public forum debate research series vol. 6 september...

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PUBLIC FORUM DEBATE RESEARCH SERIES

VOL. 6 SEPTEMBER/OCTOBER 2014 NO. 1

RESOLVED: ON BALANCE, PUBLIC SUBSIDIES FOR PROFESSIONAL ATHLETIC ORGANIZATIONS IN THE UNITED STATES BENEFIT THEIR LOCAL COMMUNITIES.

The September/October Public Forum topic is especially interesting because perhaps for the first time, debaters will have an opportunity to evaluate the role of professional sports in American society. Jack Williams, professor of law at Georgia State University, provides a brief history of the earliest use of community funds to build stadiums: “In 1914, San Diego built the first publicly financed stadium. That stadium seated 23,000 people and was built at the cost of $150,000. During the 1920s, several other stadiums were built around the country, including Pasadena's Rose Bowl in 1922, the Los Angeles Coliseum in 1923, and Chicago's Soldier Field in 1924. These stadiums were initially not intended for professional sports use, but rather ‘to encourage athletics in general and promote the reputation of [the host] cities’” (Albany Government Law Review, 2012, p. 127). By the turn of the century, however, it had become the norm for local governments to support most of the construction costs for professional sports arenas in their communities. Brett Smith, writing in the Georgetown Public Policy Review, describes this development: “Of the 111 American professional sports franchises, 102 (or 91.9 percent) of them have moved into new or significantly renovated stadiums over the past decade. Of these stadiums, nearly all have been financed with some public funding. Economist Joseph Bast quantified the total public funds spent on such professional sports facilities to be an average of $500 million per year, with $7 billion slated to be spent in public funds by 2006” (Fall 2001, p. 45).

The first decade of the 21st century has seen an even greater acceleration of public subsidization of professional sports arena construction. Martin Greenberg, professor of law at the Marquette University Law School, documents this trend: “In the past twenty years, over 100 new or renovated sports facilities have been developed in cities across the United States. In the 1990s, approximately $ 15 billion was spent on major league facilities, with approximately $ 11 billion of the funding contributed by state and local governments. Since 2003, the four major sports leagues – Major League Baseball (MLB), the National Football League (NFL), the National Basketball Association (NBA), and the National Hockey League (NHL) – have seen the development of twenty-one new facilities, at a cost of over $ 16 billion, nearly equal to the cost of the sixty-five facilities built the decade before” (Marquette Sports Law Review, Fall 2011, p. 91).

Why are local governments agreeing to provide billions of dollars to fund sports arenas? Brian Yates, writing in the University of Miami Business Law Review, summarizes the reasons:

Proponents of new sports facilities typically make four basic arguments. First, the proposed stadium or arena will bring citizens, tourists, and dollars downtown, providing a boost to downtown businesses and the local economy. Second, the new stadium is necessary to either attract a new professional team or to retain the current franchise. Third, having a sports team brings prestige to a city and qualifies it as "major league." Finally, a new stadium or arena will make the existing team more competitive in their respective league. These new venues are increasingly publicly financed, through state and local government tax incentives and subsidies, bonds, and through additional taxes, such as sales taxes or taxes on hotels and rental cars. (Spring 2009, p. 270)

But opponents of public subsidies question the claimed benefits of sports arena construction. Victor Matheson, professor of economics at the College of the Holy Cross, offers a typical example of this opposition:

The claim of significant economic benefits resulting from a sports stadium's construction and operation is problematic. First, the reports of these so-called "economic benefits" are based on are forecasts, not actual counts of jobs created or income earned in and around the new stadium. In the PILOT issue and every other sports facility construction project studied, these forecasts of economic benefits are treated as factual assessments, rather than forecasts. Statistically, forecasts, in and of themselves, are not useful data unless they measure the statistical uncertainty associated with the data measured.

Second, there is no evidence in the large body of peer reviewed scholarly research on the economic impact of professional sports facilities that indicates that any professional sports facility construction project or the ongoing operation of any such facility has generated tangible economic benefits in the local economy. In fact, economists widely agree on this point, and it is supported by decades of evidence and data. (Villanova Sports & Entertainment Law Journal,2009, pp. 284-285)

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ANALYSIS OF THE TOPIC Debaters will need to carefully consider the wording of the resolution: “Resolved: On balance, public subsidies for

professional athletic organizations in the United States benefit their local communities.” This resolution suggests several analytical questions:

What is the meaning of the term “on balance?” Without the addition of this phrase, some PRO debaters might be able to argue that the resolution only requires them to show some minor benefit to sports subsidies. Even if subsidies create disadvantages outweighing the benefits, the resolution only requires a demonstration that some benefits exist. But the addition of the term, “on balance,” makes it clear that the disadvantages of subsidies must be weighed against the advantages. Consider the following definitions of “on balance:”

CAMBRIDGE DICTIONARY OF AMERICAN IDIOMS, 2003. Retrieved Aug. 26, 2014 from http://idioms.thefreedictionary.com/on+balance. On Balance: After considering everything.

INVESTOR WORDS, 2014. Retrieved Aug. 26, 2014 from http://www.investor words.com/3410/on_balance.html. On Balance: The net result or overall effect.

OXFORD DICTIONARIES, 2014. Retrieved Aug. 26, 2014 from http://www.oxforddictionaries.com/definition/english/on-balance. On Balance: When all factors are taken into consideration.

CAMBRIDGE IDIOMS DICTIONARY, 2ND ED., 2006. Retrieved Aug. 26, 2014 from http://idioms. thefreedictionary.com/on+balance. On Balance: After thinking about all of the different facts or opinions.

What is the significance of the word “professional” in the resolution? This term makes it clear that we are not talking about the value of supporting high school or college sports teams. Instead, we are primarily focusing on such professional sports leagues as the National Football League, the National Basketball Association, Major League Baseball, the National Hockey League, and Major League Soccer. Some of those leagues also support minor league programs. Major League Baseball, for example, includes a “farm system” involving such teams as the Toledo Mud Hens, the Round Rock Express, the Iowa Cubs, and the Tacoma Rainiers. The National Basketball Association maintains a “Developmental” or D League system including teams such as the Austin Toros, the Bakersfield Jam, and the Maine Red Claws. Debaters may engage in an interesting exchange over whether the National Association for Stock Car Racing (NASCAR) constitutes an “athletic organization.” It is certainly true that ESPN and other sports media outlets often describe race car drivers as “athletes.”

What is the significance of the phrase “local communities” in the resolution? Debaters should note that the resolution does not ask whether sports subsidies benefit the nation or society as a whole. The question is whether such subsidies benefit the local community. This is an important reminder since much of the literature on sports subsidies asks whether it is appropriate that sports arenas are built with tax-free bonds. This is a tax benefit actually involving a federal subsidy. The federal government made a serious effort to eliminate this subsidy with the passage of the 1986 Tax Reform Act. With this legislation, Congress intended to preclude the use of federal tax-free bonds to finance sports arenas. The provision designed to accomplish this exclusion was, however, quite defective. Congress stipulated that local governments wishing to issue tax-free bonds must assume at least 90% of the cost of the debt service. Sponsors of the legislation believed that the 90% requirement would dissuade localities from offering the use of tax-free bonds to local sports teams. This turned out to be a miscalculation. It turned out that the fear of losing a professional sports franchise forced local governments into agreeing to issue the tax-free bonds, but now with the requirement that the government would pay back 90% of the debt. Zachary Phelps, writing in the Summer 2004 issue of the St. John’s Journal of Legal Commentary, explained how the passage of the 1986 Tax Reform Act has shifted the funding of professional sports arenas to local communities:

Whatever the additional source of revenue, the burden falls on the community, and in some instances, people who derive little, if any, benefit from the stadium. These drastic and somewhat unfair measures are undertaken merely to keep the bond interest tax-free. If a city can maneuver around the private activity bond status, they can build for a lower cost. Various experts in the field have estimated the benefits of keeping a bond issue tax-free. Some believe it can add an additional 34% to the cost of construction to a stadium, These estimates show how some stadium construction projects could possibly hinge on the classification of the bonds as private activity bonds. These cost figures also reveal why a city will go to great lengths and adopt economically irrational policies to fail one of the private activity bond tests. (p 992)

What is the significance of the prepositional phrase “in the United States” in the resolution? This phrase makes it clear that we are discussing the role of sports subsidies in this country – not the role of such subsidies in Europe or elsewhere.

PRO STRATEGIES There are a large number of strategies available to PRO debaters on this topic. The first case looks at the

resolution from the standpoint of microeconomics, asking whether individual residents of a community should view public subsidies for professional sports arenas as “on balance” beneficial to them. The case points out that the

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average cost of the subsidy for a person living in a large metropolitan area would be $5 per person per year. Residents of local communities receive much more than a $5 benefit from the presence of the professional sports team. Real estate valuations prove that living close to a professional sports arenas adds hundreds of dollars to home values. Sports teams also contribute to the success of large and small businesses in a community. Local media outlets benefit tremendously from their proximity to professional sports teams.

The second PRO case focuses on the role of sports arenas in revitalizing downtown areas in major cities. Most new stadiums and arenas are now being built in the central city, rather than in the suburbs. This type of construction provides a catalyst for economic growth in the inner city. Cities such as Cleveland, Baltimore, and Indianapolis prove the value of investment in sports-led development of the inner city.

The third PRO case highlights the intangible advantages of subsidizing professional athletic organizations. Sports arenas become gathering places for communities in both good and bad times. Aaron Mensh, writing in the Connecitcut Law Review of July 2008 describes this benefit: “A stadium can also be a gathering place for a community; its value is not limited to the professional team that it hosts. In recent years, the Louisiana Superdome has proven that a stadium provides numerous benefits. The Superdome is not only home to the NFL's Saints, but also hosts concerts, trade shows and national conventions. The television and press coverage for these events give New Orleans opportunities to showcase the city. On the other hand, when Hurricane Katrina struck, thousands fled to the Superdome for safety. San Diego's Qualcomm Stadium-home of the NFL's Chargers-also recently offered shelter for citizens displaced by raging wildfires. Stadiums are valuable even when entertainment is not the goal” (p. 1653). These intangible benefits do not show up on an accountant’s balance sheet, but are nevertheless valuable. Michael Birch summarized these values in the Spring 2012 issue of the Sports Lawyers Journal: “Local sports teams provide a benefit beyond that which can be economically calculated. Professional teams become a significant part of a city's identity, as well as that of its inhabitants, and can enhance their quality of life. Furthermore, millions of fans attend sporting events for recreational purposes each year. Professional sports also provide inspiration for others to engage in sports, which has proven highly beneficial for America's youth. Although not economically quantifiable, the intangible benefits of a sports team in a city are real and significant and should not be ignored in the public use debate” (p. 199).

CON STRATEGIESThere are also several excellent strategies available to CON debaters on this topic. The first strategy utilizes a

cost-benefit analysis strategy as a means of testing the “on balance” value of subsidizing professional athletic organizations. This case finds that the financial costs of sports subsidies are extensive and the benefits are minimal. Especially unfortunate is the fact that regressive local sales taxes place the cost of sports subsidies on the poor while heaping the benefits on wealthy owners of sports teams. Proponents of subsidies claim that the construction of new sports arenas will create jobs. But economists point out that these jobs are created at enormous expense. The accounting firm, Deloitte & Touche, calculated that the jobs created by the expansion of the Arizona Diamondbacks stadium would cost public taxpayers approximately $705,000 per job created (University of Denver Sports & Entertainment Law Journal, Spring 2011, p. 16). In Minneapolis, the proponents of subsidizing a new stadium claimed that the project cost of $310 million would create hundreds of new jobs. This claim caused University of Chicago economist Allen Sanderson to make the following counter-claim: “If the money were dropped out of a helicopter over the Twin Cities, you would probably create eight to ten times as many jobs” (Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit, 2008, p. 36).

The second CON strategy focuses on opportunity costs. The notion of opportunity costs is central to macroeconomic theory because it examines the alternative uses for the same amount of public expenditure. In other words, the question is not whether building sports arenas can have some benefits, but rather whether those benefits are greater than the alternative uses. This case argues that the money used to subsidize sports arenas would be more productive if used to fund such community needs as improved education or police protection. The high ticket prices for professional sports excludes most local residents from enjoying this form of entertainment. If communities wish to subsidize local entertainment, they should support more affordable venues such as zoos or museums.

The final CON strategy focuses on the monopoly power of professional athletics organizations that allows them to extract subsidies from local governments. We understand why local governments agree to subsidize the construction of sports arenas: local politicians are afraid that their sports team will move to another city where the financial offer will be more lucrative. Yet understanding the financial pressure facing localities does not make the situation right or just. The owners of professional sports teams are typically billionaires who are becoming even more wealthy as a result of the public subsidies. Teams have sufficient revenue from naming rights and personal seat licenses to build their own stadiums, but they extract the public subsidy simply because they can. As Arline Schubert, professor of sports law at the University of North Dakota, observes: “Absent the monopoly power of America's professional sports leagues, few communities would likely subsidize the professional sports industry. Although rooting for professional sports teams is often a source of personal enjoyment, stadium funding rarely adds economic value to a local community. In addition, the social benefits of new public stadiums are often misaligned in favor of the already wealthy” (North Dakota Law Review, 2010, p. 50).

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PEOPLE AND TERMS RELEVANT TO THE SEPTEMBER/OCTOBER TOPIC

1986 Tax Reform Act: When the federal government passed the 1986 Tax Reform Act it included a provision explicitly preventing local governments from using tax free bonds to finance sports arenas. Congress, however, provided a loophole: tax-free bonds could be used to finance a private enterprise so long as the city itself would be responsible for at least 90% of the repayment. The legislators apparently thought that few localities would agree to be responsible for 90% of the cost of building a new sports arena. But Congress underestimated the willingness of local governments to support the construction requests of their sports teams. Before the passage of the legislation, the owners of sports teams often provided almost half of the cost of constructing new arenas; with the passage of the 1986 Tax Reform Act, the only way localities could issue tax-free bonds for constructing sports arenas was to limit the lease payments of sports teams to less than 10% of the construction cost. Ironically, the legislation has resulted in increased public subsidies of professional sports teams.

Opportunity Costs: This term refers to the potential alternative uses for the funds that local governments now spend on building sports arenas: “Economists claim that a new sports facility should not be judged by the actual financial costs to the local government, but rather by opportunity cost of the investment. Simply said, if the sports facility created greater benefits than other investment options, either financially or in terms of social service needs, than it would pass the opportunity cost test. However, if other investments, such as unemployment insurance, schools, or parks are more attractive choices, then these economists would consider the new sports arena or stadium as an undesirable investment” (Matthew Parlow, University of Miami Business Law Review, Spr. 2002, p. 507).

Personal Seat Licenses: “Personal Seat Licenses (‘PSLs’) are fees paid by individuals to guarantee the individual a right to purchase season tickets in a specified location for a designated period of time. These license fees can range from $ 250 to $ 16,000 depending on the sport and team. Certain seat licenses apply only to the sport for which they were sold and not to any other special events that might take place in the stadium. Typically, PSLs have limitations on the transferability of the license and the economic benefit that can be received by selling the license” (Frank Mayer, Villanova Sports and Entertainment Law Journal, 2005, p. 202).

Special Activity Generator: “Special Activity Generator (SAG) is a strategy for downtown redevelopment centered on the idea that large facilities that generate special activity within a district can anchor redevelopment within that district by drawing visitors and suburbanites to downtown for events. This influx of people can provide the critical mass necessary to support other commercial activities in the district. In addition, these large projects can galvanize other investments in the district by the public sector in the form of new infrastructure or urban design improvements which help to establish and sustain a revitalized district” (Martin Greenberg, Marquette Sports Law Review, Fall 2011, p. 93).

Tax Increment Financing Districts: “TIF districts were first utilized in California in 1952 and are now used in forty-nine states and the District of Columbia to meet each area's unique economic development needs and challenges. Most notably, TIF has been utilized in the development of Nationwide Arena, which is discussed in detail below. TIF helps local communities attract private development and new businesses utilizing local resources that do not depend upon an increase in taxes or the reduction of other services. The theory behind TIF is simple. TIF is a tool that utilizes projected future expansion of the overall tax base to finance current improvements that theoretically will create the gains. In essence, a governmental unit makes expenditures to promote development that would not otherwise be likely to occur. Thereafter, the resulting development increases the tax base by attracting new business. Other taxing jurisdictions within the TIF district (such as school districts, county, technical colleges and the like) agree to forego the increase in property tax revenue so that the governmental unit can use it exclusively to repay the cost of public improvements. If the development results in an increased tax base, the governmental unit recoups the cost of their investment, and thereafter, all taxing jurisdictions that are part of the TIF district share in the new tax base” (Martin Greenberg, Marquette Sports Law Review, Fall 2011, p. 93).

