PART I
RAIDING THE PUBLIC TREASURY: THE POLITICAL ECONOMY OF PROFESSIONAL SPORTS
(Hustling Major-League Cities?)
Sports is big business. Fans and non-fans alike know this. It involves everything from the burgeoning sports equipment industry to international labor-migration issues, from the organization of professional sports leagues to the most sought-after times in television advertising. Indeed, one cannot think deeply about the structure and practice of the contemporary sports scene without considering its economic moorings. And we cannot understand the economics of sports without serious consideration of the political context in which it is embedded. As will be evident from Part II of this book on the media, many aspects of sports involve large corporations vying for advantage in a competitive economic environment of changing political regulation. Political and economic institutions intertwine to affect the social organization of sports.
Owners of professional sports teams operate within a very constrained set of parameters. The relationship between the owners and the government of the city in which the team resides is affected by, among other issues, tax and zoning laws, and the ownersâ negotiations with players are carried out in the context of league, state, and national labor laws. In the United States, for example, every National Football League (NFL) team has a âcap-ologist,â a business and legal expert who can advise the team on its âsalary capââthat is, the spending constraints regulating its playersâ salariesâto ensure that the team maximizes its flexibility within the limits mandated by the leagueâs collective-bargaining agreement with the NFL Players Association. There are no absolute rules about how such things should be governed, and other sports, as well as other countries, do it differently. Major League Baseball (MLB), with its much stronger players union, for example, does not operate with a salary cap and has a long-standing special relationship to the U.S. government. In Europe, a teamâs ability to sign a given foreign player is regulated by both league rules and national law. Teams must limit their number of foreign players, though some players can be claimed as citizens under a sports-specific law (for example, a foreign player may become a âfootball Germanâ and thereby not count as a foreigner on a team).
A rather unique example of this interconnection between politics and economics is found in the United States, where Major League Baseballâalone among professional sports leaguesâhas a state-sponsored monopoly. Often referred to as the âspecial antitrust exemption,â this exemption from laws concerning monopolies allows MLB to control where its teams are located, whether any new teams can come into the league, and various aspects of labor-management relations. This special treatment has been tested in court and has been reaffirmed in a number of different ways since it was established in 1922. (See Andrew Zimbalistâs essay in this part, âMay the Best Team Win: Making Baseball Competitive.â) Currently, the Supreme Court has indicated that it is up to Congress to enact legislation to take away the exemption. Although it may seem rather ironic that the country that is most committed to a free-market ideology protects one of its most profitable industries by giving it monopoly status, the United Statesâwith its relatively low-burden and unprogressive tax systemâis also unique in that it protects big property to an extent greater than most other countries. Insofar as a consideration of professional sports leagues involves labor-employer issues, immigration issues, media control issues, and many othersâall regulated by political institutionsâone ignores the political-economic context only at oneâs peril.
A political-economy approach to sports examines how political forces affect the way that actors in the sports world vie for economic advantage. Perhaps the classic example of the way this happens in the United States is with stadium construction: A professional team seeks a new stadium to increase the teamâs value and revenues and asks the relevant government agencies to underwrite costs, which might include not only the actual construction costs for the stadium and the cost of the land on which it will be built but also the cost of providing the necessary parking lots or those involved in making improvements to the cityâs transportation infrastructure. As the selection by Kevin J. Delaney and Rick Eckstein, âPublic Dollars, Private Stadiums, and Democracy,â shows, privately owned professional sports teams regularly attempt to secure public dollars for private profit. In attempting to secure public funding for their arenas and stadiums, the private owners take advantage of notions of âcivic prideâ and of being a âmajor-league city.â Allying with other powerful interests, the owners often succeed in wresting dollars and other concessions from the powers that be. The resulting increase in the teamâs value and its annual profits is privately appropriated.
Although politics is central to the business of sports, it is often ownersâ success in keeping politics (and politicians) out of their business that ensures economic success. In the article on NASCAR by Brian OâKeefe and Julie Schlosser, âAmericaâs Fastest Growing Sport,â we see how a relatively unregulated sport can develop: In the context of a near-monopoly, there appear to be no limits to its commercialization. All sports, however, must try to get as much marketing exposure as possible through cable and free television. Media conglomerates, which sometimes own sports franchises, will gamble that they can attract sufficient advertising revenue to pay for televising given events. If the demographic numbers are ârightâ (that is, the people who are expected to watch the show have a lot of disposable income), the league can count on lucrative contracts from TV outlets. Of course, there are limits to the exposure that leagues and teams can receiveâsome TV channels reach many more homes than others, and there are, of course, better and worse times to be televised.
