Is This A Weak Signal of Change in the Professional Sports Money Machine?

The 4 major American professional sports--football, baseball, basketball and hockey--require billions of dollars in financial support from sources other than ticket sales. One of the ways they get it is through full or partial public financing of stadiums. Economists who have studied the matter just about unanimously find that modern stadiums seldom, if ever, contribute to local economic development as the sports teams and leagues claim they will. Yet, politicians keep providing public financing for them--partly perhaps because of civic pride and more importantly to prevent teams from leaving their cities or to attract teams to their cities--and public opposition has been weak even though a couple of new football stadiums like the new ones for the New York Giants and New York Jets and the Dallas Cowboys cost over $1 billion. On September 7, the New York Times brought a disturbing reality to light. It is when teams abandon old still-usable, publicly-financed stadiums in favor of new ones, the public is stuck with servicing the bonds, used to finance construction of the old stadiums. In these difficult economic times, governments in this situation have to service the old stadium bonds from general revenues or other sources because they no longer have the revenues from things like parking or concession sales at the old stadiums available. For example, The Times article "As Stadiums Vanish, Their Debt Lives on" http://www.nytimes.com/2010/09/08/sports/08stadium.html?ref=government_b..., says that the old Giants stadium that was demolished to make way for the new stadium for the Giants and Jets carries a debt of $110 million or $13 for every New Jersey resident even though it is now a parking lot. The article did get nearly 300 comments on line, and the Times website is no longer accepting comments on it.

I wonder to what extent the Times article and perhaps follow-up pieces from other journalists will become ammunition for opponents of public financing of sports stadiums, and, if such articles are, whether they will carry the day in the debates. Is this revelation something that will prick the bubble of the professional sports money machine? Is it a weak signal?

Frankly, I have my doubts. What may be needed are pacts among city, state and provincial (Yes, Canadian and American cities compete for franchises!) governments in which they pledge not to provide public money for today's sports palaces and not to maneuver to take away professional sports franchises from each other. Conclusion of even one such pact is definitely a wild card.