Detroit files for bankruptcy protection

[404.livejournal.com]

So apparently the city of Detroit is having to file for Chapter 9 bankruptcy, to help the city restructure the 18.5 billion dollars in debt it owes to creditors. Less than a month ago, the city of Detroit diverted roughly 283 million dollars from economic development funds to help fund a new arena for the Detroit Red Wings, the hockey team owned by billionaire Mike Ilitch, who just so happens to own the Detroit Tigers. The Togers got their new stadium, also partially publicly financed in the early 2000's.

From an Associated Press story about the financing of the new Red Wings stadium:
Michigan lawmakers in December approved a measure allowing tax dollars collected by the Downtown Development Authority to be used for the development. The DDA has been allowed for nearly two decades to pay down Detroit's general obligation bonds with about $12.8 million a year that otherwise would have gone to education statewide.
http://redwings.nhl.com/club/news.htm?id=674634

Over the first decade plus, the state of Michigan and Wayne County (the principal county for Detroit) have or will have contributed public funds to build three new stadiums for owners that are billionaires (Illitch owns the Red Wings and the Tigers, the Ford family, of the Ford Corporation owns the Lions, the football team that plays in Ford Field) while the finances for the state and city have been dangerously close to default. The Ford family and Mike Ilitch must be taking their cues from the OCP Corporation and Dick Jones:

I say good business is where you find it.

In a previous post, I discussed the billion dollar albatross that is the Miami Marlins ball park, and how Jeffrey Loria basically conned the city Miami residents into paying for a new stadium, and then turns the club that occupies the park into a minor league team bereft of much talent. This is not the same for Detroit, the teams are doing well in their respective leagues (except for the Lions, but well, they are the Lions, so maybe next year), but it seems unconscionable for a city to pony up or to guarantee loans for a stadium when the city finances are a mess. The city has been a punchline for decades. Hell, in RoboCop 2 (1990), OCP banks on the city to default on their loans, so demolition can start of the old city, to be replaced by Delta City. This is only averted when the city is given an emergency loan from unknown sources, but I'll let you watch the movie for spoilers!

Still, I still am not convinced that owners of sports teams deserve to be supported by public funding to build a stadium they will profit off of. It would be the same as if Disney Corporation asking Orlando to finance the building of Disney Land, with the theory of the city owning part of the property, but the Disney Corporation would keep all the profits, except for the "rent" they pay the city, which is much smaller than would be required if Disney had gone in on their own. If that's not a sweetheart deal,  I've never heard of one then. Do sports stadiums improve cities they are in? Sure. Do they bring in more jobs and revenue to cities? Possibly. Should a city/state that is in major financial difficulty allocate funds that are needed elsewhere so the Ilitches and the Fordes  of the world can have sparkly new stadiums at the expense of the citizens? Apparently the citizens of Detroit did.

I love new stadiums like everyone does. When I was a kid, I started drawing diagrams for new baseball and football stadiums on paper, and when I heard about a new stadium being built, I was excited and looked forward to being able to see it on TV the next time it was on TV. I think politicians get this sort of fever, a cross between city pride and personal interest: what mayor wouldn't love to be known as the one who got the new stadium built for his hometown team? Mayor Kasim Reed of my hometown of Atlanta, seems to feel that way: he and Arthur Blank, the owner of the Falcons have, for all intents and purposes, tied the faith and credit of Atlanta to the new Falcons stadium, to the tune of 300 million dollars. The stadium, which I personally love the design of (I am not a big fan of the "retro style" ballparks that have been popular of the last few years):

Not pictured: what the stadium looks like when the alien mother returns

The question remains, how should cities balance the needs and desires of their local teams with the needs of the citizens, even if they want to help pay for a stadium they will probably never set foot into, with the cost and hassle of a sporting event like football, it pays to stay at home and watch it on TV.

Comments

[musicpsych.livejournal.com]

I agree. It's mind-boggling how much money is raked in by professional sports. They should be able to afford it.

[telemann.livejournal.com]

Totally, yearly revenue (these figures are AFTER revenue-sharing with players, etc)

Top Five Revenue Teams
1. New York Yankees, $441 million
2. New York Mets, $268 million
3. Boston Red Sox, $266 million
4. Los Angeles Dodgers, $247 million
5. Chicago Cubs $246 million

Bottom Five Revenue Teams
30. Florida Marlins, $144 million
29. Pittsburgh Pirates, $145 million
28. Oakland Athletics, $155 million
27. Kansas City Royals, $155 million
26. Tampa Bay Rays, $156 million

http://sportsillustrated.cnn.com/2010/writers/joe_posnanski/04/19/baseball.revenue/index.html#ixzz2ZSUyJaEk

[musicpsych.livejournal.com]

That's actually not as much as I thought it was. Thanks for the info.

One would think that, like any business, the facility cost and maintenance would be part of the operating costs. I'm sure other businesses might try to negotiate with a city for smaller things, like preferred interest rates, etc. But not to blatantly fund part of the building cost.