Major League Losers: The Real Cost of Sports and Who's Paying for It

Rating:
Summary: Tax money for big league millionaires? I don't think so.
Review: By ANDREW CLINEMark S. Rosentraub, Major League Losers: The Real Cost of Sports And Who's Paying For It: Basic Books, 1997, $27.50, 513 pages.

Within the past generation, the pro sports team owner has become one of the top threats to state and local taxpayers. He has achieved this position by hiring hack economists to conduct trumped-up economic studies purporting to show that new sports arenas will bring large financial returns to the general public.

In his new book, Major League Losers, economist Mark S. Rosentraub shows very persuasively how pro sports arenas do not generate the economic returns to the general public that the owners claim, and therefore public subsidies are not justified.

Major League Losers is more than an economics book, and Rosentraub more than an economics professor. The book is written not for the policy wonk or academic, but rather for the sports fan and the taxpayer. Rosentraub covers the issue from the perspective of a concerned citizen and avid sports fan who just happens to be an economist rather than an economist looking to win tenure.

Rosentraub, a professor at Indiana University at Indianapolis and an Indiana Pacers season ticket holder, begins his book by laying down a little background so the reader will not jump straight into a bunch of economic mumbo jumbo.

In the first chapter Rosentraub outlines in simple terms how a city's economy works and how professional sports fit into that economy. In the second chapter he gets into a bit of psychology by explaining why sports occupy so exalted a position that they can garner public subsidies when other, far more important industries cannot.

The next chapter covers the theory of supply and demand, or why all cities that want pro sports teams cannot have them. In this chapter Rosentraub serves up a history of the big sports leagues, showing how each formed and evolved and how each was designed as a cartel that would maximize owner profits by minimizing competition.

Chapters four and five get into the nitty-gritty of economic analysis. In them Rosentraub explains just how little pro sports actually means to a city's overall economy. Professional sports, the author shows, never make up more than one half of one percent of all jobs in any community in which they exist. Nor do they account for two-thirds of one percent of the total payroll of any community in which they exist.

Also, when it comes to generating job growth, pro sports produce jobs only in a very tiny area localized usually within the stadium's own zip code. There is no large ripple effect throughout the community. In fact, pro sports can sap jobs from outlying areas because people who would have spent their money on movies and restaurants in the suburbs will instead spend that money at the sports stadium, reducing business for suburban entertainment and food venues.

In chapters six through ten, Rosentraub uses the specific examples of Indianapolis, Cleveland, St. Louis, Toronto, Montreal, Cincinnati and Pittsburgh to show how little return taxpayers receive when they opt to spend tax money on pro sports stadiums.

Chapter eleven focuses on the fight between suburbs and center cities that occurs whenever communities try to land or keep pro sports teams within their boundaries.

In the last chapter, Rosentraub offers a quick prescription for how to avoid the subsidized disasters that have befallen so many communities that have caved in to the demands of sports team owners.

Major League Losers could have been a much shorter book. The educated reader will skim through much of the fluff to get to the meat of the economic discussion. But this fluff may prove important in explaining the situation to those serious sports fans who otherwise may tolerate subsidies to teams as a means of obtaining their favorite entertainment. The book clearly and simply achieves the author's objectives. It is a must read for all hard-core sports fans as well as all taxpayers.

Andrew Cline is director of publications at the John Locke Foundation, a nonprofit think tank in Raleigh, N.C.

Rating:
Summary: An important work about major league scam artists
Review: In today's big-time professional sports business, the relationship of pro sports owners and publicofficials has become significantly intertwined, as more and more public monies are risked to keep orattract a pro sport franchise in a community. Author Mark S. Rosentraub has written a sober study of the complexities of this "welfare for sports owners" that will stand as the classic definitive study of this issue. Rosentraub thoroughly analyzes the economic complexities of public subsidies of pro sports, with his well-reasoned recommendation that public subsidies do not return on the investment at a level high enough to warrant the tremendous risk of the hundreds of millions that owners usually want. The details are all here on the fascinating stories of owners and public officials from the communities of St. Louis, Pittsburgh, Arlington, Texas, Indianapolis, Los Angeles, Ontario, Toronto, Cleveland, and others. Rosentraub also explains the powerful, almost mythical interest of a community in a professional sports franchise, that helps to better understand this sordid joining at the hip of this business with a community. This is a solid, complete analysis of this very controversial topic that should be required reading by business majors, and especially mayors and other public officials who may think a professional sport franchise will "save" their community. Rosentraub should be called in, before they sink their precious tax dollars into this black hole. Look for the author to be in heavy demand on the talk show circuit and in open debates with owners. At almost 500 pages, Rosentraub's obvious hard work clearly shows his preeminent status as the play-by-play announcer par excellance of pro sports franchises.

Rating:
Summary: Psychology over Economics
Review: Major League Losers considers the effect that professional sports teams have on America's communities. The book is primarily concerned with the economic impact that these teams have, especially on the area surrounding the stadium. Economic reasons are often the ones which are stressed when considering public financing of professional sports stadiums.

It is Rosentraub's hypothesis that the economic impact of these teams is miniscule compared with the opportunity cost of funding these stadia. The money that is used to build these playgrounds could be used to build a school, increase police capabilities, be kept in the taxpayers' pockets, etc. The revenues generated by the stadia cannot exist in a vaccuum. States and municipalities must decide what is the best use of public funds.

The data that Rosentraub puts forth would lead one to believe that these stadiums are not a waste of money, but not the best place to be investing public funds. Their economic impact is marginal at best, and often times the teams are just taking entertainment dollars away from other area businesses. Rosentraub's contention is that the people that go to the games would have spent their money at some other location in the city anyway as sporting events are just another form of entertainment on par with movies, theater, etc.

Instead, he contends that the reasoning behind the public financing is psychological. All cities want to be viewed as being "major league". There are only a few cultural meccas in the United States: New York, Los Angeles, and Washington. Other cities need something that can make their citizens proud. Most municipalities turn to professional sports. They feel that landing a pro team is the quickest way to gaining respectability as a major metropolis.

The book does go a little off kilter when discussing the supply and demand of professional sports teams. Rosentraub feels that the number of major league teams has been kept at an artificially low level thereby fostering a vicious competition between cities for the existing teams. This opinion doesn't take in to account the impact on the level of play that drastically increasing the number of teams would have. Already major league baseball talent is spread dreadfully thin and the addition of even three or four teams would cause tremendous harm to the game. Other than this contention, Rosentraub has put together an excellent case for refusing to fund these millionaire playgrounds.