Cleveland, says Forbes. People call it “the Mistake by the Lake.” Cleveland, once America’s sixth-largest city, has been going downhill for decades.

Why do some cities thrive while others decay?  One reason is that some politicians smother their cities with the unintended consequences of their grand visions, while others have the good sense to limit government power.

In a state that already taxes its citizens heavily, Cleveland’s politicians drown businesses in taxes.

One result: Since 2000, 50,000 people have left the city. Half of Cleveland’s population has left since 1950.

But the politicians haven’t learned. They still think government is the key to revitalization.  While Indianapolis privatized services, Cleveland prefers state capitalism. It owns and operates a big grocery store, the West Side Market. Typical of government, it’s open only four days a week, and two of those days it closes at 4 p.m. The city doesn’t maintain the market very well. Despite those cost savings, the city manages to lose money running the market. It also loses money running golf courses—$400,000 last year.

Another way that cities like Cleveland cause their own decline is through regulations that make building anything a long, drawn-out affair. Cleveland has 22 different zoning designations and 673 pages of zoning guidelines.

Houston, We Have a Solution

By contrast, Houston has almost no zoning. This permits a mix of uses and styles that gives the city vitality. And the paperwork in Houston is so light that a business can get going in a single afternoon. In Cleveland one politician bragged that he helped a business get though the red tape in “just 18 months.”

Randal O’Toole, author of The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future, says Houston does have rules, but they are more flexible and responsive to citizens’ needs because they are set by neighborhood associations based on protective covenants written by developers.

Politicians’ rules rarely change because the politicians don’t have their own money on the line. Cleveland’s managers thought that funding gleaming new sports stadiums (which subsidize wealthy team owners) and other prestigious attractions like the Rock and Roll Hall of Fame would revitalize their city.

Urban policy expert Joel Kotkin says, “This whole tendency to put what are scarce public funds into convention centers and . . . ephemeral projects is delusional.”

Stadium Strikeouts

But politicians claim that stadiums increase the number of jobs.

Not so, says J. C. Bradbury, author of The Baseball Economist: The Real Game Exposed. “There’s a huge consensus among economists that there is no economic development benefit to having these stadiums,” he says.

The stadiums do create jobs for construction workers and some vendors. But “it’s a case of the seen and the unseen,” Bradbury says, alluding to the nineteenth-century French economist Frédéric Bastiat. “It’s very easy to see a new stadium going up. . . . But what you don’t see is that something else didn’t get built across town. . . . It’s just transferring from one place to the other.

“People don’t bury their entertainment dollars in a coffee can in their backyard and then dig it up when a baseball team comes to town. They switch it from something else.”

Stadiums are among the more foolish of politicians’ boondoggles. There are only 81 home baseball games a year and 41 basketball games. How does that sustain a neighborhood economy?

But the arrogance of city planners knows no end. Now Cleveland is spending taxpayers’ money on a medical convention center that the planners say will turn Cleveland into a “Disney World” for doctors. Well, Chicago’s $1 billion expansion of the country’s biggest convention center—McCormick Place—was unable to prevent an annual drop in conventions, and analysts say America already has 40 percent more convention space than it needs.

Politicians would be better stewards of their cities if they set simple rules and then just got out of the way.

I won’t hold my breath.

Even though the Dodgers left for Los Angeles almost a half-century ago, for many that move still hangs like a dark cloud over Brooklyn. Some people trace the borough’s economic decline to the loss of the Dodgers.

When the L.A. Dodgers were put up for sale in early 1997, New York politicians even took time to pander to those still suffering from the absence of “Dem Bums.” Governor George Pataki, for example, declared: “The Dodgers belong in Brooklyn, just as the Yankees belong in the Bronx and the Mets belong in Queens. The Dodgers’ temporary stay on the West Coast should come to an end.”

Brooklyn’s demise, though, wasn’t the result of the Dodgers’ leaving town. Brooklyn, along with the rest of New York City, declined because of big-government leftism, which brought with it a costly, destructive welfare state, a lack of will to fight crime, and a perverse enthusiasm for raising taxes. When one considers that crime was on the rise and that politicians imposed city personal, corporate, and unincorporated business income taxes in the mid-1960s, the reason for New York City’s woes becomes pretty clear. Rudy Giuliani came along as mayor in the 1990s to deal with crime, but big government and onerous taxes remain. In fact, in recent years, Mayor Michael Bloomberg and the city council have hiked property, sales, income, tobacco, and cell-phone taxes.