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KEY WEB SITES RELEVANT TO THE SEPTEMBER/OCTOBER PUBLIC FORUM TOPIC

Glans, Matthew. (2014, Mar. 21). Research & Commentary: Taxpayer Funding of Sports Facilities. http://heartland.org/policy-documents/research-commentary-taxpayer-funding-sports-facilities. This Heartland Institute report provides links to numerous reports questioning the value of public funding of sports venues: “Supporters of taxpayer funding for stadiums have long claimed the new facilities act as engines of new economic development, but several economic studies have found their influence to be limited. In a Reason Public Policy Institute report, Samuel Staley and Leonard Gilroy note the majority of research on the economic effects of stadium construction has found no link between the new facilities and job or income growth. Critics also challenge the notion that stadiums create new consumer spending; any new spending generated by a stadium is simply shifted from other spending, ultimately ending up in the team owner’s pocket, not the local economy. Stadium subsidies are a poor use of taxpayer dollars. They rarely realize the benefits their supporters claim, and they shift tax revenue away from where it is better utilized. To improve their competitiveness, cities would do better by reducing tax rates or investing in more cost-effective improvements such as new and improved infrastructure.”

Keating, Raymond. (1999, Apr. 5). Sports Pork: The Costly Relationship Between Major League Sports and Government. Cato Institute. http://www.cato.org/sites/cato.org/files/pubs/pdf/pa339.pdf. Keating, the chief economist for the Washington-based Small Business Survival Committee, cites numerous studies discounting the benefits of public spending on sports arenas: “For example, Robert Baade of Lake Forest College examined the evidence from 36 U.S. metropolitan statistical areas (MSAs) that hosted pro sports teams in one of the major league sports and 12 areas that did not host such teams between 1958 and 1987. Baade found that pro sports is not statistically significant in determining economic growth rates. Baade and University of Chicago economist Allen R. Sanderson looked at the employment impact of adding a pro sports team or stadium. Based on evidence from 10 MSAs over the period of 1958 to 1993, they found that leisure spending was realigned, not increased, and an insufficient number of fans were attracted from beyond the area to significantly contribute to the city’s economy, hence, no new net job creation occurred.”

Santee, Earl. (2012, Nov. 28). Stadiums That Shape Downtowns: The Impact of Stadiums on Urban Redevelopment. Populous. http://populous.com/posts/stadiums-that-shape-downtowns-the-impact-of-stadiums-on-urban-redevelopment/. Santee argues that sports stadiums have played a vital role in the resurgence of the central city in America’s largest urban centers: “Over the last 30 years, sport infrastructure has come to be an important catalyst for urban redevelopment, with arenas, ballparks and football stadiums serving as a framework for district development in each community. In cities like Minneapolis, architects, developers, civic groups, city planners and local government officials have invested in the future of their city, leading urban redevelopment efforts with the support of downtown Target Field. Their efforts have paid off, with Minneapolis boasting a reenergized downtown, enhanced quality of life and consistent growth in housing and retail.”

Wilhelm, Sarah. (2008, Apr. 30). Pubic Funding of Sports Stadiums. http://cppa.utah.edu/_documents/publications/finance-tax/sports-stadiums.pdf. This report from the University of Utah’s Center for Public Policy and Administration provides a very useful summary of the benefits and costs associated with public funding of sports arenas. Following is an excerpt from the section of the article explaining benefits: “Fan Happiness: A local sports franchise may create benefits for fans who never attend a single game. Fans may follow the franchise in the media and discuss the franchise with friends, family and coworkers. More than half of the U.S. population lives in a metro area that hosts one or more franchises from the four major professional sports leagues (MLB, NBA, NFL, NHL). Again, this is a benefit that is difficult to quantify in standard economic terms. Civic Pride: A local sports franchise will create civic pride, essentially putting the city ‘on the map.’ Cities with a sports franchise may be viewed as ‘world class’ or a ‘major’ city.”

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PRO CASE #1: BENEFITS TO RESIDENTS The thesis of this case is that individual residents of a community benefit financially from the presence of a

professional sports team in their community. On balance, these economic benefits easily justify the public subsidies paid to the professional athletic organizations.

OBSERVATION:

I. THE THRESHOLD FOR INDIVIDUAL BENEFIT IS LOW: THE QUESTION IS WHETHER HAVING A SPORTS TEAM IS WORTH $5 PER RESIDENT, PER YEAR.

Charles Santo, (Prof., City Planning, U. Memphis), JOURNAL OF URBAN AFFAIRS, 2007, 457.It might seem a stretch to suggest that these kinds of benefits can justify the enormous public

subsidies that cities offer for sports facilities; however, Noll and Zimbalist offer a hypothetical investment situation that provides an important perspective. They put forth a stadium receiving a subsidy of $250 million in a metropolitan area of five million residents. The annual cost of servicing the debt to finance such a stadium would be equivalent to approximately $5 per resident. “It does not vastly stretch credulity to suppose that, say, a quarter of the population of a metropolitan area derives $20 per person in consumption benefits annually from following a local sports team. If so, the consumption benefits of acquiring and keeping a team exceed the costs.

CONTENTIONS:

I. ON BALANCE, THE PRESENCE OF PROFESSIONAL SPORTS TEAMS IS WORTH MUCH MORE THAN $5 PER RESIDENT, PER YEAR.

A. THE PRESENCE OF A SPORTS STADIUM ADDS HUNDREDS OF DOLLARS TO HOME VALUES.

Xia Feng, (Prof., Economics, College of William & Mary), CITY, CULTURE AND SOCIETY, 2012, 199.We find evidence consistent with the idea that professional sports facilities generate externalities, and

that these effects are capitalized in residential property values and decline with distance. Our results are based on a large, comprehensive data set containing housing values located near a wide variety of sports facilities in many cities. How large are the increases in property values, in aggregate, in cities with professional sports facilities? The results in column 3 of Table 3 suggest that moving a residential housing unit one mile closer to a sports facility would increase its value by $793. The total increase in housing values in a city would depend on the number of residences in the city and the proximity of these residences to the sports facility. In order to provide an estimate of the total value of the increase in housing values in a city attributable to a sports facility, we performed the following thought experiment/back of the envelope calculation: if every occupied housing unit within X miles of a sports facility in a city were moved to adjacent to the facility, by how much would housing values increase in that city? Table 4 shows the results of this calculation, using data from the 2000 Census. The unit of observation is a metropolitan area; the housing density and location of the facility differs across metropolitan areas, leading to different values for the calculation. We have performed this calculation for four different impact areas: all occupied residences within one, two, three and four miles of the facility. Table 4 shows the average and median increase in total housing values, and the smallest and largest increases across the metropolitan areas in the sample. Note that in some metropolitan areas the increase in aggregate housing values is relatively small, and that a few very large metropolitan areas with high housing density skew the estimated average increase in aggregate housing values well above the median increase. The median increase in aggregate housing value is modest, ranging from $11.2 million in a one mile radius to $277 million in a four mile radius.

Xia Feng, (Prof., Economics, College of William & Mary), CITY, CULTURE AND SOCIETY, 2012, 198.These results indicate that sports facilities generate positive spillover effects on the local economy,

and that these spillover effects are capitalized into the value of owner occupied residential housing. The positive and statistically significant sign on the stadium age variable supports the idea of positive spillovers, as this parameter suggests the longer a sports facility has been at a given location, the greater the increase in median housing values near the facility.

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B. CITIES SUBSIDIZE SPORTS TEAMS BECAUSE ORDINARY RESIDENTS ARE CONVINCED OF THEIR VALUE TO THE COMMUNITY.

Garrett Johnson, (JD Candidate), UNIVERSITY OF DENVER SPORTS & ENTERTAINMENT LAW JOURNAL, Spr. 2011, 12-13.

The economic impact of professional sports on local economies has become a very important issue over the past couple of decades. Because the sports industry is a multi-million dollar industry, politicians believe that having a professional franchise located in their city is vital to the local economy. As the former mayor of Nashville, Phil Bredesen, once said concerning the local benefits of construction a new stadium: “First, the economic impact, which does not totally justify the investment but justifies a piece of it. Second, the intangible benefits of having a high-profile NFL team in the community at a time when cities are competing for attention is positive. Third, it is an amenity that a lot of people want. We build a golf course and parks and libraries and lots of things because people in the community want them, and certainly there are substantial numbers of people who want this. Fourth, the location of the stadium represents the redevelopment of an industrial area close to downtown, certainly a positive in its own right and a significant factor in the public's mind. Taken together, it makes a very compelling argument for going ahead with this.”

C. PROFESSIONAL SPORTS ARENAS REVITALIZE COMMUNITIES.

Aaron Mensh, (JD Candidate), CONNECTICUT LAW REVIEW, July 2008, 1650.In Buffalo, an inner-harbor, downtown project surrounding the Sabres' HSBC Arena attracted multiple

corporations. The construction convinced Adelphia to relocate 1,500 jobs to the area, while other companies promised approximately 2,500 more jobs. The additional corporate focus in Buffalo also induced Southwest Airlines to commit itself to serving the western New York city. Buffalo's dedication to building a new arena for the Sabres and developing the surrounding area created additional jobs, a higher quality of life, and led local economists to predict increasing economic success for the city. HSBC Arena boosted the local economy; the city lured additional business and revived its downtown area in large part because of the construction of a stadium for its professional hockey team.

Aaron Mensh, (JD Candidate), CONNECTICUT LAW REVIEW, July 2008, 1650.Buffalo is not the only hockey town that has reaped economic rewards from building a stadium for its

team. In Manchester, New Hampshire, a building for the American Hockey League's Monarchs raked in money that otherwise would not have entered the small city's economy. The AHL rewarded Manchester for its new stadium; the Monarchs hosted the 2005 AHL All-Star game, bringing thousands of visitors to the city. One study estimated that the facility inserted $ 40 million dollars into Manchester's market. Professional sporting events provide numerous local businesses with additional commerce.

Michael Birch, (JD, Northeastern U. School of Law), SPORTS LAWYERS JOURNAL, Spr. 2012, 197.Similarly, a 2004 case study of Manchester, New Hampshire revealed that the addition of the Verizon

Wireless Arena, home of the American Hockey League's (AHL) Manchester Monarchs, significantly contributed to consumer spending on game nights in surrounding small businesses, such as eateries and bars. The study found that the stadium brought $ 40 million in spending to the city in just three years. Similarly, a survey in Springfield, Massachusetts, home of the AHL's Springfield Falcons, revealed that restaurant business increased dramatically as a result of the team and its stadium. Although incidental economic benefits may not always present direct returns on investment, they are surely significant. The addition of the Verizon Wireless Arena and the Monarchs, a minor league hockey team, brought $ 40 million of new spending to the small city of Manchester. Logically, this sum significantly increases with high-profile professional teams and even more so in major markets, as illustrated by the increased spending in Arlington. Therefore, although opponents have presented seemingly compelling evidence that sports stadiums do not instigate direct economic benefits, tangible economic benefits do accrue.

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D. PROFESSIONAL SPORTS ARENAS INSTILL A SENSE OF COMMUNITY.

Martin Greenberg, (Prof., Law, Marquette U. Law School), MARQUETTE SPORTS LAW REVIEW, Fall 2011, 120.

To further cater to families and to provide accommodations for visitors from far and wide, Patriot Place includes a museum, hotel and spa, and health care center. The Hall at Patriot Place is the focal point of the development and includes a state-of-the-art museum that utilizes video and audio technology to help fans experience the history of New England football. To provide accommodations to visitors, the facility features a four-star Renaissance Hotel & Spa. Hotels, condominiums, and apartment complexes are essential to the success of a sports.comm because they naturally instill a sense of community that benefits the entire venue. Surprisingly, Patriot Place also includes Brigham and Women's/Mass General Health Care Center located next to the stadium, which provides outpatient care and some surgical services to the Foxborough area. The inclusion of the Health Care Center reflects the true purpose of a sports.comm, to benefit the local community. Patriot Place was truly ahead of its time, but reflects the important aspects of the sports.comm concept. Kraft was successful in making Foxborough, Massachusetts a retail destination for all of New England, which benefited him personally, and in turn, the entire business community of Foxborough. Therefore, Patriot Place is proof of the potential for a sports.comm to transform a city from an afterthought into a tourist destination.

E. PUBLIC SUBSIDIES ALLOW SPORTS ARENAS TO BE BUILT WITH LOWER INTEREST RATES, THUS BENEFITTING BOTH THE TEAMS AND THE COMMUNITY.

Matthew Parlow, (JD, Yale Law School), UNIVERSITY OF MIAMI BUSINESS LAW REVIEW, Spr. 2002, 496.

Safeco Field has turned out to be a success for both the respective government entities and the Seattle Mariners. The King County Council recently voted to refinance $ 240 million in bonds in 2003 to take advantage of lower interest rates, possibly saving taxpayers up to $ 11 million. Moreover, the taxes levied to pay the County's debt service payments have garnered approximately $ 20 million more than expected, allowing the County to pay down its bond debt more quickly. On the other hand, the Seattle Mariners have reaped substantial benefits from Safeco Field.

F. VISITING SPORTS TEAMS AND FANS BRING MONEY INTO LOCAL AREAS.

Sharianne Walker & Michael Enz, (Prof., Sports Management, New England College of Business/Prof., Economics, Western New England College), WESTERN NEW ENGLAND LAW REVIEW, 2006, 152.

Visiting teams, Mr. Denver adds, also make important contributions to the local economy. For example, Mr. Denver noted that a local hotel reports that visiting teams book approximately 1,500 room-nights at two major downtown hotels in Springfield each season. Visiting players and team officials not only stay in local hotels, but they also eat in local restaurants and rent cars locally.

Frank Mayer, (Corporate Chair, City of Philadelphia Law Department), VILLANOVA SPORTS AND ENTERTAINMENT LAW JOURNAL, 2005, 212.

The primary rationale for public funding of sports stadiums is that the stadiums provide benefits to the community. According to one commentator, "for each $ 1 spent on pro sports, an additional $ 1.75 is created in the economy; for each $ 1 spent on pro sports, household income rises an additional 17 cents; and for each $ 1 million spent on pro sports, 76 jobs are created." Most of these benefits are derived from individuals who come into town for games and spend money that otherwise would have been spent elsewhere. Sectors that see a distinct boost in revenue include tourism, hotel occupancy, charitable donations, and overall increased consumption. The increased private and public consumption promoted by the stadium extends into the area as a whole whether the local residents attend games or not.

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G. THE PRESENCE OF PROFESSIONAL SPORTS TEAMS HELPS SMALL BUSINESSES.

Sharianne Walker & Michael Enz, (Prof., Sports Management, New England College of Business/Prof., Economics, Western New England College), WESTERN NEW ENGLAND LAW REVIEW, 2006, 154.

While major corporations are the best-known supporters of professional teams, smaller businesses also support teams, and are often important beneficiaries of related economic spin-off. Indeed, the relative economic impact on small businesses created by alliances with sports teams may be more significant than the impact on major corporations. Many stadiums are surrounded by small businesses. For example, sandwich shops, pizza places, and sports bars around stadiums receive significant revenue from fan-related spending. Most AHL cities experience an average nightly attendance of approximately five thousand fans. With forty scheduled home games each season, most AHL teams draw approximately two hundred thousand total visits by fans to their communities. According to Mr. Nikolis, the spending behavior of AHL fans supports many small businesses around AHL stadiums, including those businesses providing pre-game and post-game meals, drinks, and entertainment. Mr. Nikolis also suggests that the availability of a professional team as an anchor tenant often supports stadium construction and renovation.

H. THE PRESENCE OF MODERN SPORTS ARENAS SUPPORTS ALL TYPES OF COMMUNITY ENTERTAINMENT.

Logan Gans, (J.D., U. of Florida College of Law), VIRGINIA TAX REVIEW, Spr. 2010, 770.Football stadiums have been used for soccer matches or for special high school or college football

games. Indoor basketball arenas can be used for events that might not seem at first intuitive, like fundraisers, graduations, ice skating events, and even the circus. Thus, by investing tax funds in a sports stadium, the public will receive a greater return on its investment and a broader set of interests might even be served. Furthermore, the construction of a new stadium sometimes yields a successful bid on a major event, such as a Democratic or Republican National Convention, Super Bowl, or NBA All-Star Game. A taxpayer-subsidized stadium could even be the centerpiece of a bid for the Olympics.

II. OBJECTIONS TO PUBLIC SUBSIDIZATION OF PROFESSIONAL SPORTS ARE UNJUSTIFIED.

A. OPPORTUNITY COSTS ARE PRESENT WITH EVERY PUBLIC EXPENDITURE: THE FACT THAT SUBSIDIES COULD BE USED FOR OTHER THINGS IS IRRELEVANT.


While it is true that the government could have used the revenue it gave up through tax-free bonds elsewhere, the same could be said of many governmental programs that target less than the entire population. For example, any time a local government lowers corporate tax rates to attract new businesses into the area, the same opportunity cost exists. These corporate tax benefits reduce the potential revenue for the city in the hope that the corporation will provide a boost to the local economy. Just as with sports stadiums, it is never clear that the new corporations that enter the community will provide an actual benefit to the community at large, or whether that money goes to private individuals. As long as cities continue to provide such opportunities to new businesses, it is unclear why the same benefit should not be given to new sports stadiums with the similar potential.

