Episode 11
· 53:43
[Shirin Mollah] (0:00 - 0:31)
Welcome to the Sports Economist, the podcast where we dive deep into sports economics. I'm your host, Dr. Shirin Mollah Today, we're diving deep into the fascinating concept of stadiums and sports with journalist, Neil DeMoss, who is an author of several books, including The Field of Schools.
Welcome, Neil. Good to be here. What is the best way to bridge the gap between what the taxpayers want to spend on a stadium and the actual costs required by teams or developers?
[Neil deMause] (0:31 - 2:46)
Oh, wow, that's a great question and kind of starts to get right to the heart of this whole issue of stadiums, right? So just to give a little bit of background, right? I mean, I've been researching and writing as a journalist about sports stadiums and sports economics for close to 30 years now.
You know, one of the things that I have discovered in all my research and writing is that sometimes there isn't a way to bridge the gap, right? I mean, sometimes you have teams asking for so much money, right, the owners want so much money that there's no like happy medium, right? It's not like, well, you know, you're asking for 200 million and we think it should be 100 million and let's meet in the middle, right?
Oftentimes it's, we want a billion dollars and the public or, you know, economists who have looked at this saying, yeah, no, it's really still only worth 100 million, right? And this is kind of one of the dirty little secrets of the stadium game, right? Is that new stadiums and arenas have been presented as these cash cows, right?
You build it, they will come and, you know, there's just all this money waiting. It's just a matter of figuring out how to divide up the pie equitably. But in reality, in a lot of cases, it's not the stadium or the arena that the team owner wants, right?
Because that's just costs a lot to build. It's that they want the subsidy, right? And what happens is if you were to go to the state legislature and say, hi, I would like a $500 million check, please.
You would get laughed out of the state legislature. If you would go and say, hi, I want to build a $500 million stadium. Can you pay for it?
Then suddenly there's a conversation. So, yeah, I mean, we can certainly talk more about ways to make them more equitable, but that's one of the big problems, right? Is that the gap sometimes is insurmountable because it's not like trying to find a happy medium between two closed positions.
It's more like saying, how can we find a solution that meets the needs both of the bank and of the bank robber?
[Shirin Mollah] (2:47 - 3:03)
So stadiums are still going to be built, right? They have been built for decades. The teams need it.
But what have you seen in the past where they've made the best use and spending their money in the past decade?
[Neil deMause] (3:05 - 6:46)
Yeah, I mean, well, one thing is, of course, stadiums didn't used to be built as often, right? So they used to last 70, 80 years because team owners were like, well, I've got a perfectly good stadium. I might need to do some upgrades to it or something like that.
But it would cost so much to build a new one. That's crazy. And one thing you're seeing now is, you know, like look at the Atlanta Braves and the Texas Rangers where they had stadiums that were only about 20 years old when they built new ones.
So I think one thing is to look at how often teams really need new buildings, right? Would upgrades be sufficient? Do they really need it because their business doesn't work without it?
Or do they just want it because they can make more money if they get a new stadium and they're not the ones paying for it? In terms of how to do it the best, I mean, clearly one thing is to keep the public costs down, right? Obviously, if you're talking about the public putting up a billion dollars, it's way harder to make that work than if you're talking about some small fraction of that.
So, you know, I mean, the San Francisco Giants Stadium, I think everybody loves, right? It's a great stadium. Fans love it.
It's not Candlestick Park. Importantly, as someone who went to Candlestick Park and tried to figure out how to get myself back to the city after a night game. And at the same time, it fits well with that neighborhood, right?
You know, it was sort of put in a place that didn't disrupt the other development of South of Market and, you know, sort of meshes well with that. It's easy to get to. And it didn't involve a lot of public money, right?
You know, I mean, the public put up a little bit for clearing the land. They moved to Bus Depot, but it was mostly private. That is the ideal, right?
Is to come up with something like that. That's really hard. You have to have a city that has enough revenue and enough sort of fan base and money floating around like San Francisco that building a new stadium can actually bring in a lot more revenue.
You have to have an existing stadium that is as bad as Candlestick was so that you can have a significant upgrade by building a new one. You have to have a city that, where the team owner knows that they basically have to figure out if they can fund something themselves because they are not going to get public money. And that was the case in San Francisco where four separate referendums before that in San Francisco and San Jose had failed.
And you put that all together and suddenly you can start to have these conversations, right? Seattle's another great example. The arena in Seattle, you know, for the Kraken because there was legislation on the books, actually a referendum that passed saying, you know, you can't spend money on a sports facility unless the public is getting back a positive return on investment.
That just shifted the conversation completely, right? Most places that doesn't happen, right? So I think, you know, one thing to just point out is you tend to get deals that are more fair to the public in West Coast cities.
And that's not a coincidence. It's because West Coast cities make it far easier to get a referendum on the ballot, right? And if you look at some of the research that's been done by Jeff Profiter at University of Colorado, Denver, you know, when you put something up for a referendum, a stadium arena, it's basically a coin toss as to who wins.
If you just go through the city council or the state legislature, it almost always passes. So, you know, democracy is actually an important tactic here.
[Shirin Mollah] (6:46 - 7:13)
Yeah, there's a lot of studies, you know, through economics, but looking at, you know, Jeff Profiter's papers too, is like the policy part that, you know, there's political aspects as well that are just important that it's not just building a stadium for a team. Have you been to the giant stadium? And have you done this on the boat?