The examples of stadium construction and NASCAR represent two poles of the interpenetration of political and economic institutions in the realm of sports. The article in this section by David Morris and Daniel Kraker, âRooting the Home Team: Why the Packers Wonât Leaveâand Why the Browns Did,â on the unique situation of the Green Bay Packers is included to illustrate the variation that is possible in terms of ownership and in terms of the relationships between teams and their locales. The Packers are community owned, with ownership shares sold to the public. Community ownership, which U.S. professional leagues have largely banned (the Packersâ situation is grandfathered), is more common in Canada than in the United States. But Morris and Kraker suggest that allowing such arrangements, along with other legal and economic variations from the current rulesâespecially revenue sharing among teams in a leagueâwould change the dynamics of bargaining for professional teams and their locales.
The key point here is that, in understanding sports as a business, which it certainly is, we must always understand how the stateâthe political organizations that control the economic contextâstructures the economic playing field. Similarly, we must understand that the large private corporations and individuals who own sports teams make public policy by virtue of their decisions about their teams. Their decisions have huge implications for employment opportunities, mass-transit and a host of transportation issues, the media and advertising, and tax issues. In other words, these are major arenas of public policy that are subject to private control.
Chapter 1
PUBLIC DOLLARS, PRIVATE STADIUMS, AND DEMOCRACY
Kevin J. Delaney and Rick Eckstein
Public Dollars, Private Stadiums: The Battle Over Building Sports Stadiums.
In this excerpt from the last chapter of their book Public Dollars, Private Stadiums, Kevin J. Delaney and Rick Eckstein review their argument about how democracy was subverted in the process of getting a recent spate of stadiums built. Their elucidation of how power operates in specific political-economic contexts highlights the extraordinary influence that sports and sports-team owners have in the contemporary United States. Using a comparative urban analysis, the authors demonstrate how âlocal growth coalitionsâ composed of many of the largest corporations in given metropolitan areas (itâs key that the coalition be dominated by non-sports-related corporations) push forcefully for stadiums because of their supposed contributions to recruiting top executive talent and civic pride. ⌠And politicians follow along.
Whereâs the Democracy?
Overall, the process of building private stadiums with public dollars in the United States is more akin to plutocracy and oligarchy than to democracy. Here, we include both a procedural definition of democracy (in which everyone affected by policy decisions has a meaningful say in making them) and a substantive definition (in which policy decisions reflect the real interests of affected parties without those interests being manipulated).1 Sometimes the anti-democratic processes are blatant and unmistakable, sometimes they are more subtle, and sometimes they are obfuscated by the workings of normal politics. Residents in and around Pittsburgh and Phoenix were crystal clear about not wanting to spend public dollars on private stadiums. But in both cases, powerful stadium advocates simply trampled on public sentiment and built the stadiums anyway.
Sometimes the threats to democracy are more subtle, although still obvious if you look in the right places. In Philadelphia, for instance, there was no need to blatantly trample on popular sentiment because the public was never given any say on the matter except indirectly through city council and state representatives. When a Pennsylvania state representative explained to us the inner workings of the legislature, it seemed to have little in common with democracy as we conventionally define it. He explained exactly how Pennsylvania decided to put up two-thirds of the money for the four new stadiums in Pittsburgh and Philadelphia:
Ninety-five percent of the calls we get on this issue are against it. ⌠For dynamic issues like these that are wildly unpopular, the legislative leaders decide it will happen; and then they decide how many votes each side [Republican and Democratic] will give up and which representatives are least vulnerableâso they donât get taken out [for voting for something so unpopular].
This representative was clear that, even though Pennsylvania residents were overwhelmingly opposed to using public dollars for the four new stadiums, the legislative leadership did it anyway. The leaders selected which representatives would vote for the âwildly unpopularâ issue by determining who was in a safe district and would thus be insulated from voter backlash. So, for example, a Democrat in a district that is 90 percent Democratic is cajoled into voting for the unpopular issue because she or he will be unlikely to lose reelection. Of course, that Democrat will not vote âcorrectlyâ without some serious horse trading. When we interviewed the representative just quoted a few months before the final vote, he predicted, âI would bet this [funding for new stadiums] will happen because most members have their priceâ in terms of pet projects (such as, acquiring park land or resurfacing bridges), which others will vote for in exchange for supporting the stadium issue. It turns out he was correct.
