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How to Build a Ball Club
The article, <a href="http://www.weeklystandard.com/Content/Public/Articles/000/000/006/763bgrbl.asp?pg=1" source="Weekly Standard" title="Build It, Or Else: The strange, broken economics of publicly-financed sports stadiums.">Build It, Or Else</a> is about public funding of private gain in an arena other than the military. Sports teams have been playing the <iq>stadium hopping, city-hopping</iq> game for several decades now and its only getting worse. The most recent and egregious instance is Washington D.C. <iq>issuing $535 million in bonds to build [a] stadium</iq> for the Montreal Expos, which are moving in as soon as it is complete. The article lists a litany of other stadiums, from baseball and football stadiums to basketball arenas, all built with between $200 and $400 million of taxpayer money. We know the arguments that convince enough people to float these bond issues: it will revitalize the local economy, it will bring new jobs to the area, the added prestige will raise property prices. Can't that large a chunk of change benefit the community in other, less abstract ways? The cries of these naysayers and opponents of corporate welfare are lost among the hysterical shrieks of brain-dead politicians who claim that <iq>[t]he ripple effect</iq> of a team's departure <iq>defies our imagination</iq>. It reeks of kickback. A recent study of 37 cities with large sports franchises found that <iq>claims of large tangible economic benefits do not withstand scrutiny.</iq> This study and others mostly found that the promised increases in consumer spending never occur, as people simply end up spending their money on the sports team instead of other recreational activities. It doesn't spur people to do more recreation; they don't have more time on their hands, after all. So the promised boon to the local economy is, in fact, a <iq>zero-sum endeavor, a shifting around of resources</iq>. With the shifting around benefitting the team owner, into whose pockets the money goes (they own the stadium, remember?) and depriving other local businesses. So while it's zero-sum to an economist, it's a minus for local businesses. The promised job boon falls into, at best, the category of a Walmart job boon, which increases minimum wage jobs. At best. On average, however, <iq>[a] city lost on average 1,924 jobs due to the presence of a pro team</iq>. All of these newly jobless people also got to continue paying the tax levied to pay for the stadium for the next decade until the bond is paid off. So there's a decrease in jobs, a large chunk of tax money missing and the economy is not improved. What is the point of the whole endeavor? Why do many cities still decide to build large arenas for their privately-owned sports teams? <iq>The main economic effect of publicly-subsidized stadiums is to dramatically increase the value of the teams</iq>. The advantage to local politicians ordinarily comes in the form of kickbacks and perks; in other cases, like New York City, one has to wonder how far and wide Mayor Bloomberg's investments are spread.<fn> Baseball teams see the most significant gains, where teams that had a new stadium built for them <iq>between 1991 and 1997 ... increased 79 percent</iq> in value; others increased 11 percent. The Financial Times study provided a concrete example: <bq>Here's how it works: B/R Rangers Associates purchased the Texas Rangers in 1989 for $86 million. Threatened with losing the team in the early 1990s, Texas taxpayers forked over $135 million to help build the new Ballpark at Arlington, now called Ameriquest Field. B/R Rangers Associates then sold the team in 1998 for $250 million.</bq> Arlington's $135 million investment of public funding translated into a $160 million dollar <b>private</b> profit 9 years later. Social welfare is verboten---it's socialist claptrap---but corporate welfare is the stuff of dreams. The residents of Arlington got to pay off the bond with local sales taxes for <i>17 years</i>. And who used his down-home Texan charm to convince Arlingtonians to vote for the deal and then walked away with a fat piece of the profits? Your president and mine, George W. Bush. <hr> <ft>Do they stretch into the coffers of the Jets, for example? He's worth billion and billions of dollars. It's not too hard to believe that he actually has a financial stake in the team for whose welfare he's worked so hard.</ft>