B. CITIES ARE NOW ADEQUATELY PROTECTING THEMSELVES FROM FINANCIAL LOSSES IF A SPORTS TEAM MOVES AFTER RECEIVING A PUBLIC SUBSIDY.

Martin Greenberg, (Prof., Marquette U. Law School), MARQUETTE SPORTS LAW REVIEW, Fall 2004, 142-143.

Because the relationship between a community and a sports franchise is greater than that of a landlord and a tenant, the lease agreements must be "greater," also. To ensure that "psychic income" can be used in the future to prevent relocation, communities have put specific language, which outlines the non-monetary benefits and uniqueness of the relationship in the lease with the team. Newer leases also grant the community the right to injunctive relief and specific performance. The Minnesota Court of Appeals holding suggests that a community with a well-written non-relocation clause in its lease agreement with a sports franchise can prevent a team from relocating. If a team needs to relocate for legitimate reasons, the lease should contain a liquidated damages clause with specific events that would allow the team to "buy-out" of the lease.

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Steven Chen, (Editor), BOSTON COLLEGE ENVIRONMENTAL AFFAIRS LAW REVIEW, 2013, 474.The Foxboro Stadium Act allows the state to recover its financing costs by collecting $ 1.15 million in

parking fees and $ 250,000 in administrative fees per year. The state also protects taxpayers from teams who threaten to leave the state by requiring at least some reimbursement of infrastructure costs if the team leaves the site. In the Fenway Park Act, the legislature included a clause requiring the team to pay up to $ 12.1 million per year for the lease, a cost that could be reduced by paying a percentage of revenue earned by the team. As a result, stadium bills drafted by the Massachusetts legislature are carefully constructed to protect public use.

C. THE CONSTRUCTION OF LARGE SPORTS ARENAS ARE IMPOSSIBLE WITHOUT A PUBLIC SUBSIDY.

Matthew Parlow, (JD, Yale Law School), UNIVERSITY OF MIAMI BUSINESS LAW REVIEW, Spr. 2002, 488-489.

Major league sports teams do not have sufficient revenues from their own sources and resources to pay for investments in new sports arenas and stadiums. These sports franchises are too small and have too small a profit margin to pay for the full cost of a $ 200 million, or more, facility. If a new sports facility was not subsidized, the interest and amortization for the new sports arena or stadium would be approximately 10% of the construction costs, including site acquisition and clearance. This debt payment would be too expensive for a franchise to afford with the anticipation of making the investment profitable. Therefore, local and state governments must bear some, if not all, of the costs of building a new sports arena or stadium.


Private sports teams will almost always fail the 10% tests because the teams usually use more than 10% of the new sports facility's services and receive more than 10% of the proceeds from such bond issuances. Therefore, in order to be tax-exempt, new sports arena or stadium bond issues must be structured so that no more than 10% of the debt is secured by the sports franchise. Moreover, since cities will most often pass both of the 10% tests, they are forced to secure the tax-exempt bonds. Therefore, to make a new sports facility financially viable, cities must service at least 90% of the federally tax-exempt debt in order to enter into such deals with these sports franchises.

D. EVEN IF SOME STUDIES OVER-STATE THE ECONOMIC VALUE OF SPORTS STADIUMS, THEY REMAIN WORTH THE COST.

Frank Mayer, (Corporate Chair, City of Philadelphia Law Department), VILLANOVA SPORTS AND ENTERTAINMENT LAW JOURNAL, 2005, 225-226.

New stadiums unquestionably increase revenue for teams. Many critics of public funding argue that this increased revenue flows only to the team and facility owners while the community sees very little increase in revenue. This argument has several flaws, not the least of which is that many studies have shown that stadiums can in fact revive decaying communities. Furthermore, the increased revenue from a new stadium represents increased income to individuals as well as increased public consumption. Increased consumption has a positive economic benefit for society as a whole.

Aaron Mensh, (JD Candidate), CONNECTICUT LAW REVIEW, July 2008, 1651.Allen R. Sanderson, Professor of Economics at the University of Chicago, believes that "basic

microeconomic theory may be sufficient" to validate publicly funding a professional sports stadium. Sanderson posits that if a stadium requires $ 40 million a year from its city, and the population of that city is two million people, the per capita cost would be twenty to forty dollars per year. From Sanderson's view, "It would not take much . . . to justify a commitment." On the other hand, Dr. Michael Enz, Assistant Professor of Economics at Western New England College, does not believe it is possible to quantify the benefits a sports team and its stadium provide a city. Nevertheless, "[f]rom an economist's perspective . . . because people spend time following teams, and time has a monetary value, citizens place [economic] value on personal engagement with the team."

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PRO CASE #2: REVIVING URBAN CENTERS The thesis of this case is that subsidies given to professional sports teams are justified as a means of revitalizing

decaying urban areas. In city after city, the construction of a sports arena in the urban center has produced a dramatic turnaround in the local economy.

OBSERVATION:

I. REVITALIZATION OF DECAYING DOWNTOWN AREAS IS, ON BALANCE, A WORTHY ENDEAVOR.

A. THE CONDITION OF THE CENTRAL CITY IS VERY IMPORTANT TO LOCAL RESIDENTS.

John Wagner, (Staff), TOLEDO BLADE, MAR. 31, 2002. Retrieved Aug. 27, 2014 from http://www.toledoblade.com/local/2002/03/31/Planners-pin-hopes-on-field-of-dreams.html.

“A ballpark is a signal to market developers that an area that has been beat up is getting a significant injection of money. It brings attention to an area that may not draw a lot of attention otherwise,” said Dr. Chapin of Florida State. Akron's downtown benefited greatly from the attention it received from the new ballpark. “The downtown is like the front room of a house,” city spokesman Mark Williamson said. “It's the first thing people see coming in, and it's the last thing they see going out. Before, when people came to Akron and you took them to the suburbs to entertain, what did that say? “As soon as the park opened and people went to games, criticism of the ballpark [being downtown] stopped immediately.” Dr. Chapin said new downtown ballparks spur improvements to the surrounding area. “Building a ballpark often requires improvements to infrastructure. Sometimes you need to fix the sidewalks, and you need to make sure the streets are in good shape. Where you had a previously undesirable area, now the area is more desirable because it has a better infrastructure.” Mr. Williamson said Akron found the cost of improving that city's infrastructure wasn't cheap: Akron spent $206 million, spread over 10 years. “We know it was very expensive to do what we've done, but we always tell people, ‘The cost of doing nothing is much higher.'

B. INVESTMENT IN THE INFRASTRUCTURE OF THE CENTRAL CITY IS VITAL TO CORRECT DECADES OF NEGLECT.

Garrett Johnson, (JD Candidate), UNIVERSITY OF DENVER SPORTS & ENTERTAINMENT LAW JOURNAL, Spr. 2011, 8.

Many cities became nothing more than a skeleton of a once vibrant body that was the center of arts and entertainment. Crime rates in downtown areas steadily increased, causing many people to avoid the area at all cost. However, over the past couple of decades there has been a nationwide movement to invest into these blighted areas in hopes that revitalization will bring back the golden age of urban sporting events. State and local officials often use a new stadium or arena as the centerpiece of the city's plan for economic revival, which has in turn led to the construction of many new downtown facilities. The new trend of relocating sports facilities to the inner city began in the 1990's. Camden Yards in Baltimore and Jacobs Field in Cleveland were two of the first ballparks to be constructed downtown and they made a significant economic impact on what had been impoverished, desolate or abandoned tracts of land. These ballparks were incorporated into the cityscapes and looked as if they had been part of the areas for decades. This transformation helped local officials across the country to realize the impact of having a new facility as the focus of any urban renewal project.

C. MOST NEW STADIUMS ARE BEING BUILT IN THE CENTRAL CITY AREA.

Brian Yates, (JD), UNIVERSITY OF MIAMI BUSINESS LAW REVIEW, Spr. 2009, 281.Reflecting this hope, fifteen of the last seventeen major arenas built in the United States have been

built in downtown locations. This is the case even though property and labor are more expensive in an urban setting versus building a facility in the suburbs. The greater cost of acquiring land downtown, as well as the substantial improvements to the land which often have to be completed before any actual building can begin, plays a large role in the skyrocketing cost of new sports venues. Another reason cited for the move downtown is that teams are looking to locate their venues close to their core constituencies.

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CONTENTIONS:

I. SUBSIDIES FOR THE CONSTRUCTION OF SPORTS ARENAS OFFER AN EXCELLENT MEANS OF REVITALIZING DOWNTOWN AREAS.

A. DOWNTOWN ARENAS RESTORE COMMUNITY PRIDE IN THE CITY CENTER.


Stadiums also have the ability to help revitalize dying communities. Sports teams can provide a common focus for the people of an area that tends to improve community spirit. This new common interest can bring a sense of pride back to a community. For example, Arizona's Bank One Ballpark renewed communal vigor and helped spark a re-growth of Phoenix's downtown area. Similarly, the development of Cleveland's new stadiums (part of the Gateway Project) helped the city escape some of the urban blight that had plagued the area.

B. THE SUBSIDY FOR THE SPORTS ARENA BECOMES AN IMPORTANT PART OF AN OVERALL DEVELOPMENT PLAN.

Brian Yates, (JD), UNIVERSITY OF MIAMI BUSINESS LAW REVIEW, Spr. 2009, 290-291.While building a new arena, ballpark, or stadium will not by itself revitalize a city's downtown area,

when the facility is built as a part of a coordinated redevelopment plan, it can surely drive economic development in an area. The success stories follow the same general pattern: an arena or stadium built with a mixture of public and private funding, followed by the city's investment into the surrounding neighborhoods. The arena attracts a huge number of fans downtown, from 20,000 to 60,000 people, who then eat, drink, and shop in surrounding bars, restaurants and retail outlets throughout the neighborhood.

C. THE SPORTS ARENA BECOMES THE CATALYST FOR FURTHER REVITALIZATION.

Martin Greenberg, (Prof., Law, Marquette U.), MARQUETTE SPORTS LAW REVIEW, Fall 2011, 93.In the modern context, a sports facility is more than a place to view a sporting event. Sports venues

have become a catalyst for urban transformation or revitalization. A sports facility is a destination place, an entertainment district, a bundling stimulus, a real estate development, and a place where people can work, eat, watch, congregate, buy, and socialize. Sports facility development is nothing more than real estate development. If constructed thoughtfully, a sports facility could convert the image of a league or team owner from a tax vulture into a long-term leader and visionary for a community. Moreover, a newly constructed or renovated venue can bring complete renewal and revitalization to blighted areas, environmentally hazardous sites, aged communities, or near-downtown areas. Real estate development has become a central component of sports facility development, and the results thereof – urban revitalization and transformation – may be as important as the building of the sports facility itself.

Martin Greenberg, (Prof., Law, Marquette U.), MARQUETTE SPORTS LAW REVIEW, Fall 2011, 93-94.Sports facilities have long been a staple of the economic recovery tool kit and are intended to jump-

start the recovery of dilapidated or vacant urban districts. A major shift in the focus of economic development and rationale used to justify these investments has occurred in the past decade. While previous decades saw stadium proponents emphasize the indirect economic benefits of a new facility using terms such as "spin-offs," "multipliers," and "job creation," the current economic development rationale for almost all of these projects rests upon the idea of district redevelopment; that is: the facility is a catalyst for physical redevelopment of a portion of the city's core.

Martin Greenberg, (Prof., Law, Marquette U.), MARQUETTE SPORTS LAW REVIEW, Fall 2011, 102-103.Some of America's deteriorating inner cities have provided the perfect testing ground. This has been

especially true in cities with baseball stadiums. Three baseball stadiums in particular, opened in the 1990s, are properly considered to have spurred the trend of neighborhood economic development and revitalization through the development of a sports venue, namely: Camden Yards, home of the Baltimore Orioles (now known as Oriole Park at Camden Yards), opened in 1992; Jacobs Field, Home of the Cleveland Indians (now known as Progressive Field), opened in 1994; and Coors Field, home of the Colorado Rockies, opened in 1995. The concept was extended beyond baseball stadiums in 1999 with the development of the Staples Center, home of the Los Angeles Lakers and Los Angeles Clippers NBA franchises.

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D. SPORTS ARENAS TURN THE DOWNTOWN AREA INTO A GATHERING PLACE FOR LOCAL RESIDENTS AND TOURISTS.

Martin Greenberg, (Prof., Law, Marquette U. Law School), MARQUETTE SPORTS LAW REVIEW, Fall 2011, 101-102.

Team owners and real estate developers realize the potential benefits of constructing a new facility and from developing the surrounding land. Because of developed and redeveloped sports facilities, blighted and inner city areas have turned into attractive gathering places for tourists and local citizens alike. A sports facility is created, and over time, the area around the facility develops into a popular destination place and entertainment district. These sports facilities become a staple of economic recovery, as the new facilities represent progress in dilapidated inner cities. The stadiums draw attention to the cities as areas of commerce and culture. Therefore, sports facilities have become the most popular tool for urban revitalization. The concept of concentric circles starts when the only real estate that is planned is the sports facility itself. Because of the number of people that come into the area, both on a permanent and nonpermanent basis, it only makes sense to develop support-type real estate, which may include housing, service-type establishments to support the housing, offices, other types of entertainment activities such as restaurants, movies and, of course, shopping.

Earl Santee, (Editor), POPULOUS, Nov. 28, 2012. Retrieved Aug. 25, 2014 from http://populous.com/posts/stadiums-that-shape-downtowns-the-impact-of-stadiums-on-urban-redevelopment/.

Camden Yards and the stadiums that followed it have been successful in large part because of the homage paid to their surroundings and vision for the future of the downtown area. We’ve seen urban success in Baltimore replicated in cities like Denver, Minneapolis, Houston, Pittsburgh and Cleveland. Stadiums in each of these cities served as a catalyst for change, resulting in collateral development that has ultimately transformed their downtowns. With the ability to continuously draw crowds of tens of thousands more than a hundred times a year, the area surrounding a stadium grows to accommodate visitors. Restaurants, bars and hotels can be situated near stadiums. Office buildings moving closer to these new districts and housing ultimately develops to meet the needs of residents. The stadium plays an integral role in the live, work, play equation, often encouraging development of the live and work portions by offering pedestrian-friendly connections to transit, frequent events and vibrant nightlife surrounding the stadium. These projects give downtowns defined purpose to connect, communicate and share great experiences.

E. REVITALIZATION OF THE CENTRAL CITY OFFERS A SOLUTION TO URBAN SPRAWL.


For more than forty years, leaders of most central cities have watched with frustration the growth of suburbs and the subsequent dispersion away from downtown areas. This movement of production, manufacturing, and service industries, coupled with the development of extensive recreational and retail centers miles from downtown areas, has created different commuting patterns and multinucleated urban centers. By using new sports facilities as a way to spur redevelopment in downtown areas, city leaders hope to reverse or retard the effects of suburbanization.

II. SPORTS SUBSIDIES HAVE HELPED REVITALIZE AMERICA’S LARGEST CITY CENTERS.

A. THE BARCLAYS CENTER IS REVITALIZING BROOKLYN.

Steven Chen, (Editor), BOSTON COLLEGE ENVIRONMENTAL AFFAIRS LAW REVIEW, 2013, 453.On November 3, 2012, nearly 18,000 basketball fans gathered at the Barclays Center, the new state-

of-the-art 675,000-square-foot sports arena located in the heart of Brooklyn, to watch the inaugural game of the city's new professional basketball franchise, the Brooklyn Nets. On their way to the $ 1 billion arena, fans likely walked through the Atlantic Yards, a proposed $ 4.9 billion development comprising new luxury high-rise condominiums, office buildings, and department stores. Numerous city luminaries and celebrities attended the celebration, including rapper Jay-Z, who once held a minority stake in the Brooklyn Nets, and New York City Mayor Michael Bloomberg, who officially broke ground for the project in 2010.

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Aaron Mensh, (JD Candidate), CONNECTICUT LAW REVIEW, July 2008, 1625.The professional sports business is one of America's largest industries. Stadium construction is a

multi-billion dollar facet within that industry. It is estimated that in 2008 more than three billion dollars will be spent on professional sports arenas. The Atlantic Yards Arena and Development Project (Atlantic Yards) represents the prototype of modern multi-use urban stadium construction. On its website, Atlantic Yards pronounces its dedication to building a new Brooklyn "and creating an exciting new home for Brooklyn's very own NBA franchise: the Brooklyn Nets." Images of basketball stars flash below the Nets logo, and a picture of New York City Mayor Michael Bloomberg smiling crosses the screen. Though a new stadium for the Nets is its prime attraction, Atlantic Yards developer, the Forest City Ratner Companies, confirms that their development "is not just about basketball." It advertises that the twenty-two-acre Atlantic Yards will also boast housing, office buildings, and retail space, totaling a four billion dollar investment into this "reenergized" Brooklyn.