It was announced in late January 2004 that developer Bruce Ratner was buying the New Jersey Nets for $300 million. The NBA approved the sale last August. Ratner has a dream of bringing the team to a new $500-million arena that would be part of a $2.5 billion commercial and residential project in downtown Brooklyn.

Naturally, Brooklyn Borough President Marty Markowitz brought up the Dodgers in his response to the local press when the deal was first announced: “It corrects the great mistake of 1957 . . . when the Brooklyn Dodgers moved to La-La Land.” He added: “This is redemption. This is Brooklyn getting its respect back.” Things don’t seem to have changed much in almost 50 years.

In fact, it sometimes amazes me how little things change in New York City. Today’s other hot sports-facility debate revolves around luring the NFL’s Jets and the 2012 Summer Olympics to the city with a new stadium in Manhattan. The location for that proposed stadium—over the railroad yards on the west side of Manhattan—is the same site proposed by Manhattan Borough President Hulan Jack in the 1950s when he was trying to keep the New York baseball Giants in town.

Meanwhile, the location of the proposed arena for the Nets happens to be the same spot where Walter O’Malley wanted to build a domed ballpark for his Dodgers. Like O’Malley, Ratner wants the government to condemn property for his project. Of course, the constitutional power of eminent domain was never meant for taking property from one private entity for the purpose of padding the profits of another private entity. But this is left-wing New York, so what the heck. Still, various Brooklynites who face losing their homes and businesses to government seizure for the benefit of the Nets’ new owner are rallying to oppose any such land grab.

There is one big difference between O’Malley and Ratner, though. O’Malley wanted to build his ballpark with private money. Ratner seeks enormous government help for his arena, including related infrastructure costs, the donation of air rights to build over the Long Island Railroad yards in the borough, and special tax breaks to pay for the project. The breaks being discussed include so-called incremental tax revenues, sometimes known as tax increment financing, or TIFs. The basic idea is that the government floats bonds to pay for the project, and the bonds are paid off with the future property-tax revenues generated by the project. Gee, that would have come in handy when I built my home on a vacant lot a few years ago, but then again, most home and business owners are not among the select few favored by politicians.

Another possibility is that the Brooklyn project would be funded through incremental sales and income taxes generated from the development. That’s also a dubious proposal when it comes to a sports arena. Practically every independent economic study relating to subsidizing sports teams makes it clear that teams and their facilities do not boost employment, income, or economic growth. They simply shift consumers’ leisure dollars from one place to another.

KeySpan Park

Just consider the lesson from another sports facility that opened on Coney Island in Brooklyn in 2001. KeySpan Park is home to a minor league baseball team—the Brooklyn Cyclones. As I noted attending a game last September, it is a nice ballpark in a great location. It sits alongside a boardwalk and the beach, and offers stellar views of ships going by on the sea. However, it is evident that this stadium has done nothing for the local economy. The area has vacant storefronts, some boarded-up buildings, and an empty lot right across the street from the stadium. This lack of economic vitality contrasts sharply with the claims made by local officials that the stadium would spark economic development in the area. People, for the most part, head to the ballpark for the game—and then go home.

For good measure, the cost of KeySpan Park, initially estimated at $20 million, wound up costing $39 million—all paid for by the taxpayers. Such cost overruns are anything but unusual when it comes to building stadiums and arenas, especially when taxpayer subsidies are involved.

The fact is, no political reasons exist to give special help to big-league sports, and Brooklyn’s experience provides the clearest example. The Dodgers’ move west has long been peddled as a huge tragedy for New York and has scared countless politicians across the nation into coughing up taxpayer subsidies to keep the home team in town or to attract a new team.

