(00:00:00) Last spring when there was all that talk that the state might be asked to come up with 20 minutes twenty million dollars to help bring a National Hockey League team back to Minnesota. And before that when the debate raged on over buying the Target Center to keep the Timberwolves basketball team in Minnesota both times. You would occasionally hear somebody warned that the debate over hockey or basketball was just a warm-up to the main event soon. They said we would be debating the relative cost and importance of being the Twins and Vikings in Minnesota. Well that debate is now getting underway last month. The twins made it clear that they either needed a state-of-the-art baseball facility or perhaps they'd have to leave the Vikings for their part say that without changes allowing them to make substantially more money. They will find it harder and harder to compete coexistence at the Metrodome built just 13 years ago. No longer seems possible. So do we build the twins a new stadium and fix up the dome for the Vikings do we? One or both of the teams to leave Minnesota. How much is too much to spend on professional sports? That's the question the state's advisory task force on Pro Sports is wrestling with and the question. We'd like to discuss this afternoon joining us by phone is Michael Danielson who's coming out with a new book on Sports public subsidies in the nation cities Professor Danielson teaches politics and public affairs at Princeton University like to thank you for joining us (00:01:25) Professor. I'm pleased to be with you (00:01:28) joining us from our Minneapolis. Bureau is Task Force member Paul Thatcher, who is also a member of the commission that operates the Metrodome afternoon Miss Thatcher greetings here in the studio state representative D long Minneapolis, and she too is a member of the pro sports task (00:01:44) force. (00:01:45) Glad you could join us now before we actually get started we thought it would be useful to hear from a man who thinks Pro Sports is not only good for Minnesota, but a good investment in as well Wheelock Whitney. He'll bring the Wednesday Minnesota back in the 60s. He's the co-owner of the Minnesota Vikings and as the head of the governor's task force on Pro Hockey. He's currently trying to convince lawmakers. It's a good idea to spend some public money to bring the National Hockey League back to the state Whitney testified this week before the pro sports advisory task force arguing with the public really has spent very little on Pro Sports that ticket buyers are most of the tax burden now fortunately many minnesotans are great sports fans and they've bought tickets to the games. These are the people the ticket buyers who have paid for the benefits of Major League Sports that we all enjoy most minnesotans did not purchase tickets have paid nothing, but they enjoy the team just the same. Just think for a moment if we couldn't greet one another on Monday morning with how about those bikes? Or Twins or Wolves if we couldn't do that, we'd be hopelessly stuck with cold enough for you hot enough for you. Despite the tangible and intangible benefits of Major League Sports some members of the media and some members of the legislature continue to mislead the public and continue to arouse public animosity to the point that the public thinks it is being abused by professional sports teams. I'm the kind of guy who loves to wave my Homer Anki and cheer at all sporting events. I love to get rid of my hostilities by yelling at the managers and the players. I love the second guess the pros. You can't do that kind of stuff at the symphony. You just don't scream it a goe you'd be thrown right out. Now don't get me wrong. I mean, I love the symphony. I have season tickets to the symphony. I love the theater. I appreciate the Arts. I believe they play a vital role in making Minnesota. The interesting lively place on the world map that it has become still I can't help noticing at least here in Minnesota the media and politicians have avoided stirring up public animosity concerning public support of the Arts (00:04:25) last year the legislature allocated six and a half million (00:04:28) dollars for the state Arts board and Regional Arts Council. These are direct tax dollars direct dollars from income taxes and sales taxes paid by everybody in Minnesota. You don't hear the media criticizing that investment of public funds and why should they the Arts make a great contribution to the quality of life in this (00:04:50) state? But so does Sports (00:04:53) and that's my point. It's not inappropriate for the state to support the organizations that help make Minnesota world class. Twin Cities businessman Wheelock Whitney the head of the governor's task force on Pro Hockey the co-owner of the Minnesota Vikings football team Whitney testify this week before a state task force trying to lay down some guidelines on just how much the public should or should not spend keep pro sports teams in Minnesota. Paul. Thatcher D long. Now you both heard Wheelock Whitney. Did you find him fairly persuasive? (00:05:24) Well, I think mr. Whitney it was amusing entertaining and made some points. But he also I think said some things that I would disagree with certainly the analogy to the Arts doesn't make sense unless he is proposing that the professional sports teams go nonprofit as the Arts organizations. Are there other ways that analogy breaks down. So I don't think he should be Grudge public support of the Arts. Frankly. I don't think we support the Arts enough, but that's an entirely different situation than professional (00:05:53) sports Gary. It's interesting. I wear two hats. I'm a member of the executive committee of Minnesota Orchestra and for many years and chair. Of its public affairs committee as well as being chairman of the finance committee of the Metropolitan sports facilities commission. So it's interesting that we lock interposes those two things as to public support for