Like you go, you try to catch the ball. Do you know what I'm talking about?
[Neil deMause] (7:14 - 8:07)
I have been to the giant stadium several times. I have never gone on the boat. There's still, you know, a bunch of different experiences that I need to have there, but it's a great stadium.
And honestly, I think it's a better stadium for the fact that the giants were putting up the money and so the footprint was limited, you know, the size of it, the expense. They had to kind of figure out how to value engineer it. And I think they did a great job.
You know, it's really compact. It's also compact, I think, because of San Francisco, right? You can't build something with soaring atriums because the first earthquake will fall down.
But, you know, I think that, like, the constraints on that project, ironically, made it a better stadium. And, you know, it's one of the two new ones that I think I unreservedly like, the other one being Pittsburgh, for baseball.
[Shirin Mollah] (8:08 - 8:22)
I also like it how there's the Chase. The Chase Center is very close as well. Yeah, the location of it.
How has the recent boom of online gambling affected stadium spend?
[Neil deMause] (8:24 - 10:21)
I don't know that it has, right? I mean, it's kind of a, you know, sunk benefit, if you want to call it that, right? In that you're going to be getting the gambling money as long as people have phones, right?
Whether you're in a new stadium or an old stadium. I think what you're starting to see is some elected officials thinking about, okay, how can we use that as a financing plan, right? So like in Ohio, where the governor is saying we want to raise taxes on sports gambling and use that to pay for the stadium.
Just like 40 years ago, there were people in Maryland saying, you know, we need to have a sports lottery, which was kind of new at the time, and use that money to fund a stadium for the Orioles and then after that, a stadium for the Ravens. So, you know, I mean, I think it plays into it that way, but I don't know that it changes the calculus hugely for the team owners, right? I think there's this concept that people sometimes get into and fans sometimes get into as well, that the idea is that if the team owners only had more money then they would spend it themselves, right?
If only Juan Soto were not making so much money a year, then, you know, the team owners would be rich and they wouldn't be coming and bothering the public. The problem, of course, is that the team owners are already rich, right? And the ones who are the richest are coming for stadium subsidies the same amount, right?
You don't get to be rich by leaving money on the table. And I think that's really what's going on here, right? It's like gambling money is new and great and terrific, but if anybody, any, you know, billionaire sports owner were to say, you know what?
I'm getting plenty from gambling. I don't need, you know, a new stadium. I think that they would get quickly laughed out of this dealers club because, you know, that's not how you operate.
[Shirin Mollah] (10:22 - 10:29)
Would you be able to explain a little bit about the sports lottery that you mentioned for others that might not know about it?
[Neil deMause] (10:29 - 12:09)
Yeah, sure. So in Maryland, when the, after the Colts moved to Indianapolis, right? There was a lot of fear that the Orioles were going to leave as well.
They passed a sports lottery and said, okay, this is something that we, it's new money, right? It's connected with sports somehow, right? It's sports themed lottery.
We'll take the proceeds. It's not tax money. And we'll give that to the Orioles to build a new stadium.
And that was a convincing argument, right? Because it was like, well, it's not tax money. It's not costing us anything until the Ravens then came around and said, when they moved from Cleveland said, okay we need one of those too.
And so they got one as well. And then somebody had the bright idea of saying, hey, this is great. Why don't we use that for education too?
We can have another lottery and use it for schools. This is working so well for teams, for sports teams. Let's use it for something else.
And at that point they were told, well, you know actually the lottery market is only so big and we've tapped it out with the sports team. So there's no money left for education lottery. And that's the problem with a lot of these things where it's like, well, it's a dedicated revenue stream that we can use for this.
It's not costing us anything is that there's an opportunity cost, right? Is that that's money that you then will never ever get to use for anything else. And as we've seen with the sports lotteries in Baltimore it's not even just the initial 30 year term.
And once the stadiums are paid off, you get it back because now that money is getting rolled over into new subsidies for the teams for new improvements to the stadium. So it really ends up being, you know a gift that keeps on giving forever.
[Shirin Mollah] (12:09 - 12:22)
There's a lot of things that you mentioned that a lot of people don't know about in building stadiums. What can you tell someone that surprises you about building a stadium?
[Neil deMause] (12:23 - 12:25)
Something that I learned that surprises me about?
[Shirin Mollah] (12:26 - 12:26)
Yeah.
[Neil deMause] (12:26 - 14:33)
Well, I mean, the fact that they don't pay for themselves surprised me, right? You know, I really thought the teams were looking for stadiums, team owners are looking for stadiums because, you know, the amount of new revenue was just so much. You can charge more for luxury boxes.
You can, you know, charge more for pulled pork sandwiches and to discover that most of them, again, not all but most of them don't pay off their own construction costs. And really you're just doing it for the subsidy. That surprised me.
Another thing that really surprised me going in and again, this is going back to the initial research that Joanna Kagan and I did for Field of Schemes is we had this idea that, you know sports fans are sports fans, right? They're rabid and they're just calling their local elected officials and saying you can't let the team even threaten to leave. You need to do something about this.
We don't care how much it costs, right? And elected officials just had to give in because the sports fans were so loud. We should have realized being sports fans ourselves that that's not how sports fans think mostly at all, right?
I mean, certainly they think I don't want the team to leave but honestly, we heard as much from sports fans saying don't give that owner any more money. We already pay enough for tickets and they finished in last place the last three years. Don't give him another dime until he can actually find a shortstop, right?
