Coyote Blog

My column is up this week at Forbes, and discusses the role of taxpayer money in professional sports.

A  critical battle is underway challenging the very heart of the professional sports economics model — and it is not the NFL labor negotiations.  The unlikely fight is between a struggling league (the NHL), a suburb with delusions of grandeur (Glendale, Arizona), and a small, regional think tank (the Goldwater Institute).   At stake is an important source of value for nearly every professional sports team:  taxpayer subsidies....

Consider the Arizona Cardinals new football stadium in Glendale, for example.  In part due to the promise of a Superbowl bid, the local taxpayers paid $346 million of the total $455 million cost of the facility — a building that will be used just three hours a day on ten days a year for its primary purpose.  By contrast, in 2010 Forbes valued the Arizona Cardinals at $919 million, meaning well over a third of the franchise’s value accrues from the public subsidy of its retractable roof palace.  It can be argued that much of the increase in player salaries and team owner wealth in the NFL over the last twenty years has come at the expense of taxpayers.

If anything, this example from the NFL understates the importance of public funding of stadiums.  Why?  Because of all the major sports leagues, the NFL gets the lowest percentage of its total revenues from its stadiums.  Leagues like the NBA, and in particular the NHL, are far more dependent on stadium revenue for their well-being.

Let’s return to precocious Glendale.  In 2003, the city agreed to publicly fund $180 million of the $220 million cost of building a new arena for the Phoenix Coyotes hockey team.  Whereas Glendale’s subsidy of the Cardinals represented about a third of that franchise’s value, their $180 million subsidy of the Coyotes represents over 130% of the current $134 million value of the team.  Stuck in Arizona and losing as much as $40 million a year, the team is literally worthless without ongoing public subsidies.

The column goes on to discuss yet another bond issue proposed by Glendale to subsidize these teams.

This week, we in Phoenix are supposedly getting our payoff for subsidizing the hapless Arizona Cardinals with a billion dollar football stadium that is used for its intended purpose (football games) for 33 hours per year  (3 hours per game times 11 games:  2 Cardinals pre-season, 8 home regular season, Fiesta Bowl).  In exchange we get a nicer stadium (if I were to want to see a Cardinals game live) but worse TV options (because instead of the best game of the week, we have to see our home team).

The big selling point, the cherry on top of the sundae the NFL uses to push new stadiums, is a Superbowl.  Which is in town this week.  So far, the huge economic stimulus has not really poured into our household, but I guess I need to be patient.  Anyway, the timing seems good to link this article, which comes via the Sports Economist:

If you build it, they will come. This is usually the mantra of those in
favor of publicly financed sports stadiums, including the current
proposal for a new soccer stadium in Chester. In this case they
are visitors whose spending would turn devastated cities and
neighborhoods into exciting destination points. Local schools,
merchants, and residents all would benefit as municipal coffers swelled.

There's only one problem with this scenario. It's not true. Never has been. They
do come, but cities are not saved. Over the past two decades, academic
research has generated literally hundreds of articles and books
empirically challenging the alleged economic wonders of new stadiums,
even when they're part of larger development schemes. I have been
studying and writing about publicly financed stadiums for more than 10
years and cannot name a single stadium project that has delivered on
its original grandiose economic promises, although they do bring
benefits to team owners, sports leagues and sometimes players....

Why, then, given the overwhelming academic research challenging
stadium-centered economic development do political leaders (if not
average citizens) still support such projects? In a just-released
article in the Journal of Sport and Social Issues, my colleagues and I
studied media coverage of 23 publicly financed stadium initiatives in
16 different cities, including Philadelphia. We found that the
mainstream media in most of these cities is noticeably biased toward
supporting publicly financed stadiums, which has a significant impact
on the initiatives' success.

This bias usually takes the form of uncritically parroting stadium
proponents' economic and social promises, quoting stadium supporters
far more frequently than stadium opponents, overlooking the numerous
objective academic studies on the topic, and failing to independently
examine the multitude of failed stadium-centered promises throughout
the country, especially those in oft-cited "success cities" such as
Denver and Cleveland.