However, it is instructive to note who paid the political price for the Dodgers’ move. In New York, Mayor Robert Wagner won re-election in 1957, right after both the Giants and the Dodgers announced that they were leaving for California. He was re-elected again in 1961. However, two key players in getting the Dodgers to move to Los Angeles—Mayor Norris Poulson and council member Rosalind Wyman—both attributed their subsequent failures at winning re-election to the controversies swirling around the deal to get the Dodgers, as was noted in Neil Sullivan’s book The Dodgers Move West.

When it comes to a new arena for the Nets, there is no basis for using government’s power of eminent domain, nor is there any reason for selective tax breaks. If Ratner wants to build this complex in Brooklyn, that’s great. But he needs to buy the land on the open market and build the project with private dollars, without special political treatment.

But what if Ratner chooses not to bring the Nets to Brooklyn without government aid? So what? Brooklyn will have lost nothing in economic or political terms.

There obviously is economic value in professional sports, as testified to by the millions of us fans who attend games. However, such value and how resources are allocated should be left to private-sector entrepreneurs and consumers, rather than being subject to the whims and distortions of politicians.

Oilers owner Bud Adams originally was a bold football entrepreneur. His team was a 1960 charter member in the upstart American Football League, which was set up to offer a direct challenge to the well-established NFL. Adams named the team for the business in which he earned his fortune, and the Oilers took two of the first three AFL titles.

In 1965, Adams moved the Oilers into the new taxpayer-financed, $35 million Eighth Wonder of the World, the Houston Astrodome. He got a good taste of corporate welfare early on in his sports ownership career—something probably quite soothing compared with the rough-and-tumble oil business. And it apparently left him with a taste for more.

Over the next three decades, Adams would venture to tap his hometown taxpayers twice more. In 1987, he requested $67 million-worth of stadium upgrades to the Astrodome—including new artificial turf, 10,000 more seats, and 65 new luxury boxes. Adams needed negotiating leverage, so he drew the most formidable weapon in any business executive’s arsenal: he threatened to move his team—in this case to Jacksonville, Florida. Adams got what he wanted from Houston officials through a property-tax hike and a doubling of the hotel tax.

The NFL’s “best” stadium—as Adams referred to the upgraded Astrodome—did not stay that way for very long. In 1993, Adams began tossing around the idea of a brand new dome. His proposed $235-million Ninth Wonder of the World would come with the latest in stadium accouterments, including more of the ever-critical luxury box suites. Those boxes generate big dollars that do not have to be shared with other teams under the NFL’s revenue-sharing plan. They are in fact a huge catalyst for the push in recent years for new stadiums, ballparks, and arenas by many professional teams.

Adams’s plan also called for all the seats from floor to ceiling to be reconfigured to fit not just football, but also hockey, basketball, convention, and concert floor plans. (It’s amazing the ideas one can come up with when spending somebody else’s money.) Although Adams offered to put up $75 million for this new dome, taxpayers would still be called on to sacrifice $160 million more.

As things generally go in the corporate welfare story, this is the place where politicians usually cave in to team owners. However, then-mayor Bob Lanier (no relation to the former NBA star) reacted rather coolly to the Oilers’ demands.

The Mayor Refuses

Lanier first declared that property taxes would not be used for any new sports facilities. Then, buttressed by polls in early 1994 showing that anywhere from 56 percent to 71 percent of the public thought the taxpayers should not finance a new dome for the Oilers, Lanier argued against any public funding. (Houston’s resolve against the Oilers may have had something to do with the team’s growing reputation as choke artists. In a 1993 playoff game, the Oilers blew a 35-3 halftime lead to lose to the Buffalo Bills—one of the greatest football collapses of all time.)

Support from fellow team owners in Houston couldn’t be lined up either. Adams could not get the National Basketball Association’s Houston Rockets—playing in the city-owned Summit—interested in his deal as a co-tenant of the proposed facility, and Astros’ owner Drayton McLane also gave it a thumbs down.

Mayor Lanier stuck by his refusal to put tax money into a new stadium. However, other taxpayer-funded schemes started to float about, like a $90-million upgrade for the Astrodome and $30 million for The Summit.

NFL Commissioner Paul Tagliabue came to town to aid Adams’s quest in mid-1994. In recent years, a major part of Tagliabue’s job has been to travel to cities where teams want the taxpayers to pay for new stadiums and to offer both carrots and sticks to state and local governments. He arrived in Houston promising that the city would host the Super Bowl one day if a new stadium was built for the Oilers.

