SI Vault
Ray Kennedy
July 17, 1978
FACT: Pro teams are subsidized by taxpayers.
Decrease font Decrease font
Enlarge font Enlarge font
July 17, 1978

7 The Very Old Sucker Play

View CoverRead All Articles View This Issue


Vancouver Canucks


Pittsburgh Penguins



Kansas City Chiefs


San Diego Chargers



Golden State Warriors


Detroit Pistons



Philadelphia Phillies


Milwaukee Brewers


FACT: Pro teams are subsidized by taxpayers.

In ancient Rome, stadiums were financed by taxes levied on brothels. It was not that the feed bills for the lions were too high—Christians being a glut on the market—nor a question of whether celebrity gladiators would draw all that well. No, stadiums had to be subsidized because they were so inherently unprofitable that no private investors would touch them, least of all the sports promoters. Their money was tied up in superstars like Diodes, a free-agent charioteer who switched stables for a cool 31 million sesterces ($1.8 million). "Decent men groan," wrote some Roman Ring Lardner, "to see this former slave earn an income that is 100 times that of the entire Roman Senate."

Nothing has changed except that today every taxpayer, be he panderer or prude, foots the bill for his local Colosseum. Stadiums still lose money and decent men still groan, some of them on the floor of the United States Senate.

Four months ago, Senator William Proxmire denounced as a "knucklehead-ed ripoff" a deal allowing the Yankees to pay only $170,681 in rent to New York City last year, on a gross of $13.4 million. What the Wisconsin Senator neglected to mention is that his state's major league baseball team, the Brewers, pays only $1 in rent on the first million admissions to Milwaukee County Stadium and only 5% of its gross on the next half million. Last season, with an attendance of 1,114,938 and an average ticket price of $3.68, the Brewers paid the county a mere $21,149, which is perhaps the lowest rent in professional sports. Fact is, all but a few of the teams that perform in public facilities enjoy sweetheart leases that would make Shylock blush.

It is estimated that by charging low rents, forgoing property taxes and paying the stadiums' operating losses, local governments subsidize teams by more than $25 million annually. While some leases involve tricky sliding scales, the average team pays slightly less than 10% of its home gate receipts. Here is a rundown on the rents some teams pay:

[This article contains a table. Please see hardcopy of magazine or PDF.]

In some cases the disparities are offset by other compensations. For example, the Chiefs retained a small percentage of the proceeds from concessions, parking and souvenirs, while the Pistons, who in 1977-78 were in the last year of a contract at Cobo Arena that required them to pay only $2,000 a game, received no income from concessions or parking.

Regardless of the details of the deals between the teams and the landlords, this fact holds true: 70% of the stadiums and arenas used by pro franchises have been built with public funds, and they are piling up an indebtedness that will cost taxpayers some $6 billion through the turn of the 21st century.

Nevertheless, even while construction costs have kept soaring, so, too, has the mania for more grandiose playgrounds. In 1965, Atlanta-Fulton County Stadium was completed at a price of $314 a seat; in 1970, Pittsburgh's Three Rivers Stadium came in at $700 a seat; and in 1975, New Orleans' Superdome cost $2,333 a seat. Operating losses have risen accordingly, and only one public facility, Anaheim Stadium, home of the Angels, claimed a profit ($758) last year. That occurred only because of the income from rock concerts.

There is a rationale for the profligacy. When future archeologists dig along the banks of the San Antonio River, they may unearth the remains of the Convention Center Arena and some of the 6,000 seats that are being added at a cost of $3.7 million. "Aha!" one of the diggers will exclaim, "this was a big league city!" That, at least, seems to be the hope of San Antonio Mayor Lila Cockrell, who is typical of stadium boosters all over the country. In agreeing to a lease that required the Spurs to pay only $500 a game last season—a figure that will gradually increase to $2,400 in 1986—her honor admitted that it was a partial subsidy, but added, "We have a great opportunity in this city through the gaining of national stature on the sports scene. This will help attract industry and assist our economy."

Continue Story
1 2 3