In fact, we were told that one of the big inside fights on this issue concerned the fact that Republicans wanted to provide fewer than half of the total yes votes needed to pass the stadium bill. The Democratic leadership, however, argued that because Republican governor Tom Ridge wanted the bill so badly, the Republicans should give up more than half of the votes. The Republican leadership countered that because the stadiums would benefit the two largest cities in Pennsylvania, which are largely Democratic, the Democrats should give up more than half of the votes. All of this finagling may not surprise a cynical observer, but it is not exactly what you read about democracy in a high school civics text.
While such blatant and clandestine power plays pose clear threats to democratic institutions, we think there are even more sinister threats within the everyday political process. Here, the trappings of democratic procedure often mask very undemocratic social policies. The best ongoing examples are the referendums that seem to indicate community support for new publicly subsidized stadiums, apparently demonstrating that policies allocating public dollars for private stadiums reflect popular sentiment. But this belief assumes that the referendum process is balanced and fairâthat all interested parties have an equal opportunity to influence public policy.
Referendum campaigns are anything but fair arenas for hashing out the advantages and disadvantages of using public dollars for new stadiums. Subsidy advocates have much more power in the referendum process than do stadium opponents. At the most basic level, advocates directly outspend opponents by at least ten to one and sometimes, as in San Diego, by much more. These powerful individuals and organizations also have far superior âunofficial accessâ to decision makers than do average citizensâaccess that often occurs in stadium luxury boxes! We heard a story in Pittsburgh about a city council member who spent Sundays at Three Rivers Stadium, not watching the Steelers but keeping track of who was meeting whom in the corporate boxes. In this way, the council member knew what was going on behind the scenes when certain people or companies tried to influence city policy.
In addition to these obvious advantages in the referendum process, stadium advocates also have a third-dimensional* advantage: citizens grant more legitimacy to powerful people (the so-called experts) than to average people such as themselves, especially when it comes to complex issues like stimulating economic growth. This advantage is paralleled by a political system that also grants much more legitimacy to the opinions of powerful individuals and organizations than to more ordinary ones. In a sense, then, stadium supporters rarely have to fight city hall to achieve their goals. With important exceptions, the default position among many political elites is to equate new stadiums with economic growth or heightened community self-esteem. Subsidy opponents have to convince politicians not to believe what they have already been conditioned to believe.
Why Growth Coalitions?
We have argued throughout the book that unraveling these stadium battles is best accomplished by examining the structure of each cityâs local growth coalition (or its proxy) and the strategies these coalitions use to build private stadiums with public dollars. As we have shown, the strength and unity of the growth coalition shapes the stadium battles in American cities. Both the structure of growth coalitions and the decisions they make are deeply embedded in the unique social characteristics of each city. Some combinations of structure, decisions, and social characteristics carve out relatively uncomplicated paths to publicly subsidized stadiums, while other combinations create many more challenges. Either way, no route is a shining testament to democracy in action.
We have built our analytical framework around growth coalition theory because it allows us to identify some of the covert threats to democratic institutions. We believe these threats are not just sporadic and temporary breakdowns of a fair, self-regulating system but are embedded in the workings of the system itself. Most academic and nonacademic studies of new sports stadiums, good as they usually are, miss an important part of the story because they focus only on the most obvious public-policy players: the politicians and the sports teams. But guided by our search for local growth coalitions, we have discovered a world of less discernible players; and they have tremendous power over the policies allocating public dollars for private stadiums. Like more public players, these individuals and organizations stand to gain from new stadiums, but in less noticeable ways. Because growth coalitions can be so powerful, because they are largely invisible, and because they are mostly unaccountable to other social actors, we think it is imperative to understand how they are involved in the battles over new stadiums and how this involvement poses an especially insidious threat to a democratic society.
This point has not been emphasized enough, even in critical discussions of sports-stadium funding. Instead, conversations on the issue generally take a corporate welfare approach, castigating wealthy team owners who ask for handouts and local governments that universally grant these requests. But team owners are acting in the way that team owners are supposed to act; so the brunt of criticism, from the corporate-welfare perspective, ends up being aimed at the spineless politicians who sell out the rest of the community for a private seat in the ownerâs luxury box or a future campaign contribution. In contrast, our growth coalition approach insists that we must also look at the large nonsports corporations in a community (with multibillion-dollar gross revenues) rather than just the teams themselves (with gross revenues close to $100 million) in assessing who might benefit from the public financing of new stadiums.
These corporations are far more powerful than any local sports team; and their influence over the policymaking process may be ideological (that is, third-dimensional), not just a matter of throwing their money around or thre...