Saturday, January 19, 2008

The "Free Lunch" for sports team owners and the starving of parks

In an interview yesterday on Democracy Now, New York Times writer David Cay Johnston described the country's subsidies for sports teams--though he didn't mention the Nets/Atlantic Yards--that he criticizes in his new book, Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill).

JUAN GONZALEZ: Well, I was struck—you have numerous chapters in the book on the various aspects of this transfer, but I was especially struck by your material on the New York Yankees and Steinbrenner and Joyce Hogi, who you mention in the book, who I know well, and this whole issue of sports teams across America and how the public is subsidizing them. Could you elaborate on that part of it?

DAVID CAY JOHNSTON: Sure. George Steinbrenner is getting over $600 million for the new Yankee Stadium in New York. The New York Mets are getting over $600 million. In fact, the City of New York gave them money to lobby against the taxpayers to get more money. Rudy Giuliani gave $50 million to the two teams for that purpose.

The new owners of the Washington Nationals baseball team in Washington, D.C., paid $450 million for the team. But, in fact, they got the team for free, because the subsidy they’re getting for the new stadium is worth $611 million. We actually paid these people to buy the team.


Note that Bruce Ratner and partners paid $300 million to buy the New Jersey Nets and the direct subsidies for Atlantic Yards--not all for the arena--total $305 million, and the indirect subsidies and tax breaks total much, much more.

Starving public parks

JOHNSTON: Now, in this country right now, we are spending $2 billion a year subsidizing the big four sports: baseball, basketball, football and hockey. It accounts for all of the profits of that industry and more. Now, there may be individual teams that make money, but the industry as a whole is not profitable. And that’s astonishing because the big four leagues are exempt from the laws of competition. By the way, irony is not dead, because here are people who are in the business of competition on the field who are exempted by law from the rules of economic competition.

If you go to England and you want to start a soccer team, they have to let you join the soccer league. There are thirteen commercial soccer teams in the London area. New York City, the biggest city in the country, there are two baseball teams, because there’s no free entry into the market. In Los Angeles, there’s no football team. And the owners use this power to prevent others from owning teams, to prevent municipal governments from owning teams, to prevent nonprofits from owning teams, to extract money from the taxpayers to build them new stadiums.

At the same time that we’re doing this, we are starving our public parks for money. And I show in Free Lunch how the rise of urban gangs and now suburban gangs is connected to this. We used to have all sorts of programs in this country after World War II for young men and young women on Saturdays and during the summer and school holidays, where even if you didn’t have any money—didn’t matter that your parents didn’t have any money, because—and I know this because I did it as a child—you could go to any one of a half-dozen different places, and there were organized activities to keep you out of trouble. After all, idle hands are the devil’s workshop is not exactly a radical new idea. Well, we’ve cut and cut and cut those programs to fund two different subsidies: one to sports teams’ owners, one that goes to Tyco, General Electric, Honeywell and some other big companies. And, lo and behold, we’ve had a big rise in urban violence because of the vacuum being filled by young people who no longer have these organized activities.


Then again, a privately-owned sports arena within Atlantic Yards, named for Barclays Capital, would provide opportunity for (paid) amusement and thus qualify as "recreational," according to Justice Joan Madden's January 11 decision.

2 comments:

  1. What do George W. Bush, Michael Bloomberg, Eliot Spitzer, Bruce Ratner and the New York City Council all have in common?

    They all participate in the scam of using “stadium-building” (yes, that includes Ratner’s arena) as a way to make those in the “rich club” richer. Do people who buy professional sports franchises actually like sports? Or is it just the price of a ticket to play the scam that nobody but the rich can play?

    This same story (David Cay Johnston on How the Rich Get Richer) was also covered by Terri Gross’s January 3, 2008 Fresh Air interview with David Cay Johnston which became NPR’s top e-mailed story available at:

    http://www.npr.org/templates/story/story.php?storyId=17808622&sc=nl&cc=es-20070120

    The first 20 minutes of the interview cover how George W. Bush, just like Ratner with Atlantic Yards, used the “stadium-building” scam together eminent domain abuse to transfer taxpayer money into his and his partner’s pockets. Bush himself, pocketed $17 million (failing to pay full taxes on it). The interview also covers the evidence that these stadiums/arena scams are not good for local economies.

    The end of the interview does a pretty good wrap up pointing out that these schemes constitute an objectionable thwarting of Adam’s Smith’s “invisible hand.”

    One problem is that the public does not understand these scams while the likes of George W. Bush, Michael Bloomberg, Eliot Spitzer, Bruce Ratner (and the New York City Council) do. (Do people really understand that the arena is being given to Ratner as a gift through an R-TIFIC-PILOT agreement- pronounced “Artifice- PILOT”?)

    Another problem is that George W. Bush was successful in carrying out this scam and has shown others like Bloomberg and Spitzer that you can get away with it and even become president(?).

    Finally, what Bush learned he could get away with building a stadium in Arlington Texas for the Texas Rangers surely set the stage for his confident pursuit throughout his career of further wealth transfers to the super-rich club at the expense of the general public and for other schemes like Haliburton in Iraq and New Orleans.

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  2. If you have not read How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill). you are missing one of the most important books of this century. David Cay Johnston’s writing is riveting, and his expose on how government regulations are helping take from the many to help the few is essential knowledge or all who wish a good and prosperous future for America. As you can see from the others posting this is a must read.

    Instead of bring a bottle of wine to our friends when visit, we are now bring a copy of the book. We have never had such a positive reaction to our thank you gift! Conservatives, libertarians, progressives are all appalled by information in this book. We need to get the message out and take our country back. You owe it to yourself and future generations, if you read no other book this year, to read this one. What Mr. Johnston has done provides a major service for America and it will only be useful if we read it and take action. In case you missed it Mr. Johnston was just on Bill Moyer’s, http://www.pbs.org/moyers/journal/01182008/profile.html
    and Terry Gross’s Fresh Air http://www.npr.org/templates/story/story.php?storyId=17808622
    They are well worth listening to and passing on to your friends who love America and want to help it have a great future.

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