So that was something that really surprised us, right? We thought that this was something that elected officials were being sort of backed into a corner on and you know, they just had to do it because that's what the populace wanted. It's really not true, right?
If anything, the populace is being dragged kicking and screaming into this. And the people that the elected officials are listening to are the, honestly, the lobbyists, you know and the sort of the business community. And there's plenty of research at this point that shows that, you know, the cities that pass the biggest subsidies the quickest are the ones where the business leaders, the media, the politicians, like everybody's sort of in the halls of power can are all on the same page and can quickly circle the wagon and say, okay, we agree on this.
Let's just do it. You know, we don't need to ask anyone else or have any hearings.
[Shirin Mollah] (14:33 - 14:48)
From an economic standpoint, what are your views on teams like the Oakland A's and Raiders leaving Oakland to go to Vegas? And how do you think it's going to affect Oakland and affect Las Vegas?
[Neil deMause] (14:48 - 18:40)
So, all right. There's a bunch of questions there. For one, I would say it's very different for the Raiders and the A's, right?
For decades now, the NFL and MLB have operated on very different financial systems. MLB, you basically want to be in a big market because you've got 81 games worth of tickets to sell and TV revenue has been mostly local, right? So, if you're in New York, you're the Yankees, you get a ton of cable TV money, or you have when cable TV still existed.
And you do now, now that they're, you know, getting it from streaming. Whereas if you're in, I don't know, Kansas City, you don't get very much. The NFL is completely different, right?
It's all based on a very few number of games a year and national TV contracts. So, if you play in New York and you play in Green Bay, you're pretty much getting the same amount of money because, you know, it's mostly just whatever is being paid to you by Fox. So, the Raiders moving to Las Vegas, I mean, anytime a football team moves somewhere, I'm not surprised because like, you know, the Houston Oilers moved to Tennessee, right?
And the Rams moved to St. Louis before they moved back to LA. It almost doesn't matter, right, where you play as long as you're cashing those national TV checks. For John Fisher in the A's, it's extremely different, right?
And I do not understand at all why he's moving from one of the top five or six, you know, TV markets in the country to, I believe, Las Vegas just moved up from 41st to 40th in the latest Nielsen rankings. So, you know, he's leaving a lot of money on the table. He's putting himself on the hook for a lot of stadium costs.
And the only thing that really makes sense to me is that he's basically a Nepo baby who, like a lot of wealthy Nepo babies, felt very unappreciated for who he was by the, you know, city of Oakland and was like, well, forget you. I am just going to go off to someplace where they love me and that's Las Vegas. And we will see how that works out for him.
I doubt it will work very well. For Las Vegas, it doesn't matter, right? Las Vegas is Las Vegas.
It's not like Las Vegas needs the Raiders or the A's or the Golden Knights to put them on the map. For Oakland, I think it definitely doesn't help and then it sort of plays into this narrative of, you know, Oakland's a violent dying city and, you know, yada, yada. At the same time, you know, the Bay Area has been booming like crazy, right?
You can't afford to live in most of Oakland now because it's, you know, within a BART ride of San Francisco and anything like that is just, you know, completely unaffordable. My friends who used to live in Oakland are now way off the other side of the hills because that's the cheapest they can afford. So I think Oakland will probably do fine.
You know, it's obviously sad if you're an A's fan and you're a Raiders fan. If you're a Raiders fan, you're probably used to it. If you're an A's fan, it's sad that you've lost this team.
But, you know, there are plenty of other cities that have done just fine. I always point to Portland, Oregon, right? Which turned down getting an NFL team in, I think, 1970 because they would have had to build a stadium and, you know, sort of muddled through with just the Blazers to watch.
And, you know, Portland is about as hip as a city can be and, you know, is much in demand and, you know, reasonably affordable compared to San Francisco or Seattle. So I think Oakland will be probably fine in the long run. But yeah, I mean, obviously sucks in the short run.
[Shirin Mollah] (18:40 - 19:12)
Oakland, you're talking about the Bay Area, we already have a lot of teams. But if there's like a city that doesn't have that many teams and let's say a team moves from there, how do you think the effect on that city would be? I can't imagine LA not having the teams that they have now.
But like, let's say like another city that's not too densely populated, but it just doesn't have a team, a baseball team or like a football team, they move out.
[Neil deMause] (19:12 - 20:48)
Well, LA didn't have a football team for a really long time and people did just fine there, right? Trying to think of the last city to lose its last team. I mean, Oakland, obviously, but like, you know, Oakland is part of the Bay Area.
So it's not like there's nowhere you can go. Man, you'd have to go back to like, you know, the Rochester Royals or somebody like that. Yeah, I mean, obviously it would hurt.
And I think that's one reason you see a city like Buffalo, right, be just absolutely freaked out about even the possibility of the Bills leaving. Not the Sabres, nobody cares about the Sabres. Nobody even remembers the Sabres exist.
But, you know, it definitely has more of an impact when it's like, you know, a sports monoculture, right? And I understand that, right? You know, I absolutely get it.
You know, I live in New York City and I'm lucky to, that if any team ever left, which I don't think that they would, because they'd be stupid to, I would have plenty of other options. But, you know, at the same time, you know, you can't let team owners hold you for, you know, hold you hostage over that. And you have to say, okay, fine, we have to talk.