B. CAMDEN YARDS HAS REVITALIZED BALTIMORE.

Brian Yates, (JD), UNIVERSITY OF MIAMI BUSINESS LAW REVIEW, Spr. 2009, 287-288.The standard for downtown sports facilities is Oriole Park at Camden Yards in Baltimore, Maryland.

Opening in 1992, the home of Major League Baseball's Orioles ushered in the new era of stadium construction and moved away from the cookie-cutter philosophy of the 1970s to a more innovative, fan-friendly stadium. The stadium famously incorporates the historic 1898 B&O Warehouse building, which can be seen beyond right field. The ballpark cost $ 106.5 million to build and was paid for by the state of Maryland. Today, a report conducted for the Maryland Sports Authority, which owns Camden Yards, found that in 2006 "the team generated more than $ 166.9 million in sales and wages, with $ 17.9 million going to the state and city government in the form of tax revenue." The ballpark also supported more than 2,452 jobs, paying more than $ 72.6 million in 2006. Camden Yards is widely credited with revitalizing downtown Baltimore. The city government apparently thought highly enough of its successes that it decided to build M&T Bank Stadium downtown for the NFL's Baltimore Ravens in 1998.

Martin Greenberg, (Prof., Law, Marquette U.), MARQUETTE SPORTS LAW REVIEW, Fall 2011, 103.In the 1980s, Baltimore's downtown, located on a historic seaport, experienced a dramatic

renaissance and revitalization. A new convention center, the National Aquarium, and the Maryland Science Center attracted tourists and Baltimore residents to the downtown Inner Harbor neighborhood, which resulted in property values increasing and further new development occurring. The downtown Inner Harbor neighborhood has become an iconic Baltimore Landmark and today is the destination of not only the afore-referenced centerpieces of development, but also the American Visionary Art Museum, Baltimore Museum of Industry, Geppi's Entertainment Museum, Port Discovery Children's Museum, and First Mariner Arena, to name a few. More recently, the Inner Harbor neighborhood has seen the development of the Legg Mason Tower, Ritz Carlton residences, and Harbor View Pier homes. As a result, perhaps no city has garnered more attention and acclamation for its downtown revitalization and rehabilitation efforts than Baltimore, Maryland. "Baltimore "is the town cities unabashedly seek to copy to revive their own decaying downtowns.'" The culmination and accumulation of these projects have helped to create a "tourist bubble" in which a well-defined perimeter separates the tourist space from the rest of the city.

Martin Greenberg, (Prof., Marquette U. Law School), MARQUETTE SPORTS LAW REVIEW, Fall 2004, 157.Baltimore's Camden Yards was the first ballpark to be utilized as a magnet for urban development.

Before Camden Yards, residents of Baltimore had no reason to go downtown. The strategic placement of the stadium downtown has brought people and businesses like bars, restaurants, and retail shopping back into the city. This flock of people and new businesses produced a resurrection of Baltimore's Inner Harbor area. The Citizens of Baltimore are now going downtown to do their shopping and dining, and to enjoy the other cultural events that make urban life special.

C. JACOBS FIELD REVITALIZED DOWNTOWN CLEVELAND.

Martin Greenberg, (Prof., Law, Marquette U.), MARQUETTE SPORTS LAW REVIEW, Fall 2011, 108.The second example of concentric circles occurred in Cleveland, Ohio, with the creation of Jacobs

Field (now Progressive Field), home of the Cleveland Indians, and Gund Arena (now Quicken Loans Arena), home of the Cleveland Cavaliers. The ballpark and arena were the first sport facilities in the United States to be constructed simultaneously at the same general location, i.e. the Gateway District.

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Martin Greenberg, (Prof., Marquette U.), MARQUETTE SPORTS LAW REVIEW, Fall 2004, 157-158.In Cleveland, planners strategically located Jacob's Field and Gund Arena to stimulate economic

growth and development. Cleveland, however, did not see the same intense level of success that occurred in Baltimore and Denver because they had already started on a plan for redevelopment before the stadium was built. Although Cleveland has not incorporated the stadiums into the surrounding neighborhood as much as in other cities, Jacob's Field and Gund Arena did help to jumpstart more development in the surrounding "Gateway" area. They have used some of this new commercial development to draw additional residential and business tenants to the upper floors of buildings. The addition of Cleveland Browns Stadium, which is located near the Rock & Roll Hall of Fame, will further attract business to the area.

D. THE STAPLES CENTER REVITALIZED LOS ANGELES.


Ten years after the grand opening of the Staples Center there has been $ 5 billion worth of development in the four block radius of the arena, half of which was generated by L.A. Live. Much of the economic growth can be attributed to a dramatic growth of the area's residential market. When construction of the Staples Center began, the district was home to 5,000 residents, but today the same area is home to almost 50,000 residents. Tim Leiweke, president and CEO of Anshutz Entertainment Group (AEG) explained the transformation: Staples Center has not only been the catalyst for development, it's been the catalyst for making this a true, livable downtown community. . . . Ironically, in our industry, we always hear from the politicians and professors about how sports facilities ultimately don't create any economic rejuvenation... . The fact [that] there is $ 5 billion worth of bricks and steel and glass proves that is not accurate. In October 2010, the L.A. Live complex was honored as one of five worldwide winners of the Urban Land Institute's Global Awards for Excellence competition honoring the world's finest achievements in land-use practices.

E. SPORTS ARENAS REVITALIZED DOWNTOWN INDIANAPOLIS.


The most complete vision of a minor league sports.comm and the use of sports for economic revitalization is the development of downtown Indianapolis and its use of a Minor League Baseball stadium as the catalyst for economic development. The construction of Victory Field, home of the Indianapolis Indians, the Triple-A affiliate of the Pittsburgh Pirates, was strategically designed to synergize the developing professional and amateur sports districts within the city. Beginning in the 1980s, Indianapolis became a model for the utilization of sports for economic revitalization with the institution of their Regional Center General Plan: Indianapolis 1980-2000, which was designed to foster the development of Indianapolis as the capital of the Midwest for both professional and amateur sports. The plan arose in response to two decades of economic decline throughout Indianapolis and the Midwest, in general.

Martin Greenberg, (Prof., Law, Marquette U. Law School), MARQUETTE SPORTS LAW REVIEW, Fall 2011, 128-129.

The $ 20 million facility was strategically placed to act as an economic catalyst with the purpose of consolidating the amateur and professional sports sections of downtown Indianapolis. The stadium is located at the southwest border of White River State Park in downtown, which is now home to numerous cultural, commercial, recreational, and educational facilities. Nearby attractions include the NCAA Hall of Champions, the Indiana State Museum, an IMAX theater, and the Congressional Medal of Honor Memorial. In the ten years following the stadium's opening in 1996, the area received over $ 3 billion in private and public capital investments, which includes the development of the Circle Centre Mall, 300 new retail stores, and 200 bars and restaurants downtown. The city has used the minor league stadium as a catalyst for urban revitalization by taking a synergistic approach to implementing its various recreational and entertainment attractions.

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F. COORS FIELD REVITALIZED DOWNTOWN DENVER.

Earl Santee, (Editor), POPULOUS, Nov. 28, 2012. Retrieved Aug. 25, 2014 from http://populous.com/posts/stadiums-that-shape-downtowns-the-impact-of-stadiums-on-urban-redevelopment/.

Coors Field, situated in Denver’s Lower Downtown (LoDo), has had a lasting impact on the city’s development, leading to the growth of a charming and eclectic neighborhood surrounding the stadium where pioneering young professionals and families have flocked. The results of the investment in the stadium were both immediate and impactful with retail, restaurants and housing in the surrounding area growing rapidly. LoDo has seen an increase of housing units in the area by 408 percent, growth in the occupancy of hotels downtown by 25 percent and a substantial increase in the number of restaurants, night clubs, breweries and art galleries in the city. It was estimated that the economic influence of the stadium was double what initially was predicted- at $195 million a year.

Martin Greenberg, (Prof., Law, Marquette U.), MARQUETTE SPORTS LAW REVIEW, Fall 2011, 110-111.Coors Field, home of the Colorado Rockies, completes the trilogy of baseball stadiums that have been

characteristic of the concept of concentric circles. Ground for the baseball stadium was broken in 1992 and opened on April 26, 1995. The 50,445-seat, $ 215 million stadium was located at the northern edge of the Denver central business district, commonly referred to as Denver's Lower Downtown (LoDo), a 25-square block section of downtown Denver that was designated a historic district in 1988. However, prior to the construction of Coors Field, LoDo was described as a "double-ugly" strip of dilapidated 1930 warehouses and industrial buildings. LoDo was considered one of the most blighted areas in the Denver downtown area. At the time of planning the sports facility, many politicians and planners were worried that suburbanites would not venture into this part of downtown Denver. Not only have the Rockies set attendance records, but the Cincinnati Post described the area as a "sparkling symbol of urban hipness." The Coors Field project was funded by a $ 162 million six-county Denver Metropolitan Area ballot initiative. In addition, money was spent to insure access and pedestrian connections to the area. "The announcement in 1991 that Coors Field would be located in LoDo gave the neighborhood another boost. Sales tax revenue in LoDo increased by 22 percent a year from 1990 to 1995, and the number of restaurants increased 140 percent between 1993 and 1996."

Martin Greenberg, (Prof., Marquette U. Law School), MARQUETTE SPORTS LAW REVIEW, Fall 2004, 158.The redevelopment of Denver's Lower Downtown ("LoDo") district was based on the success that

occurred in Baltimore and Cleveland. An immediate result of the downtown location of Coors Field has been a population increase, and a swell in the number of area businesses. People now live in and use the area around the stadium that was once a run-down warehouse district. A study by the St. Paul Area Chamber of Commerce illustrates the economic impact of Denver's Coors Field on the LoDo area: Eighteen new restaurants opened; Population in the area has nearly doubled; The residential base of LoDo is approximately 3,000 units with another 1,600 units expected; Downtown Denver Partnership Inc. estimates the direct and indirect impact in downtown at over $ 200 million (when including increases in related sales and new jobs at area restaurants, stores and hotels)

G. PETCO PARK REVITALIZED DOWNTOWN SAN DIEGO.

Martin Greenberg, (Prof., Law, Marquette U.), MARQUETTE SPORTS LAW REVIEW, Fall 2011, 123-124.Development of the Ballpark Village sports.comm began around the same time as Patriot Place and

Nationwide Arena, but had the added benefit of significant public support. Petco Park, home of the San Diego Padres, was constructed as the last phase in the revitalization process of downtown San Diego, California and was to be the centerpiece of the downtown revitalization. In 1998, 60% of voters approved Proposition C, which allocated $ 411 million toward building a ballpark and redeveloping a twenty-six block area of downtown San Diego now known as Ballpark Village. In return, the Padres pledged to spend $ 115 million on the new ballpark, to invest at least $ 300 million in the surrounding developments, and to be responsible for all construction cost overruns. Ultimately, the Padres contributed over $ 200 million to Petco Park and nearly $ 600 million to the surrounding redevelopment. The revitalization of the blighted East Village section of San Diego exemplifies the effective utilization of the sports.comm public-private partnership model.

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Brian Yates, (JD), UNIVERSITY OF MIAMI BUSINESS LAW REVIEW, Spr. 2009, 287.San Diego, California, opened the $ 411 million Petco Park, home to Major League Baseball's Padres,

in 2004. The ballpark was built to fit seamlessly into downtown San Diego, even incorporating the historic Western Metal Supply Company building, which holds the left-field foul pole. Since the ballpark's opening, an estimated $ 4.3 billion has either been spent on development or allocated for such purposes. Moreover, the downtown growth is not just commercial. San Diego's downtown population has nearly doubled to around 30,000 over the past seven years, as well.

H. CONSTRUCTION OF A MINOR LEAGUE BALLPARK REVITALIZED DOWNTOWN OKLAHOMA CITY.


With an NBA tenant in the newly-named Oklahoma City Center, a successful AAA Minor League Baseball franchise at AT&T Bricktown Ballpark, and the completion of a $ 63 million convention center, Oklahoma City has provided the infrastructure necessary for private residential, commercial, and retail businesses to flourish. Most importantly, to accommodate overnight guests, the Bricktown District has created a total of 1600 downtown hotel rooms and plans to include a total of 2250 units upon completion of the development. Beyond hotels, the city council has set a goal of creating 2000 new permanent housing units in the district, of which 1400 units have been completed. Housing units include market-priced condominiums, high-end townhomes, and low-income housing. Construction of a $ 36 million, twelve-story mixed-use condominium, retail, and office space is also underway. Most recently, the city council has approved funding for a TIF district to support the creation of the Center City Residential project, a 230 single-family unit structure set to open in 2012.

Martin Greenberg, (Prof., Law, Marquette U.), MARQUETTE SPORTS LAW REVIEW, Fall 2011, 149.As a staged sports.comm, a true judgment of the Bricktown District's economic impact cannot be

concluded until the development is complete. However, even as an incomplete entertainment district, Bricktown has revolutionized Oklahoma City. By contributing a steady one-cent sales tax to the city's public infrastructure investment fund since 1993, taxpayers have successfully transformed a previously blighted area into the city's most popular tourist attraction. Recently, Oklahoma City was named Forbes sixth most livable city in 2009 and the most recession-proof city in America in 2008. Future construction is likely to only enhance the city's reputation further as the Bricktown District will transform the Oklahoma City skyline with the future addition of the 40-story, $ 400 million Devon Tower, which will be the largest building in the city. With smart investment, strong political will, and private sector support, Oklahoma City has used the staged development of sports and entertainment venues to reinvent its national identity.

I. THE VERIZON CENTER REVITALIZED DOWNTOWN WASHINGTON, D.C.


Another success story includes the Verizon Center in Washington D.C. In D.C., the Verizon Center is home to the NBA's Washington Wizards, the NHL's Washington Capitals, the WNBA's Washington Mystics, and the Georgetown Hoyas men's basketball team, hosting approximately 220 events per year. Before the arena was built the surrounding area was a slum, where the general public dared not venture. Since then the city has received over $ 1 million in tax revenues because of the development and created several thousand new jobs. Visitors to the area have substantially increased, as well as the number of new restaurants and bars, all leading most to agree that the Verizon Center has had an enormous economic impact on the downtown area.

Brian Yates, (JD), UNIVERSITY OF MIAMI BUSINESS LAW REVIEW, Spr. 2009, 286.In addition to the Wizards and Capitals, the arena is home to the WNBA's Washington Mystics and the

Georgetown University Hoyas basketball team. All told, the Verizon Center hosts events 220 nights out of the year. Prior to the arena being built, the downtown area was a slum, largely dilapidated and avoided by the public. Vagrants slept in the park and urinated publicly. Today, however, nearly $ 5 billion in development has been completed within a 6-block radius of the arena. The city has received more than $ 1 billion in tax revenue as a result of that development and created an estimated 41,000 new jobs. Additionally, the number of visitors to the area has tripled and the number of restaurants has doubled. All involved parties agree that the Verizon Center has been a catalyst for downtown development.

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PRO CASE #3: INTANGIBLE BENEFITS The thesis of this case is that subsidies given to professional sports teams are justified by such non-economic

considerations as entertainment, community pride, improved quality of life, support of philanthropy, and promotion of physical fitness. While it is true that numerous studies have found minimal economic benefits from sports subsidies, almost none of these studies claim that sports subsidies depress economic growth. Even if it is true that economic factors amount to a “wash,” the non-economic factors highlighted in this case will then show that “on balance” sports subsidies are beneficial for local communities.

OBSERVATIONS:

I. LIFE SATISFACTION IS A BETTER MEASURE OF COMMUNITY BENEFITS THAN SIMPLE ECONOMICS.

A. HAPPINESS IS MORE IMPORTANT TO COMMUNITY WELL-BEING THAN ECONOMICS.

Ilona Boniwell, (Psychologist), HAPPINESS AND SUBJECTIVE WELL-BEING, 2014. Retrieved Aug. 25, 2014 from http://positivepsychology.org.uk/pp-theory/happiness/57-happiness-and-subjective-well-being.html.

Happiness has been a topic of interest for many centuries, starting with Ancient Greek philosophy, post-Enlightenment Western-European moral philosophy (especially Utilitarianism) to current quality-of-life and well-being research in social, political and economic sciences. Nowadays, happiness as a concept seems to be readily embraced by the majority of people and appears to be more valued than the pursuit of money, moral goodness or going to heaven. Not surprisingly, during the past thirty years and especially since the creation of positive psychology, psychology too has turned its attention towards the study of happiness and well-being. There are several reasons why the field of well-being is flourishing at the moment: First of all, Western countries have achieved a sufficient level of affluence, so that survival is no longer a central factor in people's lives. Quality of life is becoming more important than matters of economic prosperity.