the team's I think though we represents an important point of view is the probably Chief spokesman and cheerleader for sports and in Minnesota and a voice that importantly needs to be heard. I think it's also true that the public has supported the Major League Sports in this state and done it well and four years in the current parent Paradigm, we find that the public provides Public Finance in the low interest rate, so that can be derived therefrom as well as real estate tax free the the facilities free of real estate taxes, and I would suggest that just at the Metrodome. (00:07:01) Loan (00:07:02) over time that those two subsidies amount to about 70 million dollars. I it is also true that the hotel motel and liquor tax that was imposed. I think D and 77 in and went clicked off in 84 produced 23 million dollars of tax revenue and we often forget the four million dollars of cash expended by the City of Minneapolis in infrastructure to make the Dome possible. (00:07:34) They should have that the arrangements with the Target Center where in parking revenues that would normally go to the city and thereby to the property taxes in the city, which I am one are being rerouted to support Target Center. So certainly there has been substantial support dating back to when the Minneapolis taxpayers under wrote the original bonds to build the original stadium in Bloomington (00:07:59) now just as a point of reference, so Note how what we're talking about here. If some public body were to come up with enough money to subsidize the purchase of the hockey team build a twins of state-of-the-art baseball stadium and remodel the Dome so that the Vikings could make all the money they say they need what would be the total cost if some if somebody were to write out a check, what would it what would a total Gary? I think the Dome needs 60 million dollars of improvements are apparently we did the Target Center in a way to allow for the economic cost of a 50 million dollar franchise. And we now have coming our way a 67 million dollar franchise and the best estimates that we can get for a new stadium would be about 350. So it would be about 450,000 dollars give or take Bit 450 million. I'm sorry 450 million of a chunk of change. And if and if somebody said the state or whoever said, okay, it's worth it to us. We'll write a check tomorrow for the 450 million would we then be guaranteed that all the franchise is pro franchises would stay here for eternity or at least as long as we care that they stick around. I think the citizens could reasonably require and get 30-year Ironclad agreements. (00:09:30) But Paul, I'm not sure that that those Ironclad Agreements are worth the paper. They're written on sometimes certainly usually there are loopholes and any such (00:09:41) agreement Professor Danielson. I'd like you to get in the conversation at this point do the cities and states that decide to spend that kind of money get their money's worth in terms of what they spend and in terms of a kind of a guarantee that the teams will actually be there and hanker hang around (00:09:55) money's worth of questions professional sports. Couple people were already made. Distinctions between intangible and tangible benefits there lots of intangible benefits and they're real. There's no question about that the economic benefits. Most of them are overstated. It's very difficult to prove in most cases that what we think what we're told we're going to get you will actually get cloths are almost always underestimated the statement that was made earlier about Minnesota's not doing very much minnesotans have done a great deal. I think that part of this discussion is right on the mark third of a century of significant public investment. I think the record of the last 40 years is that you're always going to get less than you think you get from professional sports teams, which is simply to say that commitments are going to tend to erode over time that's in part because the life the life cycle of professional sports facilities is shortening very quickly. And of course you have a Dome built less than 15 years ago thats obsolete. (00:11:02) I (00:11:02) was shocked I guess three or four years ago when we were doing something with a number of repairs people come to Princeton in the head of the New Jersey. What's an exposition Authority? Which runs what's generally considered one of the wonderful modern football stadium that our stadiums already five years out of date economically. The point is simply it's unrealistic to think that there's some easy fix. It's going to hold things in place for a quarter Century more. I very much (00:11:30) doubt that in terms of a quick boost though. I would think for example Camden Camden Yards out in Baltimore as given that town a big boost as (00:11:40) it what I see, I don't disagree in terms of the booth that you can get. I don't disagree in terms of the fact that sports are important to people there a point of reference they overcome lot of our differences and sprawling complex metropolitan areas. I'm a sports fan. I don't have any trouble with those it's much more difficult to be precise about the economic benefits. I think we ought to be up front. About that. I agree with I'm not opposed to spending money on professional sports facilities. I get very distressed as a student of public policy when I think when we don't confront what we're talking (00:12:12) about because I (00:12:14) won didn't expect the aquarium in Baltimore to make money, but the aquarium by the way is a private facility to me is a public facility because one of the things that was mentioned earlier, I think that's absolutely Central in this discussion is we're talking about private firms whose value has increased enormously, and now one of the principal factors enhancing the value of major league sports franchises is building new public facilities, but more Orioles appreciation in value was significantly affected between the I think the team was sold in 