But, you know, we have to come up with something that's reasonable. Instead, you see things like Oklahoma City, right? Where they, the Thunder, you know, just stuck them up for like $900 million, I think, for new arena.
Not long, they haven't even had the team for that long, right, there are plenty of adults there who remember Oklahoma City not having a major league sports team. And presumably they lived there for a reason and, you know, weren't planning on leaving unless they got an NBA team, so.
[Shirin Mollah] (20:49 - 20:52)
Can stadium investments turn around struggling franchises?
[Neil deMause] (20:53 - 23:11)
Investments by teams or investments by cities or like, or either? Either. Either?
I'm trying to think of examples, seldom, you know, not very often, I guess is my answer, you know. Occasionally you will see a team that gets a new stadium and it really makes a difference. You know, I mean, are the Twins really that much better off with their new stadium?
I mean, they're certainly better than the Metrodome, but like, you know, it's not like they're competing with the Yankees, you know, or, you know, bidding on Juan Soto. You know, same thing, like, you know, if you look at all the teams that have gotten new stadiums, you know, it's pretty much the same thing, right? You know, it's the teams in big cities or with big fan bases.
You know, the Dallas Cowboys are incredibly popular and the Dallas Cowboys will continue to be incredibly popular and without a stadium too. So I think it can help a little bit, but I don't think, you know, it makes a huge difference, especially when everybody's doing it, right? You know, I remember, you know, when the Yankees were trying to get a new stadium in the late 90s, and one of the arguments, I think it was Rudy Giuliani who made it, was mayor at the time, was we have to build a new stadium for the Yankees so that they can compete with the Baltimore Orioles.
So if you're the Baltimore Orioles, right? I mean, Camden Yards sounded like a great idea at the time. Oh, we can finally, you know, have a new stadium and, you know, we're going to be able to compete with the Yankees.
Except the Yankees will then turn around and use that as an argument to get their own new stadium as well. So it just winds up being, you know, you know, a constant race to keep up with the Joneses. So I cannot think, there's gotta be some team, Mariners, maybe a little bit, but you could also argue that that's, you know, has to do with Ichiro and, you know, just the fan base in Asia.
This is like, there are teams that have done slightly better, you know, by getting new stadiums, but for every one of those, there's the Miami Marlins, you know, who got the stadium that they wanted and are still the Miami Marlins and are going to be the Miami Marlins forever, apparently.
[Shirin Mollah] (23:12 - 23:22)
So in your work, you have exposed the hidden cost of stadium subsidies. Why do you think cities keep agreeing to fund them despite the data showing little to no economic return?
[Neil deMause] (23:23 - 27:34)
Yeah, so I did probably close to 15 years ago, an article for the Nation Magazine where I called why do mayors love sports stadiums? Trying to answer this exact question, right? Of like, okay, fine.
We've established that these are dumb investments. They keep happening. What's the reason?
And I went through a bunch of possible reasons and was able to quickly dispense with them, right? One is, well, they're afraid they're gonna get voted out of office if the team leaves. That's happened once in Seattle when the Sonics left and their mayor, from what I understand, arguably was voted out of office more because it snowed and he didn't juggle the streets than because the Sonics left.
So it's not that. It's not that they believe these economic impact studies, right? Everyone agrees that's kind of butt covering, right?
I'm like, well, sure, there's these hundreds of economic studies that show that these stadiums are bad, but I have this other one that says it's good, that a consultant did. So they'll answer, the truth must lie somewhere in the middle. So that, I don't think it's that.
I don't think it's like campaign donations from team owners because those are so small, it really doesn't make a difference. Really the answer, and this isn't because of any of my work, right? This is from another book that came out in, I think, 99, 2000 by a couple of sociologists in Philadelphia called Public Dollars, Private Stadiums.
They really tried to look at this same question and say, okay, what is determining what cities, whether cities are funding these things? And that they're the ones who came up with this idea of the growth coalition, right? That there's this sort of social circle almost of elected officials, business leaders, media leaders, and anyone else who's kind of the very important people in town.
And if you've got rifts among them, right? If you're the New York Jets owner and you wanna build a stadium in Manhattan and the Knicks owner doesn't want you to build a stadium in Manhattan and can hire one lobbyist for every lobbyist you have, then that very likely is not going to happen. If everyone in town who, again, has this sort of level of power agrees on, can sit around one table and agree and say, okay, this is what we're gonna do, that's when it happens very quickly.
And so, for the second new edition, right? Of a Field of Schemes, I called up this guy in Minnesota and the Minnesota State Senate, which had just passed a new stadium for the Twins after a decade of saying no over and over again. And I said, what happened?
You guys were the poster children for saying no. And he said, the lobbies just wore us down, man. They just kept coming back and saying, we are never going to go away and this issue is going to be on your agenda forever until you approve something.
And finally, it was a deal where the state didn't have to put up the money, they just had to approve the county putting up the money. And it's still only passed by a couple of votes, but it was like, there were a lot of people who were like, you know what, fine. We don't wanna have to talk about this ever again.
And I'm sure those state senators are never going to talk about during their careers, probably another 10 years from now, somebody is gonna have to talk about it again with the Twins because they're gonna be coming back for more money. But I really do think it's that. It really is a lot of this comes down to how governance in America works.