B. LEISURE AND COMMUNITY PRIDE ARE MAJOR COMPONENTS OF LIFE SATISFACTION.

Joseph Sirgy, (Prof., Business, Virginia Polytechnic U.), COMMUNITY QUALITY-OF-LIFE INDICATORS: BEST CASES, 2006, 63.

Life satisfaction is mostly determined by the evaluations of individual life concerns. Thus, the greater the life satisfaction with such life domains as community, personal health, work, family, neighborhood, and leisure, the greater is the satisfaction with life in general.

II. LEGAL ENTITIES HAVE RECOGNIZED THAT SPORTS SUBSIDIES CAN BE JUSTIFIED BY NON-ECONOMIC FACTORS.

Aaron Mensh, (JD Candidate), CONNECTICUT LAW REVIEW, July 2008, 1653.Since at least the 1930s, American courts have, nearly unanimously, recognized the importance of

sports stadiums to a community. Much of the reasoning behind these holdings is premised on the intangible benefits that such buildings offer cities and their citizens.

Brian Yates, (JD), UNIVERSITY OF MIAMI BUSINESS LAW REVIEW, Spr. 2009, 275.The question as to whether expending funds to build a stadium or arena for use by a private for-profit

sports franchise is a legitimate usage of public funds is addressed every time a new stadium proposal is placed on the table. Courts have continually held against these challenges, finding the construction of a stadium serves a public purpose. For example, the Minnesota Supreme Court found a public purpose in the expenditure of public funds to "induce private development in an urban development district." That court took judicial notice of the important role that professional sports plays in a person's social life and noted the use of the facilities by diverse groups of citizens.

Michael Birch, (JD, Northeastern U. School of Law), SPORTS LAWYERS JOURNAL, Spr. 2012, 201.In 1971, the Superior Court of New Jersey had to decide whether Giants Stadium served a public

purpose so that public funds could be devoted to its construction. The state proposed that its purpose was the facilitation of recreational activities. The court held that sports do constitute a public purpose, stating, "Sports are absolutely essential to the public welfare." Therefore, sports stadiums as recreational facilities would likely constitute a public use, even without any economic justifications, especially in light of the deferential public use jurisprudence.

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Giovanna D’Orazio, (J.D.), ALBANY LAW REVIEW, 2006, 1156.The Supreme Court of Pennsylvania adopted the view that a stadium has an inherently public nature.

In Martin v. Philadelphia, which involved a dispute over public financing of a sports stadium, the court cited the lower court's rationale that public purposes are not limited to municipal purposes such as streets, water, sewers, and police protection. Instead, public purposes encompass anything relating to public education, recreation, or pleasure including museums, parks, libraries, and gardens; a sports stadium also falls under this umbrella because it is public recreation. Similarly, Justice Musmanno, in his concurring opinion in Conrad v. City of Pittsburgh, observed that there is need today to provide the public with facilities for recreation, sports and enjoyment of outdoor athletic competition. Even passive participation as an onlooker in competitive sports stimulates a desire for physical exercise. In any event it takes the spectator into the open air and provides him with exuberant escape from the cares of the day and arms him with recharged energy to meet responsibilities as a citizen. All this helps to build up a healthy community.

CONTENTIONS:

I. LOCAL COMMUNITIES RECEIVE INTANGIBLE BENEFITS FROM PROFESSIONAL SPORTS TEAMS.

A. PROFESSIONAL SPORTS TEAMS PROMOTE COMMUNITY PRIDE.

Aaron Mensh, (JD Candidate), CONNECTICUT LAW REVIEW, July 2008, 1651.Charles A. Santo, Professor of City & Regional Planning at the University of Memphis, recently

published an article steeped in empirical data examining the "public consumption benefits" of a city hosting a professional sports team. He defines "public consumption benefits" as the "rewards" a city gains from "hosting a team." These benefits include "civic pride, greater community cohesion, and the image benefits of 'big league city' status."

Aaron Mensh, (JD Candidate), CONNECTICUT LAW REVIEW, July 2008, 1652.Civic pride is one of the intangibles a professional sports team provides for a community to which

economists cannot assign a dollar value. A city that attracts – or retains – a professional sports team through the construction of a new stadium often obtains or improves its national reputation. By consistently hosting professional sporting events, a large town can enhance its identity to that of a big-league city. Teams and the stadiums in which they play "are important components" in establishing a city's individuality and identity. Indianapolis provides a prime example. A survey of its residents showed numerous benefits "associated with local sports teams." Specifically, Indianapolis residents ranked auto racing, the NBA's Pacers, and the NFL's Colts as most important to their national reputation. When asked hypothetically about what would damage Indianapolis's national reputation most if taken away, the same three topped the list. The results illustrate how valuable a sports stadium can be to a community.

Costos Spiroli & Larry Bennett, (Prof., Social Science, National-Louis U./Prof., Political Science, DePaul U.), IT’S HARDLY SPORTIN’: STADIUMS, NEIGHBORHOODS, AND THE NEW CHICAGO, 2003, 17.

In the United States, as in many other parts of the world, sports have become a core culture industry. Professional sports franchises have assumed a central role in expressing civic achievement, and sports arenas are the locales in which these cultural symbols are observed, packaged, marketed, and purchased. Like museums, performing arts complexes, and theme parks, professional sports facilities are social spaces that promote communal consciousness. Thus, the production of capital and the expression of civic identity converge.

Jack Williams, (Prof., Law, Georgia State U.), ALBANY GOVERNMENT LAW REVIEW, 2012, 124-125.For state and local governments, there appears to be a certain distinction associated with maintaining

a professional sports franchise. A city that lands a team makes it into the inner circle of prominence among other cities. There are only thirty Major League Baseball (MLB) teams, thirty-two National Football League (NFL) teams, thirty National Basketball Association (NBA) franchises, and thirty National Hockey League (NHL) teams. With the recent move of the NHL's Atlanta Thrashers to Winnipeg, Manitoba, there are just twelve cities with teams from the four major sports. In all, only about forty-nine cities may tout that they are the home of at least one team from a major sports league.

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Logan Gans, (J.D., U. of Florida College of Law), VIRGINIA TAX REVIEW, Spr. 2010, 770.A sports franchise, especially a highly successful one, could dramatically increase a local area's

reputation and popularity on both a national and global scale. One might wonder who would have heard of Green Bay without the Packers or Edmonton without the Oilers. However, the existence of a team that receives the support of a local city by a publicly financed stadium guarantees that the city's name will always be in the sports section of major newspapers or on TV. A new stadium with a strong professional sports franchise has become the way many citizens determine their city has arrived as a nationally important city and a good place to do business. Moreover, there are countless examples of how success on the field has improved a city's morale. In the case of the New Orleans franchises, the return of the teams after the disaster of Hurricane Katrina was a warming influence to many and showed the rebirth of the city.

Michael Birch, (JD, Northeastern U. School of Law), SPORTS LAWYERS JOURNAL, Spr. 2012, 200.Local sports enhance community pride and play an important role in establishing a city's identity. In

many cities, the success and failure of a team can dictate the mood of a city. In some instances, the success of a team can unite residents and raise morale in dire times. For example, the New Orleans Saints' Super Bowl victory in 2010 provided at least a temporary diversion for many residents still affected by the aftermath of Hurricane Katrina. Moreover, sports teams and stadiums can build, enhance, or maintain the national – and even international – reputation of a city. For example, a survey of Indianapolis citizens found that they considered the Pacers, the Colts, and auto racing events as the three most important aspects of their national reputation.

B. PROFESSIONAL SPORTS TEAMS CONTRIBUTE TO COMMUNITY IDENTITY.

Martin Greenberg, (Prof., Marquette U. Law School), MARQUETTE SPORTS LAW REVIEW, Fall 2004, 112.The value of having a sports franchise is greater than simply the rent paid or revenues produced and

paid to the landlord. A baseball franchise creates local identity, national press, media exposure, entertainment value, community pride, business location decisions, and economic and fiscal impacts. A baseball franchise is a community asset that is sometimes difficult to monetarily assess and may provide to a community greater non-economic benefits than economic.

C. PROFESSIONAL SPORTS TEAMS PROVIDE WORTHWHILE ENTERTAINMENT.

Brian Adams, (JD Candidate), CATHOLIC UNIVERSITY LAW REVIEW, Winter 2002, 663.The [Meyers] court stated that a stadium could promote all of the same public benefits as an

auditorium, including concerts, festivals, mass meetings, and other public functions, while also allowing the crowd to enjoy the outdoors. As long as the stadium promoted the public welfare, it would serve a public purpose. The court broadened the definition of a city's responsibilities to its citizens by holding that "the powers of a municipal corporation are not limited to providing for police, pavements, water, light, sewers, docks and markets, but it has been held that a municipality may minister to the comfort and health of its citizens, and may educate, instruct, please, and amuse its inhabitants."

Brian Adams, (JD Candidate), CATHOLIC UNIVERSITY LAW REVIEW, Winter 2002, 688.The proliferation of public financing for professional sports stadiums has created a fiscal dilemma.

Concerns about the vast sums of public money spent on these facilities, however, must be balanced with the public interest in maintaining professional sports as a means of entertainment and an integral part of civic identity.

Gregory Fox, (JD Candidate), BROOKLYN LAW REVIEW, Fall 2005, 508.One of the first taxpayer lawsuits challenging public funding for a stadium under the public purpose

doctrine was Meyer v. City of Cleveland. Meyer, a Cleveland taxpayer, sued on behalf of the city and sought to enjoin the issuance of $ 2,500,000 in bonds for the construction of "a fireproof stadium on the lake front." He argued that the true purpose of the stadium was for use by the Cleveland Indians baseball club, a primarily private use that should not be publicly funded under the public purpose doctrine. The court, in rejecting the taxpayer's argument, pointed to the public entertainment and educational purposes that a stadium could provide, such as carnivals, theatric performances, and concerts. The court stated that cities are "not limited to policing the city, to paving the streets, to providing it with light, water, sewers, docks, and markets" and that "the power of cities and towns to maintain institutions which educate and instruct as well as please and amuse their inhabitants.”

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D. PROFESSIONAL SPORTS TEAMS IMPROVE COMMUNITY QUALITY OF LIFE.

Aaron Mensh, (JD Candidate), CONNECTICUT LAW REVIEW, July 2008, 1652-1653.Sports are also a "socially-consumed commodity" and provide quality-of-life benefits. People talk

about sports in the workplace, in social settings, and at home. A sports team gives people common ground for water cooler discussion and enhances collegiality. If alone, individuals can still "derive some satisfaction from television and radio broadcasts of the games, and from reading newspaper articles about the games." For some "the mere existence of a team in their home city adds value to their lives." Yet it is not only the die-hard fanatic sitting in the arena for every game who gains satisfaction and pride from his city being home to a professional sports team. A study focusing on Pittsburgh showed that sixty-seven percent of its residents enjoyed having the NHL's Penguins in its city, even though less than forty percent of them ever attended a game.

Michael Birch, (JD, Northeastern U. School of Law), SPORTS LAWYERS JOURNAL, Spr. 2012, 196.Despite the studies touted by opponents, credible evidence exists that highlights the incidental

benefits that result from sports stadiums, such as consumer spending. This includes parking, merchandise sales, hotel stays, and car rentals. A stadium also provides a venue for other entertainment and business-related events, such as concerts and conferences, which attract visitors and money. For example, Cowboys Stadium has been credited with increasing tourist spending in Arlington tenfold. Local sports teams also engage in extensive charity work to raise money for local communities.

Michael Birch, (JD, Northeastern U. School of Law), SPORTS LAWYERS JOURNAL, Spr. 2012, 200.Sports can also improve the quality of life of a city's residents. Local sports are a constant topic of

discussion in social settings. People throw parties and gather to watch sporting events on television. Every day, people enjoy watching highlights, listening to radio broadcasts, and reading about their favorite teams. For some, "the mere existence of a team in their home city adds value to their lives."

E. PROFESSIONAL SPORTS TEAMS PROMOTE COMMUNITY PHILANTHROPY.

David Lasday, (Program Dir., Netanya Foundation), SOCIAL IMPACT OF PROFESSIONAL SPORTS TEAMS, Nov. 28, 2011. Retrieved Aug. 25, 2014 from http://www.sportsnetworker.com/2011/11/28/social-impact-of-professional-sports-teams/.

The power of sports teams to enact wide social good is unarguable. Few other entities have access to the built in resources for wide social impact. Sports philanthropy turns sponsors into philanthropists, fans into volunteers, and players into change makers, while building a community we can all cheer for.

David Lasday, (Program Dir., Netanya Foundation), SOCIAL IMPACT OF PROFESSIONAL SPORTS TEAMS, Nov. 28, 2011. Retrieved Aug. 25, 2014 from http://www.sportsnetworker.com/2011/11/28/social-impact-of-professional-sports-teams/.

In an age where collaboration and being lean is the name of the game, professional sports teams have the ability to create partnerships with community organizations quickly and easily. Schools and community centers are excited to partner with professional sports teams. These partnerships function as a win win, enabling both parties to leverage their resources and abilities to better serve the community.

F. PROFESSIONAL SPORTS TEAMS PROMOTE PHYSICAL FITNESS.

Aaron Mensh, (JD Candidate), CONNECTICUT LAW REVIEW, July 2008, 1655.Justice Musmanno, in concurrence, wrote: There is need today to provide the public with facilities for

recreation, sports and enjoyment of outdoor athletic competition. Even passive participation as an onlooker in competitive sports stimulates a desire for physical exercise. In any event it takes the spectator into the open air and provides him with exuberant escape from the cares of the day and arms him with recharged energy to meet responsibilities as a citizen. All this helps to build up a healthy community. Courts followed Justice Musmanno's logic. In 1968, Denver's purchase of a sports stadium was upheld as a public purpose. A New Jersey act that was premised on the idea of a sports complex as a public purpose was deemed constitutional in 1972. The Michigan Supreme Court agreed; shortly thereafter it held that Wayne County could issue bonds to finance the construction of a sports stadium because the issuance involved a public purpose.

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Michael Birch, (JD, Northeastern U. School of Law), SPORTS LAWYERS JOURNAL, Spr. 2012, 201-202.Local professional sports teams provide heroes that inspire young athletes across the country to

participate in sports. For many young Americans, sports help shape their childhood and identity. Sports also promote physical activity, which encourages a healthy lifestyle. Overwhelming evidence shows that participation in sports throughout childhood and high school significantly benefits children and teens. The rising popularity of professional sports likely correlates to increased youth participation in sports programs. Therefore, local sports teams inspire youth interest in sports, contributing to the benefit realized by their participation.

G. PROFESSIONAL SPORTS TEAMS PROMOTE ENVIRONMENTAL QUALITY.

Alice Henly, (Staff, Natural Resources Defense Council), GAME CHANGER: HOW THE SPORTS INDUSTRY IS SAVING THE ENVIRONMENT, Sept. 2012, 11.

Sports can be a powerful engine for social change. Now, environmental stewardship is starting to benefit from that influence as teams and venues have begun to inform their fans about their commitment to environmental protection, even as they save millions of dollars by integrating environmentally progressive features into their facilities and operations, making their organizations more financially viable and ecologically responsible.

G. PROFESSIONAL SPORTS ARENAS PROVIDE GATHERING PLACES FOR COMMUNITIES.

Aaron Mensh, (JD Candidate), CONNECTICUT LAW REVIEW, July 2008, 1653.A stadium can also be a gathering place for a community; its value is not limited to the professional

team that it hosts. In recent years, the Louisiana Superdome has proven that a stadium provides numerous benefits. The Superdome is not only home to the NFL's Saints, but also hosts concerts, trade shows and national conventions. The television and press coverage for these events give New Orleans opportunities to showcase the city. On the other hand, when Hurricane Katrina struck, thousands fled to the Superdome for safety. San Diego's Qualcomm Stadium-home of the NFL's Chargers-also recently offered shelter for citizens displaced by raging wildfires. Stadiums are valuable even when entertainment is not the goal.

H. PROFESSIONAL SPORTS TEAMS ENRICH THE CULTURE OF A COMMUNITY.

Brian Yates, (JD), UNIVERSITY OF MIAMI BUSINESS LAW REVIEW, Spr. 2009, 283.A rich cultural experience may entice new development in a city, as firms seek a quality of life for their

employees that depends in part on a wide array of sports and entertainment options. A Brookings Institute study on Seattle's downtown initiative, which included building or renovating three sports stadiums, found that the result was a "street scene that visitors and residents find appealing, and that high tech companies definitely view as an asset in recruiting employees."

Michael Birch, (JD, Northeastern U. School of Law), SPORTS LAWYERS JOURNAL, Spr. 2012, 202.Although difficult to measure, the intangible, noneconomic benefits that result from a stadium are

significant and should be taken seriously in the public use debate. Community pride, city identity, national reputation, recreation, and youth participation in sports are undeniably constructive aspects of a city and life. The importance of these public benefits should not be undervalued. Because the Takings Clause does not require that condemned land generate money or spur economic development, the significance of the intangible benefits that result from stadiums justifies the use of eminent domain.

