Editor’s Note: This is another installment of our intermittent collaboration with Cleveland Frowns, published by Peter Pattakos.
by Andrew Scheid
During the final minutes of last month’s World Cup match between the US and Belgium, I joined an army of bodies crammed into a tiny gelato shop near my office in downtown Chicago to watch the end of the game. Naturally, every set of eyes in the café was locked on the screen. Individuals who previously failed to utter a word to each other during regular encounters in elevators and hallways were laughing and sharing stories, instantly united by the national team playing on a global stage. But of course, not everything on the ground in Brazil was fun and games, with FIFA’s corporate machine having ushered in policies of massive housing displacement and police brutality in the name of the soccer tournament, along with the allocation of billions in public funds for stadiums with severely limited use.
Days later, the announcement of LeBron James’ return to Cleveland offered another reminder of the unparalleled capacity of sports to unite strangers into a community, as well as the danger created by corporate exploitation of this unifying power. Naturally, the basketball superstar’s decision brought out a collective euphoria in Northeast Ohio residents, with massive crowds gathered in downtown Cleveland to celebrate the prospect that the Northeast Ohio native would return home to lead the nation’s longest and most suffering sports town to a long-awaited championship. Yet after 4 years of “petulance and poor planning,” for reasons apparent to no one, the biggest financial beneficiary of James’ return is the Sultan of Subprime himself, Dan Gilbert.
Gilbert, of course, has already gotten plenty of leverage out of James’ talent, especially since 2009 with the passing of the Ohio Casino Initiative after a number of similar ballot measures had been rejected by Ohio voters. Absent the public clout of owning the then-historically-successful NBA franchise, it’s doubtful that the Cavs owner would have been handed a legally monopolized casino market as he was. Thus, the man who gravy-trained the cache of “owning” the athletic brilliance of LeBron James used the city’s goodwill to profit off of its misery. Which is how your favorite athlete’s superhuman talent can lead to grandma blowing her retirement savings at the slots.
Beyond grandma’s pension and social security checks, Gilbert will use his bully pulpit to sell her Option ARM mortgages from Quicken Loans along with whatever else his sponsors are hawking to his captive audience. And he’s already into her alcohol and cigarette budget until at least 2035 via the recently passed Cuyahoga County Sin Tax, another $260-plus million to add to a $1B-plus and counting pile that County taxpayers have given to Cleveland’s sports owners since 1993, despite that these owners already take untold millions in profit each year from operating the franchises without ever having to open their books to the public. Needless to say, it’s a sound business model.
[blocktext align=”left”]It’s hard to find better proof of the uselessness (if not the parasitic nature) of team owners under the current model than there is in the arc of LeBron’s relationship with the Cavaliers, not least in the media hysteria surrounding his recent free agency.[/blocktext] For the owners, anyway. But what about everyone else? Dennis Coates, Professor of Economics at the University of Maryland echoes the unanimous opinion of academic scholars on this issue in concluding that: “Residents of cities with professional sports teams pay a high cost for the privilege, both in terms of large public subsidies and in terms of lost income and employment.” In a paper co-authored by Professor Brad Humphreys of the University of West Virginia, the pair states further:
“There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.”
No one has ever been able to explain why closely-held private ownership of publicly cherished professional sports franchises is necessary at all, let alone why the public should bear so much of the costs of these franchises when all the profits end up in the pockets of plutocrats. Yet during the recent Sin Tax campaign, Council President Kevin Kelley fawned to the media about what great “partners” the city has in its professional sports owners. Of course, Mr. Kelley could only have been referring to the unholy matrimony of campaign cash and legislation bought and paid for by financial elites, an arrangement that’s become a staple of American electoral politics. There’s no more apt sign of the times than Kelley and Cleveland Mayor Frank Jackson having declared “victory” over the allocation of $260 million in public money to three billionaires who outspent a grassroots opposition group by three million dollars to essentially none.