Amazingly, though, Lanier’s resolve only strengthened. He declared that he would not go along with “taking Joe Sixpack’s money and putting it into supporting a stadium . . . for owners with $100 million assets and players making $1-million-plus on salary.” The editorial page of the now-defunct Houston Post even chimed in with some down-home common sense: “If it is a good deal, private enterprise will do it.”

Confronted by this unprecedented opposition, Adams once again drew the ultimate weapon: the threat of a move from the city. First, he pitted nearby county against county in a bid for a new stadium. Then, for good measure, the Oilers commissioned a study from a major accounting firm—the kind of study that ignores basic principles of economics, the failure of government industrial policy, and the efficiency of the private sector—which asserted that a new dome for the Oilers would be worth $20 million annually to Houston. Still, none of it turned the tide in Adams’s favor.

Nashville Woos the Oilers

So, in August 1995, he opened negotiations with the city of Nashville. Unlike Houston, Nashville and the state of Tennessee had wooed Adams. The city had long wanted to be “big league.” Mayor Phil Bredesen had already built a new hockey arena without a National Hockey League tenant; so he stood more than willing to build a football stadium for an actual NFL team. And Tennessee Governor Don Sundquist announced that state taxpayers also would be tapped to help bring the Oilers to Nashville.

Back in Houston, Lanier started to crack. He offered a deal to build an open-air stadium for Adams. But Adams decided it was too little too late, and besides, it supposedly was too hot to play outside in Houston.

A deal between the Oilers and Nashville was announced in November 1995. The stadium would seat 67,000, with 120 luxury suites and 9,600 premium seats. Adams would not only not have to lay out a dime to build the new facility, but he would also receive a $28 million relocation fee and garner 100 percent of stadium-related revenues. The state would kick in $55 million in construction bonds and $12 million more for road improvements. Nashville would fork over $144 million and had to guarantee $70 million in net sales of personal seat licenses, giving fans the option to buy tickets.

One hurdle remained, however: against the mayor’s wishes, local stadium opponents gathered enough signatures to require a referendum on the city package. Big dollars poured into the pro-stadium “Yes for Nashville” campaign—outspending the opposition by about 16 to 1. Commissioner Tagliabue naturally stopped by to give support. The resolution passed with 59 percent of the vote.

Meanwhile, the Oilers had a couple of years left on their lease in the Astrodome, and Adams promised to stay and play out those years. But after fewer than 21,000 fans attended the last three games of the 1996 season, the Oilers wanted out. (A few days prior to the Nashville vote, a save-the-Oilers rally in Houston drew fewer than 50 people.) Adams negotiated a buyout deal.

Not long after the Nashville vote, Tagliabue met with Houston officials and sang a familiar song. Houston could get a new NFL team—if it built a new stadium or upgraded the Astrodome. Astros owner Drayton McLane talked about selling his baseball team, claiming a string of annual losses since he acquired the club. And Houston’s lone champions—the Rockets—made noises about playing in an arena far glitzier and more profitable than The Summit (recently renamed the Compaq Center).

The Mayor Caves In

Apparently, this was all too much for Mayor Lanier. His rhetoric about taking money from Joe Sixpack gave way to defeatism. He noted that “the three leagues are monopolies and they’re behaving logically for monopolies.” He and Harris County officials announced the formation of a commission to study the possibility of building new sports facilities. This is the equivalent of establishing a bipartisan commission in Washington, D.C., to deal with Social Security or Medicare. It provides cover. Predictably, the commission came back with the recommendation that Houston build new facilities for baseball and basketball, and upgrade the Astrodome for football. Estimated price: $625 million.

By September 1996, a deal was consummated with the baseball Astros. A 42,000-seat ballpark, with a retractable roof and 66 luxury suites, would be built for about $240 million, of which taxpayers would pick up $180 million through rental car, parking, sales, and liquor taxes. Lanier explained his surrender: “If people want professional sports in this city, the reality is their presence requires certain public participation.” The Astros’ owner offered one of the standard justifications for stadium subsidies: “If we’re going to compete with teams like Atlanta, we need to have a stadium like this.”