Michael Birch, (JD, Northeastern U. School of Law), SPORTS LAWYERS JOURNAL, Spr. 2012, 199.Local sports teams provide a benefit beyond that which can be economically calculated. Professional

teams become a significant part of a city's identity, as well as that of its inhabitants, and can enhance their quality of life. Furthermore, millions of fans attend sporting events for recreational purposes each year. Professional sports also provide inspiration for others to engage in sports, which has proven highly beneficial for America's youth. Although not economically quantifiable, the intangible benefits of a sports team in a city are real and significant and should not be ignored in the public use debate.

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CON CASE #1: COST-BENEFIT ANALYSIS The thesis of this case is that subsidies given to professional sports teams are unjustified because the costs of

providing the subsidies outweighs the benefits. Subsidies to professional sports teams undermine the economic welfare of communities while enriching team owners. Contrary to the claims of promoters, subsidies for the construction of sports arenas do not promote economic growth or provide jobs for the community.

OBSERVATION:

I. COST-BENEFIT ANALYSIS OFFERS THE SUPERIOR MEANS OF DETERMINING “ON BALANCE” BENEFITS.

Q Finance Bulletin, APPLYING COST-BENEFIT ANALYSIS TO PROJECT APPRAISAL, Nov. 2013. Retrieved Aug. 26, 2014 from http://www.qfinance.com/contentFiles/QF02/hnrfm9bx/13/2/applying-costbenefit-analysis-to-project-appraisal.pdf.

The advantage of conducting a cost–benefit analysis is that you can weigh up all the positive and negative impacts of a project using their equivalent financial value to determine whether, on balance, the project is worthwhile.

Paula Holland, (Technical Support Services, Natural Resources Governance Unit), A SIMPLE INTRODUCTION TO COST-BENEFIT ANALYSIS, Jan. 2012, 4.

Cost-benefit analysis involves comparing the values (costs and benefits) of an activity by assessing the benefits and costs faced by a community with the activity compared to without the activity. This allows decisions makers to see what difference the activity would make to well-being.

CONTENTIONS:

I. THE COSTS OF PUBLIC SUBSIDIES FOR PROFESSIONAL SPORTS TEAMS CREATE EXTENSIVE HARDSHIPS FOR LOCAL COMMUNITIES.

A. SUBSIDIES ADD TO THE LOCAL TAX BURDEN.

Jack Williams, (Prof., Law, Georgia State U.), ALBANY GOVERNMENT LAW REVIEW, 2012, 134.While the proposed tax is usually small, voters often oppose using their tax dollars to support privately

owned sports teams. Examples of general sales taxes are: .1 percent sales tax increase in five counties surrounding the Milwaukee Brewers' new ballpark; .5 percent sales tax for the maintenance and expansion of the Green Bay Packers' stadium; and the one percent sales tax increase to support the SuperSonics' (presently named the Thunder) new stadium in Oklahoma City.

Lynn Reynolds Hartel, (JD), LOYOLA OF LOS ANGELES ENTERTAINMENT LAW JOURNAL, 1998, 601.Currently, cities use a variety of public financing mechanisms to fund the construction of new stadiums

or renovations of existing facilities. Cities utilize low interest municipal bonds, lotteries, sales taxes, and levies on parking, hotels, alcohol, car rentals, and cigarettes to finance subsidies to team owners. Cities may also offer tax abatements on land, broadcast arrangements, and assumption of past debts. Cities essentially fund these initiatives by passing new taxes, extending old ones, and reallocating money from one pocket to another. Ultimately, the taxpayers bear the burden of all these subsidies.

B. SUBSIDIES COST COMMUNITIES TENS OF MILLIONS OF DOLLARS ANNUALLY.

Mitchell Nathanson, (Prof., Law, Villanova U. School of Law), CASE WESTERN RESERVE LAW REVIEW, Fall 2007, 179.

In sum, the existence of professional sports teams does little to bolster a city's economy despite loud claims to the contrary. Worse, many professional sports stadiums are such bad deals for cities that one economist, Roger Noll of Stanford, concluded that cities which build them should expect to suffer losses of $ 20-25 million annually. To all of the team owners who argue otherwise, Professor Noll provides the most basic and obvious retort: if these stadiums were the surefire economic goldmines their supporters claim them to be, they would build them themselves. That they do not, that they instead look to public entities to foot the bill (and therefore take some of the revenue), says all anyone needs to know regarding their profitability.

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C. SUBSIDIES ENRICH THE ALREADY-WEALTHY TEAM OWNERS.

Mark Rosentraub, (Prof., Public Affairs, U. Indiana), MAJOR LEAGUE LOSERS: THE REAL COST OF SPORTS AND WHO’S PAYING FOR IT, 1999, 1.

A welfare system exists in this country that transfers hundreds of millions of dollars from taxpayers to wealthy investors and their extraordinarily well paid employees. Who are these individuals profiting from life on the dole? They are the owners of America’s professional sports teams and the athletes who play in each of the four major sports leagues (baseball, basketball, football, and hockey).

Adam Safir, (JD, U. Virginia School of Law), JOURNAL OF LAW & POLITICS, Fall 1997, 963.Recent stadium deals in professional football and baseball have disproportionately allocated economic

benefits to team owners and economic costs to state, local, and federal taxpayers. This is a result of team owners' unfair leverage over municipalities and federal tax laws that force municipalities to finance the lion's share of a stadium's debt. Under this arrangement, taxpayers suffer because they are not receiving economic returns on their investments. Sports fans suffer because current stadium economics drive ticket prices past affordable levels. Any Congressional attempt to regulate the stadium boom must address both leverage and tax issues to prevent individual football and baseball teams and their respective monopoly leagues from relocating or threatening to relocate at taxpayer and fan expense.

D. SPORTS SUBSIDIES UNDERMINE CITY BOND RATINGS.


The net result of all this is that, at best, spending on professional sports represents a shift in resources and not the creation of new ones. From the city's perspective, this shift is not without risk in that the debt created by the use of public funds on projects that generate such little economic impact may affect the city's credit rating with the result being that, in the future, it would have to pay a higher interest rate on future loans. In the end, the city's taxpayers bear the brunt of the city's urge to attract or retain a professional sports team at any cost.

E. SPORTS SUBSIDIES GOUGE THE POOR.

Arline Schubert, (Prof., Sports Law, U. North Dakota College of Business), NORTH DAKOTA LAW REVIEW, 2010, 55.

The main social benefit of stadium subsidies – the opportunity to attend games in the new stadium – skews in favor the wealthy because the current cost of attending a professional sports events precludes the lower- and middle-income segment of the population. For example, in 2008, the average price for a family of four to attend a New England Patriots football game was nearly $ 600. Meanwhile, the average price for the same family to attend a Chicago Bears game was close to $ 500. For the common American, this means that taking his family to either one of these events would cost roughly one percent of that family's pre-tax income. Recent stadium-design trends have only further priced the typical American out of the professional sports game market. For example, new seating innovations such as luxury boxes and premium seating have led to building new stadiums that contain a greater number of seats targeted for the ultra-wealthy. In turn, many new stadiums have reduced their number of traditional seats. By contrast, the tax burden of building new sports facilities often falls predominantly on the lower and middle classes. From 1990 until 2003, sales taxes, which are regressive in nature, accounted for 29 percent of the public funds going to new stadium construction. Meanwhile, in the most recent stadium building cycle, sales tax increases were used to fund new stadiums in Arlington, Cincinnati, Denver, Indianapolis, Oklahoma City and Tampa. In addition, local lotteries, which are also regressive in impact, were used in Seattle and in the State of Maryland to subsidize their new sports facilities.

Marc Edelman, (Fellow in Law and Economics, Wharton School), VIRGINIA SPORTS & ENTERTAINMENT LAW JOURNAL, Spr. 2003, 295.

Taxes to erect new sports facilities usually do not follow either the benefits principle or the Ramsey Rule, since new facilities typically benefit the wealthy but tax the poor. Recent stadium-design trends such as luxury boxes and premium seating concentrate the benefits of the new, professional sports' facilities within the middle-and upper-income brackets. Additionally, the increasing price of sports tickets often keeps the low-income population from attending games. Contrary to the benefits principle, however, the lower-income segment bears much of the tax burden of new sports facilities, which often are funded by regressive taxes.

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F. SPORTS ARENAS ADD TO TRAFFIC CONGESTION.

Gregory Fox, (JD Candidate), BROOKLYN LAW REVIEW, Fall 2005, 506.The opponents of this stadium plan also argued that New York City is facing serious social crises that

are not being adequately addressed, which would only have worsened if tax dollars were diverted towards the risky NYSCC plan. These opponents felt that public schools, police and fire protection, and affordable housing should be primary concerns, not secondary to stadium construction. They also were concerned that the traffic that already makes travel on the West Side exceedingly difficult would worsen exponentially with the construction and operation of a football stadium. According to the New York City Council Member for the district where the stadium would have been built, "the simultaneous arrival and departure of 80,000 people would devastate already-clogged streets and transit lines, even with a subway extension."

G. CONSTRUCTION OF SPORTS ARENAS UNDERMINES THE ENVIRONMENT.

Thomas Grant, Jr., (JD Candidate), VILLANOVA ENVIRONMENTAL LAW JOURNAL, 2014, 151.During both their construction and general usage, sports stadiums create a number of environmental

problems. Construction projects in the United States, including sports stadiums, consume sixty percent of the nation's raw materials annually. Often, these construction projects fail to use recycled or local products that could reduce their environmental impact. Many of the products that go into stadiums' interiors and exteriors, both during and after construction, also contribute to the detrimental environmental effects of these projects.

Thomas Grant, Jr., (JD Candidate), VILLANOVA ENVIRONMENTAL LAW JOURNAL, 2014, 151-152.Stadiums can also worsen an area's traffic and traffic-related air pollution because of the use of both

construction and personal vehicles of stadium attendees and employees. Vehicular air pollution emits a number of harmful chemicals into the atmosphere; gathering thousands of vehicles in one location like a stadium releases an even greater amount of those substances in a concentrated area. Exposure to these chemicals can have serious health consequences, and the Harvard School of Public Health found that exposure to these compounds is the most prominent contributor to heart attacks around the world.

Thomas Grant, Jr., (JD Candidate), VILLANOVA ENVIRONMENTAL LAW JOURNAL, 2014, 152.In 2010, the Health Effect Institute (HEI), a non-profit, independent research association, conducted

one of the most comprehensive examinations of traffic-related air pollution. HEI found that between thirty and forty-five percent of individuals living in large U.S. cities, where the vast majority of sports stadiums are located, live within "exposure zones" that increase susceptibility to the effects of traffic-related air pollution. HEI also identified a number of possible health problems that could result from living in exposure zones and attempted to determine which, if any, were directly connected to traffic-related air pollution. HEI concluded more information was needed in some instances to state definitively that traffic-related air pollution caused these problems; however, the organization did find enough evidence to confirm a causal connection between exposure to air pollution and a worsening of asthmatic symptoms.

Thomas Grant, Jr., (JD Candidate), VILLANOVA ENVIRONMENTAL LAW JOURNAL, 2014, 153.Further studies show exposure to traffic-related airborne pollutants has a detrimental effect on the

respiratory systems of infants and children. For instance, the new Yankee Stadium located in the Bronx, New York created more traffic and, subsequently, more air pollution in an already congested part of New York City. City officials have cited the increased traffic congestion as a contributing factor to a higher incidence rate of asthma in local Bronx residents, particularly in young children, compared to other areas of New York City.

Thomas Grant, Jr., (JD Candidate), VILLANOVA ENVIRONMENTAL LAW JOURNAL, 2014, 153.Sports stadiums can also impact the environment due to the volume of water simply needed for day-

to-day operations. The average MLB stadium uses approximately twelve million gallons of water per year. Special events require much more water, such as the 2012 NHL Winter Classic held in Philadelphia's Citizen's Bank Park, where 3.5 million gallons of water were consumed over a period of several days.

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II. THE BENEFITS OF PUBLIC SUBSIDIES FOR SPORTS ARENAS ARE NON-EXISTENT.

A. SPORTS ARENAS ARE AN UNPROFITABLE INVESTMENT.

Adam Safir, (JD, U. Virginia School of Law), JOURNAL OF LAW & POLITICS, Fall 1997, 954.In his testimony before the Senate Judiciary Committee, Robert A. Baade, an expert in municipal

financing of athletic facilities, analyzed how economic gains for the Arizona Diamondbacks' planned 1998 stadium compare to taxpayer expenditures. Applying data from the economic impact study used to defend the stadium subsidy, he found only a one to two percent rate of return on the $ 253 million taxpayer investment. If these figures apply to all new stadium constructions, then stadiums are not profitable economic investments for taxpayers to make.

B. A STUDY OF 30 SPORTS STADIUMS FOUND EITHER NO BENEFIT OR A NEGATIVE IMPACT.

Adam Safir, (JD, U. Virginia School of Law), JOURNAL OF LAW & POLITICS, Fall 1997, 952-953.Economists view direct and indirect spending generated by sports stadiums as spending which would

not have occurred in the city, but for the stadium. Because stadiums generally fail to draw significant amounts of business from outside local communities, and because money spent on sports would otherwise be spent on other leisure activities, stadiums do not generally benefit the localities that build them. Of the thirty stadiums built within the last ten years, twenty-seven could not be shown to have had a significant effect on per capita income growth. In St. Louis, San Francisco, and Washington, D.C., stadiums were actually believed to have a negative effect on per-capita income.


One prominent research study, conducted by the Congressional Research Service, analyzed 30 different stadium projects and found that none of them positively impacted the local community. Another study, conducted by economists Robert Baade and Allen Sanderson, found that subsidized sports facilities also do not improve local employment. Meanwhile, a third study, prepared by the Maryland Department of Business and Economic Development, found that the Baltimore Ravens' new stadium cost more money and created fewer jobs than the best alternative public tax investment, and the stadium did not even lead to much in-state tourist spending.

Jeffrey Moore, (JD, Washington U. Law School), VIRGINIA SPORTS & ENTERTAINMENT LAW JOURNAL, Fall 2008, 4.

Public investment in professional sports facilities is generally considered to be a losing proposition for the taxpayer based on a strict economic analysis. "Many economic studies have come, more or less, to the same conclusion: stadiums do not serve as catalysts for economic development, nor do they constitute good public investments."


By way of but one example, a 1997 study conducted by the Congressional Research Service (CRS) found that of the 30 stadium projects considered in the study, 27 had no discernable economic impact on the community and three had, of all things, a negative impact. Baltimore's stadium building experience is typical: the CRS found that its newly constructed football stadium did indeed create jobs, albeit at a cost of $ 127,000 per position – more than 21 times the $ 6,250 it cost to create each new job through Maryland's general economic development fund. Overall, stadium construction resulted in a negative economic impact upon the community given the diversion of economic resources. Its baseball stadium, long hailed as an economic success story, produced similar dubious benefits. A mid-1990's study of Oriole Park at Camden Yards found that it generated approximately $ 3 million annually but at a cost of $ 14 million to Maryland taxpayers.

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Neil DeMause & Joanna Cagan, (Journalists), FIELD OF SCHEMES: HOW THE GREAT STADIUM SWINDLE TURNS PUBLIC MONEY INTO PRIVATE PROFIT, 2008, 34.

[Robert] Baade [Professor of Economics at Lake Forest College] looked at forty-eight cities over a thirty-year time span, examining every U.S. city during that period that had acquired either a new professional sports stadium or arena or a professional sports team (baseball, football, basketball, or hockey). His overwhelming finding was that "professional sports teams generally have no significant impact on a metropolitan economy." Because of that research, Baade's study "finds no support for the notion that there is an economic rationale for public subsidies to sports teams and stadium and arena construction Professional sports does not appear to create a flow of public funds generated by new economic growth. Far from generating new revenues out of which other public projects can be funded, sports 'investments' appear to be an economically unsound use of a community's scarce financial resources."

C. THE HIGH COST OF SPORTS STADIUMS CAN NEVER BE RECOVERED.

Logan Gans, (J.D., U. of Florida College of Law), VIRGINIA TAX REVIEW, Spr. 2010, 777.A study by Robert Baade and Richard Dye claims that for every one million dollars of debt incurred for

stadium construction, it would take two dates per year of large crowd activities to impact the local economy greatly enough for the benefits of the stadium to outweigh its costs. Thus, a modest 200 million dollar stadium would need 400 events a year to truly justify its existence, a number that is virtually impossible to achieve considering stadiums are rarely used for different events on the same day. At a cost of more than a billion dollars, the new Yankee Stadium would need an even more unrealistic number of large events to outweigh its cost.