1987 sold again last year by the fact that the people of Maryland invested a couple hundred million dollars in that in that beautiful Stadium. (00:12:54) We have a caller on the line from West Bloomington Jean are you with us? Yes, I am. I understand your concern has to do with Guess it doesn't well, what's your (00:13:02) question? Well, I have a couple of things to say first. I I we support Sports love sports support the Arts and support the symphony, but I bet you a dollar to a doughnut that mr. Whitney was first in line to vote for every candidate that said I will not raise your taxes yet. It's okay for him to come back and say we want to raise your taxes if we cannot support our schools and universities laying off professors. Our schools are increasing class site. Why can't we have both and they wonder why people are mad that's why thanks for listening. (00:13:41) Let me go back to why not just buy the team's if Well, we're having there we go. How does this suggest that is a suggestion that some here in Minnesota have made and you know in the in this Century, we have learned that those that suggest that the state own the means of production. We have learned to call Communists and I had rather thought that there were only three left in the world and that they could be found in a theme park in Albania. But lo and behold they turn up in Minnesota and they are all Republicans. They are appointees of our governor and they have suggested that the state perhaps own these franchises and let us see how would that work? If we thought common wisdom was that we needed a new quarterback midseason. What would we do go to 1006 Summit Avenue and tear the gate from the fence and tear down the door and grab that little governor and Shake him till his teeth rattled and get from him some appropriated money to buy a new quarterback who would go to the Um to the sessions in which the draft choices were made and who would make those those decisions for us and what our mayor in Minneapolis be the one to get us a new center and the deficits how would they be funded? It's an interesting question and I've found interesting recently that it always is Republicans who are suggesting that we interfere in the marketplace. But if if the value of a franchise is going up and that seems to be a continuing problem in this whole discussion of pro sports. The the cost of these things goes up up up and you're always being held hostage next year the team's going to pull the plug. Why not buy controlling interest in that team watch your investment grow and at the same time ensure that the team isn't going to go (00:15:32) anywhere here. You only realize your return on the investment if you sell the team, all right, so otherwise you really don't have a game until that point but interestingly enough one of the models and Paul if public ownership in terms of the public. It genuinely owning the team is indeed a communist plot. Then you have a bunch of Reds up there and Green (00:15:50) Bay and now they aren't that is not the case that is not owned by (00:15:53) government. Oh, I know it isn't and that's I think the other option that you do have public ownership in the sense that members of the public large numbers of members of the public in the Green Bay example own that team that team doesn't threaten to leave green because people live in Green Bay on the team (00:16:09) Boston Celtics (00:16:10) is now illegal within the National Football League framework. You can't have that ownership model anymore that's outlawed by league rules (00:16:19) in all the leaks. Yes. Why because they find it impossible to work with interestingly. What is the gentleman's name? Who owns the Saints baseball team Benson Tom Benson? No. No, the the other (00:16:35) 5000 (00:16:37) the Saints over here. I was involved in baseball. Is and they live through those experiences of Malta shareholder ownership and they never work people are owned franchises today and are paid in part through public glorification and public standing and and all of that and generally our own frankly by people who have it appears too much testosterone and everybody wants to get into that act and everyone wants to be in the Limelight and everyone wants to be the decision maker. It simply doesn't and hasn't worked Michael Danielson dupes Pro Sports owners make money as a rule. You hear them say frequently boy, we wouldn't get into this to make money. We're just returning we're doing our part for the community and yet gee it seems like you'd make money doing this. (00:17:37) Well, I teach political science not accounting and so it's it's a little hard to answer that question. I think the general impression of most people who Very professional sports in the outside. Yes, indeed professional sports teams make money. They are typically privately held the are often held it's not privately as part of all the large conglomerates. It is extremely difficult to unravel the finances of most professional sports teams. There are some exceptions the few that have some public Holdings in like but I think in general public professional sports teams, do not lose the kind of money they often suggesting they lose and that's one of the problems that governments local governments state governments have to cope with and dealing professional sports teams is that one doesn't have a clear idea of what their financial condition is and one rarely gets out of these negotiations a very clear or arrangement in which you can tell what their finances are the perfect most of them. In fact are fairly profitable Enterprises not all Market size is a significant factor amount of subsidy that they get from One of the significant factor and it varies from League the league the in the NFL. It's very hard not to make money with the you sharing Arrangement huge television contract. Let's bring this home though to (00:18:57) Minnesota and I think the professor has identified a real problem for us here and particularly for those who