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The Current Landscape in the Sports Subsidy Game

2011 January 6
by Skip Sauer

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.

2 Responses
  1. MikeM permalink
    January 12, 2011

    At this point, speaking of subsidies, I’d like to know what you think of a sham company like Power Balance buying naming rights of an NBA arena. In a general way, that is.

    But specifically, do the odds of a local subsidy (in the form of a publicly-funded arena) increase or decrease when you sell signage rights to what most seem to regard as a company that sells a scam product?

    In my view, the odds get worse, although I’m not sure how to prove that.

  2. Greg Pinelli permalink
    January 17, 2011

    Mike..give up the odds!! Let private sponsors become the Subsidy chumps for pro sports franchises. IF these “sponsors” are bogus..then whose problem is it? Whose problem ought it to be??? Here are my simple rules..

    1. NO City or Municipality either stands in the way of..or pay for..a team to come to their City…
    2. Owners..and their business..pay the freight for everything! The City tells THEM what roads they must improve for access..what the minimum parking requirements are..and their responsibilities for providing for public safety..ATY THE OWNER’S EXPENSE….
    3. IF owners don’t like it…move….

    Any politician who pushes for a professional team subsidy (STADIUM..ROADS..PROTECTION…LAND..ETC) is pimping some owner..end of story…

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