A referendum barely (51 percent) approved the Astros’ new ballpark, as well as $200 million in Astrodome upgrades, just in case the NFL came back to town. Houston had fought a valiant struggle against corporate welfare, but it finally gave in—big time.

Early in 1997, Lanier proposed a new arena to be shared by the Rockets and a minor-league hockey team. For a $200 million facility, the teams would be asked to chip in only about $75 million. The latest talk around town is about a completely new stadium for an NFL expansion team.

Meanwhile, Texas state officials rolled out the red carpet for the pro sports corporate welfare juggernaut. Governor George W. Bush signed legislation allowing localities—after voter approval—to set up sports authorities that could impose a county-wide 2 percent hotel tax, a 5 percent rental car tax, and taxes on parking and tickets, and to use sales tax revenues collected at facilities, all to pad the bottom lines of team owners and boost the salaries of players.

To the very end, the Oilers’ Adams never stopped thinking out loud about his beloved Houston. In a strangely sympathetic piece in late 1996, which appeared in the Houston Chronicle, Adams was asked what he would do over. “I’d let [Astros owner] Drayton go first. Then he’d be the one moving and I’d be getting a new stadium.”

At a Nashville rally in November 1995 celebrating the announcement of the Oilers’ move, Adams declared: “When Bud Adams tells you we will come if you live up to your end of the bargain, that’s binding.” Yet, among most team owners today, to “live up to your end of the bargain” isn’t what it used to be. Now it means, “as long as you keep forking over taxpayer subsidies, then we’ll stay put. Otherwise, we’re outta here.”

Some small, short-term justice, though, has been dispensed. The Oilers’ attendance in the 1997 season was just as bad as in their final days in Houston. Adams persists in his quest for corporate welfare; he reportedly complains that the team’s new training site is too small. Of course, he demands a new one.

In the end, the guilt lies with politicians willing to dole out sports pork in one form or another. In June 1997, Nashville’s Mayor Bredesen admitted the tenuous ground upon which stadium subsidies rest: “I can’t justify building a football stadium on direct economic impact. The professors who make a living pooh-poohing that are right. But there are a lot of intangible benefits that make it more than easy to do.”

Such sentiments by politicians bent on tapping the “intangible benefits” of sports are a long way from the political sensibilities of a man like Calvin Coolidge, who as president once said: “The collection of any taxes which are not absolutely required, which do not beyond reasonable doubt contribute to the public welfare, is only a species of legalized larceny.”

Today, legalized larceny on behalf of million-dollar athletes and owners is all the rage. And as the performance of Houston—a generally free-enterprise city without, for example, zoning laws—and its former mayor show, resisting a man in an athletic uniform is hard to do.

Beyond labor strife, two issues particularly annoy pro sports fans today—exorbitant player salaries and city-hopping by teams.

Player salaries that seem wildly out of kilter have been bothersome for some time. For example, the average Major League Baseball player reportedly earned $1.2 million dollars last year. Payrolls averaged about $32 million per team. The Montreal Expos were considered cheap—their payroll was only a bit more than $15 million, compared with the New York Yankees’ top payroll, reportedly exceeding $60 million by year’s end.

Almost as irksome are team owners who move, or threaten to move, their teams from city to city. Art Modell’s recent uprooting of the NFL’s Browns from Cleveland to become the Ravens of Baltimore is the most-publicized example—though actual and threatened moves have spread into a mini-plague in pro sports.

Fans regularly identify private greed as the source of these annoyances. However, the true genesis of these problems is government action. In this instance, federal, state, and local governments contribute to the mess.

At the federal level, antitrust legislation serves as one culprit in the city-switching games played by teams. Pro sports leagues have been classified by government officials as monopolies, and are therefore subject to antitrust regulation. This makes it all but impossible for leagues to exert any control over team movements. If a league wishes to stop a team from picking up and moving to another city, it faces an expensive and probably losing litigation battle. The exception to this has been Major League Baseball, which operates under an antitrust exemption, and indeed, baseball teams remain far less mobile than, for example, NFL teams.