are in government and represent the public and D. Perhaps you could comment on on this I think it is true that the public believes that there's funny Accounting in special depreciation and tax advantages and write-offs people need and that therefore there isn't really economic losses that are being sustained and that somehow this is all kind of funny numbers this sad and and exact truth is that the twins are in deep and serious and real economic trouble and unless and until the public. That fully explained to them in a way that they understand believe and accept we will not be able to deal importantly with this issue. It is indeed lamentably very true. (00:19:58) Well, I think Paul yes looking at what has happened with the gate receipts particularly this year, but that's due to a multiplicity of factors the strike certainly hurt the twins as it hurt most of the major league baseball teams, but I think also the team itself and its performance hasn't done much to bring people into the stadium this year beyond that. However, I think we really need to look at where the public ought to be on this. Are we responsible for making up losses to keep a team here. I certainly don't want to lose the twins. I don't want to lose the Vikings and I'd love to see professional hockey come back to the Twin Cities. But the question is at what cost and what are the Public's priorities in terms of looking at limited public resources (00:20:42) Our Guest today to members of the states. Is re task force on professional sports Delong and Paul Thatcher joining us from Princeton University Professor. Michael Danielson who is coming out with a new book on Sports public subsidies. And the nation's cities James is on the line from Minneapolis with a question. Go ahead sir. (00:21:02) Hi, how is everyone doing today? You just Farm. I've been listening quite closely and I'm troubled by I think we have a cultural priorities wrong here. We you have professional sports with their hands out wanting subsidies, but for example, if I owned a small manufacturing firm making widgets, let's say and you know, my quality control goes down and nobody buys my widgets, you know, I don't run to the local city council say can I you know, can you give me some tax breaks, etc, etc. You know, it gets down the winning, especially with the twins. They are winning people don't go to the games, you know, and I can't see. You know subsidizing them any further and to be honest with the twins and the Vikings got together. I know they could secure enough Capital to build themselves a stadium if they really truly wanted to so I guess that's that's the point I wanted to make and then the question is maybe we have to get our priorities straight. (00:22:08) Is it fair Professor Danielson to compare a pro sports franchise with a traditional (00:22:14) business? No, they're not. They're not traditional businesses. I think the question would assume that's the stuff. They are peculiar business has the most peculiar feature of courses that they don't independently produce a product. They need to be in a league have to be joined with 7 or 14 or 22 or however many other businesses that that you joined together. So it's a jointly produced product and it's a jointly produced product which has almost no value unless you join together and it is that feature which has given his both its peculiar economic status and peculiar personal Sports peculiar legal status in case baseball overly full antitrust exemption. We think and in case of the other three Sports impartial antitrust exemptions, it is also that feature Permits leagues to in effect raishin franchises much of the problem we're talking about today is a consequence of the fact that there's more demand from Major League Sports than than this then Supply in the suppliers controlled by T by the League's and as a consequence the Vikings were the twins or anyone else that wishes to has substantially more leverage than a business would have in which there is as much demand as people on this program and talking about which is simply to say it's very hard to go out and get a replacement one ought to be very concerned about losing teams for that reason my work shows how much more difficult it is to get a new team and to keep the one you have but we should understand that the consequence of that is because places compete with each other for a commodity that these peculiar businesses have a monopoly (00:23:54) over preferred Professor How likely is it that Congress is going to really seriously look at lifting the antitrust exemption. (00:24:02) I think it's not very likely at all. What we didn't see serious action on antitrust in the throes of the baseball strike with as much unhappiness. It seems to me quite unlikely that we are going to see anything much happen is what the courts might do is like predictable, but the courts to date have been really quite quite comfortable with both baseball baseball's exception and the and then challenges. I don't see any significant evidence I have there is not a single instance where a place has ever gotten the team back because of antitrust (00:24:38) considerations all sacher what if there's another piece of congressional action that's been proposed in some quarters namely that Congress stepped forward and prohibit States and communities from bidding against each other. I guess not just for pro sports teams, but for other businesses as well, but I purposes of this conversation. It would essentially prohibit communities from from trying to steal our team's if you I'm not as familiar with the Congressional activity. I just understand some staff has been concerning themselves with that. But I know here that our governor has suggested that perhaps the governor's could enter into some kind of a treaty that would get them to agree that they wouldn't enter into these kind of competitions and let me say I think that's a daunting undertaking and let us just imagine that the governor was enormously successful