The owners’ pro-Sin-Tax campaign was based on little more than a baseless threat that one of the three teams would leave town if the measure didn’t pass, and it’s easy enough to understand why this worked. Beyond the vast sum of money spent to convince Clevelanders that a subsidy for these billionaires would “Keep Cleveland Strong,” sports fandom is one of the last enjoyments left for the common man in this era of runaway industrialization and inequality. “Elimination vs. advance, hierarchy of rank and standing, obsessive statistics, technical analysis, tribal and/or nationalist fervor, uniforms, mass noise, banners, chest-thumping, face-painting, etc.” David Foster Wallace once asked why “war’s codes are safer for most of us than love’s” when it comes to sports. The cultivation of blind allegiance to the current system by the ownership class must be a significant part of the answer. More than just manipulation, it’s the deliberate targeting of a specific weakness. But if you’re lucky enough to afford to attend a game in person, you might catch an ill-fitting t-shirt with a Sherwin Williams logo on it, a frozen pizza launched from an air-cannon, or a lottery ticket falling from the rafters on a parachute. Would Dickens’ worst villain have dropped lotto tickets down onto scratching and clawing masses?
Fortunately, even despite the recent setback in Cleveland, the tide is turning against the current model of public subsidies for privately owned professional sports. In a paper titled A History of Public Funding 1890-2005, Dr. Judith Grant Long detailed the evolution of American cities’ financial and civic justification for funding the cost of pro sports stadium construction:
“In this era, (the 1960’s and 1970’s) sports facilities were commonly perceived as civic infrastructure, like spending on education, municipal services and highways. Voters consistently approved bond issues to pay 100% of costs for new pro sports facilities throughout the1960’s and 1970s. In urban areas, the federal government also decreed that sports facilities—arenas mainly—constituted civic infrastructure, permitting their financing and construction under the urban renewal program.
By the 1980’s, governments were less willing to foot the bill as they had done in the past, especially in light of soaring franchise values, lucrative broadcast and naming-rights deals, and the unprecedented relative size of salaries for professional athletes. In addition, team owners were finding it more difficult to market sports facilities in elements of civic infrastructure, as they had done in the 1960’s and 1970’s. Academics, and soon taxpayers, rejected the notion that public funding for sports facilities could be rationalized as pure public good akin to traditional infrastructure.”
[blocktext align=”left”]But if you’re lucky enough to afford to attend a game in person, you might catch an ill-fitting t-shirt with a Sherwin Williams logo on it, a frozen pizza launched from an air-cannon, or a lottery ticket falling from the rafters on a parachute.[/blocktext] The momentum that Dr. Grant chronicles can be seen all over the country: In Miami, where voters rejected a $400 million stadium subsidy to see the Dolphins owner Stephen Ross shortly admit that he could pick up the tab himself; In St. Louis where city leaders were forced to admit that they couldn’t afford an absurdly owner-friendly stadium deal; In Pittsburgh, where Mayor Bill Peduto bragged about $40 million in Heinz Field improvements to be “completed without any public dollars”; And most recently in Atlanta where Mayor Kasim Reed refused to shovel $250 million dollars to the Braves’ new stadium proposal, stating that he’d rather put the money into Atlanta’s suffering neighborhoods.
All of which adds to the sublime comedy in the timing of LeBron’s return to Cleveland, following as it does on the heels of the complete whiff by the city’s leaders in standing up to the outdated and unjust demands of its team owners in the Sin Tax renewal. It’s hard to find better proof of the uselessness (if not the parasitic nature) of team owners under the current model than there is in the arc of LeBron’s relationship with the Cavaliers, not least in the media hysteria surrounding his recent free agency — headlines about “nervous” billionaires who could only sit and wait to hear where the superstar would “take his talents” next. Thanks to James, the Cavs became instant NBA title contenders and the best story in sports, even despite four years of degenerating into an unimaginable laughingstock in his absence. That Gilbert, when LeBron left town in 2010, infamously issued a “guarantee” that he would somehow lead Cleveland to a championship before the star basketball player ever won one in Miami — only someone who’d been openly stealing millions for years would have been able to summon the gall for that.
If it goes to show the power of the home team, it should show just as well that there’s no such thing without the community that makes a place its home. Everything else in the pro sports equation is replaceable, with the exception of singular athletic talents like LeBron. It would be easy enough to imagine community-owned sports franchises even if the Green Bay Packers didn’t exist. And it’s absurd to think that pro athletes wouldn’t be able to hire their own business managers to competently run a player-owned league. A partnership between pro athletes and the community is even easier to conceive; one that would be glad to use its own profits, instead of billions in tax dollars, to pay for its own facilities. While these aren’t likely changes that could happen overnight, there’s no better place to pick up the conversation than Cleveland — where Art Modell left, and where LeBron gloriously returned despite Dan Gilbert.