And the fact that who mayors are listening to is not credentialed economists and it's not their constituents and it's not anybody like that. It's the people at the parties they go to. And the people at the parties they go to tend to be from a particular social circle of people who are in governance and lobbying.
And those people are not saying, hey, you need to make sure you get the best deal you can. Those people are saying, you have to get something done, right? The team owner needs this, you need to do it, figure out a way, we don't care how you do it, just figure out a way to do it.
And so that becomes their agenda.
[Shirin Mollah] (27:34 - 27:55)
You were talking about kind of like stepping on one another's toes in the area. Like, isn't there something that's going on with like a team either wanting to be in San Jose or something new in San Jose that they wanted to do, but they can't do it for some reason?
[Neil deMause] (27:55 - 30:09)
Well, the A's wanted to, the A's owners before Fisher, even Lou Wolfe, wanted to build a stadium in San Jose and wanted to go and sort of take advantage of that market, but was tripped up by the fact that earlier on when the Giants were talking about moving to San Jose, the then owners of the A's said, oh, you know what? Fine, we'll give you sole operating rights to a team in San Jose because then you can move to San Jose and we'll have the whole East Bay and San Francisco to ourselves, right? And then you'll just be down in the South Bay.
That did not work out very well because the Giants, as we know, stayed put and now the A's don't have, every other two team market, New York, Chicago, and LA, it's shared, right? So if the Mets want to move to Manhattan or the Yankees want to move to Brooklyn, neither team has priority there, whereas the Giants have veto rights against the A's and the A's owners keep trying to go back to Major League Baseball and say, it's not fair. It's like, you guys agreed to this.
Maybe not you, but the people you bought from agreed to it. And the Giants have based their entire business model on having those rights and then being able to market to the people in the South Bay. So yeah, it's not fair, but fairness is not how the sports business operates.
So yeah, I mean, it's interesting when those sorts of things happen. We may see that soon in DC where the commanders are looking at going in and getting a stadium that would cost something like $8 billion or more in subsidies when you count all the tax breaks and free land and stuff like that. And one of the things they want to use is this revenue stream of business taxes that has been used by the Nationals to pay for their stadium.
And now that's getting paid off, the Nationals would like very much to continue to use that for upgrades. So you may see some squabbles there. That'll be really interesting if the Nationals owners come out against the commander's deal, even if it's subtly against, right?
Because they think it'll cost them a potential access to tax money.
[Shirin Mollah] (30:09 - 30:18)
How have sports owners evolved in their tactics to extract public money over the past few decades? And what should taxpayers be watching out for now?
[Neil deMause] (30:19 - 35:08)
So overall, it's kind of hilarious in that when we were first doing Field of Schemes, so again, probably talking like 1996, I had heard from somebody that this guy, Frank Rashid, who is an activist and college professor in Detroit, Tigers fan, had come up with a checklist of the different tactics that teams use. So I call Frank and I'm like, Frank, send me your checklist. And he's like, I don't really have a checklist, but I've got sort of some things.
He'll bat them back and forth. So the two of us came up with what wound up chapter four of the book, which was called The Art of the Steal, which is basically the playbook, right? And it's the same things everybody used at the time.
So threatened to move, claim that there's huge economic benefits, claim that the team will fail if you don't do this, like claim that there's some sort of deadline that has to be done by, even you have to make up a deadline out of a whole cloth and so on like that. And we wrote it down. And 10 years later, we're doing the update to the book.
And I'm like, oh, we'll have to revisit this. Let's do Art of the Steal, revisit it. And there's a chapter like that in the third edition, sorry.
And it basically says, yeah, what chapter four said only still, nothing really had changed. It's still the exact same playbook. There are a few things, a few tweaks, right?
That are new. One, I think is the state of the art clause. And that is the idea that team owners have figured out, oh, what if we put in something saying in the lease that if the stadium needs to be kept state of the art what's that considered?
That means as good as other stadiums in the league. So what does that mean, right? So you have things like the Cincinnati Bengals lease that specifically spells out a list of other things that if other teams in the league get it, the county has to pay for the Bengals to get too, including, and this is the best part, holographic replay systems, if ever invented.
They have not yet been invented in however many years since the Bengals signed that lease. But if they ever are, Hamilton County has to buy one for the Bengals regardless of what it costs. So you're starting to see that a lot more.
And that was the trick that the Rams owner, Stan Kranke, used to move out of St. Louis, right? He was not there for the 30 years his lease was supposed to lock him in. But he said, oh, sure, our stadium was shiny when we built it, but now other people have shinier stadiums.
So you need to build me an even shinier one. And St. Louis said, no, I don't think we will be doing that. And then Stan Kranke said, okay, fine.
I'm gonna move to Los Angeles. And then St. Louis sued saying, well, actually you didn't follow the NFL bylaws for what you have to do to negotiate with your home city before moving. And Stan Kranke said, oh, whoops, actually we didn't do that.
Here's $800 million. We're paying you in a settlement. So, but again, that's a trick that teams are more and more using because it becomes a way to sort of not just get the initial stadium money, but to come back later and say, oh, okay.
We need even more down the road. I'm trying to think of other things that are new. You're seeing more of these, like it's not just a stadium deals, right?
So ballpark districts where it's like, we don't just wanna build a stadium. We want development rights, this whole area around it. And that's what's driving up the cost of that Washington commanders deal is that they're not just getting a billion dollars in change for the stadium.