in that undertaking and got 48 of the 50 several states to thus agree and that the legislators all cooperated on QD you understand they always do and and passed laws that would make the the treaty actually work. But let's assume that the two states that weren't in that treaty were Tennessee and Florida to states that are now aggressively seeking teams. And as far as we're concerned particularly The hockey team that is headed our way and why would those governors trying frustrate the will of their people in trying to get those teams? And if you didn't snare all of the states, you have snared none because the Lichen all antitrust matters when you try and form a combine if everybody isn't in it and stays in it it all falls apart, but here again, isn't it strange that Republicans are off trying to rig a market. This (00:26:34) is what I have something on that score. Hello. Yes. Go ahead the whole quarter Century of trying to do something in Congress about competitions for Major League Sports just reinforces. What was just said, which is simply to say the have-nots have no common interests with the hat. My solution is a somewhat different one of my suggestion that is that the haves unites everybody else in the professional sports business who has a big stake is a quite cohesive actor the teams and leagues. Their leaves are cohesive actor. The players have become extremely cohesive actors and the public through cities metropolitan area states that provides now almost all the capital facilities of professional sports and some additional operating subsidies is a competing warring internally in coherent group of places, which collectively might have a great deal of influence. It seems to me that one of the first steps isn't so much to try and get what I think is probably a futile Endeavor in this stage of the game a treaty among the septal not only states that once States would have to somehow bring their major cities in the line, but some greater cohesiveness some greater coherence on the part of places that have teams might be the beginning of getting some ground rules in this game that would better protect the public and the enormous interest that we have in the teams that we have. We do have an interest that we don't call them. Our team's professional sports has played on our loyalty. Our devotion on our identification and has been received me very very callous terms of its willingness to reciprocate (00:28:13) G. Yeah. I have a question Gary of the professor on this it would seem to me that as the teams are more and more cast as Carpetbaggers. They're here today. They're gone tomorrow. They're threatening to leave if they don't get what they want. You're going to find more and more fall off and team loyalty and that this is going to be reflected in the gate receipts. I'm a third-generation Cubs fan hoping to establish the fourth generation in my family. We would never go think of going to a Sox game when we're in Chicago. That's because the they've been there in Wrigley Field since 1914 and you know where to go and the Cubs are not planning to pick up and move to Indianapolis. For example, doesn't that somehow translate into fans not as willing to come and see a team it's not their team. They don't have the identification with the team. (00:29:00) I'm not sure one of the things of course that's happened is That professional sports is expanded enormously the principal thing that's going on at States has not been in Canada has not been the movement of teams. It's been the growth of team and that's been to a significant degree response to growth. And so that's how you have major teams from one form or another primarily and that expansion has been a seems to be by and large a healthy natural process. There are lots of people all over the country who have major league teams who didn't have them before so don't get that's one of them. In fact, we have less movement today than we've had in the last previous decades. We have more threats to move. In fact, there aren't an awful lot of good places left to move to the metropolitan areas. That don't have teams are quite small. What makes them more attractive is the willingness of governments to underwrite with with very very attractive deals. I think we will continue to get particular the larger metropolitan areas were competition between cities and suburbs simply because love Want to be in the best markets, they don't have any particular reason to be in New York City rather than in New Jersey, but I the Loyalty issue is a tough one. I speak as someone who grew up as a Brooklyn Dodger fan and my head my team stolen away from me. I've re-establish some other loyalties over time, but I think I think there is some evidence to support what you have to say, but not as much as one would think which is simply to say it's because when teens go to new places, they build their own loyalty. I mean I suppose there are still some people who pined to the original Washington Senators that are now the Minnesota Twins. Probably not many laughs. (00:30:43) We ignore that history here. (00:30:46) I would have reflected about our (00:30:47) history. Let's get another caller on the line, Eldon. (00:30:53) Let me preface my remarks by saying I'm a baseball and football fan from many years standing but I'm unalterably opposed to having taxpayers support for profit Sports. (00:31:10) Even if it would mean the the loss of our major franchises the (00:31:14) twins. That's right. I wouldn't care one bit whether they were lost or not. There's too much unsubstituted UPS unsubstantiated print and talk about the value of these sports teams to a city. I have yet to hear of a manufacturer moving to a town because it had a major league team of any sort. (00:31:40) Excuse me. Go ahead. (00:31:42) Then the one of the worst things about the whole business is that you constantly hear about these the value to a city, but I have never seen any compilation of figures that are stent are good. Figure good