To quote Dave Zirin, “[t]here is a rich history of athletes using their hyper-exalted platforms to say something about the world.”
It’s hard to imagine an athlete with as much to say and as much power to say it as LeBron with the Cavaliers, and the superstar certainly hasn’t been shy about using hyper-exalted language: “The Chosen One.” “Global Icon.” “Bigger than basketball.” “Strive for greatness.”
Words, though, are easy. Saying something is different. A sports fan can only hope.
Andrew Scheid, a Northeast Ohio native currently living in Chicago, is a Cleveland sports fan, paralegal and playwright.
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I disagree with your premise regarding the casino.
I do not believe that voters supported the casino because Gilbert owns the Cavs.
I believe the issue passed because attitudes regarding gambling have shifted over the past 20 plus years. (much like gay marriage and pot legalization).
In addition, the shrinking middle class has caused voters to focus more on jobs than on social issues.
I also believe it passed because it smartly had casinos spread around the state, not just in one location (like the previous failed attempt, which would have put one single casino somewhere outside Columbus, providing no service for the large Cleveland and Cincinnati markets).
In addition, people outside of Northeast Ohio are not Cavs fans. They really don’t care whether Gilbert owns the Cavs or any other big business.
Northeast Ohio is the most populous region in the state. Hundreds of thousands if not millions of people identify as Cavs fans. Gilbert relentlessly bombarded Quicken Loans Arena attendees and Cavs broadcast viewers with casino ballot ads. That you’d suggest this would have no significant impact on the election is, um, something that makes me wonder who you work for.
I don’t work for the Cavs or Gilbert.
I merely point out the facts of a changing electorate…..society is becoming more accepting of former “taboos” like gambling, homosexuality, and marijuana.
When there is a financial incentive to embrace these issues, that further accelerates the process.
Voters throughout the state wanted more jobs, and they viewed casinos as a means to achieve it.
I expect marijuana to become legal within the next 10-15 years for similar reasons.
Voters will view it as a painless means to collect additional tax revenue.
And no, I don’t think that Gilbert’s constant in-house marketing has much affect on elections. As you pointed out during the Issue 7 campaign, a small percentage of voters can even afford to attend these games.
Much like with basketball, Gilbert benefitted from great timing. If he had pitched the casino idea ten or fifteen years ago, he would have failed just like Spitzer.
“And no, I don’t think that Gilbert’s constant in-house marketing has much affect on elections.”
I wonder why he spends so much on it, then. There was also the constant TV and radio ads broadcast at Cavs fans as well.
He didn’t spend very much at all.
The ads were during Cavs broadcasts, which he controls.
Same for the in-house Q ads.
So they were basically free.
Now you are accusing me and the other guy of being the same person.
That is not true.
It’s sad that you think so few people read Belt. It’s a very good site.
The teams spent $3M in advertising on the recent Sin Tax campaign, which included $1M-worth of in-house advertising. Just because he “controls the broadcasts” doesn’t mean there’s not a price to the ads.
And he spent more money on the casino campaign than anyone had ever spent on an election campaign in Ohio history.
http://www.cleveland.com/opinion/index.ssf/2009/08/ohio_will_lose_if_casino_issue.html
Though I guess when you’re Gilbert that really all is “basically free.”
And I agree that Belt is a great site.
The casino measure passed in OHIO which includes Columbus, Cincinnati etc. I live in Cincinnati which has had casinos on the border in Indiana for years. It was just a matter of time. Rather hilarious that you think it passed due to some ads from Dan Gilbert during Cavs games.
Rather hilarious to think that the largest advertising campaign in Ohio election history would have impacted the election? OK.
Mitch is spot on, on the casino. Additionally, until the Horseshoe was built in Cleveland, over half the cars in the lot at Mountaineer were from Ohio. Ditto in Erie. I’m sure the new casino in Pittsburgh would’ve seen similar numbers. In this day and age, it made sense to keep those dollars at home. There’s no denying that Cleveland’s downtown is more vibrant today than it was before the casino was built. Which came first? The Revitalization or the Casino? Disputable. But its helped. Go inside. Its not just Grandma pulling the one armed bandit. Its 20somethings who would otherwise stay at Kamms/West End/somewhere local, who instead now come downtown to party because they know they can hit the casino too. I know. I’m a cab driver who takes them from their suburban homes and picks them up at some ungodly hour to take them home.
