Joanice Johnson Case Study 2

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Feb 20, 2024

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Case Study 2: Public Stadium Financing Joanice L. Johnson Helms School of Government, Liberty University PADM475: Advanced Public Administration Profession Jennifer Holmquist February 12, 2024

2 Case Study 2: Public Stadium Financing Introduction In their case study "Take Me Out to the Ball Game and You Buy the Ticket...", authors Christopher P. Borick and Jay M Shafritz explore the controversial issue of major U.S. cities subsidizing the construction of professional sports stadiums. These sports stadiums are notoriously expensive to build due to their massive size and luxurious designs (Shafritz & Borick, 2016). Supporters of public stadium financing contend that professional sports franchises can stimulate economic growth and enhance a city's social status (Bradbury et al., 2023). As a result, the negotiations and agreements between franchises and governments to finance these new stadiums are often complex and are done with or without citizens' approval. This paper will examine the major facts and decisions surrounding the use of public funds to finance privately franchised sports stadiums and present alternative solutions. Facts Sports are a beloved pastime in America, with basketball, football, baseball, and hockey all holding special places in the hearts of many. It's no surprise that when professional sports teams move into a city, it generates excitement among fans. But while cities may be eager to attract major sports franchises, building and maintaining sports stadiums with public funds is a controversial issue due to its significant cost. Take, for instance, the construction of the New York Yankees stadium in Bronx, NY. While the original stadium in 1923 cost the owner $2.4 million to build, the new stadium in 2009 was built with almost half a billion dollars in public funds and only $400 million from the owner. As privately owned sports franchises look to increase their organization's overall income, they tend to seek public funding from elected officials who may be eager to keep or attract a major sports franchise to their city. Thus, it is not

uncommon for team owners and officials to make deals before the public can weigh in, or in some cases, sign agreements despite public rejection (Shafritz & Borick, 2016). Public funds for constructing sports venues can be obtained through public approval or nonelectoral negotiations. Surprisingly, the most commonly used approach is the latter, where a negotiating agreement occurs between a sports organization and a government institution. This agreement involves the organization agreeing "to operate within the geographic confines of the city, county, or state in exchange for a predetermined level of financing for the venue construction or renovation..." This approach has been employed in approximately 60% of all venue deals (Shafritz & Borick, 2016, p. 237). Decisions The decision to subsidize a professional sports arena is complex and requires careful consideration of several factors. For one, elected officials must consider the potential impact on their political future, as a wrong decision could damage their reputation or even end their career (Shafritz & Borick, 2016). Also, there is always the possibility that team owners may threaten to relocate if city officials refuse to provide public funds. During the late 1980s and into the 1990s, the National Football League (NFL) saw an unprecedented number of football owners relocating their franchises to other cities, primarily driven by the promise of new public-funded stadiums. The most shocking relocations involved the Baltimore Colts and the Cleveland Browns. Following refusals from city officials to upgrade existing stadiums or assist with funding new ones, both teams secretly relocated to new cities, renaming themselves the Indianapolis Colts and the Baltimore Ravens (Gulizia & Willis, 2019). However, the primary factor in approving public funds for the construction of professional sports stadiums has been the expectation that it will boost city revenue, generate job

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