I can attest to the latter.  During the run up to various stadium-related referenda, the media was quite rah-rah for the stadium subsidies.  In fact, on radio, several talk show hosts denigrated voters who opposed the stadium subsidies as "stupid old retired people."  I remember calling in to a couple of talk shows opposing the stadium bills and being treated like a Luddite.

My article on sports team relocations and stadium subsidies as a prisoners dilemma game is here.

James Pethokoukis argues that we might have spent a lot of the $1.3 trillion cost of the Iraq war on containment of Iraq had we fought the war.

I will admit I have not seen the studies, but I declare right now that there is NO WAY.  If we really would have spent $150 billion a year containing Iraq in absence of a war, we should be spending similar magnitudes today on other similar regimes on which we have chosen not to declare war, like Iran, North Korea, Venezuela, etc.  But demonstrably we are not.  One might argue that oil prices would be lower, I guess, but one could also argue that the post-9/11 recession would not have been as deep without a war.  I am sure there is a broken window fallacy in here somewhere.  This reminds me nothing so much as the tortured economic studies that purport to show a gullible populace that it makes sense to build a billion dollar stadium for the hapless Arizona Cardinals because the city will make it all back in future revenues.  Sure.

I am not going to argue the justifications for the Iraq war here.  What I will say is that folks who have enthusiastically supported the war should understand that the war is going to have the following consequences:

1. In 2009 we will have a Democratic Congress and President for the first time since 1994.
2. The next President will use the deficits from the $1.3 trillion in Iraq war spending to justify a lot of new taxes
3. These new taxes, once the war spending is over, will not be used for deficit reduction but for new programs that, once established, will be nearly impossible to eliminate
4. No matter what the next president promises to the electorate, they are not going to reverse precedents for presidential power and secrecy that GWB has established.  Politicians never give up power voluntarily.  [if the next president is Hillary, she is likely to push the envelope even further].  Republicans are not going to like these things as much when someone of the other party is using them.

I am done with the Cardinals until they get an offensive line. I have written many times about the sad, failing strategy of drafting high-profile position players (particularly wide receivers) but paying no attention to the offensive line.  The Cardinals have one of the best receiving corps in the nation, have what looks to be a great young quarterback, has a top-notch running back, but did NOTHING over the winter to shore up what last year was a crappy O-line.  This is despite being $10 million under the cap!

And you saw it last night.  Commentators have criticized the coaches for getting too conservative in the second half of last night's debacle, and certainly that is true.  But a good team with a back like Edgerin James should be able to close out a game in the fourth quarter by pounding the ball on the ground.  And the Cardinals could not, with James averaging less than 1 yard per carry after the opening drive in the first quarter.

I give up.  I am tired of getting suckered onto the bandwagon.  Until the Bidwells crack open the wallet and focus some cap money on the O-line, I am back to rooting for the Broncos.

Update:  Greg Easterbrook piles on:

When my two football-crazed boys got up early this morning I said,
"Guys, Arizona was ahead by 20 and had the ball on the last play of the
third quarter." Immediately both said, "And the Cardinals lost." Not
only did Arizona blow a late 20-point lead at home in front of a
national television audience; the Bears committed six turnovers and the Cards still managed to lose. Arizona held Chicago to nine first downs and was plus-four
in turnovers, yet managed to lose. In the closing seconds, Arizona had
last year's Pro Bowl kicker lined up for a 41-yarder to win, and
trigger what would surely have been wild civic celebration, and still
lost. What's a stronger expression than "pitiful"? We must now twist an
old line and proclaim: Whom the football gods would destroy, they first
make Arizona Cardinals.

You hear a lot of debate about what wins NFL Championships - is it offense, defense, the running game, the quarterback?

Well, if we look beyond what is probably the most important determination of success -- don't have any injuries -- I think the last few games have really proven the importance of having a great offensive and defensive line.  The Indianapolis Colts, the team that supposedly had everything, lost because the Steelers penetrated their O-line at will.  Both the winning teams yesterday won in large part because their lines pushed the other team's around the field. 