I’m older than many of you. I remember what the Gateway neighborhood looked like. Believe me, the Gateway project was a definite improvement. And for sure, Cleveland would’ve lost the Indians without it. And without those teams, there would be no East 4th Street. No Lola. No Red. No WInking Lizard. No Hodges. No Greenhouse. No Comedy CLub. No House of Blues. No Chinatos. Just a dusty old narrow street; almost an alley actually with Otter Moser’s place and a bunch of winos hidng in doorways. So academics can pontificate about their econometric models all they want. I’d wager not one of them ever walked down the old East 4th let alone the new one. But scientific theorems are only valid if their underlying assumptions are true. Most of those, I’d wager, probably fail before they even started writing the theories.
“Most of those, I’d wager, probably fail before they even started writing the theories.”
What I’d wager, if I’d wager on anything, is that you’re not really a cab driver.
The academic studies, though, are unanimous and clear that the economic activity on E4 would just take place somewhere else if it wasn’t happening on E4. But sure, yeah, E4 looks great.
Bet me whatever you’d like. Americab 1692 until this past April.
Your constant accusations that anyone who disagrees is a shill aren’t befitting of a reasonable journalist.
I don’t know. I suppose the casual dismissal of 20-years of unanimous academic research has a particular ring to it. I further suppose that when someone puts forth a misleading argument under an anonymous handle it’s only right for a “reasonable journalist” to consider the source. Especially when the misleading argument sounds so familiar. Folks would certainly rightly be interested to know if shills for team-owner types were astroturfing the comment sections of critical articles to pollute the discourse.
Anyway, sure, I’ll bet you lunch at your favorite place on E4th if you’d like to prove to me that you’re a cab driver. I’m downtown every day at my office, come by whenever.
If someone could prove that “MitchVigil” and “Ignats75” aren’t the same person, that would be great, too.
In the meantime, I should probably also clarify that the casual denial of the idea that millions of dollars of advertising would impact an election has a particular ring to it as well.
“There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.” – No citation for this. What articles? What journals?
There was a link in the article. The paper by Professors Coates and Humphreys is here and it’s loaded with citations that point you to the articles and journals in question:
http://econjwatch.org/articles/do-economists-reach-a-conclusion-on-subsidies-for-sports-franchises-stadiums-and-mega-events
My office is downtown and I walk by or through the casino almost daily. I have been here since the 80’s. I don’t think the casino has made downtown more vibrant. People go to the casino but they don’t seem to go anywhere else. People going to ball games stop at the casino on the way to and from the games. I don’t think people go to the casino and then go to a play or visit one of the restaurants nearby. It looks like they are there to gamble and go home. They get in and get out.
On the other hand, Cavs and Indians fans come downtown and go to bars and restaurants, but are there enough of them to keep the places open 365 days a year?
Cheap property has made downtown vibrant. Housing became available. There have been ball parks in Gateway for 20 years. Only the last 3 to 5 have seen downtown become more lively. If the ball parks brought vibrancy we would have had an immediate boom. East 4th happened because people could get buildings cheap and then a concentration of buildings and then did something with them. If the ball parks were “economic engines” the property would not have been so cheap. The same thing with Gordon Square, Tremont and Ohio City. People could make some money revitalizing property. The ball parks are a nice feature, but not worth the hundreds of millions of dollars of tax money paid to create them and maintain them based upon a public ROI. They have some hard to measure benefits but they are very expensive and create a very concrete benefit to the owners of the teams that use them. I wish my employer could be subsidized to the same extent.
There was no implied or implicit threat that one of the three teams would leave town if the sin tax was no renewed – maybe if you were actually IN Cleveland you would know that. What was threatened (not threatened actually but a FACT) was that if the sin tax was not renewed that the money would have to come out of the city or county budget as the upkeep of the facilities is guaranteed in the long term leases they signed with the city. Get your facts straight.
Actually, there were implied threats and explicit threats. I think we have the facts perfectly straight here. http://www.clevelandfrowns.com/2014/05/art-modell-hostage-economics-do-not-keep-cleveland-strong/
Fantastic article!