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Of Devils and Details: Bargaining for Successful Public/private Partnerships between Cities and Sports Teams

2009; SPAEF; Volume: 33; Issue: 1 Linguagem: Inglês

2327-4433

Mark S. Rosentraub, David Swindell,

Sport and Mega-Event Impacts

INTRODUCTION In November 2005, the National Basketball Association (NBA) Bobcats began play in a new downtown Charlotte arena. Earlier in 2005 Newark and team officials broke ground for an arena for the National Hockey League's (NHL) New Jersey Devils and Indianapolis initiated work for a stadium for the National Football League's (NFL) Colts. Arlington, Texas' voters passed a tax increase to pay a substantial portion of the costs of a new stadium for the Dallas Cowboys. Even New York City, with its economic vitality and well-defined image, has been pursuing public-private partnerships for new facilities for a basketball team in Brooklyn (Nets) and ballparks in the Bronx (Yankees) and Queens (Mets). New York will likely invest more than $1 billion in the three facilities. With seven new facilities scheduled to open between 2006 and 2010, and with 10 other communities currently in negotiations with teams for new facilities, the interest in hosting professional sports teams remains part of the public agendas in world cities and dominant cities in large metropolitan areas (Turner and Rosentraub 2002). Negotiating with teams for the building, use, and maintenance of sports facilities is not an annual activity for cities, but represents a relatively rare event that requires specialized knowledge. As a result, most communities engage outside consultants to work with their staff and leaders. Although this strategy is often helpful, it does not relieve community leaders of the burden of establishing the city's goals for the negotiations and the level of investments appropriate for the anticipated goals. In terms of specialized knowledge, city leaders need to understand the constraints facing the team and the commitment an owner is willing to make to assist in achieving the city's goals. These elements are particularly complex because professional sports leagues in the United States receive special protection from market forces through court decisions and legislative actions. Hosting teams requires a level of a public investment that has ranged from the public sector supplying only the needed infrastructure (roads and sewers) to the investments made by some cities to support the full cost of a facility and its maintenance. With the scale of these investments often in the hundreds of millions of dollars, community leaders must understand the range of public benefits possible and the available strategies to insure that committed tax dollars have the potential to achieve the desired goals. This paper addresses the strategies available to public officials against a background of why cities pursue sports team for their communities and the unique dimensions of the sports business that make these negotiations for cities unlike most others. That discussion precedes the presentation of a model for developing public-private partnerships that can help cities secure their goals. WHY DO CITIES PAY FOR SPORTS? Critics of public investments to attract or retain professional sports teams often ask why local governments care about the presence of professional sports in their communities? Frameworks for deciding what governments should or should not provide underpin the field of public administration, and at first blush would suggest that professional sports is not a public good. Buchanan (1968), Musgrave and Musgrave (1989), Ostrom, Bish, and Ostrom, (1989), and Savas (1999), have provided the theoretical background that has educated generations of public administrators with regard to the scope of joint consumption goods and services the public sector should provide. Goods and services characterized as involving individual consumption and for which it is possible to exclude non-payers are those best left to market transactions. Those goods that fall between joint consumption and private goods and that are deemed worthy of government action to insure their existence in a community are called merit goods and are provided and produced by numerous local governments (Musgrave and Musgrave 1989). …