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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
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Adds Stanford's Noll: "This is the whole reason cities get in these bidding wars. Leagues create this situation by making sure there are far more cities than teams."

Policy insists that the 49ers aren't threatening to leave. "I heard on the radio the other day someone saying we were threatening to leave," he says. "That's not true. I haven't done a very good job of getting our message out."

But Policy says the team can't stay in Candlestick. "We don't think Candlestick in 2007 [one year after the 49er lease expires] is possible," Policy says. "I think the mayor agrees with that." But from there, he refuses to predict the future.

What the city has on its hands then is a subtle, PR-smart threat. Former Giants owner Bob Lurie, who threatened to move his team if he didn't get a new stadium, taught DeBartolo that blatant blackmail doesn't work. But for all his bombast and arrogance, at least Lurie was on the level. What team owners do now, whether it's the Giants' new owners or DeBartolo, is deliver a coded message to city officials -- we can't play in Candlestick -- allow them to draw the obvious conclusion, and then filter the message to the public in small, savvy doses. Whether the 49ers are bluffing or not, the threat of them leaving is definitely hanging in the air.

Pressed on the economists' critiques, Policy interrupts to lay it on the line. "We could take forever and deal with what this or that economist says or with what this or that study says," he begins. "But it won't do anyone any good to get too philosophical. The real question is what are communities without football teams willing to do to get them."

Then Policy deftly shifts the argument away from actual economic benefits to the city and back to the supply-and-demand equation that serves teams so well.

"There is no better way for coming up with what something is worth than to look at the market value out there on the free market. Teams who have not come within sniffing distance of a Super Bowl are being offered a couple of million dollars in concessions to locate somewhere."

Notice how he's turned the discussion from what is best for the city to what is best for him, his boss, and the corporation he works for. Part of city's soul, eh?

San Francisco isn't alone in bartering over stadiums. As any ESPN viewer knows, America is spiking with stadium fever. Everyone is cutting deals for new sports cathedrals. Two years ago, San Jose built its stadium to lure the San Jose Sharks. What's more, the city failed to make even the most modest attempts at recapturing revenue from the stadium. New York is agog: Both the Mets and the Yankees are angling for new stadiums. And in Houston the city is juggling three separate stadium demands -- from the Astros, the National Basketball Association Rockets, and a third for some football team to be named later. The situation in Houston has gotten so comic and severe that SF Weekly's sister paper, the Houston Press, has launched a column called "Stadia Watch" just to track all the developments. At the same time, teams are bolting from cities and heading for better deals elsewhere. The Oilers fled Houston after the mayor failed to pony up for a new downtown stadium -- this after the city had poured $200 million in renovations into the football team's arena. Cleveland gave the Indians and the NBA's Cavaliers the $425 million Gateway sports complex two years ago but still failed to keep the Browns in town, losing them to Baltimore. And here at home, not only are the Giants building a new Camden Yards-like stadium at China Basin, but both the Raiders, who fled L.A. back to Oakland, and the Warriors are getting total makeovers at both the Coliseum and the indoor arena next door. By no means is this an exhaustive list; it's not even close. Everywhere fans turn, they're either getting new stadiums or getting screwed and losing teams.

The reasons for this explosion in new stadiums are simple, says the troika of economists. It starts with players' salaries. As player pay shoots into the ionosphere, the costs of operating a ballclub also rise. Keeping pace with players' demands, owners have to find new ways to generate revenues. Other than the teams' names, most of which are already marketed to the hilt, what most owners have left is the stadium and the streams of money it produces: admissions, food and beverages, and souvenirs. In pondering DeBartolo's demands, don't think of a stadium as a municipal asset, as Policy has been calling it. Think of it as a giant cash machine for DeBartolo and his players.

Baade says stadiums aren't physically obsolete; they're economically obsolete. "It's all about generating more revenue," he says. To make stadiums more profitable, owners are adding more and more exclusive amenities: Stadium clubs that bear a membership fee, skyboxes, personal seat licenses (lifelong or similarly time-bound tickets), luxury suites that cost in the neighborhood of $200,000 a year, and what's called signage, a euphemism for selling the name of your stadium to a corporation for a million or two.

"The lack of business discipline on the part of team owners [in reining in salaries] is translating directly into a taxpayer burden financing their new stadiums," Baade says.

To make matters worse, when a team goes into building a new stadium not only does it have to provide enough revenue-producing elite amenities -- some stadiums have even included hotels -- to keep up with players salaries, it also has to count on the increased revenues to pay off construction costs it has incurred. So the pressure to upscale is severe. But when all is said and done, a stadium can be an incredible money machine. The Cowboys' stadium generates close to $40 million a year after expenses, Baade says.

About The Author

George Cothran

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