D. EXTENSIVE STUDIES SHOW THAT SPORTS STADIUMS DO NOT PROMOTE ECONOMIC REVITALIZATION.


Research of approximately fifty cities and their activities for the past thirty-five years demonstrates that local communities are not likely to benefit perceptibly from the construction and existence of a new sports facility. In fact, such efforts often yield little, if any, profits. For example, Phoenix is getting between a 1-2% return rate on the $ 253 million taxpayer investment in Bank One Ballpark. Moreover, experts posit that, in most cases, sports teams and facilities produce a very small scale of economic activity and therefore cannot reverse the aforementioned decentralization of residential and business activity that plagues most cities' downtown areas. Therefore, because new sports facilities, for the most part, have little success in revitalizing a city's downtown area or generating new profits in this region, critics condemn the downtown revitalization investment model of using a new sports facility to spur economic growth.


The systematic decline to decentralization of economic activity and suburbanization of urban life is well documented. Many cities, like Baltimore, Phoenix, and St. Louis, have built new sports facilities in their respective downtown areas in hopes of retarding, if not reversing, such trends. These cities hope that people attending games will purchase goods and service and thus bring economic prosperity to their respective downtown areas. However, in contrast to cities that did not build downtown sports facilities, the experience of cities with these assets is not encouraging. For example, from 1985-1995, the population in cities that built new sports facilities declined more than those which did not. Moreover, both types of cities also experienced the same decrease in job levels during this period. In addition, new sports facilities have not historically provided a resurgence in local economic activity.

E. THE COST OF SUBSIDIZING PROFESSIONAL SPORTS TEAMS FAR OUTWEIGHS THE BENEFIT.


With all of the rhetoric about the economic benefits of a new sports facility, a leading expert points out that major league sports teams represent a very small portion of the economies of the cities in which they are located. However, the tax expenditures for a new sports facility often represent a significant portion of city and state budgets.

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Sports stadiums and arenas don't pay for themselves—not even their staunchest advocates claim they do. Even in the 1960s and '70s, when public money was first used consistently on sports facilities, the returns on the new buildings—increased rent and advertising, higher ticket sales and concession prices were still usually not enough to offset the millions of dollars a year in debt payments by the state or city that fronted the money. And for today's buildings, with exponentially higher costs, there is no question of making them self-sufficient.

F. FEW JOBS ARE CREATED BY SUBSIDIZING SPORTS ARENA CONSTRUCTION.


Generally, studies do not produce evidence of a positive connection between professional franchises and the creation of jobs. Jobs will only be created if there is an increase in aggregate spending on goods located within the city, but this is usually the exception and not the rule. On this premise, new stadium construction might not be a sound economic investment for a city.

Peter Asselin, (JD), RUTGERS JOURNAL OF LAW & PUBLIC POLICY, 2006, 414.The citizens are serenaded with claims that building a stadium will create jobs, increase tax revenue,

attract business, and improve tourism. The public subsidy, they are told, will pay for itself. However, the majority of research indicates that the presence of new stadia and teams have no significant economic impact. Most independent economists agree that the number of jobs created after the construction phase has ended is minimal, and these jobs are seasonal, unskilled, and low paying.

G. THE COST OF EACH JOB PROVIDED BY SPORTS ARENA CONSTRUCTION IS EXCESSIVELY HIGH.

Andrew Goodman, (JD Candidate, Tulane U. School of Law), SPORTS LAWYERS JOURNAL, Spr. 2002, 205-206.

Proponents contend that stadiums create new jobs. The empirical evidence, however, flatly denies that stadiums are an effective public method for job growth. Construction interests are classic supporters of stadium building, private and public, but contractors are only beneficiaries to the extent that they were not working previously. Public reports in Maryland showed the then-proposed NFL stadium in Baltimore to be a poor civic investment and to represent a significant opportunity cost. Estimates had the new stadium creating 1,394 full-time jobs at a cost of $ 127,000 per job. In contrast, the state's existing Sunny Day Fund for economic development had created 5,200 full-time jobs at a cost of $ 6,250 per job.


Not only is it rare for many new jobs to be created from building a new stadium or arena, it can also be extremely expensive for taxpayers. In July 1990, the Arizona state legislature authorized the construction of a retractable roof stadium for the expansion Arizona Diamondbacks. The Arizona Office of Sports Development commissioned Deloitte & Touche to conduct a study to estimate the total number of full-time jobs that would be created by the team being in town. The firm concluded that only 340 jobs would be created and that each job would cost the taxpayers of Arizona approximately $ 705,800.


While advocates of new sports facilities point to job creation as an attribute to the public investment, evidence exists that creating jobs in this manner is actually inefficient and costly. For example, although Bank One Ballpark in Arizona created four hundred new jobs, the project cost $ 280 million, averaging $ 700,000 per job. Critics point out the obvious: This return on such an investment is quite expensive. Moreover, to aggravate this situation, economic impact studies tend to overestimate the number of jobs that will be created. For example, in Jacksonville, the team asserted that it would create three thousand new jobs. However, a report later adjusted this number to approximately one tenth of the previous estimate.

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Scott Jensen, (JD), MARQUETTE SPORTS LAW JOURNAL, Spr. 2000, 443.Even if one sets aside the diversion argument for a moment, and pretends that some marginal level of

jobs are created by sport facility projects in areas not currently hosting professional sport franchises, the jobs created are simply not worth the cost. The cost per job created significantly outweighs the benefit of creation. For example, consider the following: the State of Maryland paid $ 177 million toward the construction of a stadium in Baltimore. Assuming the 1394 jobs proponents claim were created were not the result of economic diversion, the publicly subsidized cost per job amounts to $ 127,000.00. This number quickly escalates when one considers hidden and indirect costs. To add perspective, the Maryland Sunny Day Fund economic development program created jobs at an average per job cost of $ 6,250.00 during the same period.

H. JOBS CREATED BY SPORTS SUBSIDIES DO NOT BENEFIT THE COMMUNITY.


Moreover, the types of jobs that new sports facilities create tend to be low- wage, part-time, and seasonal. As economist Andrew Zimbalist points out, sports teams employ between fifty and one hundred and twenty full-time employees, along with several hundred low-skill and low-wage part-time and temporary jobs. With the majority of the jobs created by new sports facilities being low-wage and part-time, critics lambaste such an option as ineffective for true job creation and economic growth. To this same end, these facts help explain why sports teams and new facilities do not induce the same magnitude of economic activity as other types of public investments.


Moreover, the new jobs that are created are not necessarily cream-of-the-crop positions. "They're parking-garage attendants, they are hot-dog salespeople, they are waiters and waitresses, sometimes cooks, people who do maintenance work and repair work and cleaning," says Cleveland union activist John Ryan. 'And none of them are jobs that the mayor hugs his kids and says, 'I hope you can get one of those jobs someday.

Peter Asselin, (JD), RUTGERS JOURNAL OF LAW & PUBLIC POLICY, 2006, 413-414.Once the construction phase is complete, jobs generated by professional sports activities are

concentrated in the service and trade sectors. Since professional sports activities are seasonal and each event is completed in a matter of several hours, jobs in professional sports are classified as part-time, seasonal employment. While these low wage part-time jobs are still important to a local economy, they are not the kind of jobs that lead to greater economic growth for a region. Such employment does not position a community to take advantage of national and international trends toward workforces with higher skills and familiarity with technology.

Scott Jensen, (JD), MARQUETTE SPORTS LAW JOURNAL, Spr. 2000, 443-444.While the direct economic cost per job alone provides ample basis to seriously question the wisdom of

expending millions of dollars to create new employment, when one considers the type of work created it quickly becomes clear that this may be an example of poor legislative judgment. Not one single sport team plays the entire year. Not one single stadium or arena is used every business day of the year. As a result, these jobs are generally lower paying, seasonal jobs. Furthermore, the type of work is generally non-technical, and requires little or no skill, unless you consider the ability to hit a fan with a bag of peanuts from several rows away or the ability to balance a tray full of beer while scaling a flight of stairs, a skill. At a time when companies are struggling to attract workers as the available labor pool shrinks, it seems ludicrous that a state would pay such a large sum of money to create more low-end jobs.

I. CLAIMS OF INTANGIBLE BENEFITS DO NOT JUSTIFY SPORTS SUBSIDIES.

Scott Jensen, (JD), MARQUETTE SPORTS LAW JOURNAL, Spr. 2000, 447.Although taxpayers would probably agree that having a sporting franchise brings exposure to the host-

city, a second flaw may be that not all of the exposure is good. When a team consistently loses, will the city be thought a loser? When local athletes run into trouble with the law or perpetrate generally unethical behavior upon society is the exposure a benefit to player's host city? Perhaps the effects of positive and negative exposure are counteractive. Where a city or region might gain some advantage from notoriety, the benefits might face counteractive forces.

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CON CASE #2: OPPORTUNITY COST The thesis of this case is that subsidies given to professional sports teams are unjustified because the opportunity

costs outweigh the benefits of the expenditures. The term “opportunity cost” refers to the loss of potential gain from other alternatives when one alternative is chosen. Communities would benefit more from additional expenditures on education, police protection, or infrastructure improvements than they do from sports subsidies.

OBSERVATION:

I. OPPORTUNITY COST IS THE STANDARD THAT SHOULD BE APPLIED WHEN DETERMINING THE “ON BALANCE” BENEFIT OF SUBSIDIZING PROFESSIONAL SPORTS.

A. OPPORTUNITY COSTS CONSIDER ALTERNATIVE USES FOR PUBLIC SPENDING.

Bruce Lindeman, (Prof., Economics, U. of Arkansas at Little Rock), MICROECONOMICS, 2002, 26.Opportunity cost is the trade off that must occur when an economic choice is made. Specifically, it is

the value of the next-best alternative that is foregone when the economic choice is made.

B. AN “ON BALANCE” EVALUATION OF SPORTS SUBSIDIES MUST CONSIDER OPPORTUNITY COSTS.


Other economists claim that a new sports facility should not be judged by the actual financial costs to the local government, but rather by opportunity cost of the investment. Simply said, if the sports facility created greater benefits than other investment options, either financially or in terms of social service needs, than it would pass the opportunity cost test. However, if other investments, such as unemployment insurance, schools, or parks are more attractive choices, then these economists would consider the new sports arena or stadium as an undesirable investment.

CONTENTION:

I. SUBSIDIES FOR PROFESSIONAL SPORTS ARENAS IMPOSE EXCESSIVE OPPORTUNITY COSTS.

A. SUBSIDIES FOR SPORTS TEAMS RESULT IN LESS SPENDING ON CITY PARKS AND RECREATION.

Mitchell Nathanson, (Prof., Law, Villanova U. School of Law), CASE WESTERN RESERVE LAW REVIEW, Fall 2007, 178-179.

Opportunity costs further erode the impact of stadium construction as well as consumer dollars spent on professional sports entertainment. Public spending on construction means that less public money is spent on other projects such as parks, public buildings and infrastructure improvements that likewise would promote the image of the city and act as a public good. In addition, consumer spending on sports entertainment results in less spending on other forms of entertainment.

B. SUBSIDIES FOR SPORTS TEAMS RESULT IN LESS SPENDING FOR SCHOOLS.

Katherine Leone, (JD Candidate), COLUMBIA LAW REVIEW, Mar. 1997, 488.In fact, some observers maintain that cities reduce spending on traditional municipal responsibilities,

such as education, to keep or to attract teams. George Autry, an economic development expert, concludes that "'state officials and lawmakers are obligating funds ... that they'll need to provide the 'necessary infrastructure to keep their states progressing – the roads, the schools, the security, the water and sewer.'" These cities are spending scarce public dollars to subsidize teams that are privately owned by millionaires.

C. THE JOBS PROVIDED BY SPORTS SUBSIDIES COULD BE PROVIDED MUCH MORE EFFICIENTLY THROUGH OTHER MEANS.

Zachary Phelps, (JD Candidate), ST. JOHN'S JOURNAL OF LEGAL COMMENTARY, Summer 2004, 1012.It cannot be questioned that a stadium will create jobs. But further analysis shows that these jobs are

usually very low paying and low skill jobs. Further, if you look at the opportunity costs of stadium construction, such large expenditures could be used to create jobs directly. By funding various programs that develop skills and educate, the local government can realize a much higher return on its investment.

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D. AVAILABLE COMMUNITY SUBSIDIES WOULD BE BETTER SPENT ON POLICE PROTECTION.

Michelle Anderson, (Prof., Law, U. California at Berkeley School of Law), THE YALE LAW JOURNAL, Mar. 2014, 1163.

Indeed, cuts to police departments in some cities have been so dramatic that they necessarily accompany a major policy shift: the concentration of resources on emergency response alone. Reflecting budgets that look more like triage than primary care, cities have cut most deeply into non-emergency response, crime prevention, and community policing strategies aimed at improving local quality of life. A national study found that in the recession, twenty-six percent of police departments reduced investigations and follow-ups of "property crimes, fugitive tracking, non-felony domestic assaults, financial crimes, computer crimes, narcotics, and traffic cases." Nationwide, funding for law enforcement declined throughout the 2007-10 period, with 2010 marking the largest downturn in revenues in the twenty-five year history of the survey.

E. THE INTANGIBLE BENEFITS OF SUPPORTING PROFESSIONAL SPORTS CAN BE BETTER PROVIDED THROUGH OTHER TYPES OF PUBLIC SPENDING.

Scott Jensen, (JD), MARQUETTE SPORTS LAW JOURNAL, Spr. 2000, 447-448.Finally, assuming some immeasurable, intangible benefit exists in the pride the public feels for their

team, or in the exposure the city receives because of its team, one must question whether the cost is worth the benefit. Similar to the case of the diversion argument, one should consider whether there are other investments that could generate a similar or greater level of exposure and public pride. For the sake of argument, and as an example, the construction of a local zoo may provide many of the same intangible benefits at a much lower cost. A zoo could be a civic focal point for uniting community interest and increasing civic pride. It could serve as a place for family recreation and enjoyment. Additionally, a zoo would also likely have the same attractive effect, if any, for a company considering relocation to the host community area as would a professional sports team. A zoo may also have the same ability to attract broader attention by hosting special attractions such as rare touring animal exhibits. And while it is true that a zoo animal may act unruly at times, it is likely that most, if not all of the public exposure generated by a local zoo would be positive.


Beyond competitive advantages, supporters of stadium construction sometimes tout the "renewed civic pride" resulting from the gleaming new edifices. Increased opportunities to promote the city as a tourist destination and even improved racial harmony have also been cited as justifications. However, all of this could just as easily be achieved by means other than the construction of costly and economically inefficient stadiums. Improved police protection, well-tended parks and other public buildings would likewise raise civic pride and render the city more attractive to outsiders. To the extent that these improvements are foregone due to the shifting of limited resources to stadium construction, it is difficult to conclude that a city is better off merely because a new stadium is built. Once again, opportunity costs must be factored into the equation.

F. IF THE GOAL IS TO ATTRACT INDUSTRY, CITIES HAVE MORE EFFICIENT MEANS AVAILABLE THAN THROUGH SUBSIDIES TO SPORTS TEAMS.

Scott Jensen, (JD), MARQUETTE SPORTS LAW JOURNAL, Spr. 2000, 446-447.Proponents often take the position that a city gains some indefinable status for having a sports

franchise. They claim that having a major league sports franchise improves and strengthens civic reputation, and attracts expanding business and industry to their area. They argue that this status pays dividends to the city that are not easily quantifiable, such as the number of times the city's name appears in the media because of the sporting team. Facially this argument seems to have solid reasoning, but closer analysis reveals flaws in its foundation. The shortcomings in reasoning may give the taxpayer reason to dismiss the qualitative claims argument. Although local entertainment options are sometimes a minor consideration in business relocation, the claim that major league business is attracted by major league sporting franchises may be unrealistic from a monetary prospective. If the city is dolling out hundreds of millions of dollars to sports franchises for the construction of sporting stadiums, what amount of tax rebates and expenditures can the city afford to grant to prospective business? This question implies that the budgetary pie is only so large, and that at some point government will be unable to continue to pay out or allow such heavy tax benefits.

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Zachary Phelps, (JD Candidate), ST. JOHN'S JOURNAL OF LEGAL COMMENTARY, Summer 2004, 1014-1015.

Some feel that luring a professional sports team into a community will increase the community's attractiveness to industry. However, if this is a goal of the local government, there are many more direct ways to attract industry than by building a sports facility. Local governments can offer property tax breaks or other special incentives that are less costly and can directly create new jobs. This job creation could bring new money into the economy, instead of just recycling the old. Additionally, the availability of a professional sports franchise will have little if any relevance in a company's decision to relocate. The economic factors of a community, including labor costs, will be weighted much more heavily than the availability of a professional sports franchise. A city could invest in giving corporate tax breaks or other incentives that would greatly benefit both the local economy and community more than a new stadium.

