Sports Stadium Financing in the 1990's

INTRODUCTION

The sentiment can be heard in any office break room, local tavern, or play field. The utter discontent of the increasing cost of attending professional sporting events. Distain ranges from players salaries to cost of parking and concessions. One local newscaster, channel 5 in Chicago, Illinois - April, 2003, reports that for a family of four to attend a major league baseball game on opening day costs between $160 and $200 dollars.

The precursor to this cost was a decade of skyrocketing salaries and the trend to build huge public ally financed megaplexis to house these professional athletes. The current response to this ostentatious decade is to put forth bills to prevent and/or set limits on public financed projects (Shafroth, 1996). The history of stadiums shows that it was always the norm of publicly building stadiums, however, with the cost of these projects astronomical the public is more skeptical (Rosentraub, 1991). The reason why state and local governments continue to want to finance these stadiums has been much debated. The main debate is one of economic impact. The following two excerpts illustrate this debate:

Stadium subsidies do not increase economic activity in total and are not necessary to keep sports leagues in existence. Cities, though, face competition for sports teams; small market cities particularly might need to offer subsidies in response to remain competitive with larger markets. Riverfront Stadium in Cincinnati had not reached the end of its usefulness. But with other cities offering stadium deals, the Reds and Bengals secured new stadiums at a total cost of $500 million. If residents wish to support a team in this case, they should recognize that the subsidy reallocates resources and investing resources means more sports but less of something else: police and fire protection, road repair, parks or private consumption.

~ Daniel Sutter, "Public Subsidies for Sports Stadiums Don't Spur Economic Growth"

Some urban (stadium) facilities....Built in blighted areas, have had positive spin-off effects that no other type of development could have matched due to the regional support for professional sports. Not only did the facilities stimulate development in the immediate area, but it happened with help from entire metropolitan areas. It is unlikely that suburban counties would ever subsidize core- city development in any other circumstance.

~National Conference of State Legislatures, "Playing the Stadium Game: Financing Professional Sports Facilities in the 90"s.

This illustrates the polar ends of the debate as to whether or not publicly

financing stadiums and professional sports facilities is truly beneficial to those whom are paying the bills, the taxpayer of that community.

This investigatory paper will look at the decade of the 1990's and explain the role of public versus private financing of professional sports stadiums. A particular attention will be given to Major League Baseball facilities as they seem to be the most polarizing venue. This paper will not consider psychological and social benefits, prestige and other society factors, in its attempts to catalogue the trends in financing.

REVIEW OF RELEVANT LITERATUTE

By the time the new millennium was being celebrated some 45 new sports stadiums and complexes were built spanning the previous ten years. Four out of five dollars spent on these projects were derived from public monies (Sanderson, 2000). The new stadium, Pacific - Bell, that houses the San Francisco Giants is the 1st Major League Baseball stadium to be constructed entirely with private sector monies since the construction of the 1962 Los Angeles Dodgers stadium (Sanderson,2000). From the period of 1988 through

1999 the following stadiums are the only ones financed by majority of private sector money

City Facility Cost

Boston The Fleet Center 160M

Carolina Carolinas Center n/a

Chicago United Center 180

Detroit The Palace of Auburn Hills (1988) 70

Milwaukee Bradley Center 80

Minnesota Target Center 113

Montreal Molson Center 230

Philadelphia Core States Center 235

Phoenix America West Arena 100

Portland Rose Garden Arena 260

Sacramento Arco Arena 65

St. Louis Kiel Center 130

Utah Delta Center 78

Vancouver GM Place 180

Cost is in $ millions. Canadian money converted to U.S. Dollar.; source Federal Bureau of Congressional Finance - www.us.gov

This accounts for 10 percent of new stadiums. It is interesting to note that all the stadiums are indoor facilities with no National Football and Major League Baseball franchises present. As we see in the next table only Boston's Fleet Center and Philadelphia's Corestates Spectrum are 100% funded privately.

TABLE 2 New Stadiums Since 1990

Location Stadium % Publicly Financed

Arizona Bank One Ballpark 75

Philadelphia Corestates Spectrum 0

Buffalo Marine Midland 45

Carolina Ericsson Stadium 20

Tampa Ice Palace 62

Jacksonville Jacksonville Stadium 90

Seattle Key Arena 82

Boston Fleet Center 0

Colorado Coors Field 75

Portland Rose Garden 14

St. Louis Trans World Dome 96

St. Louis Kiel Center 46

Cleveland Gund Arena 97

Texas Ballpark At Arlington 71

Cleveland Jacobs