They're getting several billion dollars worth of valuable development rights for the next 90 years with no rent for the first 30 years and then a reduced rent for the next 60. And if you're a team owner who has any interest in development, or if you're a team owner who has any interest in partnering with a real estate developer who might be interested in this, I mean, that's just free money. So you're seeing more and more of those.
So again, there's like little ways in which they've developed new things, but it is remarkably similar. Again, somebody who's been looking at this stuff for 30 years, I did not think that in the year 2025, we would still be having some of the same arguments that we were in the year 1995, but it really is. It really is the same playbook and it's working for the team owners and they keep finding new suckers, right?
If there's one mayor who happens to have read my book or otherwise knows about how these deals go down, then they just wait them out. And in a few years, they're not the mayor anymore and somebody else is, and you sit down with them and say, hey, have you heard about how stadiums are a great deal for cities? No, tell me more.
And you're off to the races.
[Shirin Mollah] (35:09 - 35:33)
So when we're looking at stadiums, we look at the short run and the long run. And the short run, how do we acquire the cost? How do we know if it's gonna be helpful for the team?
But what about looking at a publicly funded stadium deal that actually benefits a city in the longterm? And what did that deal look like? Has that ever happened?
[Neil deMause] (35:34 - 37:33)
I don't think the longterm ever really comes into play because typically team owners only sign 30 year leases. And typically they start talking about a new stadium well before that, right? Or renovations to a stadium.
And part of that is using those state-of-the-art clauses to say, okay, it hasn't been 30 years, but you need to upgrade it because it's not as new anymore. And sometimes it's, well, it's only been 20 years, but that means there's only 10 years left. So we better start talking now.
So that's the problem. If you could just pay for the thing, and I think this is an argument that people make, right? Whether it's fans or elected officials or whatever, it's like, we've been listening to this for so long.
We'll just build you a stadium and let's just be done with it. We don't have to talk about it again. But that's not what happens, unfortunately, right?
Because nobody who's a sports team owner ever sits back and says, okay, we got our stadium, we're set. Because there's always possibilities to come back for more. So, I mean- Is it beneficial?
Maybe you could argue that Dodger Stadium, giving over the land to Dodger Stadium, aside from having to evict an entire community, that once it's been a hundred years or something and those people's descendants have all been resettled somewhere, and at least it's still there. Maybe you could say that that's an argument, but that's a slim reed to hang it on, right? And who knows?
You know, a Dodgers owner could completely come back and say, we know that it's one of the most popular stadiums in baseball, but we want to build a new one or we want public money for improving it or anything like that. That's the problem is that, you know, it's like dealing with blackmailers, you know? It would be really easy if you could say, okay, let's just pay the blackmailer and then we never have to deal with them again.
That's not how it works. Until you get the negatives of the photos and tear them up yourself, you're always holding to them.
[Shirin Mollah] (37:33 - 37:43)
So what impact do you see in streaming, cord cutting and media rights changes you have on the financial power of major leagues in the next five to 10 years?
[Neil deMause] (37:43 - 41:12)
So the big thing I think everyone is waiting for is how is streaming going to change? Not necessarily the overall revenues available to leagues. And it will, right?
Because I think the leagues have been using the fact that cable companies want to outbid each other for the rights and that, you know, sports is the only thing that people really pay for cable for because it's live. You can't pirate it easily. I think that the rights fees will go down somewhat, but more important is how does it change the revenue sharing, right?
Again, talking about a sport like baseball where the Yankees have always had 10 times as much local team revenue or something like that as the Royals. If baseball were to say, okay, we're selling everything through our streaming rights through MLB from now on and we're going to be like the NFL and we're just going to give everybody an equal share. Probably not going to happen, but could happen.
And that's got to really scare the crap out of the Yankees, right? Because the Yankees are the Yankees, not because they're the best run team in baseball or because of their tradition or because of Babe Ruth or any of that. It's because they get to have just tons and tons of revenue that they can spend.
And, you know, they can trade for Juan Soto and lose him a year later. And it doesn't matter at all because there's more money where that came from. So, yeah, so I think that's going to be very interesting to watch is sort of how it shakes out and how the, you know, the streaming deals are still sort of coming into play.
And is it going to be the old model of, you know, when you sign up for a Yankee subscription on streaming that the Yankees get all the money or is it going to be more like, you know, NFL where the Yankees maybe get a small cut, but a lot of it goes to the central fund and gets distributed to everyone. Because that changes things in a lot of ways, right? It increases competitive balance, right?
So like in the NFL, I mean, there are certainly teams that are terrible for years on end, but it's not because they play in tiny markets. You hear a lot of talk about small market versus big market teams in the NFL. Whereas that would change things dramatically for, you know, the smaller market teams in baseball if they could get as much TV revenue as the big market teams.
At the same time, as we just were talking about, you can put an NFL team anywhere. So suddenly move threats in baseball and make a lot, you know, be a lot more valid. Because right now, you know, if the Yankees say, want a new stadium and say, we're going to move to Charlotte, North Carolina, if not, then it is completely valid.
Just laugh at them and say, you're not going to move to Charlotte, North Carolina because nobody is going to, you know, sign up for Yes Network at exorbitant prices to watch you in Charlotte, North Carolina. Whereas if, you know, they would be able to keep all their TV revenues by moving there, then, you know, hey, if Charlotte's stupid enough to fund the new stadium for them, then maybe. So I think, or, you know, I guess a better example would be the White Sox, right?
