Mark S. Rosentraub

An important work about major league scam artists: In today's big-time professional sports business, the relationship of pro sports owners and public officials has become significantly intertwined, as more and more public monies are risked to keep or attract a pro sport franchise in a community. Author Mark S. Rosentraub has written a sober study of the complexities of this "welfare for sports owners" that will stand as the classic definitive study of this issue. Rosentraub thoroughly analyzes the economic complexities of public subsidies of pro sports, with his well-reasoned recommendation that public subsidies do not return on the investment at a level high enough to warrant the tremendous risk of the hundreds of millions that owners usually want. The details are all here on the fascinating stories of owners and public officials from the communities of St. Louis, Pittsburgh, Arlington, Texas, Indianapolis, Los Angeles, Ontario, Toronto, Cleveland, and others. Rosentraub also explains the powerful, almost mythical interest of a community in a professional sports franchise, that helps to better understand this sordid joining at the hip of this business with a community. This is a solid, complete analysis of this very controversial topic that should be required reading by business majors, and especially mayors and other public officials who may think a professional sport franchise will "save" their community. Rosentraub should be called in, before they sink their precious tax dollars into this black hole. Look for the author to be in heavy demand on the talk show circuit and in open debates with owners. At almost 500 pages, Rosentraub's obvious hard work clearly shows his preeminent status as the play-by-play announcer par excellance of pro sports franchises.… (mais)

With Major League Losers: The Real Cost of Sports and Who's Paying for It Mark S. Rosentraub puts forth a fairly simple thesis regarding funding for public sports facilities: it ain't worth it.

Rosentraub presents a lot of data regarding the impact that sports teams have on city economies. His conclusion is that the overall direct impact is fairly large, but that the net direct impact is very small. That is, if you just look at the economic activity generated by the sports teams themselves, it would appear to be significant, but when you consider the fact that almost all of the dollars spent as a result of the existence of the sports team would still have been spent on local entertainment venues, the impact is just one of shifting economic activity, not creating it.

This would, however, have little significance for the average city dweller if sports facilities were built with private money, but they are not. Most stadiums and arenas today are built mostly with public money (i.e., taxes). State and local taxpayers are funding these facilities to keep the teams from moving to other cities. When you factor in the cost to the public of funding these facilities, what little economic benefit they might generate is completely washed away by the increased taxes on the people that winds up depressing spending and economic activity. In other words, public financing of sports facilities actually decreases the amount of economic activity occurring within the city.

Rosentraub makes the case that sports financing is not about economics, but about psychology. Americans have been "trained" to believe that if a city does not have a major league sports franchise, then it isn't really an important city. City officials have talked themselves into believing that their city cannot grow and prosper if it doesn't have a major league sports franchise, and, perhaps more importantly, they know they will likely not be re-elected if the voters see them as the people who let their favorite sports team move away. Hence, the fierce competition (funded by taxpayer money) over existing franchises. In actuality, though, there is no connection between the existence of a major league sports franchise in a city and its economic growth.

Of course, this wouldn't be an issue if every city could have a team. Rosentraub goes on to make the point that the restriction of the number of major league franchises to a number well below the actual demand for such franchises is not only contrary to American antitrust laws (for which Congress has given an exemption to the sports leagues), but is also artificially inflating the value of such franchises.

In effect, sports leagues in the U.S., which are run by billionaires and multimillionaires, have used their clout with Congress to establish a system that permits them to engage in a cartel that restricts the supply of the service that they provide (sports entertainment), which then gives them the bargaining power to wrest huge subsidies from local and state governments that are contrary to the well-being of the public at large. These subsidies are effectively large wealth transfers from the middle- and lower- class taxpayers to the millionaire and billionaire athletes and owners.… (mais)