Published Monday, March 20, 1995
Ever feel like a referee calling plays after the game is over?
For three months, two researchers at the Federal Reserve Bank in Minneapolis have been working on an article about the perils of city and state governments subsidizing sports franchises and private industry. Exhibit A: The estimated $720 million cost to taxpayers to lure the Los Angeles Rams to St. Louis.
Too bad their warning, to be published this month in the bank's annual report, comes a little late. Last week, football owners barred the Rams from moving to St. Louis, presumably leaving St. Louis stuck with a huge, empty stadium and big, looming bond payments.
But the authors, Melvin Burstein, executive vice president and general counsel of the Minneapolis Fed, and Arthur Rolnick, senior vice president and director of research, aren't upset about the timing of their warningeven if it comes too late to be heeded (by St. Louis or Minneapolis, which just bought the Target Center in hopes of keeping the Timberwolves in town.)
Our audience really is Congress, Burstein said, noting that the paper calls on lawmakers to bar bidding wars that lead to multimillion-dollar public subsidies of pro sports and private industries.
Burstein noted the Wall Street Journal recently has published a number of articles and an editorial on how public subsidies can boomerang.
Six months earlier, our piece might have come out and everybody could have said, 'Ho hum,' Burstein said. Now, maybe they'll say, 'Wow, that's a good idea.'
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