The White Sox are sort of, Derry Reinsdorf has been alluding to the idea that he might move them to Nashville. He's not going to move them to Nashville under the current revenue system for baseball. If MLB moved to a more NFL-like system, then suddenly that's not out of the realm of possibility.
So I think that that's something that everyone's going to have to sort of closely watch.
[Shirin Mollah] (41:13 - 41:24)
So we know that you have a lot of knowledge on stadiums, but let's back up. And would you like to tell me why you got into the stadiums?
[Neil deMause] (41:25 - 44:35)
So this was, again, we're talking almost 30 years ago now. And my coauthor, Joanna Kagan and I were working on a little political zine in Brooklyn. And we were like looking around, and we were both sports fans.
She's originally from Cleveland. I'm originally from New York. She was a Browns fan.
I was, you know, following the Yankees at the time. And the Yankees were looking to get a new stadium at that time in Manhattan, at the same time as Giuliani, who was mayor, was like cutting library hours. And the Browns had just moved to Baltimore and to get a new Browns team.
Cleveland was talking about building them a new stadium at the same time their schools were in receivership. And Joanna and I were kicking around ideas. And we're like, oh man, we've got to think of other stuff to write.
What, you know, like maybe we could just write something like a little thousand word piece about, huh, isn't this funny that two different cities are facing the same situation? So we started looking around and digging into it and calling people and one call leads to another. And I remember distinctly, there was a point where I called her, she called me and I said, hey, I just had an hour and a half long conversation with a city council member from Milwaukee.
And she said, you know, I just got a 74 page fax from Seattle and it kind of dawned on us, maybe this is bigger than the thousand word story that we were thinking about. And that was when we realized this was really a national problem. And then we started calling economists and saying, okay, so like what's a good deal and what's a bad deal?
And they would say, oh, that's easy. There are no good deals, right? You know, or if, you know, there's a possibility of a good deal, but they never happen.
These are all almost all terrible. So that's when we started doing, you know, more articles about it. And then I got a call from Common Courage Press, our first publisher saying, do you want to do a book about corporate welfare in general, right?
And we thought about it and we looked around the topic and we were like, you know what? That's really huge, but we have, and it's kind of a very broad topic, but we have all this wealth of information about sports subsidies and, you know, a lot of interest in it. We think we can, you know, get, it's a good way to get people interested in it, right?
You talk about giving money to corporations and people are upset in the abstract, but you know, who really like knows about the deals for the local computer chip plant, right? Whereas the sports team subsidies, that's on the front page of the sports section at least. So we said, okay, what if we did it on sports?
And our publisher said, you know, I don't really know anything about sports. I went to a hockey game once, but if you guys think that's a good idea, you know, we think we can sell it, then let's do it. And I think, you know, I think it worked out right.
And again, you know, we talk in the book and I've talked since then and written more since then about other kinds of subsidies. I've done a lot of work on film subsidies, which are, if anything, even worse than sports. That was the entry point, you know, was being sports fans and people interested in kind of, you know, public budgets and public spending and public priorities and saying, how can we make this all fit together?
And realizing that this thing was going on completely under our noses.
[Shirin Mollah] (44:35 - 44:45)
Since you started working on stadium research, stadium, you know, all of this journalism, has your favorite stadium changed?
[Neil deMause] (44:46 - 44:48)
Well, my favorite stadiums got torn down.
[Shirin Mollah] (44:49 - 44:55)
Okay. So tell me about it. What was your favorite stadium before?
And what's your favorite stadium now?
[Neil deMause] (44:56 - 49:18)
Probably Tiger Stadium. I mean, I loved Yankee Stadium, right? I used to, when I was in like high school, I would go to like, you know, 35 games a year and go sit in the bleachers for $1.50. And, you know, it was just, there was something about the history there, about the fact that it was still, even though it had been redone in the seventies, it was still this very, I mean, it was huge, but it was in terms of capacity, but it was very compact. And like, you know, the seats in the upper deck were fairly close. And it felt like a stadium built in the 1920s, more than one built in the seventies or eighties. And, you know, just the cast of characters that you could go sit in the bleachers and there'd be like, you know, people from the neighborhood who would be like, you know, going out and buying Chinese food for everybody and bringing it back in a den.
And, you know, Melly Mel from Grandmaster Flash and the Furious Five would always hang out there. And anyway, it was, you know, there was a lot I liked about that place. But Tiger Stadium was special.
You know, Tiger Stadium had had nothing done to it, you know, since it was built in 1912, I believe, 1914, somewhere in there. And, you know, it was, you know, the just epitome of the stadium where every seat in the house is a good one, right? I mean, you could famously sit in the front row of the upper deck and like, you know, hear the pitcher talking to the catcher because you were so close because it was just the seats were stacked on top of each other.
And you don't get that anymore, right? You know, modern stadium design is, we want to build this for the rich people sitting in the front rows and they don't want to have, they don't want to be in shadow. They want to be able to see the sky.
So let's push the upper deck way back and let's put some luxury seats in front of it. So the cheap seats are genuinely terrible in the new stadiums. My favorite stat about this, which we put in the book, is that when the White Sox built their new Comiskey Park, now called Wright Field, I think, the front row of the upper deck in the new White Sox stadium is farther from the field than the back row of the upper deck in the old stadium.
