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The Source: The NFL Coming To Town Might Be A Bad Idea

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Nathan Cone

    

On Monday, The Los Angeles Times reported a group of developers that included the owner of the St Louis Rams, Stan Kroenke, announced plans to build an NFL Stadium in a Los Angeles suburb.

Kroenke's involvement gave rise to speculation on whether the Rams would return to Los Angeles, where they played from 1946 to 1994. 

This news comes on the heels of another former LA-based NFL team, the now Oakland Raiders, being wooed by San Antonio boosters, like former Mayor and housing and urban development Secretary Henry Cisneros. 

In both cases the teams are unhappy with older stadiums. In St. Louis, the Rams have until Jan. 28 to let the city of St. Louis know if they would like to change the lease to be year to year. Currently, the team's owners and the city are millions of dollars apart on an agreement for a taxpayer-financed upgrade.

States, cities and counties across the country are subsidizing professional sports by paying to build and maintain  the stadiums. This is especially true of the NFL, which made $9 billion in revenue in 2014. The "upgrade or we leave" is a common refrain for professional sports teams when they don't get the money for renovations they want, and they tend look to other cities to build them stadiums. 

Examples of  are plentiful. When San Antonio billionaire, Red McCombs owned the Minnesota Vikings he threatened to sell or move the team when he couldn't get the Metrodome upgraded in the '90s. Both the Rams and the Raiders left Los Angeles for this reason.

In the NBA, the Seattle SuperSonics became the Oklahoma City Thunder in 2008 after failed negotiations with the state of Washington.

An example of subsidizing pro sport land locally, Bexar County authorized $101 million to renovate the 12 year-old AT&T Center, home of the Spurs, last month.

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Credit AT&T Center
Rendering of expanded AT&T Center SE entrance and wraparound LED ticket tower.

The NFL is also a nonprofit trade association, and therefore pays no corporate taxes. 

These issues bring up questions of why. Why would a community want a pro sports team? Why would elected officials approve large-scale investment in facilities benefiting a sole business?

There are a lot of reasons, with the biggest being the economic impact of a pro-sports franchise. Many argue the teams pay dividends in terms of sports-tourism; a city's profile and brand go up possibly attracting businesses, and the hope that the area around the stadium develops more and better tax revenues.

The Alamodome has generated $1.7 billion in economic impact from 2003 t0 2012, according to the Saber Institute. The San Antonio Spurs are NBA champions and have generated international exposure for the city. Critics would cite that the promises advocates made for both the Alamodome and the AT&T center were outrageous, and have not been delivered on. Regarding AT&T, the area around the center continues to be extremely low-income 12 years on, meaning it failed to spur redevelopment for the area as promised.

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Alamodome Interior

The other reason communities invest in professional sports teams is that they are popular, and the NFL is most popular of all. For 30 years the NFL has been the most popular sport in the United States. Over the last four years, the NFL was not only more popular than other sports, Sunday and Monday Night Football have been more popular than the average viewership of the top 10 network television shows.

Should the public subsidize professional sports? Does San Antonio want the Raiders?  Is it worth it for communities?

Guests:

  • Heywood Sanders, professor of Public Administration at the University of Texas San Antonio
  • Michael Taylor, business columnist at the San Antonio Express-News
  • Neil deMause, co-author of the book "Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit"
  • Greg Easterbrook, author of "The King of Sports: Football's Impact on America." He also writes the "Tuesday Morning Quarterback" column for ESPN, and is a contributing editor at The Atlantic Monthly.

*This episode of the source originally aired on January 7th, 2015

Paul Flahive can be reached at Paul@tpr.org and on Twitter at @paulflahive