State and Local Issues

Heartland Study: Fan Ownership Could Stop Sports Bidding Wars

Polls show a majority of Americans oppose public subsidies for professional sports. But nationally, subsidies to professional sports facilities cost taxpayers $500 million a year, says Joseph L. Bast of the Heartland Institute. And $7 billion worth of stadiums and arenas are planned between now and 2006.

Fans support taxpayer subsidies mainly because teams threaten to relocate. But Bast says there is an attractive alternative to competition between cities for team franchises: fan ownership.

A model for this type of ownership is the Green Bay Packers of the National Football League. The Packers have been owned by a nonprofit corporation since 1923.

  • The Packers' stockholders elect the organization's board; but no dividends are paid on the so-called souvenir stock, and no shareholder can hold 200 shares or more.

  • All profits are put back into the team, making the Packers the least-subsidized team in the country, and there is no incentive to sell or move the team, since by law any profits would have to be distributed to a charity.

  • Approximately 52 major league baseball, National Hockey League and National Basketball Association franchises are owned in part by public companies.

  • And the trend is toward further public ownership, and stock in the NBA Boston Celtics is even traded on the New York Stock Exchange.

In November 1997, says Bast, the owner of the MLB Minnesota Twins offered to give the team to a charitable foundation in return for taxpayers building a $250 million stadium.

Finally, Bast points out that the going price for NFL teams in 1997 was about the same as the cost of a new stadium, suggesting fans in some cities would be able to buy a team and keep the old stadium -- if other team owners would allow more nonprofit ownership.

Source: Joseph L. Bast, "Sports Stadium Madness: Why It Started, How to Stop It," February 23, 1998, Policy Study No. 85, Heartland Institute, 800 East Northwest Highway, Suite 1080, Palatine, Ill. 60067, (847) 202-3060.

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