sound was not something that people pull out of the hat that show you what fiscal or monetary benefit there would be. (00:32:07) Okay Paul Thatcher. I agree that end of the professor said this at the opening of our program today that these numbers are Elusive and difficult to prove and over time people. I think have misused them. You know, we're talking about disposable income here discretionary income and people will spend it one way or the other if they don't spend it at a ballpark, they'll spend it at the theater, but surely it will be spent so the economic activity argument I think. Probably fails in the in the end. But let me suggest something else that that I think has to do with substantial value to communities and to two states and regions that teams bring I think if you walk into any Factory lunchroom that you will hear and indeed I find it in mind you will find that half of the conversation that takes place there relates to these teams. It relates to their successes their failures their hopes their disappointments there next year hopes. I think that you can make a huge case that this directly affects productivity and I suggest if it only was one half of 1% of productivity. It's an incalculable benefit to any state region or Community. (00:33:36) Well, I think certainly There is a feel-good factor in having professional sports here. We've all experienced it when we've gotten the teams, but let me ask you then. Do you think that the people in the Twin Cities are more productive workers than the the ones up in Fargo? For example, they don't have any major league sports (00:33:55) teams. No, they aren't and certainly no more so than my Workforce in my Factory in Huron South Dakota. But let me remind you that our friends in Huron and our friends in Fargo are twins fans and and Vikings fans and wolves fans and they come here and they spend money and they care deeply about it is deeply as we are caller suggested that nobody really has moved here because of pro sports that not only is the economic impact overstated but this but some of the intangibles are too and yet I can't help but think that somehow Cleveland is a more attractive city today than it was before they got their new ballpark. And got all the publicity on national TV is to be kind of a dumpy place or thought to be Baltimore. Even Denver I think is probably been boosted or am I wrong about that? (00:34:48) I think you're right. I think that there is a certain Pizzazz there Orlando prior to Disneyland wasn't known as a particularly exciting place. So any time you put something new in a city that draws a crowd you're going to sort of have an upbeat feel about it and people are going to flock to that area. But Cleveland, I think certainly I don't think you can argue that the baseball stadium did as much as cleaning up the lake did to revitalize Cleveland that was probably the single most significant factor. There are a lot of things that happen to bring that City (00:35:19) back pressure Danielson. What about these intangibles? Do they amount to a hill of beans (00:35:23) heading out to Hill how big a hill I think you're going to depend a lot on how much you value and what was mentioned earlier at what cost? I don't think there's any question that there's been a lot of positive impact both in terms of from the intangibles we About and when we haven't talked about directly very much, which it seemed to use an extraordinarily important factor here. And that's the Synergy between professional sports development and downtown Redevelopment. In fact, I would argue very strongly that if it hadn't been for Business Leaders and politicians desire to put major league sports high on the agenda sports facilities for rebuilding downtown's that certainly the case stadiums. Most of them will be out in suburbs somewhere. There's no compelling reason to put a stadium in the middle of the city. It's an expensive location land is expensive parking is difficult all the things that I think we're all familiar with so you can certainly make a case that is part of rebuilding downtown's whether it be the impact the supplemental impact in places. I think like Baltimore and Denver Mint and Cleveland are with by themselves. They were all processes that were fought quite far along but as important elements, I wouldn't doubt that at all, but we have to Berthold, you know how important is this compared to other things? What is what's the consequence of of all the Downtown Development in Baltimore bin for the quality of the school system because these are all opportunity costs and I think we just thought bear those in mind people say well it didn't cost anything in Maryland are using a sports Lottery but they're not using that's worth lottery for something else. And so I think it's that kind of question. I have absolutely no doubt that there are both tangible benefits some economic their overstated, but there are some Really tangible benefits in terms of place values usually positive although their negative for some people who know what stadiums were real is next to them. And there are these substantial intangibles in terms of collective Goods that we value but we've got to be careful there. They are valued and whereby men that women are valued more my places that have winning teams in places that have losing teams and they're valued more for some kinds of words to others. I mean, we talked to your like they're all the same but they're not I mean, I find one thing that's somewhat amused units perhaps because I'm from working New Jersey resident Minnesota is that one would think with three major league sports that hockey was a fairly essential element equations hockey is by far the least popular the least valued by any way, we measure professionals worth. If I guess I'd have some real second thoughts on top of all the money that's already been invested in the Twin Cities about hockey. That's not because I don't like hockey, but when I asked these questions, but the questions