What Sports Can Learn From New York's Refusal to Subsidize Amazon
When it comes to stadium welfare, cities now have the leverage
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Earlier this year, the good people of New York City did something admirable: they told Amazon to f—k off.
Actually, scratch that. They didn’t tell Amazon to f—k off willy-nilly. They told Amazon to f—k off, specifically, with its plan to collect nearly $3 billion in public subsidies in exchange for building an office campus in Queens—a scheme that fell apart under political pressure and scrutiny following the e-commerce and tech giant’s protracted national hat-in-hand campaign to see which of America’s cities would be willing to offer up the juiciest corporate welfare package to one of the world’s most valuable and successful firms.
When Amazon abruptly backed out last February, a spokesperson for Gov. Andrew Cuomo called political opposition to the subsidy “a terrible blunder”; meanwhile, one local business booster said that reluctance to shower an able-bodied company with approximately $112,000 of taxpayer money per each new Amazon job sent a “pretty bad message to the job creators.”
But guess what? Last Friday, Amazon announced that it would lease Manhattan office space for more than 1,500 employees, upping its New York footprint without the city paying for the, uh, privilege.
And yes, there’s a lesson here for every city that’s home to a sports franchise asking residents to spare a couple hundred million bucks or more for a new stadium.
MARIA TERESA KUMAR @MariaTeresa1BREAKING: @amazon agrees to open in Hudson Yards in a deal without any financial incentives from New York City or state. 🤔@AOC @votolatino https://t.co/RjaufJU2wz
The lesson is this: cities don’t need teams. Teams need cities. And when the former attempts to extort the latter by threatening to move somewhere else—a smaller-scale spiritual sibling to Amazon’s Empty Your Pockets HQ2-apalooza, which saw Maryland offer a staggering $8.5 billion in goodies and Indiana officials allegedly manipulate an investigation into an Amazon worker’s death to protect the state’s bid—the truth of the matter is that You, The People, have way more leverage than you think.
After all, when it comes right down to it, where else is your local team gonna go? Omaha?
Look, sports stadium welfare sucks. Numerous studies have shown that the local economic impact of stadium construction is nil; more than one economist who studies the issue has told me that a city looking for a fiscal jolt would be better off literally dropping bags of taxpayer cash out of a helicopter hovering over downtown. (In fact, University of Maryland, Baltimore County economics professor Dennis Coates once calculated that “the professional sports environment”—that is, having stadiums and teams in a particular area—may actually reduce local incomes by as much as $40 a year for a family of four). Every public dollar spent on a stadium is a dollar not spent on a textbook or patched pothole. Worse still, stadium deals are typically regressive, funded by lotteries and sales taxes that disproportionately burden the poor so that mostly wealthy sports fans can pay $8 for a beer. As a society, we should tax stadium giveaways into oblivion, and then shoot the next able-bodied billionaire team owner who asks for a handout—because, apparently, banks no longer lend money nor want to do business with billionaires—directly into the sun, the better to set an appropriate cultural example for future generations.
However, lambasting the evil of sports stadium welfare is not really my point, here. My point is that said giveaways are an unnecessary evil. A price no current major league city has to pay, anymore than New York City had to bribe a major corporation to set up shop in … New York City, arguably the most important city in the United States, a city teeming with talent and infrastructure, the kind of place where Amazon wants to be and where people who work for Amazon want to live.
The same dynamic applies to pretty much every current big league franchise. Again: where the heck else are they gonna go? Columbus?
This wasn’t always the case. Once upon a time, leagues, team owners, and armies of well-paid lobbyists could credibly threaten mayors, city council members, and state legislatures with some lawyered variation on real nice little local football team you got here, it’d be a shame if they moved to Baltimore in the middle of the night.
After all, the Colts really did move to Indianapolis. The Cleveland Browns decamped to Baltimore. The St. Louis Cardinals skedaddled to Phoenix. The Los Angeles Rams peaced out to St. Louis. The Montreal Expos relocated to Washington, D.C. The Seattle Sonics reverse Oregon Trail-ed it to Oklahoma City. The Vancouver Grizzlies took a long walk to Memphis. The Oakland Raiders went south to Los Angeles, then north back to Oakland, then east to Las Vegas.
A bunch of National Hockey League teams shuffled locations, too, mostly to the Sun Belt, but honestly, who can keep track?