Good teams know this.  Bad teams, like our Arizona Cardinals, don't.  At the beginning of the year, the Cardinals were getting a lot of publicity because they had exciting new players at many of their skill positions.  I went to see their 3rd preseason game, and I knew then that they would suck this year, yet again, because their lines got pushed around by Denver's second team.  Denver, by the way, is a great case for building from the lines - for years they have turned no-name guys into thousand yard rushers because of their O-line.  Same this year in Pittsburgh.  The great Cowboys teams of the 90's had Aikman and E. Smith and M. Irvin, but it also had what may have been one of the great offensive lines the league has seen.

Unfortunately, the Cardinals, like many bad teams, feel the need to draft big-name position players that temporarily excite a lethargic fan base rather than really building unsexy offensive and defensive lines.  I mean, for god's sakes, we have drafted like 3 or 5 wide recievers in the first round of the last few drafts.  This team needs EVERYTHING and we are drafting recievers?

Hats off to ex-Arizona Cardinals cheerleeder and Phoenix resident Sarah Coggin for being part of the work to support our troops by visiting them overseas.  And here is more on other cheerleader visits here at the NFL Cheerleader Blog (as I have said in the past, if I could get paid to write that blog, my life would be set).  And shame on you cynics who think that I posted this just to have an excuse to get a cheerleader picture on the front page.  I actually did it to get two cheerleader pictures up:

Previously, I explained why I like Football Outsiders here. Their week 12 statistical rankings of teams is here.

If you really want to dig into NFL stats, this is a great site.  Also, they just ran their model restrospectively on the year 2000.  And, what do you know, our beloved Arizona Cardinals again came in dead last, with the worst full-season score in the history of the rankings.

Previously, I explained why I like Football Outsiders here. Their week 10 statistical rankings of teams is here.

Despite the win last week, our Arizona Cardinals have finally returned to their usual stomping grounds -- in the bottom 5 teams, along with Miami, Oakland and San Francisco.  Hard to argue about these teams being the worst.  Perhaps the biggest surprise is the team fifth from the bottom - Dallas.  Cowboy haters rejoice.  Parcel's record of second year improvement seems to be in serious trouble.  If the season ended today, San Francisco would set the record for the worst statistical performance since these guys started keeping the stats, beating the second worst team, the 2002 Cardinals and the third worst team, the 2003 Cardinals, but just shy of the 2002 performance of the expansion Texans.  (Gotta love our Cards).

The top three, unsurprisingly, are New England, Philly and Pittsburgh.  New England has taken the top spot, which is where I think they belong.  For a while, Philly's special teams rank was carrying them, but history in these rankings has shown that special teams ranks are very volatile and tend to regress to the mean.  Philly's soft defense may well spell another playoff disappointment for the Eagles.

Previously, I explained why I like Football Outsiders here. Their week 9 statistical rankings of teams is here.

Miami still can't nail down that bottom spot. San Francisco and the Raiders both have fallen below the Fish (so much for Bay Area football). Miami has the worst offense in the league by a HUGE margin, but its defense keeps it off the bottom, as it probably should:  A good defense will win you a few games, no matter how bad the offense is.  My Arizona Cardinals continue to fall, down to their rightful place in the bottom quartile, despite having a pretty good defense. At the top, Pittsburgh, New England and Philly are threatening to run away and hide, which just goes to show that every once in a while, BCS notwithstanding, computers and common sense can converge.

Previously, I explained why I like Football Outsiders here. Their week 7 statistical rankings of teams is here.

A couple of observations. For the first time in recent memory, our hapless Arizona Cardinals crack the top half of the rankings. Woohoo. Arizona is ranked 5th in total defense, and first in rush defense. Good thing, since we can't score to save our lives. Also of note, Miami pulls out of last place, ceding the spot to cap-hangover suffering San Francisco. I can't believe the Cards lost to those guys in the fourth quarter. Yeah, I know what you are thinking - you can't believe anyone really cares about the Cards.

Also, this weeks Tuesday Morning Quarterback is up. Always entertaining.