Sacking Markets
Don't blame capitalism for football's woes.
Here's a crash course in the rapidly changing geography of professional football. There's no test afterwards, but there is a larger lesson to be learned: Don't confuse pork-barrel handouts with free market incentives.
The Los Angeles Rams, who actually played in Anaheim and who once hailed from Cleveland, are now the St. Louis Rams. The Los Angeles Raiders, who once were the Oakland Raiders, are now the Oakland Raiders again. The Houston Oilers are set to become the Nashville Oilers in 1998. The Cleveland Browns want to become the Baltimore Browns.
There are rumblings that the Tampa Bay Buccaneers will move to Orlando. Or they may head for Los Angeles, which is also a possible relocation site for the Arizona Cardinals (née the Phoenix Cardinals, formerly the St. Louis Cardinals, previously the Chicago Cardinals). The Chicago Bears, once upon a time known as the Decatur, Illinois, Staleys, are eyeing Gary, Indiana, with wanderlust in their hearts.
Watching this flurry of actual and potential travel activity among National Football League teams, observers have quickly flushed out the culprits behind such unsettling movement: free markets and the "greed" that makes them work.
"This is all about one thing, and one thing only," Denver Bronco owner Pat Bowlen told the Los Angeles Times, shaking his head. "Money." In The New York Times, Alan Ehrenhalt, the executive editor of Governing magazine, intoned, "It is the tyranny of the market that has destroyed the loyalty of…teams to their cities."
Lamenting that sports team owners are "borrowing a page from the playbook of…businessmen," the Boston Globe's Charles Stein noted, "In business, there is no such thing as too much profit….When it comes to profits, the skybox is the limit." In a Senate subcommittee hearing on a proposed "fans' rights" bill, Sen. Patrick Leahy (D-Vt.) railed against "extortionist demands of insatiable [team] owners."
To be sure, there are economic forces at work in the movement of teams from here to there. For instance, Browns owner Art Modell doesn't want to move his team to Baltimore just because he has a hankering for crab cakes. Check out the bargain dangled in front of the man: Rent-free use of a brand spanking new $200 million stadium paid for by a dedicated state lottery; up to $80 million in one-time seat license fees for fans who want season tickets; luxury suites and club seats that fill Modell's pockets to the tune of about $30 million a year; all proceeds from parking, concessions, and advertising signs; and $75 million in moving expenses.
Who among us could resist such an offer, which is typical of, if a bit bigger than, the bargains offered to itchy franchise owners? I moved to Los Angeles for a job that pays less than half as much.
But such deals have little to do with the "tyranny of the market," unless you consider publicly funded stadium projects to be of central importance to private enterprise. When Bud Adams, the owner of the Houston Oilers, wanted a new stadium, he didn't think to build one–at least not by his lonesome self. He proposed that the city put up $150 million for a $235 million domed stadium that would house both the Oilers and the National Basketball Association's Rockets.
When Houston officials demurred, Adams embraced Nashville's offer: a $28 million "relocation" fee, a new stadium with 82 luxury suites, 9,600 "premium" seats, and 42,700 seat licenses, the proceeds from which will go to Adams. Nashville will kick in $144 million and the state another $80 million toward the stadium. Adams may well be as greedy as Midas, but that's not the problem.
The problem is the willingness of state and local governments to shell out taxpayer money for sports teams. This propensity includes expansion teams as well as traveling ones: To woo the NFL's Jaguars franchise, Jacksonville, Florida, raised hotel and parking taxes and levied ticket surcharges. The city spent $124 million to refurbish the Gator Bowl, guaranteed ticket sales, deferred $250,000 a year lease payments for five years, and even paid $4 million to move a paint company from the site of a practice field.
The dizzying cost spiral of pork-barrel politics is even lost on hard-luck Cleveland. At the Senate hearing for the fans' rights bill, Mayor Michael R. White lobbied for legislation that would allow the city to keep the Browns in Cleveland. "We believe Congress and only Congress has the power to stop this insanity." To White, it is crazy that another city should woo his Browns and that Modell should follow the trail of money south. After all, as White told the panel, he had engineered a $175 million stadium renovation deal by raising parking and sin taxes. The deal would have given Modell a free ride and kicked him into the top third of owners in profitability.
There is indeed insanity here, as well as tyranny, extortion, and greed. But the cause for concern has precious little to do with free markets and football–it has to do with politicians throwing low-percentage bombs with the taxpayers' money.