Anyway, the upshot of these moves was that they gave extortion threats teeth. And those threats worked. Incredibly well! Indeed, the clear and present danger of losing teams to other locales willing to empty their coffers produced a multi-decade orgy of sports franchise money-suckling from a seemingly inexhaustible public teat. In 2012, an interactive map at Deadspin (RIP) estimated that the total cost to the public of the 78 pro stadiums built or renovated between 1991 and 2004 was nearly $16 billion—more than what Chrysler received in auto industry bailout following the Great Recession ($10.5 billion), and enough money to fund, in today’s dollars, 15 Saturn V moon rocket launches.
A few lowlights: Indianapolis spent $1.2 billion on a football stadium. My hometown of D.C. coughed up an estimated $1 billion for a baseball stadium. Miami forked over roughly $500 million up front for a baseball stadium by issuing bonds that eventually will cost the public $2.4 billion. Cincinnati dropped an estimated $555 million on a football stadium in an epochally dunderheaded deal that also puts the region’s taxpayers on the hook for current and future operating expenses, including a potential “holographic replay machine.”
When you’re afraid that the Bengals’ lousy stadium lease deal is quite operational. Image via YouTube.
Only here’s the thing. The overwhelming success of this shameless grifting and plutocratic greedhead grubbing has produced an unintended and delightful consequence. The major leagues have basically killed their stalking horses. Major League Baseball can’t threaten to move a team to Washington, because the Expos already are there. The National Football League can’t wield Los Angeles’ vast, untapped media market like a Sword of Damocles, because the city is now home to two relocated clubs. The National Basketball League can bluster about Seattle, but that city’s taxpayers have shown little interest in funding a new stadium to lure a replacement for the Sonics.
There’s no more greener grass out there. Which means cities now have the upper hand, the same way New York had the upper hand with Amazon. Take my local NFL franchise. The team wants a new stadium, and would very much like people such as yours truly to pay for it. Thing is, politicians in Maryland, Virginia, and the District have shown no interest in picking up the tab. My fellow residents are similarly unenthused. And why wouldn’t we be? The Washington area is a large and lucrative market with deep affection for the team, despite owner Dan Snyder’s heroic and ongoing effort to smother that goodwil under a cholroform-soaked pillow of incompetent management.
Meanwhile, every other comparable area already is home to a franchise. What is Snyder going to do if local lawmakers tell him to pound sand—move to Mexico City? London? San Antonio? Ask New York to take on a third NFL club?
Oddly enough, some areas seem not to have realized that team owners have little left but bluffs. Atlanta spent hundreds of millions—or billions, depending on how you crunch the numbers—to give the Falcons and Braves new buildings. Indianapolis bribed the Pacers with $600 million in fresh handouts to make sure the team keeps playing in the same building where it always has.
But times are changing. As friend of the newsletter and longtime sports subsidy scourge Neil deMause points out, Anaheim in 2014 rebuffed the Angels’ attempt to receive $200-plus million worth of stadium parking lot land for the low, low price of a buck, while the mayor of Calgary has insisted that any plan for a new hockey arena allow taxpayers to recoup their costs. Then there’s Los Angeles, where locals refused for decades to ante up for a football stadium—and were rewarded with not one but two franchises, one of which no one even seems to want. So much for sending the wrong message to job creators.
In a semi-reasonable world, you wouldn’t be reading this, because I wouldn’t be writing it. Welfare King billionaires wouldn’t be leeching off hardworking Americans in the first place. We wouldn’t allow it, and laugh at them for asking. Only that’s not the world we live in. From the occupants of White House to WeWork to some $80 billion of annual national corporate handouts to the Prosperity Gospel to private equity to whatever it is that management consultants actually do, our world is a griftocracy, all the way down. As such, Just Saying No to sports stadium giveaways isn’t just the smart and right thing to do. It’s an increasingly rare opportunity to tell the grubby, grasping forces of Too Much Is Never Enough—adult children who need to have every toy in the sandbox, and all of the sand in the Sahara, too—to f—k right off. And really, who can put a price on that?
This has been Hreal Sports, a weekly-ish newsletter written by Patrick Hruby about sports things that don’t stick to sports. If you have any questions or feedback, contact me at my website, www.patrickhruby.net. And if you enjoyed this, please sign up and share with your friends.