Pioneer Planet

It's time for Congress to end
sports bidding wars

Published Sunday, August 17, 1997, in the Pioneer Press.

You'd think $17 million a year might be enough for a young man to live on. But amid the big-league larceny of modern pro sports, such an offer is evidently an affront to a fellow's dignity.

Timberwolves star Kevin Garnett isn't the only one feeling insulted just now. When Garnett's agent indignantly rejected the Timberwolves' offer of a $103-million, six-year contract last week, Minnesotans as a group finally seemed to take offense at the whole shameless sports scam. Even the state's most prominent sports nut, Gov. Arne Carlson, got disgusted, calling on federal officials to stop the bidding wars among American communities that fuel the hyperinflation of the sports economy.

Much of the response to Carlson, lampooning him for complaining of sports excesses while promoting taxpayer subsidies for new stadiums, misses the important point. The governor is exactly right that only federal intervention can break pro sports' inflationary fever.

Pro athletes are paid like pharaohs because owners wage undisciplined bidding wars for talent. At bottom, they do so because sports revenue streams are torrential and, so far, perpetually increasing. Moving or threatening to move from one community to another, owners are able to extract subsidies from politicians for new sports palaces that spout new cascades of revenue. This saves owners the disagreeable work of disciplining themselves and their industry and rationalizing salaries.

If stadia subsidies ended and pro sports owners had to build and maintain their own facilities, they wouldn't have hundreds of millions to lavish on players. A semblance of reality would return to sports salaries and, probably, to ticket prices.

The trouble is that so long as nothing prevents communities from stealing one another's teams with subsidies, individual jurisdictions are as helplessly trapped in this self-destructive spiral as are individual team owners. A community that refuses to participate in raging bidding wars is likely to lose its teams. That's a serious loss no responsible politician can shrug off.

Extricating state and local leaders from this dilemma would be an altogether proper role for the federal government. The constitutional power to “regulate interstate commerce” was bestowed to prevent precisely this kind of destructive competition among states.

Arthur Rolnick, research director at the Minneapolis Federal Reserve Bank, has for years been promoting a federally imposed ceasefire in the subsidy wars. The federal government, he says, should simply require that sports teams (and perhaps other businesses) report as income any unique benefits they receive from state or local governments. Then high federal taxes, as much as 100 percent, should be levied against such subsidy “income.”

This would neatly make state or local subsidies worthless and thereby end the bidding wars. It would change the economics and politics of pro sports dramatically and for the better.

Rolnick's plan deserves a hearing in Congress. It may be too late to spare Minnesota the decision whether to build new facilities for the Twins and Vikings or lose them.

But some member of the Minnesota congressional delegation could serve the nation admirably by championing an end to this madness.

This material is copyrighted and was republished with the permission of the PioneerPlanet. PioneerPlanet is a service of the Pioneer Press.

 
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