseball) who accepted a lucrative offer from the city of San Francisco.

Since then, every team in a major professional sports league in America, from the NFL, NBA, MLB and the NHL, has asked for and received, in varying degrees, financial help or incentives from government entities in the construction of new, bigger or better stadiums. In many of these instances, a competing city was used as the impetus to make the investment in the hometown team’s facility lest the team move on to greener pastures.

In most such cases, the team asking for help has made it clear that the request was critical to the project. Many times there were dire warnings from the teams that absent the requested help, the team may have to leave town. Recently, it’s been Minnesota and San Francisco in the NFL; Milwaukee in the NBA.

So are these types of deals worthwhile to a community and its taxpayers? The answer is, well, sometimes, but not always.

Much has been written about the pros and cons of government aid to such projects. On the con side, the arguments range from “why are taxpayers helping billionaire owners?” to “use the money for roads, schools or other projects” to “government help and subsidies unfairly compete with private businesses” to “there is no direct economic benefit to the community when government help is used to fund stadiums and arenas.”

On the pro side, there are arguments such as “the sports facility will bring in hundreds of jobs through construction and then operation of the facility” to “the facilities bring in much needed business to the community” to “the facility creates strong taxable revenue that flows back into the community” to the softer “major league sports are needed in the city to keep the city as a major league city.”

Whether its “worthwhile” ultimately depends on the type of help sought, the size of the help, the city involved and the type of funding. For instance, some types of help are only available for sports and entertainment use. Some terrible projects have been ill conceived; some great projects have been supported.

Minor league baseball has been a tremendous source of economic development for many communities new and old. Dozens of the 170 teams affiliated with major league baseball have created wonderful new facilities through very successful public-private partnerships.

Any city, county or state which is asked to help fund a sports facility project should leave their jerseys and logoed hats at the door of the negotiations and bring sharp pencils and calculators instead. The numbers will sometimes work to create a great result for both sides in such a partnership. Often they will not.
There are already rumblings about the Rangers, Stars and Mavericks considering new stadiums in the next 10 to 15 years. And Dallas will be at the center of that discussion. Whether Dallas should help is not a closed question. The devil, as they say, will be in the details.

Michael Cramer is the executive director of the Texas Program of Sports and Media at The University of Texas at Austin. He is the former president of the Dallas Stars and Texas Rangers.

A version of this op-ed appeared in the Dallas Morning News.

To view more op-eds from Texas Perspectives, click here.

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Texas Perspectives is a wire-style service produced by The University of Texas at Austin that is intended to provide media outlets with meaningful and thoughtful opinion columns (op-eds) on a variety of topics and current events. Authors are faculty members and staffers at UT Austin who work with University Communications to craft columns that adhere to journalistic best practices and Associated Press style guidelines. The University of Texas at Austin offers these opinion articles for publication at no charge. Columns appearing on the service and this webpage represent the views of the authors, not of The University of Texas at Austin.

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