SBJ/November 12 - 18, 2001/Opinion

MLB changes its tune toward hometown fans

The vow of contraction in Major League Baseball presents a new wrinkle on the financial landscape of pro sport subsidies.

Baseball's owners last week voted to dissolve two teams, which have not yet been identified. Fans in Minneapolis, Montreal or Miami, the likely candidates, may not even have a chance to say goodbye to their teams as MLB says it intends to contract before the start of the 2002 season.

Admittedly a variety of legal and economic issues would need to be addressed (negotiation of compensation, scheduling, minor league operations, the MLB Players Association) before the game could purge its current roster of 30 teams.

Then a few other issues not mentioned by MLB would remain — especially for fans in cities with teams. Those issues take on added significance when viewed against the backdrop of how baseball and other sports have been acting.

During the past 15 years, residents of various U.S. cities have been deluged with requests and demands for new pro sports facilities. Owners in cities such as Denver, Minneapolis, Oakland and Charlotte have told local citizens that if public support (in the form of millions of dollars) is not provided, they will move to an area willing to grant their demands for corporate welfare.

Owners lament the fact that public support is necessary to remain "competitive" in the rapidly changing financial landscape of professional sport. The argument is made that without public subsidies, the quality of the team will diminish.

Professional sport franchises provide "hard" data to create the appearance that public subsidies in the form of land, low rent, infrastructure improvements or increased taxes provide an economic investment rather than an expenditure. Citizens are not paying, the argument goes; they are receiving benefits from the team's presence — jobs, an enhanced tax base and increased economic activity.

The arguments historically proffered by teams have not withstood sound reasoned analysis. Numerous economists have noted how teams inflate the value of their economic benefits to the community. The minuscule real economic benefits of the presence of a professional team are particularly appalling when compared to the $200 million to $400 million price tag for a new facility. Common sense indicates that businesses can still prosper, and life for citizens can still continue, if a city loses its local team.

These issues and arguments are certainly not new to the pages of SportsBusiness Journal, but they take on new significance in regard to the issues of contraction.

For example, it is difficult for baseball to argue that the presence of a team is vital to the economic and psychic survival of a local community while at the same time eliminating franchises. Apparently the economic studies that have been so proudly proclaimed during times of ballot initiatives are not available when the ax is about to fall on the local franchise.

If the earlier economic studies commissioned and financed by MLB are to be believed, the cities that are potentially losing their team could claim a drastic loss of revenue in the local community. At a minimum, cities that were once told how valuable an MLB franchise was to their community should receive an apology for removing a business that attracts numerous other industries to the region and provides a positive life force to the citizenry.

Obviously professional sport franchises are like any other private company that can elect to remain open, relocate or fold. No one expects MLB to financially compensate Montreal, Minneapolis or Miami if these teams are removed, even if previous arguments made by the league might warrant that consideration.

What is baffling is the inability of cities to recognize the shenanigans of MLB and other leagues. The economic benefits of a professional franchise are minimal (especially in relationship to the investment) and in many cases the psychic benefits fall far short of expectations. In addition, citizens in places like Minneapolis-St. Paul may overspend (see Metrodome, Target Center and Xcel Center) to appease their teams and still see their franchise eliminated.

Unfortunately, when a team folds, all citizens are left with is an ultimate irony: no apology, no refund for past financial commitments, and maybe most important, no future opportunity to watch their team in another city because now it is just a memory.

Mark Nagel ( teaches sport management at the University of West Georgia.

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