The Current Landscape in the Sports Subsidy Game
Ken Belson reviews the current politics of sports subsidies in today’s New York Times. In this era of state and local budget stress, the answer to the request for subsidy is more often “no” or “less,” or as in the case of San Francisco, in non-monetary transfers to the organizers of the America’s Cup. But as TSE’s Dennis Coates observes, “…no matter how often the public sector says no, the people who want to build a facility will come back to that well because no is not permanent, but yes is.” Indeed, as long as the threat of exit exists, agreements which offer “less” can be renegotiated. This appears to have been going on in San Francisco, where the organizers may have used last-minute leverage to change the terms of the deal in their favor. One of the changes eliminates a provision which entitled the city to a share of future revenue from the sale of condominiums to be developed on what is now city property. But when you have a mayor running around claiming an event will generate $1.4 billion in economic benefits (anyone know where that comes from?), seeking sweet subsidy terms is a fair game.
A strong case can be made that stress on public budgets has changed the form and not the substance of the subsidy game. Nevertheless, direct public expenditure on new stadiums seems harder to come by in the current landscape.