In 1961 Modell bought $1 percent of the Cleveland Browns for $4 million. The team is now worth an estimated $160 million. During the last decade the Browns have averaged 70;000 fans a game, fourth best in the league. The NFL has equal sharing of TV revenue, generous sharing of gate receipts and a (porous) payroll cap. No wonder the Packers can thrive in little Green Bay. But Modell says that he managed to lose millions and that Cleveland is so stingy with subsidies that he had to succumb to Maryland’s blandishments and move to Baltimore, a city salivating for a team since 1984, when its Colts skedaddled to Indianapolis, which then had a domed stadium in need of a tenant.
Maryland, which probably would have gift-wrapped the Bay Bridge if Modell had thought to demand it, promises to build a $200 million stadium with 108 luxury boxes, usually bought by corporations, and 7,500 club seats where affluent patrons pay premium ticket prices in order to be pampered with various services, lest they be stuck with only football for amusement. But that is just the beginning of Maryland’s largess. Modell will get, to use for paying some team expenses, up to $75 million generated by the sale of “personal seat licenses.” (Purchasers acquire the right to purchase season tickets.) Modell will pay a minimal sort of rent and will get all revenues from ticket sales, concessions, parking and stadium advertising. When the stadium is used for college football games, rock concerts and other events, Modell will collect a 10 percent management fee and half the profits. No wonder Maryland has added an estimated $60 million to the value of the Browns, who even under Modell’s guidance probably will be unable to avoid making an annual profit of $80 million.
Modell’s move is part of the new trend of NFL teams moving to smaller cities. This year the Los Angeles Raiders and Rams moved to Oakland and St. Louis respectively. The Raiders were returning to where they started. St. Louis got the Rams to replace the Cardinals, whom St. Louis got from Chicago and then lost to Phoenix, which may soon lose them to another city on the make. Baltimore might have got them for less than the Browns are costing. Long ago, the Rams belonged to Cleveland. And the beat goes on. The Houston Oilers will light out for Nashville when that city’s $292 million stadium (82 luxury suites, 9,600 club seats) is ready in 1998. The Tampa Bay Buccaneers are flirting with Orlando.
This “socialism of sport” is explained-rationalized-as what is known as “industrial policy,” a strategy for urban economic development supervised by interventionist government. It began in 1953 when Milwaukee built a stadium to lure the Boston Braves, the first major league baseball team to move in 50 years. After 12 years the Braves defected to Atlanta, so Milwaukee plucked the Pilots from Seattle, renamed them the Brewers, and now in order to keep them is going to build a better (definition: more luxury suites for “fans” more interested in canapes than double plays) ballpark. To mollify litigious Seattle, baseball invented the Mariners, who recently were on the verge of migrating until last year’s success on the field revived interest in building them a new park.
There is a high ratio of bald assertion to serious demonstration in most arguments purporting to prove that sports franchises give cities large economic benefits. One reason Maryland is committing football folly is because Baltimore clearly benefited when the Orioles (on whose board of directors I serve without compensation) moved into a gem of a ballpark Maryland built for them near Harborplace, the development that sparked the city’s downtown revival. But the Orioles play 81 home games a year and average attendance at the new park has been 45,036, so the park is putting 3.5 million people a year into a commercial setting, generating what economists call “multiplier effects” of spending on restaurants and hotels. The Baltimore Browns will use the stadium just 10 times a year (two preseason and eight regular season games). Besides, much of the money spent on sports would otherwise be spent on other things in the local economy.
The argument that a particular project will be “self-financing” is usually the first refuge of politicians defending the indefensible. So Maryland says the Browns will mean $128 million a year to the local economy, a figure ginned up with dubious assumptions, such as that 20 percent of the people attending games will spend a night in a hotel. (Where will those people be coming from in a region with NFL teams in Pittsburgh, Philadelphia and Washington?) Maryland says the Browns will create the equivalent of 1,400 full-time jobs. But if the cost of the stadium and other inducements is $250 million, that comes to $178,000 per job–rather pricey, even if the 1,400 figure is not inflated and even if many of the jobs are not low-wage (ushers, food services) and seasonal.
Downtowns as different as those of Baltimore, Cleveland and Phoenix are benefiting from new sports facilities. And major league sports can give a rising city a cachet that has a cash value in attracting other businesses. And it only takes a few cities in search of such cachet to create a sellers’ market for team owners eager to move, or to feign eagerness in order to extort more subsidies from their home cities. Still, hats off to Houston’s mayor, Bob Lanier, who, asked to sink $150 million in a new stadium to keep the Offers out of Nashville’s clutches, said, “Can you ask the average guy to build luxury suites for rich people, so they can support rich owners, so they can pay rich players?”
If litigation in Cleveland and indignation in Maryland do not derail the deal, it will make Modell the latest proof that there often is no penalty for failure in America. Maryland’s role in this farce is the latest proof that government often is the servant of those strong enough to wheedle it cleverly.
