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Hook, Line, & Stinker 

Everyone loves the 49ers. But even love has its limits. Are taxpayers willing to subsidize millionaire owner Eddie DeBartolo Jr.'s dreams of a new stadium when economists say it's a bad deal

Wednesday, May 1 1996

Page 2 of 7

That's a start. But what Brown should have asked for was an economist with expertise in professional sports franchises, their economies, and the dollars-and-cents impact they have on a city.

Then again, maybe Brown was smart not to ask for such a person. If a truly independent economist were to join the team, the mayor would learn some unsettling facts. Chief among them: Sports teams are a bad investment. In the words of Fortune magazine, "they don't do diddly" for a city's aggregate economy, and they tend to have a negative fiscal impact on other segments of a city's entertainment industry.

Upon learning the economists' findings, Brown would be left without an economic explanation for subsidizing a multimillionaire. He would have to start telling the public the truth: "I am giving this incredibly rich guy over here lots of your money because if the team leaves on my watch I am toast." Or you can look at it this way: The $25 million to $100 million in public money the mayor and his team are thinking of forking over is in reality a giant contribution to Brown's 1999 re-election campaign. In a way, you've got to applaud the man; he's just found the most lucrative method yet for skirting the $750-per-contribution limit prescribed by local law. And he's thinking of doing it with tax dollars.

Is it really so clear-cut that the only ones benefiting from a 49ers-San Francisco, public-private partnership are a politician and a corporation? Certainly, San Francisco earns about $6 million in lease revenue from Candlestick each year. But factor in costs -- maintenance, police overtime, fire official pay, and new construction upgrades -- and that $6 million evaporates. Also, since DeBartolo bought the team in 1977, he has been slowly but persistently renegotiating -- in nine amendments to the lease -- a better deal for himself, taking an ever increasing share of revenue. (Who would expect anything less from putting the son of a shopping mall king who negotiates leases for a living at a table with bureaucratic lifers?)

So that leaves the indirect economic benefit, the so-called ripple effect sports teams have on a city. But according to four academics -- three economists and one sociologist -- who've studied the issue extensively over the last decade, no such spinoffs occur. These academics are Roger Noll, a Stanford economics professor who is currently on sabbatical at the Washington, D.C.-based Brookings Institute; Robert Baade, an economics professor at Lake Forrest College in suburban Chicago; Andrew Zimbalist, an economics professor at Smith College in Northampton, Mass.; and John Zipp, a sociologist at University of Wisconsin-Milwaukee.

Since the late '80s, these scholars have issued studies, theses, dissertations, and well-received books refuting the owners' claims. Yet cities keep falling for the millionaire franchise owner's con, year after year. Talking to the academics, it's easy to hear the edge their voice-in-the-wilderness status has lodged in their throats.

Sports teams and their cheerleaders -- chambers of commerce, politicians seeking PR points, and newspapers that bank on their sports pages -- argue that people who come into a city to see a game also spend their money in local restaurants, bars, and hotels. They also say that sports franchises act as advertising vehicles for cities, wherein fans who see San Francisco's team on television in other locales will want to visit here -- bringing their wallets, of course. This is the fulcrum of their economic argument.

"I'm talking actual money," says Jack Immendorf, the local private eye and political fund-raiser who serves as president of the city's Recreation and Park Commission, the body that will have to approve any 49er stadium deal. "When you talk about the effect on businesses, you're talking billions-plus dollars since they've been here." Immey, as he's called, stresses that he doesn't have exact numbers to back his assertion.

This rosy presumption also holds sway in the innermost circles of the Mayor's Office. Rudy Nothenberg, the city's former chief administrative officer who returned to sit as Brown's major domo on, among other things, the 49er deal, is a true believer in the national advertising power of sports teams. "There's no question they bring in visitors," he says.

It's disturbing enough that two of the officials in charge of getting the best deal for the city are entering negotiations assuming that it's in their best interest to cut the deal. Such bias calls into question their resolve at the negotiating table.

Worse still, their presumptions are utter hogwash, economists say.
"There is simply no evidence that building a new stadium or refurbishing an old one has any economic payoff for a city whatsoever," Andrew Zimbalist says. "If I were mayor and DeBartolo came to me and asked for money for a new stadium, I'd tell him to go back to Kezar," the Golden Gate Park stadium the 49ers played in until they struck a Candlestick lease with the city in 1969.

The academics say teams rarely if ever bring in new spending to a city or metropolitan area. "They are realigning spending," says Robert Baade, who has published several studies on the economic myth of professional sports franchises. "They are taking from movies and restaurants."

What irks Baade is the "multipliers" arguments, in which hired consultants claim that new stadiums will have a yeasty effect on a city's economy. "They assume that all ballpark spending is new and therefore can have a multiplier effect," he says.

To create genuine new spending, Baade and his fellow economists say, a team would have to attract fans from distances of greater than 30 miles away. Only these far-flung fans, who may consider eating out or spending the night in the host city, would constitute new spending, and thus a net economic plus.

About The Author

George Cothran


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