Roots, Roots, Roots for the Home Team: Community-Owned Professional Sports

To millions of fans across the country, professional sports instill a sense of civic pride and identity. They provide a common ground for all parts of a community: black and white, old and young, rich and poor, urban and suburban.

This combination of emotion, history and entertainment makes sports a business unlike any other. The people of Detroit don’t congregate around the television to watch Ford or GM workers build cars; Seattle residents don’t watch Microsoft employees design software. But rooting for the Tigers and the Supersonics and the Lions is a natural communal activity.

Thisintimate connection between cities, fans and home-town teams is what makes it so difficult to see those teams shipped around the country like so many packaged goods.

Teams have been moving for several decades, but the recent quantitative increase in relocations and threats of relocations has led to a sense of crisis and widespread anger. More than 50 million people live in and around communities where sports teams have recently moved or where they are threatening to relocate. The catalyst is the owners’ insistence on new sports facilities complete with luxurious skyboxes and other revenue-generating amenities.

Between 1992 and 1998, eight teams have uprooted themselves from Minneapolis, Quebec, Cleveland, Los Angeles (the Rams and the Raiders), Winnipeg, Houston and Hartford. They moved because their host cities wouldn’t build them a new stadium, or competing cities offered the owners a sweeter deal. Another 20 cities retained their teams by remodeling or building a sports facility. Still another 44 teams are planning a new stadium or have expressed dissatisfaction with the one they’re in and are demanding subsidies from their cities. All told, $7 billion is expected to be spent on new sporting facilities by 2006, most of which will come from taxpayer pockets.

Recently, the owners’ demands for public assistance have reached new heights. Many owners now insist on subsidies from their host communities greater than their teams are worth. This year’s Super Bowl champion Denver Broncos are threatening to leave Denver-The Sporting News’ number one-rated sports town-if the city doesn’t ante up $250 million. The team is worth only $180 million. Carl Pohlad tried to extract $250 million from the Minnesota state legislature for a state-of-the-art retractable roof stadium-the team is worth around $100 million.

Communities are wondering why they should give the owner more than the team is worth simply to keep them local for another 10 to 20 years. Why not instead buy the team outright?

Community ownership of professional sports teams is an idea with decades of successful experience. The Green Bay Packers have been operating as a nonprofit corporation since 1923, during which time they have won three world championships and three Super Bowls, and have recently financed two stadium upgrades from retained earnings. Their ownership structure has generated unprecedented fan support while maintaining the fiscal discipline exhibited by corporations.

At least seven minor league baseball teams are publicly owned, including the Toledo Mud Hens, famed favorite team of Corporal Klinger of M*A*S*H.

The Mud Hens are a nonprofit owned by Lucas County, which funnels all profits earned by the ball club back into its stadium. Other clubs are for-profit entities with publicly traded stock, but most of these teams have stipulations making it extremely difficult to move out of the community. The Wisconsin Timber Rattlers are the one minor-league team owned by shareholders of commemorative stock, an arrangement identical to the Packers.

In Canada, fan-owned professional football teams are more successful than those that are private investor-owned. Three teams in the Canadian Football League have been fan-owned since before 1950. A fourth, the Calgary Stampeders, may soon become the first publicly traded team in Canada. In a league that is struggling to stay afloat, community-owned teams have proven profitable-privately run clubs often have not. In 1996 privately run clubs in Montreal, Vancouver and Ottawa-three of the largest markets in Canada-were propped up with $4 million dollars from league coffers, most of which came from fan-owned teams.

The organizational models vary but they all have one thing in common: public ownership permanently takes the wheels off sports franchises.

Despitet he undeniable long-term success of community-owned teams, they don’t exist at the major league level outside of Green Bay. The reason is that all major leagues formally or informally prohibit public ownership. The NFL formally outlawed public ownership in 1961, the same year it instituted a radical revenue-sharing policy. Major League Baseball outlawed public ownership through an informal resolution passed in the mid-1980s when Joan Kroc sought to donate her baseball team, the Padres, to San Diego.

Three Steps to Rebuilding the Ties Between Sports & Community

The connection between sports and community has already been seriously weakened. The fans are mad at footloose owners. The owners themselves are rapidly becoming corporate entertainment conglomerates in which the sports teams play the same role as their sitcom-a synergistic device to sell their other products, subject to cancellation whenever the ratings drop below a certain level.

What can be done to repair the traditional ties of sports and community? We offer three remedies.

First, overturn the major leagues’ prohibition on fan ownership. This will likely require Congressional action. Representative Earl Blumenauer’s(D-Oregon) Give Fans a Chance Act (HR 590) would accomplish this goal. The bill would forbid any of the professional leagues from prohibiting community ownership, and would withdraw the leagues’ antitrust privileges if they did so. It also requires teams to give their communities 180 days notice of proposed relocation, during which time the community can put together an offer to retain the franchise. Lastly, it requires that leagues consider factors such as fan loyalty and whether the community is opposed to the move before approving relocation.

Ownership by the public permanently roots teams in their communities. In and of itself, however, it is not a sufficient solution. Despite their storied fan support, the Green Bay Packers would have folded or moved long ago if not for the revenue-sharing agreement of the NFL, which distributes revenues from merchandise sales, broadcasting and a portion of gate receipts evenly among all teams. Without such sharing, small-town teams could not survive. The NFL rightly understood that the media revenue comes in large part because of the parity the league has achieved since revenue sharing. Such parity has not occurred in the other sports leagues where the team with the biggest payroll usually wins. Congress needs to extend the NFL’s revenue sharing program to the NHL, the NBA and Major League Baseball.

These two steps would be sufficient if all communities were willing to own their teams. But the rights of fans and cities must also be protected when they don’t want to own their teams, but still support them both economically and emotionally.

When the Cleveland Browns left for Baltimore in 1995, professional sports fans everywhere were enraged because the team had sold out its 70,000 seat stadium for many years. The fans had demonstrated their support. The team was making a profit. Yet Art Modell, enticed by the public subsidies offered by Baltimore, which had lost their Colts to Indianapolis less than 20 years before, uprooted the team. The fan uproar was so great that the NFL was forced to compromise. The league gave the city of Cleveland the right to retain the Browns’ name, colors and logo, and promised the community a new team by 1999. If this”mandated expansion” was extended to all supportive communities vacated by their teams, then owners itching to move would be forced to decide between increasing their team’s value in the short term and the long-term consequence of decreased average team values caused by expanding the number of teams.

The opportunity for community ownership, a revenue-sharing plan that ensures league-wide competition and the vitality of small-market teams, and a form of”mandated expansion” for cities whose team owners move in the face of demonstrated fan support are the three key elements in an overall strategy that will allow our children and grandchildren to once again have the opportunity to root, root, root for a team that is truly rooted.

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David Morris

David Morris is co-founder of the Institute for Local Self-Reliance and currently ILSR's distinguished fellow. His five non-fiction books range from an analysis of Chilean development to the future of electric power to the transformation of cities and neighborhoods.  For 14 years he was a regular columnist for the Saint Paul Pioneer Press. His essays on public policy have appeared in the New York TimesWall Street Journal, Washington PostSalonAlternetCommon Dreams, and the Huffington Post.