vested the time needed to understand why this welfare system exists and just how profitable it is for the team owners and players who now control it (Knight, 1996, p. D2).
This welfare system can be dismantled; and it can be changed so that taxpayers do not subsidize a very healthy industry and some of the wealthiest people in this country. However, if changes are to be made, and if providing hundreds of millions of dollars in welfare to millionaire owners and players is to end, elected officials and community leaders must understand why this welfare system exists, how it operates, and how taxpayers are its victims.
Once upon a time, the investors who owned teams and hired players also paid most of the costs for building stadiums and arenas. Prior to World War II public contributions to the building of playing facilities were quite modest. In the post-World War II era public participation in the financing of playing facilities did increase, but in most circumstances teams paid substantial rent for their use of a stadium or arena (Noll and Zimbalist, 1997, p. 2).
The governments that were landlords to professional teams generally lost some money, but the franchises were required to pay for their use of the stadium or arena. In addition, the public authorities who owned facilities frequently shared in the revenue collected from parking and the sale of food and beverages. To be sure, there were exceptions to these patterns, but through the 1960s and into the 1970s, for the most part, the professional sports leagues were able to operate without substantial subsidies from state and local governments. Expanding television revenues and favorable federal tax regulations, combined with the ability of each league to control the number of franchises that existed, created a profitable environment for team owners.
The financial world of professional sports has been substantially altered during the past two decades; these changes have ...