Billionaire sports team owners should not hold cities hostage

An illustration of a birds-eye view of a glittering, expensive football stadium.

Sept. 26 marked the Oakland Athletics baseball team’s final game in Oakland following the announcement of plans to move the franchise to Las Vegas. The team, infamous for its bottom-of-the-league payrolls (enough so to warrant a Brad Pitt movie), has played in Oakland since 1968. The National Football League’s Oakland Raiders, who also played in California for decades, also relocated to Las Vegas in 2020.

The basis for the move? The Athletics’ stadium. The decrepit Oakland Coliseum, long considered one of the worst in professional sports, was desperately in need of replacement. The team’s owners and the city of Oakland spent decades attempting to complete a deal to build a new stadium, to no avail. Most recently, the city of Oakland put together a $375 million offer to build a new stadium on San Francisco Bay.

Taxpayers previously paid tens of millions of dollars in 1995 to finance a now-hardly used assortment of seats; the team was forced to lay a tarp over it. This came when Oakland was forced to lay off police officers due to financial constraints.

Current owner John Fisher, heir to $8 billion clothing retailer Gap, opted to instead relocate the team to the larger TV market of Las Vegas, planning to rely on a mixture of private funding and $380 million of public funds to build a stadium along the Las Vegas strip.

This pattern raises a question: Why are large cities, many of which are struggling with underfunded schools, crumbling infrastructure and housing crises, willing to cough up hundreds of millions of dollars for sports teams?

One of the most common justifications for public subsidies of billion-dollar sports projects is that they spur economic activity in metropolitan areas. Proponents argue that new stadiums attract tourists, boost local business and create jobs, thus benefiting the city’s economy as a whole. But this claim doesn’t tell the whole story.

Numerous studies have shown that the economic impact of sports stadiums is vastly overstated. They often divert money away from more productive uses like community development, displacing spending that would have gone elsewhere in the city. For example, all of Alameda County was recently granted a comparatively paltry $14 million by the state of California to address the intersection of mental health and homelessness, seemingly a much more important issue. Experts feel similarly about the Las Vegas deal.

For many Oakland residents, the move felt like a betrayal, a gut-wrenching conclusion to decades of loyalty and support for a team that’s now leaving for greener financial pastures. Many fans spent their entire lives rooting for the Athletics and the Raiders.

Take the example of the St. Louis Rams, who relocated to Los Angeles, the second-largest television market in the U.S., in 2016. While owner Stan Kroenke has certainly profited from the move — CNBC values the team at $8 billion — the fans and city of St. Louis were left behind, while the new Los Angeles stadium plays host to a nonexistent fanbase. SoFi Stadium, which cost an eye-popping $6 billion to build, regularly sees visiting teams’ fans outnumbering Rams fans by a hefty margin.

Six billion dollars is a lot of money; what does it buy you? Essentially, a glorified playground. SoFi Stadium boasts 260 luxury suites, 13,000 premium seats, 12 club spaces, 7 suite experiences and a dual-sided elliptical video board. And, of course, it’s close to Los Angeles International Airport for out-of-towners flying in to attend games. But it’s questionable how much of the $6 billion goes toward making the game experience better for the average fan.

This same issue hits closer to home. In the mid-2010s, the Ilitch family, owners of the Detroit Red Wings and Detroit Tigers and no strangers to the University of Michigan, secured more than $400 million in taxpayer-funded grants from the city of Detroit to construct Little Caesars Arena. The Ilitches promised the creation of “District Detroit” — a thriving entertainment district that would surround the stadium and provide long-term economic growth. But, almost a decade later, the “District Detroit” remains little more than a sea of parking lots; the promised development failed to materialize.

In 2023, the Ilitch family, along with developer Stephen Ross, another billionaire heavily associated with the University, announced that the project was finally moving ahead thanks to another $133 million in tax breaks. The issue is not necessarily that all tax breaks for construction projects are bad; but they are bad when the beneficiaries previously received hundreds of millions of dollars in taxpayer funds only to renege on their end of the bargain. For all intents and purposes, giving taxpayer money to those who haven’t delivered in the past is an unintelligent investment. In Los Angeles, Detroit and shortly Las Vegas, billionaires underdelivered.

Time and time again, cities have been left scrambling to meet the demands of billionaire team owners, funneling hundreds of millions into stadiums while neglecting essential services like education, infrastructure and housing. Despite claims that these deals spur economic growth, the reality is that the promised benefits often fail to materialize, leaving cities and their residents to bear the cost. Instead of prioritizing profit-driven ventures (with oblique value adds for the average person), cities should focus on investments that most directly improve the lives of their citizens.

The value of professional sports teams has already more than tripled in the last 10 years; owners have evidently done fairly well for themselves. Sports teams will always chase the next best deal, but cities must listen to the public before approving hundred million dollar projects. Cities should also think more critically about whether future help should not come from public coffers.

I’m as big a sports fan as the next person — I spend my Sundays watching the Detroit Lions and my summers watching the Detroit Tigers. I am sure that many residents of Detroit, and other cities, would feel devastated by losing their favorite sports teams. There is a genuine social value added by playing host to professional sports teams; however, cities must prioritize listening to public input on whether preserving that value warrants a significant opportunity cost of not funding several important public services.

Hayden Buckfire is an Opinion Analyst who writes about American politics and culture. He can be reached at haybuck@umich.edu.

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