Owners to Build Stadium in L.A.

For a long time I have thought that cities who paid for the stadiums used by professional sports teams have been suckers, this morning I was proved right by the NFL owners.

The argument normally goes something like this: build us a new stadium for X hundred million dollars, or we will HAVE to move to another city. The owners (who guard the data about franchise profitability with more zeal than you would expect) claim that pro sports just can't be profitable unless the public (most of whom will never see a game in these stadiums) pay for the stadium.

Now, it seems unusual to me that, if these ventures are really so unprofitable, so many rich people are willing to step up and spend hundreds of millions of dollars on what they allege is really public charity. Think of all the billionaires who buy sports teams out of the goodness of their own hearts, amazing.

It is also unusual that money losing ventures would continue to aggressively bid up the salaries of their employees. You don't see a lot of unprofitable businesses spending $50 million per year for a short stop. You don't see Ford and GM in bidding wars for machinists or electricians.

So for years that owners have tried and tried to persuade the fine people of Los Angeles that they should pony up for a new stadium, full of new luxury boxes for the ultra rich, so the people of LA can see a game in person every once in a while instead of watching them on TV.

The people of LA have wisely chosen to spend their money on more important items, despite the claim that pro sports will make your city "major league" and bring in billions of tourist dollars, and billions of new jobs, LA has done okay without pro football.

Well, this morning's Journal details the NFL owners' new plan to build a stadium, and suddenly the stadium that could only be built with public money will be built by ... the NFL owners. I guess pro sports might be profitable after all.

From today's Wall Street Journal:

"Over the years, the league has played footsie with a variety of potential ownership groups in Los Angeles, including one led by former Hollywood superagent Michael Ovitz, but the efforts have always faltered because of stadium issues. In contrast to dozens of cities around the country, L.A. has been unwilling to earmark a huge amount of public money for a new stadium, much to the NFL's frustration.

But the owners have finally come around: Prodded by former Commissioner Paul Tagliabue, they have resolved to spend their own money to build a venue in the area, with the hope that a brand-new, luxury-suite-filled stadium would entice an owner to move or sell a franchise to local investors."

Timothy Burger
timothyb(at)timothyburger.com