G. THE CONSTRUCTION JOBS CREATED BY SPORTS SUBSIDIES WOULD BE CREATED BY ANY OTHER TYPE OF INFRASTRUCTURE SPENDING.

Victor Matheson, (Prof., Economics, College of the Holy Cross), VILLANOVA SPORTS & ENTERTAINMENT LAW JOURNAL, 2009, 285.

Among the most abused and commonly cited justifications from subsidy-seekers is the claim of tangible economic benefit of construction jobs created during stadium construction projects. This justification is commonly used due to its apparent self-evidence. One has to simply drive by a construction site and observe workers busy at work to confirm these claims of economic benefits in the community. This view, however, is overly simplistic and does not identify the true value of these projects. Determining the actual net economic benefit generated by sports stadium construction projects requires calculating the number of jobs that are created or improved that would not have otherwise been in the absence of the project. Moreover, it requires considering how many of the workers filling those jobs would have been unemployed if the project had not taken place. According to economic theory, only this small subset of the total number of jobs created by a stadium construction project can be counted as part of the economic impact of the project.

H. SUBSIDIES FOR SPORTS ARENAS REDUCE FUNDING FOR OTHER TYPES OF ENTERTAINMENT.

Peter Asselin, (JD), RUTGERS JOURNAL OF LAW & PUBLIC POLICY, 2006, 414-415.Publicly funded stadia also come at a great cost to both local and federal taxpayers. Moreover,

spending at the stadium and in the area is likely shifted from other forms of local entertainment and therefore does not create a net benefit. Lastly, using public funds to subsidize stadium construction limits the availability of funds for essentials such as education, police, streets and water.

I. HIGH TICKET PRICES AT PROFESSIONAL SPORTS EVENTS PRECLUDE ATTENDANCE BY MOST LOCAL RESIDENTS.


Moreover, from a "public consumption" standpoint, critics of new sports facilities point out that ticket prices for major league sporting events have risen to the point where many local residents cannot afford to take advantage of the new facility. In this regard, a new sports facility would provide access to fewer people in the city than a park or a school. Therefore critics decry new sports facilities as inefficient public investments that fail to offer more attractive benefits than socially integral projects.

Brian Yates, (JD), UNIVERSITY OF MIAMI BUSINESS LAW REVIEW, Spr. 2009, 273.The average cost for a family of four to attend a National Football League (NFL) game rose to $

329.82 in 2005. The other major professional sports have slightly lower prices, primarily due to a greater number of home games, but they are increasing as well. The National Basketball Association (NBA) will cost the average family of four $ 267.37 to attend basketball games. The average cost of a Major League Baseball (MLB) game is $ 171.19. And the National Hockey League (NHL), the least popular of the major professional sports, is no more of a bargain, costing the average family $ 258.08 to attend a game.

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CON CASE #3: MONOPOLY POWER The thesis of this case is that subsidies given to professional sports teams are unjustified because the owners of

professional sports teams use their monopoly power to manipulate local governments.

CONTENTIONS:

I. LOCAL GOVERNMENT SUBSIDIES TO PROFESSIONAL SPORTS TEAMS ARE UNJUSTIFIED.

A. PROFESSIONAL SPORTS TEAMS GENERATE MASSIVE PROFITS.

Jami Maul, (JD), UMKC LAW REVIEW, Fall 2011, 199.Imagine a business that has $ 7.8 billion in revenue in the current year, with an overall operating

income of more than $ 1.0 billion. The business comprises thirty-two individual franchises that themselves each have an average value of $ 1.0 billion. Now imagine this organization is classified by the Internal Revenue Service as a nonprofit organization under Internal Revenue Code ß 501(c)(6), and thus, while the individual franchises may have to pay taxes, the organization itself enjoys tax-exempt status. A business with such a desirable tax arrangement does exist. In fact, millions of Americans devote their Sundays to this organization every week. This organization is not a religious organization or denomination, though many may follow it religiously. This "nonprofit" organization is the National Football League ("NFL"). Like most other professional sports leagues such as the National Basketball Association ("NBA"), the National Hockey League ("NHL"), and the Professional Golf Association ("PGA"), the NFL is a ß 501(c)(6) tax-exempt business association that the Internal Revenue Service treats similarly to tax-exempt charities, religious organizations, and educational institutions. This similar treatment seems hard to fathom when one considers the fact that professional sports in America are an approximately $ 225 billion industry.

B. PROFESSIONAL SPORTS TEAMS COULD BUILD THEIR OWN STADIUMS USING NOTHING MORE THAN THE REVENUE FROM NAMING RIGHTS.

Arline Schubert, (Prof., Sports Law, U. North Dakota College of Business), NORTH DAKOTA LAW REVIEW, 2010, 46-47.

In recent years, teams in large markets such as the New York Mets have sold stadium naming rights for as much as $ 400 million (20 year rights at $ 20 million per year). Meanwhile, teams that play in less traditional sports markets such as the Houston Texans have sold their stadium naming rights for as much as $ 300 million (30 year rights at $ 10 million per year). Although many teams that have obtained lucrative naming rights agreements have chosen to build expensive sports facilities, these kind of naming rights agreements could conceivably cover the entire cost of building a more affordable stadium or arena.


Despite the trend toward subsidizing professional sports stadiums, most professional team owners do not need government aid to profit. This is because, in addition to earning a high rate of return on the team's resale, most team owners have recently learned to capitalize on two important stadium-related revenue streams: stadium naming rights and personal seat licenses.

C. PROFESSIONAL SPORTS TEAMS GENERATE HUNDREDS OF MILLIONS OF DOLLARS FROM THE SALE OF PERSONAL SEAT LICENSES.


Although the Dallas Cowboys football team sold a limited number of "seat options" back in 1968, the NFL's Carolina Panthers in 1993 became the first team to extensively use the concept of PSLs when they privately financed their new facility, Bank of America Stadium (formerly known as Ericcson Stadium). By selling PSLs before beginning stadium construction, Carolina Panthers ownership raised $ 180 million in upfront capital. Since then, several other sports teams including the Baltimore Ravens, St. Louis Rams, and Chicago Bears have copied this strategy, similarly raising substantial amounts of money.

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D. PUBLIC SUBSIDIES OF PROFESSIONAL SPORTS IS A DESPICABLE FORM OF CORPORATE WELFARE.

Mark Rosentraub, (Prof., Public Affairs, U. Indiana), MAJOR LEAGUE LOSERS: THE REAL COST OF SPORTS AND WHO’S PAYING FOR IT, 1999, 10.

This welfare system is not needed. By virtually any measure, professional sports is an extremely successful business. The players – once underpaid and abused – now enjoy princely salaries, and the vast majority of teams earn profits and generate sustained wealth for their owners through the escalating values of most franchises.

Martin Greenberg, (Prof., Marquette U. Law School), MARQUETTE SPORTS LAW REVIEW, Fall 2004, 103.To add fuel to the controversy surrounding public financing of sports facilities, a study by researchers

at the University of Dayton, released in March of 2004, concluded that large public subsidies for the construction of major league baseball stadiums are unnecessary. Economic professors Mark Poitras and Larry Hadley examined thirteen stadiums built between 1989 and 2001 and concluded that the teams could probably recover all or nearly all of the cost of construction if the ballparks were built with private money instead of taxpayers' money. "The bottom line is that these new stadiums generate sufficient revenues to pay for themselves," Hadley said.

Scott Jensen, (JD), MARQUETTE SPORTS LAW JOURNAL, Spr. 2000, 454.Sports facilities and stadiums can survive without burdening federal taxpayers with their costs. Within

an eight-year period spanning the late seventies and early eighties, Miami taxpayers rejected four separate proposals to pay for renovations of Joe Robbie Stadium. Following the fourth rejection, the stadium owner proceeded with the renovation, funding it through the lease of clubhouse seats and luxury boxes. Similar examples exist, collectively pointing to the plausibility that the IRS tax code could be amended to eliminate the tax-exempt status of bonds issued for the construction of sporting venues.

E. THE RELEVANT QUESTION IS NOT WHETHER SPORTS ARENAS SHOULD BE BUILT; THE QUESTION IS SIMPLY WHO SHOULD PAY FOR THEM.

Scott Jensen, (JD), MARQUETTE SPORTS LAW JOURNAL, Spr. 2000, 448-449.The real difficulty with many of the arguments is that tax opponents are often cast as anti-stadia.

Proponents place their opposition into the unfair position of arguing that stadiums should not be built, or that stadiums will not bring the qualitative and quantitative benefits claimed. While the above material demonstrates that there are significant arguments in favor and in opposition to the construction of new stadiums, the reader must not lose sight of the real issue and be lured into consideration of the benefits and detriments of new stadiums. Instead, the reader should focus on the question of whether it is sound tax policy to subsidize professional sports franchises in this manner. In other words, the issue is not whether stadia should be built, but rather, who should bear the financial burden of paying for them. History has shown that this should not necessarily be the taxpayer.

F. IN MOST CASES, THE STADIUM ALREADY EXISTS – THE SPORTS TEAM IS SIMPLY INSISTING ON HAVING A NEW ONE BUILT AT PUBLIC EXPENSE.


It should also be noted that many new stadiums and arenas are built simply as replacement facilities for teams that are already located in a city. Replacing a sports venue does not produce growth in the local economy, but generally maintains the status quo on economic activities. In situations where replacing infrastructure is necessary, jobs are not created simply because the workplace relocated.

Peter Asselin, (JD), RUTGERS JOURNAL OF LAW & PUBLIC POLICY, 2006, 413.It is also important to note that many of the new stadia and ballparks being built are replacement

facilities. Merely replacing sports infrastructure does not expand the local economy. Once the construction phase of the new facility is completed, economic activity will remain at or near its former level. A new stadium or ballpark simply relocates the workplace while leaving the workforce basically unaltered. This should be viewed not as jobs gained, but rather as jobs not lost.

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Scott Jensen, (JD), MARQUETTE SPORTS LAW JOURNAL, Spr. 2000, 442-443.Among the more popular arguments the proponents of public subsidy for stadium construction assert

is that by providing tax subsidy to build stadiums the city or government is helping to revitalize or boost economic growth through job creation. Specifically, proponents argue that by constructing stadiums new jobs will be created for construction workers, athletes, managers, team executives, stadium employees, and throughout the community, because of an increase in economic activity. Because of the diversion of economic resources, this suggestion is questionable. In addition, many new stadiums are being constructed in cities and areas that already have stadiums. Construction in these areas amounts to nothing more than stadium replacement. These existing teams already have athletes, managers, and team executives.

II. PROFESSIONAL SPORTS TEAMS USE THEIR MONOPOLY POWER TO EXTORT UNREASONABLE SUBSIDIES FROM LOCAL GOVERNMENTS.

A. PROFESSIONAL SPORTS TEAMS HAVE A NATURAL MONOPOLY.


Absent the monopoly power of America's professional sports leagues, few communities would likely subsidize the professional sports industry. Although rooting for professional sports teams is often a source of personal enjoyment, stadium funding rarely adds economic value to a local community. In addition, the social benefits of new public stadiums are often misaligned in favor of the already wealthy.


The unique structure of professional sports leagues, as well as the American government's historic hands-off approach to regulating the sports industry, has allowed America's four premier professional sports leagues to exploit their monopoly power in the market for sports franchises. As a result, professional sports teams have garnered billions of dollars in local subsidies. Governments would otherwise spend these dollars to improve public welfare.


By engaging multiple cities in a competitive bidding process for it, the team emerges victorious regardless. Cities, by contrast, do not enjoy similar negotiating advantages. Geographic exclusivity puts them at a disadvantage in that, by definition, they are unable to negotiate with more than one team at a time. Given the extremely limited uses of large sports facilities and given the monopoly power of sports leagues to limit competition within geographic regions, cities are left vulnerable at the bargaining table, with no other recourse than to outbid potentially several other cities by offering up sub-market rents and above-market perks if they hope to retain their teams. In this way, "a sports franchise can extract a monopoly price from a community by insisting on millions of dollars of publicly financed subsidies, such as reduced rental fees, playing facility or infrastructure improvements, or new arenas or stadiums."

Stephen Ross, (Prof., Law, U. Illinois), CASE WESTERN RESERVE UNIVERSITY, Fall 2001, 134.Owners of clubs comprising Major League Baseball ("MLB"), the National Football League ("NFL"), the

National Basketball Association ("NBA"), and the National Hockey League ("NHL") engage in a variety of exploitive activities that consumers cannot avoid by substituting rival products.

Stephen Ross, (Prof., Law, U. Illinois), CASE WESTERN RESERVE UNIVERSITY, Fall 2001, 170.In terms of dollars lost through wealth transfers, local governments are probably the major victims of

sports leagues' anticompetitive practices. Challenging NFL rules that facilitate the exploitation of local governments and bringing actions to secure structural relief may prove to be sound investments by local governments, especially if costs could be shared through coordinated litigation. Consumers are most directly exploited today by anticompetitive broadcast market restrictions.

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B. PROFESSIONAL SPORTS TEAMS USE THE THREAT TO MOVE TO ANOTHER CITY AS A MEANS OF EXTORTION.

Katherine Leone, (JD Candidate), COLUMBIA LAW REVIEW, Mar. 1997, 478-479.The NFL's control over the professional football market allows club owners to elicit wide-ranging

concessions from local governments to the detriment of taxpayers and fans. Congress has given the NFL special treatment under federal antitrust laws, resulting in what is essentially a monopoly in professional football. The NFL presently limits the number of member teams to thirty, while the number of cities competing for a team far exceeds the supply. This scarcity has enabled owners to use relocations, or threats of relocation, to secure better financial packages from cities and taxpayers. Such deals are not negotiated on a level playing field – the owners, through the league, control the supply of the limited commodity they market to the cities. The cities, in turn, spend public funds for stadium construction and renovation in order to attract or keep teams. While maintaining scarcity may be necessary to maintain a successful league, the phenomenon of franchise free agency is harmful to the NFL because it threatens to erode its fan base.

Katherine Leone, (JD Candidate), COLUMBIA LAW REVIEW, Mar. 1997, 482-483.The fixed number of NFL franchises coupled with the markedly greater number of cities competing for

teams allows owners to shop around for the best package of subsidies a city is willing to offer. Revenue sharing – the process by which NFL teams pool ninety-three percent of their revenues, including television income – exacerbates the problem. This arrangement dampens the incentive for individual owners to seek out the largest markets because earnings dependent upon population are shared amongst all teams. Moreover, because income from stadiums and luxury seating (excluding ticket prices), food and beverage concessions, stadium advertising, and parking is not pooled, owners have an incentive to relocate to cities offering lucrative stadium deals quite apart from the new market's size. Owners therefore can relocate based solely upon which city offers more subsidies, including reduced costs.


A few recent examples illustrate the extent to which teams benefit from their superior bargaining positions. In the NFL, the city of St. Louis, which had been without a team ever since its Cardinals relocated to Phoenix in 1988, was determined to outbid its rivals in order to secure the Rams, who had made it clear that they were unsatisfied with their lease arrangement in Anaheim. With several cities vying for the franchise, St. Louis offered up the key to its city and then some, promising to turn over to the team 75% of all advertising revenue from its newly constructed domed stadium (paid for, at a cost of $ 300 million, primarily with public funds), personal seat license revenue of $ 74 million, luxury seat revenue, and $ 1.3 million per year in naming rights. In exchange, the city and state of Missouri kept for themselves all of $ 250,000 per year in ticket sales and $ 1 million per year in taxes based upon attendance. If all of this were not enough, the city agreed to include in its lease an opt-out clause which would allow the Rams to void the agreement and relocate without penalty if the stadium was not ranked in the top 25% of all NFL stadiums. Finally, when a snafu between the NFL and Rams emerged over the league's insistence that the Rams pay a $ 29 million league-mandated relocation fee, the city agreed to pay $ 20 million of this. In all, by one estimate, as a result of this arrangement the city and state receive no more than 10% each year of what they spend on the stadium. Clearly, St. Louis's lack of bargaining power contributed to this overwhelmingly one-sided deal.

C. WHEN PROFESSIONAL SPORTS TEAMS CARRY OUT THEIR THREAT TO MOVE, CITIES ARE LEFT WITH MASSIVE DEBT AND AN EMPTY STADIUM.

Katherine Leone, (JD Candidate), COLUMBIA LAW REVIEW, Mar. 1997, 490-491.Moreover, even after undertaking financial commitments of the sort agreed upon in the Ravens deal,

there is no guarantee of any security for the city, state, or taxpayers. This is best demonstrated by those cases where teams have packed up and moved despite fan and local financial support. In Cleveland, for example, even with the negative feelings engendered by Modell's plan, voters approved spending $ 175 million to renovate Cleveland Stadium--yet the Browns still moved. Similarly, despite tremendous fan support in Oakland, Al Davis moved the Raiders to Los Angeles in 1980. This left Oakland without an NFL team, but with a stadium construction bond obligation of $ 1.5 million annually until the year 2004. Premature departures make the financial losses even more acute because the revenue derived from the stadium itself does not justify the amount invested in the structure.

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