Skip to main content

The "moral limits of markets" and the Atlantic Yards impact: naming rights, sponsorships, and visas for sale

Upate: Also see Michael Ignatieff's review in The New Republic, which criticizes the author for not explaining how "a politics of money beat a politics of public goods" and how "the republic came to depend more heavily on corporations and wealthy individuals to provide public goods" (hence naming rights). His conclusion: "Without a politics—of redistributive taxation, public goods investment for growth, and rules controlling money in politics—any critique of what money has done to American life is just moralizing."


Yes, the luxury suites and sponsorships needed to pay for the enormously expensive Barclays Center are part of a questionable trend. So is the credit to the Barclays Nets Community Alliance for playgrounds it has helped refurbished. And so is the green-cards-for-jobs scheme used to save Atlantic Yards developer tens of millions of dollars.

In case you missed it, New York Times columnist Thomas Friedman on Sunday wrote This Column Is Not Sponsored by Anyone, taking off from Harvard philosopher Michael Sandel’s new book, What Money Can’t Buy: The Moral Limits of Markets. (Here's an excerpt from The Atlantic)

Sandel might be thought of as the anti-Brett Yormark, as the Nets/Barclays Center CEO has tried to monetize nearly everything to do with the team/arena, and, in the wake of experience finding sponsors for soccer jerseys and NASCAR gear, is ready to sell sponsorship space on NBA uniforms.

He told Sports Business Daily, "You can monetize this in ways you can’t monetize any other kind of marketing inventory." Indeed. Because the arena and team are, in the words of developer Bruce Ratner, a "civic" endeavor.

Reasons for concern

And while Friedman's professed shock at the proliferation of sponsorships and logos seems a little strained, the trend identified by Sandel--a childhood friend of the columnist, by the way--deserves recognition, and concern:
 “Over the last three decades,” he states, “we have drifted from having a market economy to becoming a market society. A market economy is a tool — a valuable and effective tool — for organizing productive activity. But a ‘market society’ is a place where everything is up for sale. It is a way of life where market values govern every sphere of life.”
Why worry about this trend? Because, Sandel argues, market values are crowding out civic practices. When public schools are plastered with commercial advertising, they teach students to be consumers rather than citizens. When we outsource war to private military contractors, and when we have separate, shorter lines for airport security for those who can afford them, the result is that the affluent and those of modest means live increasingly separate lives, and the class-mixing institutions and public spaces that forge a sense of common experience and shared citizenship get eroded.
Sandel, and by extension Friedman, lament the “skyboxification of American life,” which keeps rich and poor from each other. Indeed, the much-lauded Brooklyn Dodgers did not separate fans into luxury suites and cheap seats.

Diminished public sector

But, as Sandel points out--and so do some Times commenters--this proliferation of sponsorships results from an increasingly diminished public sector. One commenter wrote:
I imagine that many Americans will think that "skyboxification" is inevitable, but it doesn't have to be this way. One has only to spend time in the more egalitarian parts of Europe - the Netherlands, say - to see a social compact that does a much better job of making life experience not quite so predestined by the circumstances of one's birth.
It's not a perfect system: inequality is more widely reviled as a vice, but entrepreneurship is less ingrained as a virtue. The market is not all-powerful, but the bureaucracy is more entrenched.
Still, education and health care are excellent in the "social compact" countries. These are the two main pillars of a modern existence, the two major human rights of the modern age. 
Cheap seats

One Times commenter wrote:
Wouldn't it have been a good idea if New York City, as part of the deal for supporting the new Yankee Stadium, had required the Yankees to make 1000 seats available at every game to school age kids for $5.00?
Indeed, Forest City Ratner promised that 2000 seats per game would be available for $15. None of those seats are currently available for season tickets. (See screenshot at right, and click to enlarge.)

It's not clear whether they will be made available later for season tickets, because the team is currently pushing more expensive seats, or whether they'll be available as individual, per-game tickets.

I'm betting on the former, though I suspect a fraction of individual tickets might be available.

The naming rights proliferation

Sandel's book cites a 5/30/04 New York Times article, At (Your Name Here) Arena, Money Talks, about the proliferation of naming rights:
"In 1988, there were only three naming-rights deals with a total contract value of $25 million,'' said Dean Bonham, the chairman and chief executive of the Bonham Group, a sports marketing company based in Denver that has negotiated many naming agreements. "Today, there are 66 deals worth $3.6 billion.''
That means that more than half the arenas and stadiums in professional baseball, football, basketball and hockey now bear corporate names, creating new cultural touchpoints that may be difficult for fans accustomed to the sound of a Fenway Park or a Yankee Stadium.
The article does raise a couple of troublesome issues: naming rights sponsors come and go with corporate gyrations, and some shareholder watchdogs wonder if the spending is wise.

Sharing the wealth?

But a key question was not raised: shouldn't sports facilities that are publicly owned, or get public funding, share some of the naming rights revenue? Or, if not, shouldn't potential naming rights revenue be explicitly calculated as a subsidy?