We talked about in this program hockey seems to give you the least (00:38:14) in the Princeton University Professor. Michael Danielson joining us here in the Twin Cities Paul Thatcher who's over at her million Minneapolis Bureau and state representative day long here in our Studios as we talk about public subsidies for Pro Sports. How much are they worth to the state of Minnesota? It's a debate that's starting. Once again. We are coming to a point where some decisions presumably will need to be made about how much if any money should be spent to try to keep the twins happy keep the Vikings happy. There's talk about whether or not money should be spent to try to bring the National Hockey League back to the state Bob's on the line for Minnetonka. Go ahead sir. (00:38:51) Yes. Thank you. I wanted to re art to support a point the professor made a few moments ago pointing out that the public has so little to say or such a little say in the control and the investment and the growth and the decisions in the The owners have the largest say and they in fact which they make up the league and they limit the product which causes its value to rise. The players have a great say and of course television has a great say but the public has very little say and that's why people are clamoring to get a say and that's why people say why don't you give a stock or something and and I a little bit resented the Laughing comments to buy some gentleman earlier saying something about communism. I think what people are trying to say is we want a say in how this franchise is run. We don't want to vote on who is acquired in the draft, but we want to share in the growth of the assets. So perhaps our leaders could come up with a way of getting more public support by saying the public will share in the growth in the value of these teams should a team decide to move even if they're not sold to other owners. If they just pick up and decide to leave Minneapolis and go to to Fargo and the team value has increased during the time the public has substance supported it here are local public the built the stadium should share in the increased value at the time the team moves and I think perhaps the proportion that the public should gain out of this increase in the value should be in proportion to the amount of the a share of the asset. For example, if we build a four hundred million dollars worth of facilities in the teams put in a hundred million, then the public should perhaps be entitled to 3/4 of the gain or some very high substantial part of the gain of the value of the team. Should the team take up stakes and (00:40:57) leave. What do you think Paul sacher? Well, I've heard variations of that. I think first of all, they never would agree to such a proposition, but I think a different one that I've heard currently in regard to the the Winnipeg Jets. Is that the 16 million dollars that is the difference between the 50 economic accommodation that exists at Target Center and the 67 million dollar purchase price that Birkin Glogster and are apparently paying for the franchise that perhaps the state could purchase that as kind. It's kind of a preferred stock and that it be if the team moves be redeemed at a penalty and a day plus the the pro rata increase that that investment would represent and perhaps that that is something that should be (00:41:49) considered. I also think that and I'm again I'm not sure that any of the league rules would allow this to certainly allow the public if there is a need to make up some dollars to have a minority position as shareholders issue shares to residents of that particular State as is the Green Bay situation. There is a certainly total ownership, but it could be a partial ownership situation. (00:42:10) Mordecai your question, please. (00:42:12) Yeah, I just like to say that my family has been doing pretty well since the North Stars left town, but I haven't been doing so well since the bus strike began and I was wondering if we could get our priorities straight and appropriate some money to get the MC teal buses running again and then deal with later with professional sports. I'm also wondering why these billionaire owners of professional sports teams can't get financing for the private sector for their Enterprises and why? My taxpayers low-income working people have to bail them out. (00:42:49) Okay, D long do the legislators. Look at this in the sense of well, if we spend money for for the twins that will take money away from the bus system. (00:42:59) I think it would depend if it were a direct subsidy. Yes, but I don't think anybody at this point is talking about that but I do think that it is important that the public look at what the priorities are. Where do they want their dollars to go and certainly the bus riders right now would want dollars to go toward ending the strike so that they have a way to get to (00:43:20) work Professor Danielson. Do do these Sports owners have access to all the capital they really need and they just simply are coming around to the public trough because it's it's cheap money. (00:43:34) No, I don't think so at all. I think there is a real Capital problem in professional sports. We have to assume that if it was Profitable to build sports facilities privately private entrepreneurs would do it. They did up until the 1950s almost everywhere. They really largely stop to be true sure, but of depression first test Century, we're seeing a little bit of a rebirth of private development, but I think there are real problems trying to generate enough Capital to invest in the kind of facilities that Sports owners want the lots of businesses have that trouble to ask oneself again, what is there about this business that suggests that the Public's role should be to invest to be the primary provider of capital and has such a weak position (00:44:29) Professor. There's a good answer to that. Go ahead pull that Chester. There's a good answer to that and that is that we compete in an