Kroenke forces St. Louis out of the pocket
The city of St. Louis is being held hostage by its football team. Nearly two decades ago, city leaders wooing the Los Angeles Rams offered a preposterous lease agreement that allowed the contract to be torn up after the 2014 season if the Your Name Here Dome that was being built for them downtown was determined to be outside the top 25% tier of NFL stadiums through a series of agreed-upon indices. The Dome, completed in 1995, was almost "out-of-date" from the start-- add to that the fact that more than half the league's franchises have had a new facility built since-- and Rams' owner Stan Kroenke clearly has a contractual "out" after '14 if he chooses to take it.
He may or he may not, but what Kroenke, the billionaire son-in-law of Sam Walton, does want for sure is to bleed St. Louis taxpayers for all they're worth. The citizens of the state of Missouri, the city of St. Louis, and St. Louis County paid for the Dome's construction to begin with-- that is, they continue to pay for it, and now a city that's laying off police officers and fire fighters, dropping city services, and has a public school system so broken that it lost state accreditation in 2007, is being asked to pony up even more. Each year since construction-- and for the next 10 years-- the state already pays $12 million towards the Dome's debt, with the city and the county each kicking in another $6 million. The St. Louis Convention and Visitors Bureau, which operates the Dome, already offered Kroenke an upgrade deal worth more than $120 million and "as expected," he rejected it. Eventually, the bid is expected to surpass $500 million. Just what are a city's priorities when you're in a recession economy, have a crumbling infrastructure, and you offer any subsidy at all to a man that Forbes Magazine says is worth more than $3 billion? And how does that man get to be called a "civic leader"?
What really are the stakes here in this hostage situation? To further the metaphor, does Kroenke even have a bullet in the chamber? What benefit does the NFL actually offer the city of St. Louis? The Rams have 15 wins and 65 losses over the last five years. The team does not attract visitors from out of town the way the baseball Cardinals do-- or anything close to it. The baseball team plays 81 home games annually, filling hotels and restaurants nightly for almost a quarter of the year. The Rams play only eight games, and Kroenke recently signed a deal to move one of those eight to London for each of the next three years (a deal that really has to be interpreted as an "up yours" gesture to the city in light of its timing.)
As the Rams' home crowd is comprised primarily of season ticket holders and/or St. Louis residents, it brings, especially relative to a "regional sports franchise" like the Cardinals, a negligible economic benefit to the city. Study after study confirms that money spent by locals on major sporting events is only money that's displaced from being spent elsewhere in the community. Additionally, professional football is a weekend-only sport so it competes more aggressively than does baseball with the rest of a community's entertainment calendar. In fact the argument can be made that the Rams rob dollars from the region in the sense that a greater percentage of money spent on the Rams (as opposed to other local entertainment) goes to individuals who don't live in the community, providing a smaller percentage of dollars to re-circulate-- and it provides even fewer well-paid jobs than the others as a whole-- virtually none. Even the parking attendants, concessionaires, etc. employed by the Rams can't do the work full-time as they only work eight, now seven days a year.
The NFL is an enormous business entity, but it makes its money almost entirely through television and media agreements, and from branding products. This reality exists to such a degree now that, in many ways, a team's geographic region only matters to the degree that it impacts and informs fan identification. This perpetuates popularity for the sport, of course, but as a result of this new reality, the team gets to share an increasingly smaller percentage of the overall financial pie of its product with surrounding ventures. I'd be curious to see a study that examined what percentage of St. Louis Rams fans go to a game on a Sunday afternoon, eating first at the house, or eating and drinking only inside at the Dome or outside in team-sponsored tailgate locations, visiting and returning from the city without spending any money whatsoever other than the cost to park their car. To put it in football terms, I suspect it's probably closer to the size of an offensive lineman than a kicker.
The most ridiculous argument made is the one that says you need a big league sports team to be considered a "big league" town-- that for St. Louis, a city dropping nationally in population rank, it's all about holding on to a reputation of being a "big city." Of course this says nothing of the fact, in this case, that St. Louis has two other major pro sports teams already-- a pair, incidentally, that are currently having much more success than the Rams on the field of play. Los Angeles doesn't have a professional football team, and it seems to suffer few ill effects economically or psychologically from the absence.
The city of St. Louis should actually be 'case in point' as to why you don't grab ankle for the cartels of pro sports. The city has gone through extended periods of time both with and without an NFL Team (without, most recently, from 1988-1995), and with no discernible difference in their economic standing either way. City negotiators acting from their current posture of needless panic and emotion are put at a specific disadvantage when you consider that the business leader they're being extorted by... oops, I mean bargaining with, operates from a purposefully emotionless angle. The city should have plenty of leverage in negotiations like this, when we consider the actual economics, but a city that chooses to define itself by its football team loses any of that leverage before the negotiations even commence.
posted by CM @ 9:09 PM
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