So anyway, I miss Tiger Stadium terribly. I miss Yankee Stadium terribly. There are a whole bunch of them that I miss.
In terms of what I like the best now, I mean, I'm a Mets fan, so I, you know, have, Citi Field is home, even though it's not necessarily a final stadium. If I had to pick a stadium to go to, I have, I don't know, I haven't been to Wrigley since they did all the upgrades and stuff. One of the things I really loved about Wrigley was that it felt like going to a game in, you know, 1920.
And I guess it feels less like that now, but I haven't been there. I, you know, dislike the Red Sox, but I love Fenway because it's just wacky. I remember going there the first time and being like, I really feel like if Ty Cobb walked out on the field right now, it would not surprise me.
Or, you know, who's a Red Sox player? Tris Speaker. In terms of the new ones, I think I mentioned, you know, I like the Giants Stadium and the Pirates Stadium, I think are the best designed, you know, but the Giants financing was a lot better than the Pirates, but for whatever, you know, I think they're both nice place to see games.
And, you know, I'm not really a football fan for arenas. They're mostly kind of all the same. There's probably a minor league stadium I still like.
I'm trying to think if there's any that are particularly lovable. I don't know. I never got up to McCoy Stadium in Pawtucket before the Paw Sox left.
I'm sad about that. I was going to do it and then COVID hit and then never got up there. So that was a stadium that was built in the 30s and, you know, it was still around.
So, yeah, I mean, it's interesting actually. You know, when I was in college, I went on a driving trip with a friend and we went to see all these old stadiums. You know, we went to, I think it was Pittsburgh, Detroit, Chicago, Cleveland, and Baltimore.
And none of those stadiums are around anymore. And honestly, if I were getting out of college now, would I want to do that? I don't know, because they're just so much the same, you know, and, you know, they don't have the history and they don't have the, you know, so.
So yeah, I think less in terms about having favorite stadiums, honestly, anymore. You know, I just, you know, there are fan bases I like, there are cities I like and I'll happily go to them. But it's not like I go for the stadiums that much.
[Shirin Mollah] (49:19 - 49:28)
If you were designing a new model for sports team ownership in a stadium development that prioritized public good over profit, what would it look like?
[Neil deMause] (49:28 - 52:41)
Well, I'd have to be very rich because I would have to accept the fact that I was not going to be getting even richer based on my plan. You know, I mean, I remember probably 20 years ago, people talking about the fact that you could build a new Comiskey, not Comiskey, a new Wrigley Field, right? For about $90 million.
And that probably has gone up now, but say it's $200 million, $300 million, whatever, that's still incredibly cheap. I think that it would be interesting to try to build a stadium and a fan base and a community around the idea of, you know, we're not going to build something that's the glitziest and flashiest and most spectacular, sort of overwhelm you with shock and awe. We're going to give you something that, you know, kind of harkens back to, we just want to give you a good seat to enjoy the game, right?
And maybe we're not going to have a ton of restaurants inside, but we will, you know, have lots of stuff in the neighborhood that you can go and buy food from as well. Obviously, you're not going to make as much money that way. You know, I don't know.
I don't know how it would work out in terms of a fan base, right? I remember Alan Sanderson who died recently, who was an economist from Chicago, used to tell me about having met up with a sports marketing guy and had the same complaint as me, right? You know, oh, what's all this stuff?
You got to have all these other things going on at the game. And the marketing guy says, Alan, we have terms for different kinds of fans and you're what we call a traditional fan. You go there to see the game.
Let me tell you something. There aren't that many of you. So I don't know.
Are there not that many people who go just to see the games because going to see the game is not what modern stadiums are good for, right? Or is it because it's just, you know, that's not what they want, you know? They want the ability to spend $15 on a beer and to see themselves on a giant screen and to hear loud pop music, you know, that they can sing along with.
I mean, that's fine. It's just not what I particularly like. So that's what I would do, you know, and keep the cost.
There was a plan actually with the White Sox that architect Phil Bess in Chicago had, which was basically to do that, right? To build like a Wrigley style ballpark on the cheap near where old Comiskey was. And that got shot down and never went anywhere.
But I'm always curious to see what a team would be able to do if they tried that. Like, you know, let's just try to replicate old Wrigley Field before all the improvements and see what that looks like. You know, the Rays could try that, right?
They've certainly, nothing else has worked for them. Say, okay, fine. We're gonna go spend $300 million of our own money on some land somewhere in Tampa Bay and say, we are bringing back the old time baseball experience.
This is something you're not gonna get anywhere else and see what happens, you know? I mean, honestly, it couldn't do worse than they're doing now.
[Shirin Mollah] (52:42 - 53:06)
So you've given us a new perspective on stadiums and teams. So the next time we'll be at a game, we'll look at it very differently. And I, as an economist, think it's very interesting, the work that you do.
So I just wanted to let you know, I appreciate having you on this podcast and thank you, Neil, for all your time and your insights on stadiums.
[Neil deMause] (53:07 - 53:14)
Thank you so much for the questions and, you know, always happy to talk about this stuff and, you know, and to go to games with people too and complain about everything behind there.
[Shirin Mollah] (53:16 - 53:32)
Until next time, teammates, I'm Shereen Mulla and this is The Sports Economist. If you enjoyed today's discussion, be sure to subscribe and leave us a review and don't forget to follow us on social media for more insights into the fascinating world of sports economics. Thanks for tuning in and we'll see you next time.
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