international order or in a continental it East Market to to obtain our franchises and to keep them and we must meet that competition. We don't have a choice that is the reality of our economic life unless and until you're able to figure out some combine that will relieve us from that (00:44:58) but Paul you have free market forces jacking up the value of the teams so that you might say the the new owners are overpaying for a team and then they can't cash flow when they come into an existing situation that that also is what would the irony of it is Paul is that you now have basically a lack of competition because what was it all overwhelmed one of the homes who ruled on the the baseball just situation and so basically they don't have to be treated as any other business in terms of how they compete and yet they can go out and pay these highly inflated prices for the teams and then come to the public for (00:45:39) support. Yes. Let's be Frank about this. There's been a lack of discipline on the part of owners to run their business correct correctly. And because I think there has been a recognition that there's a rummy at the other end that will pick up whatever's left over and too often are the public feels that they are the rummy that pays twice they pay as fans and they pay as taxpayers and it would seem to me that it would do the owners well to get their house in order before there's a total Revolt by the people. Let's get another listener on the line done. (00:46:18) I would concur with that last statement that often the public is the one left essentially holding the bag as it were I don't have any problem with sports teams being in a Major Market, I understand their arguments as to why the benefits the public the income that it brings in the tax revenues that I think we need to keep in mind that these Bit these professional sports teams owners are businessmen. There's often a play on the Loyalty of fans, but when it comes down to it, they're businessmen in this is a business. We see in the strike the baseball strike the owners and the players are still making enormous amounts of money. If the owners are losing money, they get to write it off but they have Deep Pockets to begin with it is a business the people that are hurt the most are the vendors the people all are with the peripheral businesses the working stiffs and they are the ones that get hurt by those strikes. So I think if we're going to negotiate with the owners, we need to make sure that when we sit down to the table, we have someone as shrewd as hard a negotiator going up against these owners from a Strictly Business perspective representing the interests of the public at large and not buying into a bill of goods not Fine Blue Sky get it on paper Professor. Honey owners are going to do the same thing. They may talk about how to enable humans to understand their need to a lot of blue sky, but the bottom line is they're not going to lose money. (00:47:55) That's your Danielson a question listener wanted to know was suggested that that when cities states negotiate with the owners they make sure they know what they're talking about. Get some expert help draw a line in the sand be tough with these owners. Do you think that that would actually work or what the owners just walk away and go to st. Louis where they're willing to pay hundreds of millions of dollars for the opportunity to watch a bad football team. (00:48:22) I think it's desirable to do and that's in part because I think it's quite important for political leaders have some clear idea of where they're going into at least in some general sense to educate the public about what the what the what the situation is. Some people would walk in some wouldn't we're talking about negotiation. I don't believe I don't even any city or state that says whatever it costs were going to keep the team is not proceeding in a very sensible way in terms of being a negotiator most teams are where they want to be have to always keep remembering that they are they have to be in big markets. They can't go and we'll play you know in Little Rock and Spokane and Boise and Fargo and Amsterdam New York. That's not going to happen. And so in a sense, we need to be better bargainers. We need to have a better idea of what we willing to do and not to do and it is true. We have to bite the bullet that in some of those cases somebody's going to steal our team but by doing that we may have a better idea of what our team is worth to us. (00:49:31) We are just about out of time. But Paul Thatcher D long. Do you think the two of you that we are going to lose one of the big The Big E's to Windsor Vikings. (00:49:41) Well, I think this week the focus has been on bringing in hockey team, which we now don't have I don't think ultimately we will I think accommodations will be worked out the Vikings aren't asking for very much frankly and they'd like a little a few changes in the stadium. I think the twins financial situation is somewhat more precarious and certainly the likelihood is greater that they I believe but I think there is time for the public to take a look at this and see as members of the public what they're willing to do. (00:50:09) I agree with Dee and I think it's our duty to better inform the public so that they can make an informed decision. Well, thanks folks for coming by and Professor Daniel. So thanks for joining us from (00:50:21) Princeton. (00:50:24) Appreciate your your participation Michael Danielson who is politics and public affairs professor at Princeton University working on a new book should be out pretty soon on Sports public subsidies and the nation's cities joining us from our Minneapolis Bureau today Paul Thatcher. A member of the state's pro-sports advisory task force. He's also a member of the Metropolitan sports facilities commission that operates the Metrodome and state representative D long Minneapolis is here in the studios. She is a member of the pro sports advisory task force as well.