In reality, pro sports leagues can in no serious economic way be considered monopolies. Leagues are nothing more than partnerships competing for consumers’ entertainment dollars. Members of Congress often remind Major League Baseball how lucky it is to be granted an antitrust exemption. And baseball is indeed lucky to be granted a reprieve from congressional economic ignorance. Antitrust regulation stands on highly precarious ground even in more seemingly simple cases. On the field of pro sports, it lands clearly out of bounds.

All pro sports leagues should be exempt from antitrust regulation. The effect of this action would allow leagues to be run as the partners see fit, including the power to stop team movements that hurt the sport.

At the state and local levels, government subsidies boost player salaries and also encourage team mobility. These subsidies take the form of taxpayer-financed stadiums and arenas.

In essence, the taxpayers pick up the majority of a team’s capital costs—usually running anywhere between $100 million and $400 million for a new stadium (though New York City is talking about more than $1 billion for a new Yankee Stadium on the city’s West Side). The annual debt-service costs on a new ballpark can run into the tens-of-millions-of-dollars range. Obviously, relieved of such expenses, owners are free to bid player salaries ever higher, while boosting their own bottom lines as well.

Government-built stadiums also transform teams from the status of owners to renters. It’s always easier for a renter to up and leave than it is for an owner. So, perversely, government officials who believe that only a taxpayer-built stadium can attract or keep a major league team in their state or city merely ensure that teams will continue issuing threats and moving. Naturally, under this scenario, teams possess every incentive to pit city against city and state against state in a vicious game of corporate welfare.

My fellow fans, in the end, it is not the greed of players and owners that result in skyrocketing salaries and city-hopping by teams, but the actions of government officials.

In a truly free sports market, leagues operate free of antitrust regulation, teams receive no subsidies, owners build their own stadiums, and player salaries stay within the realm of sanity as owners are forced to consider the full cost of team operations including stadium or arena financing. Indeed, this is how the pro sports business largely worked until the 1960s and 1970s, when corporate welfare expanded along with all other forms of government activity.

Government needs to deregulate, privatize, and downsize, allowing the market to work. The result will be healthier sports leagues, happier fans, and savings for taxpayers.

When America was founded there was much debate over the proper role of government. Today that debate continues every time someone proposes a new program.

Proposals to subsidize business emanate not only from Washington, D.C., but also its nearby environs. For instance, Maryland Governor Parris Glendening wants to spend nearly $300 million (construction and other related costs) to construct a football stadium for Art Modell’s former Cleveland Browns. Modell’s team—to be named later—would not only get free use of the stadium. It would also earn an estimated $32 million annually from concessions, tickets, parking, and a split in revenues from concerts and other stadium events.

There’s nothing new about sports moguls supping at the public trough. The District, Maryland, and Virginia have all offered Jack Kent Cooke a variety of deals to keep or move the Washington Redskins. Now he plans on building his own stadium in Maryland, though the state is supposed to kick in $73 million for local “improvements.”

And team owners in cities across the country have routinely received generous payoffs from the taxpayers. For instance, Cleveland offered to spend $154 million to renovate Cleveland Stadium for the Browns, before Modell received a better deal from Baltimore. Cincinnati plans to build two facilities, one for the Bengals and one for the Reds, costing some $540 million. Wisconsin recently chipped in for a new stadium for the Milwaukee Brewers. Washington state did the same for the Seattle Mariners, even after local voters rejected a tax hike to subsidize the team. The Chicago Bears recently rejected an offer of a $475 million facility because the team would have had to cover about one-third of the cost.

But the fact that sports subsidies are ubiquitous does not make them a proper function of government. Of course, stadium proponents argue that new facilities increase economic activity and government revenues. Jack Kent Cooke organized a rally backing his project; one participant lauded the “potential $250 million investment in our neighborhood.” Governor Glendening has similarly optimistic projections for his proposed stadium in Baltimore: $110.6 million in new economic activity and $9.3 million more in annual tax revenue.

Alas, these sorts of estimates typically assume that all of the spending on a new sports team will be new. But even the nicest stadium cannot create dollars out of nothing. People who go to games are likely to divert their expenditures from other forms of entertainment: restaurants, movies, and other sporting events. “The money they are counting on being spent at the stadium, much of it is already being spent on other forms of recreation in the area,” explains Indiana University Professor Mark Rosentraub.

