Homerun or Running From Home? Sports Teams Follow the Money

(Photo courtesy ABCNews.com)
(Photo courtesy ABCNews.com)

by Mike Gudgell, ABC Sports

Sports fans may soon have to get used to new names for some of their favorite teams.

How does the Oklahoma Sonics sound? Would the San Antonio Marlins have that fish-out-of-water ring to it?

Will opposing teams be less threatened by the "Fremont Raiders" than the fearsome "Oakland Raiders?" What's wrong with the "Santa Clara 49ers?"

Teams are on the move again, trying to find better and more profitable homes. Some cities are saying goodbye and others hello, adding to a decent list of befuddling sports team names.

The Utah Jazz is a carryover from their namesake home, New Orleans.

There are few lakes in Los Angeles. The Lakers name came from the Land of Lakes, Minnesota.

Seattle named its team the "Sonics" as a ploy to draw attention to Boeing's bid to win a government contract for a supersonic plane -- the plane was never built. Now the team will likely move to the Midwest and take the Sonic name with them.

More Stadiums Than Teams

There are more stadiums and arenas than professional sports teams, but new ones are being built every day.

Most will be subsidized with public funds. Seattle has coughed up nearly $800 million for stadiums and will lose the Sonics. Pennsylvania taxpayers will pay a billion to host the Phillies, Eagles and Pirates. It's a continuing trend.

New, modern stadiums generate more money. Their designs include more concessions, luxury boxes, advertising space, and room for in-seat delivery of not only beer and peanuts but sushi, clam chowder and lattes.

"NBA arenas can be obsolete in 10 years," said Brad Humphries, an economist at the University of Illinois. "It's all about revenue."

Every year, a few teams threaten to leave town unless they get updated or new homes. The latest trend in sports-facility financing is the ballot box.

Last week, voters in Seattle and Sacramento, Calif., said no to new stadiums. Minnesota's Twins haven't had much luck in the voting booth, but Houston; Green Bay, Wis.; and Kansas City have done better.

"It's the usual story of deep-pocket owners ... against poorly funded grass-roots groups," Humphries said. "It's often a lopsided contest."

Microsoft billionaire Paul Allen spent millions to support a ballot measure to fund the Seattle Seahawks' Qwest Field. Houston Rockets owner Les Alexander did the same to get a new facility for his team.

Still, there is some consensus among most economists that stadiums and arenas are not big economic engines.

"Taxpayers are getting more skeptical about stadium economics," said Robert Baade, professor of economics and business at Lake Forest College in Chicago.

The Battle for Sports Teams

Despite the cloud over the economics of professional sports venues, every year counties, cities and states fight over professional sports teams.

The pressure on politicians to come up with public money can be enormous. On Monday, San Francisco dropped its bid to host the 2016 Olympics. The city's proposal depended on a new stadium built for the 49ers.

Sen. Diane Feinstein and Speaker of the House-elect Nancy Pelosi put pressure on San Francisco Mayor Gavin Newsom, but the 49ers owners and the city couldn't make a deal. The football team has threatened to move to nearby Santa Clara.

Today, computer giant Cisco Systems will announce a deal that will move the Oakland Raiders to nearby Fremont.

Cisco says it will build a new high-tech stadium that will offer laptop computer replays at your seat. You can even have your picture on the Jumbotron -- for a price. The City of Fremont would likely come up with the land for the stadium.

According to a study by University of Dayton economists, new, well-designed privately funded stadiums and arenas can make money. The San Francisco Giants SBC Park is often used as an example.

"No economic justification exists for large public subsidies," the study concludes.

That may be true, but Gerald Carlino and N. Edward Olson say in their study that "once quality-of-life considerations are included in the calculus, the seemingly large public expenditure on new stadiums appears to be a good investment for cities and their residents."

Public Subsidies for Sports Teams: Federal Intervention Needed?

San Antonio has dropped its $200 million offer to the Florida Marlins, but the City of Hialeah in the Sunshine State is still in the running.

Santa Clara is gearing up for talks with the 49ers, and Fremont officials will appear at a news conference with Raiders' owners today.

Meanwhile, Chris Van Dyke, founder of Citizens for More Important Things, is fielding e-mails at his home in Seattle from all over the country.

His group, armed with a little more than $60,000, sponsored an initiative in Seattle that banned public subsidies for professional sports teams.

"We got out in front of them this time," he said. "The public is very frustrated. These teams pit one city against another. ... At what point do they stop asking we want more? They won't in my opinion."

Van Dyke believes the debate over public subsidies for professional sports teams is a national issue that will need federal intervention.

"Professional sport teams hold a public trust," he said. "They create a love, a passion between local citizens and the team. They breach that trust when they use that to get at my pocket book, and that is not right."

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