Super Bowl: Super Subsidy Sunday

Cam Newton.jpg

Imagine what it would cost to fly from New York to Los Angeles if the country tolerated a National Airline League? Answer: about what a “personal seat license” will cost at the new City of Champions Stadium in Los Angeles, say $28,000.

In the latest shifting of NFL deckchairs, the League raided St. Louis, San Diego, and Oakland — cities that need things to cheer about — and told team owners that they are free to move to Los Angeles, the city of tomorrow, because of its willingness, today, to chip in on the construction of a $2.66 billion stadium in Inglewood, a city within Los Angeles, for the Rams and possibly the Chargers. Around the opulent new stadium the league will even have an NFL campus, maybe for all those 'communications majors' who play in the game?

Rather than take subsides on its construction bonds, the new LA stadium prefers to limit its local taxes until “costs are amortized.” That way it can boast: “No tax dollars or public funding will be used for the construction of the City of Champions Revitalization Project, including the new stadium.” The operative phrase is “for the construction.” Afterwards, the football depletion allowance will kick in, big-time.

The reason that the National Football League can move around its franchises is because Congress, in the Sports Broadcasting Act of 1961, deemed professional football a sacred national resource and conferred an exemption from anti-trust rules on the manufacturers of professional football.

Instead of running a sport where there is no limit on teams or competition, the NFL is the pigskin equivalent of OPEC, and its main function isn’t to govern a league of competitive teams, but to protect monopoly pricing and practices.

The National Football League runs on backhand payments to athletic organizations, sweetheart contracts, and monopoly pricing, in addition to screwing over its fan base by moving teams around. Its reward for urban price fixing isn’t prosecution for collusion under antitrust laws (it is exempt). Instead, it is awarded a national day of reverence, Super Sunday, during which 30 seconds of ad time costs $5 million, and the strategic national stockpile of guacamole is severely threatened.

The owners don’t actually own teams, but are general partners in a football trust, which allows them to share equally in all television revenues and collectively 'bargain' with concussed players, who are only free agents after five years of indentured service. By then, most are broken men. The league's attitude toward the declining mental of health of its retired players could be summarized as “So sue me”.

Yes, a few stars make big money, for a while, but teams are rarely on the hook for long-term guaranteed contracts and salaries are “capped,” they say, “in the interest of competition.”

Although NFL teams wave the flags of their home cities (best understood as their allocated captive markets), hometown fans have no sway over their local teams, which can pack up their pads in the night and move, as long as the new location is authorized by the League.

Nevertheless, St. Louis will still get the pleasure of paying off $100 million in outstanding debt on the Rams’ Edward Jones stadium, even though the team will be playing in LA.

What keeps NFL teams constantly on the move? Promises of state and city subsidies for new, multibillion stadiums, and then the granting of nearly all local revenues to the owner.

The new Santa Clara stadium, home to the hype of Super Bowl 50, has $950 million in hidden public finance, even though while the deal was being made the city was laying off teachers and firefighters.

According to Stadium Subsidy Trickle-Down Economic Theory, a new NFL stadium helps to 'revitalize' some downtrodden city. In reality, stadiums add little to urban life other than mountains of debt and part-time jobs for Sunday ushers and parking lot attendants.

The reason that NFL teams do little for their home cities is that the league’s economic model is akin to strip mining or wildcat drilling. Unlike coal or natural gas, though, the price of the harvested commodity is controlled at the league’s head office, although still for the benefit of absentee landlords. National revenues are shared, while local revenues flow into the pockets of the team’s owner, often a billionaire.

If, instead of a football trust, the US had an open market for gridiron services, when there was a demand in a growing city for a pro team tryouts would be held for players, and shareholders would gather to invest in the new franchise. Maybe when the franchise got good enough, it could compete with more established teams.

Think about it: if the city of Green Bay (population about 104,000) can support a championship team which is owned by the fans, it means that there are 278 larger cities in the country that could well duplicate its model and host professional football. Instead, only 31 other cities have pro teams, thanks to the league’s attitude toward parity and level playing fields. Metropolitan areas with populations greater than two million that don’t have a team include San Antonio, Las Vegas, Portland (Oregon), and Orlando, St. Louis and, possibly soon, San Diego and Oakland. Many other large American cities could easily support three or four professional teams.

All that these outlier cities can do to get a franchise is to promise the NFL ownership monopoly stadium subsidies and political tolerance for continuing the anti-trust exemption. Cities that want to keep their teams (such as San Diego) can pay ransom money in the form of a new, subsidized stadium and other favors. Challenge this payoff system and the league will vote away your team faster than you can say antidisestablishmentarianism.

The irony of Los Angeles now becoming the holy grail of two, or even three football teams is that, in the past, the city has had several franchises —ironically, the Rams, Chargers, and Raiders — and all left because the fan base preferred the beach and the Lakers to Sunday afternoons in the archaic LA Memorial Coliseum.

What has changed since Sid Gilman coached the Los Angeles Chargers in 1960 is that shared NFL television contracts make it irrelevant whether fans show up or not for the in-studio fan game experience, although generally most stadiums sell out.

What of the cities that have ransomed their future to an NFL team? How have they fared? Just because Forbes Magazine values pro football franchises at between $2 and $3 billion does not mean that the citizenry sees much benefit from having a team.

For example, the Hackensack Meadowlands Giants are now said to be worth $2.8 billion, but New Jersey taxpayers are still paying interest on the old Giants Stadium, where the end zone was rumored to be Jimmy Hoffa's resting place, and which was torn down so that a new stadium could be built in its place (“without public money”).

Most cities get a paltry rental stream from their subsidized ballparks, and that’s it. From the Seahawks, owned by Microsoft bigwig Paul Allen, Seattle gets $1 million a year in stadium rental income, while the team rakes in more than $200 million. And state taxpayers are on the hook for some $300 million in outstanding CenturyLink stadium bonds. (The 12th man abides.)

No wonder Allen’s $160 million yacht has been out tearing up the coral reefs of the Caribbean. Even to Hoffa, that red zone opportunity would be worth some dabbin’.

Matthew Stevenson, a contributing editor of Harper’s Magazine, is the author most recently of Remembering the Twentieth Century Limited, a collection of historical travel essays, and Whistle-Stopping America. His next book, Reading the Rails, will be published in 2016. He went to his first professional football game in 1960, and saw the New York Titans plays the Dallas Texans. He lives in Switzerland.

Flickr photo by Mike Morbeck: Cam Newton of the Carolina Panthers