Another argument is that stadiums bring prestige to a city, and hence new business. Contends the Glendening administration, “more corporate headquarters will be attracted to Baltimore.” Yet most companies are more likely to worry about the tax burden—which would be adversely affected by the stadium project—than the presence of a football team. Connie Kone, a member of the City Council of St. Petersburg, Florida, warns that “The tax increases we had to pass to support [the Suncoast Dome] actually drove some residents and businesses out of the city.”

In fact, in 1987 Robert Baade of Illinois’ Lake Forest College surveyed nine cities that renovated an old or built a new stadium. In seven of those cases the city’s share of regional income actually fell. Two years later Dean Baim of Pepperdine reviewed the experience of 14 stadiums and found that only one—private Dodger Stadium—generated net income. His sobering assessment: “massive capital costs of modern facilities make it very unlikely that modern stadiums will earn enough to cover debt service expenditures regularly enough to earn a profit.” Baade then studied the experience of 48 cities between 1958 and 1987. His conclusion: “Professional sports teams generally have no significant impact on a metropolitan economy.” Participants at a 1995 conference organized by the Federal Reserve Bank of Atlanta also generally concluded that stadium construction rearranged existing leisure revenues rather than created new wealth.

Even the Maryland legislature’s Department of Fiscal Services warns that Governor Glendening greatly overstated the likely economic impact of his project. Most of the jobs that would result from construction of a new stadium “either are temporary or seasonal, low-wage employment,” concluded the Department, which further warned that the state might not collect enough in taxes to cover debt service payments. The loss over 30 years could run as much as $75 million.

About the only argument left is essentially municipal ego. Moon Landrieu, formerly mayor of New Orleans, admitted: “The Superdome is an exercise in optimism, a statement of faith. It is the very building of it that is important, not how much of it is used or its economics.” Such sentiments would be unobjectionable if the money spent to build the facility was his own. But it was not.

Which means that, in the end, government-funded stadiums in the Washington area and around the country are little more than corporate welfare. Yet so common have become these sorts of deals that businessmen think public subsidies are their due. For instance, when the Maryland legislature first suggested that Modell chip in a modest $24 million, less than a tenth of the state’s estimated cost, he pled poverty. Modell did, however, offer to help pay for the governor’s PR campaign on behalf of the stadium.

A Simple Alternative

The obvious alternative, obvious at least to people outside of government, is simple. Save the taxpayers’ money and tell team owners to raise the financing themselves. That is hardly an insurmountable obstacle; Jack Kent Cooke is committed to spending $160 million or so on a new stadium for the Redskins. Jerry Richardson financed a $164 million stadium for the Carolina Panthers. William Davidson, owner of the Detroit Pistons basketball team, paid for the $70 million Palace project. And Miami Dolphins owner Joe Robbie built a $100 million facility after local voters told him no to public aid. Roughly one-third of existing stadiums have been privately financed.

In fact, this option is usually supported by the people who are otherwise stuck with the tax bill. Polls demonstrate that the vast majority of Maryland residents oppose government construction of a new football stadium. Ten years ago Cleveland voters said no to a similar measure; so did the electorate in Oklahoma City. Miami residents thrice rejected proposals to renovate the Orange Bowl. Initiatives for state-financed stadiums in San Francisco and nearby Santa Clara County for the San Francisco Giants failed. Allegheny County, Pennsylvania, voters ousted two county commissioners in a revolt against plans for a $200 million stadium for the Pittsburgh Pirates. Washington’s King County voters said no to the Seattle Mariners; explained one skeptical citizen, “There are too many private investors’ hands in public pockets.”

But popular opposition only seems to make sports boosters work harder. It’s not enough to spend $300 million of the taxpayers’ money on a stadium. In the case of Maryland, the governor spent millions more in an attempt to win legislative approval.

At a time of tight public budgets, a serious debate over the role of government is long overdue. Although entertaining the masses might have been an accepted role for government in ancient Rome, surely Americans today are capable of amusing themselves without government subsidies for the modern equivalent of gladiatorial games.