The Atlantic Yards arena, now known as the Barclays Center, is nominally publicly owned, for the purposes of a devilishly clever funding scheme, but privately operated. The state gave away the naming rights. Neither the city nor the state calculated the sale--announced at $400 million over 20 years, likely closer to $200 million--as a subsidy.

The market society

In his book, Sandel asks, "Why worry that we are moving toward a society in which everything is up for sale?"

His answer:
"It is not about inequality and fairness but about the corrosive tendency of markets. Putting a price on the good things in life can corrupt them. That's because markets don't only allocate goods; they also express and promote certain attitudes toward the goods being exchanged."
He gives a good example from baseball. Once it was the norm to return a ball hit to set a record to the holder of that record. Now that such a ball is marketed, "presenting it to the player who hit it is no longer a simple gesture of decency. it is either a heroic act of generosity or a foolish act of profligacy."

Selling green cards

Sandel points to how economist Gary Becker "first proposed selling the right to immigrate in 1987," and "in an age of rising market faith, the gist of the Becker-[Julian] Simon proposal soon found its way into law."

That law, in 1990, established the EB-5 program, in which immigrant investors in purportedly job-creating enterprises, could get green cards for themselves and their families.

Sandel does not mention an important--and, to my mind, not unreasonable--spur to the law: the competition with Canada and Australia for expected high net worth immigrants from jittery Hong Kong, facing an incorporation into China.

Nor does he mention how the use of the EB-5 program has boomed as developers and other entrepreneurs have discovered a source of cheap financing, with rather vague requirements to prove job creation.

Rhapsodizing about sports

Writing about sports, Sandel the scholar channels his inner George Will:
Like few other institutions in American life, baseball, football, basketball, and hockey are a source of social glue and civic pride. From Yankee Stadium in New York to Candlestick Park in San Francisi\co, sports stadiums are the cathedrals of our civil religion, public spaces that gather people from different walks of life in rituals of loss and hope, profanity and prayer.
He recognizes, however, that there are limits to the "civic" nature of sports:
Of course, sports stadiums are mainly places where people gather to watch athletic events. When fans go to the ballpark or arena, they don't go primarily for the sake of a civic experience. They go to see David Ortiz hit a home run in the bottom of the ninth, or to see Tom Brady throw a touchdown pass in the final seconds of the game. But the public character of the setting imparts a civic teaching--that we are all in this together, that for a few hours at least, we share a sense of place and civic pride. As stadiums become less like landmarks and more like billboards, their public character fades. So perhaps, do the social bonds and civic sentiments they inspire.
The civic teaching of sports is eroded even more powerfully by a trend that has accompanied the rise of corporate naming rights--the proliferation of luxury skyboxes... The advent of skybox suites high above the field of play has separated the affluent and the privileged from the common folk in the stands below.
Even though, in the late 1980s, Congress cut back on the tax deductions for skybox expenses, that didn't stop the trend.

Moreover, as Sandel notes, the naming rights trend has extended to nature trails and subway stations. Yes, the Barclays Center naming of the Atlantic Avenue/Pacific Street station gets a mention.

And just today we learned that the MTA, at least on the first cut, sloppily excised Pacific Street from the D/N/R/ station name and left it as the misleading Atlantic Av-Barclays Ctr.

A lament

Sandel concludes:
Commercialism does not destroy everything it touches... Sports fans can still root for the home team in Bank of America Stadium, AT&T Park, and Lincoln Financial Field, even if few of us can name the teams that call those places home.
Nevertheless, imprinting things with corporate logos changes their meaning... These are, I admit, contestable judgments... In fact, we disagree about the norms appropriate to many of the domains that markets have invaded--family life, friendship, sex, procreation, health, education, nature, art, citizenship, sports, and the way we contend with the prospect of death. But that's my point: once we see that markets and commerce change the character of the goods they touch, we have to ask where markets belong--and where they don't.
Commercialism, he warns, erodes commonality, the sharing of experiences and a shared search for the common good.

And a contrarian take

One reviewer writes:
What Money Can't Buy will tap into a widespread unease about having to limit government and accept a larger private domain in this age of austerity; and about crass commercialisation when unemployment and inequality are too high. But it does not offer a clear guide to which markets are repugnant, and why.
Indeed, as the critic points out, Sandel's own job is as "Anne T. and Robert M. Bass Professor of Government."

There is a distinction, though perhaps a fine one. The donors--at least in most cases--aren't selling something, nor do they ask for control. They're being honored for generosity. But it would make a difference, wouldn't it, if the donor were a corporation, and, indeed, there are corporate-sponsored professorships.

Another impact

The trend has another impact, I would add. The more commercialism, the more "normal" it seems. I remember entering the Brooklyn Public Library with some European visitors, who registered shock when we saw a banner at the Brooklyn Public Library hailing all the sponsors of Summer Reading.

Even the New York City Independent Budget Office didn't calculate the value of naming rights to the arena.

And commercialism teaches kids there's a price on everything, a price to be paid by a "presenting sponsor," no matter whether the product is good or not, or whether it misleads straphangers or not.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…