Published December 15, 2010
Once a staple in sports cities small and large, multipurpose stadiums have been deemed economically obsolete by franchises that increasingly cater to the whims of luxury-suite-loving corporate America.
While that thinking makes financial sense for sports teams, it also tends to leave states and municipalities under pressure from franchises threatening to flee unless they agree to use taxpayer money to help build two stadiums, when in many cases one would seem to do the job.
“These teams are private businesses. They don’t want to share any more revenue than they have to -- either with the league or a co-tenant,” said David Carter, a sports business professor at USC and author of Money Games.
The gap between the wants and needs of pro sports teams and public officials is underscored by the situation in Minnesota, which suffered a blow last weekend when the roof of the beloved Metrodome collapsed under the weight of a snowstorm. The collapse forced the Vikings, the building’s tenants, to play their game in Detroit’s eight-year-old Ford Field.
That setback could also give the Vikings an excuse to skip town for Los Angeles unless the state of Minnesota, which has a $6.2 billion budget deficit, ponies up some $300 million needed to help fund a gleaming new stadium.
“This plays right into their hands,” said Thomas Richard, a principal and former CEO at Merritt & Harris, a construction consultant that worked on Dallas’s $1.3 billion Cowboys Stadium. The team can say, "Look. it’s falling apart. Every time it snows the roof is going to cave in and we have to go play in Detroit.”
Standalone Stadiums Gain Favor
However, taxpayers in Minnesota already helped foot the bill to build Target Field, the beautiful new home of the Minnesota Twins, with Hennepin County backing $350 million of public financing.
The two franchises could have teamed up to build a new stadium. After all, they used to cohabitate the Metrodome. But the huge building was considered ill-suited for baseball, regularly ranking low in fan surveys, and needs an upgrade in luxury suites and club seats.
Multipurpose facilities used to be the norm, playing host to football and baseball teams in countless cities, including New York, San Diego, Minneapolis, St. Louis, Houston, Philadelphia, and Seattle.
“That was before corporate sponsorship and corporate America became so intimately involved in sports marketing,” said Carter. “With the advent of the luxury suite and club seating…these facilities were becoming economically obsolete.”
They also offered poor sight lines for football fans and featured tons of empty seats for baseball games, which typically draw far fewer fans. Baseball parks are actually shrinking, with teams in New York, Philadelphia, Houston and elsewhere all constructing stadiums in recent years with smaller seating capacities than their predecessors.
Today, Oakland and Miami are the only two cities that have stadiums playing host to both baseball and football teams, and the Florida Marlins are expected to move into their own ballpark in 2012.
“These teams prefer to have stadiums they own lock, stock and barrel. They control all of the inventory and the revenue streams,” said Paul Swangard, managing director at the University of Oregon’s Warsaw Sports Marketing Center.
In New York (technically, New Jersey), the Giants and Jets teamed up to build the $1.6 billion New Meadowlands Stadium. But this made economic sense because the stadium will only play host to football.
Are the Vikings L.A.-Bound?
Under pressure from the slow economy and voter disapproval, many public officials are loathe to use taxpayer money on funding new stadiums. This is especially the case in states like California, New York and New Jersey that are facing mounting budget deficits.
Minnesota officials are also in a bind as that state is facing a $6.2 billion budget deficit that won’t disappear just because the Metrodome’s roof caved in.
“It doesn't make the Metrodome more important than solving the budget issues, I can tell you that -- no," Mary Liz Holberg, the incoming chair of Minnesota’s House Ways and Means Committee, told the Star-Tribune.
The Vikings have requested a tax subsidy of more than $300 million to go towards building a new home. In May, a Minnesota State House panel narrowly voted to shelve plans to build a new stadium.
“The sad part is that tradition and loyalty to a market has become less and less important as the business realities have taken hold,” said Swangard.
That could open the door for the Vikings to jump ship for Los Angeles, which despite being the No. 2 U.S. media market hasn’t had its own NFL franchise for 15 years. Vikings Owner Zygi Wilf paid $600 million to buy the franchise in 2005 and the team is worth $835 million today. But it would be worth at least $1.2 billion in a new L.A. stadium, according to Forbes.
Billionaire real-estate mogul Ed Roski has received approvals to build a privately-financed, $800 million football stadium outside of L.A. as soon as the city can land a franchise. As of late October, the project had received more than a million requests for season tickets and 11,000 requests for the proposed stadium’s 176 luxury suites.
“I would be surprised if Wilf isn’t at this point having copies of the LA Times delivered to the doorsteps of all the [Minnesota] elected officials to remind them of the underserved market” there, said Carter.
But NFL insiders believe the league will wait to resolve its labor standoff, which could result in a work stoppage next season, before awarding L.A. a new franchise.
Given technological advances in stadium building that allow for seating bowls to be transformed and roofs to open and close, it’s possible multipurpose facilities could make a comeback, especially if cities and states remain wary to use taxpayer funds. But that comeback isn’t likely any time soon.
“The newness of all of the stadiums that have been built in this boom makes this a discussion for 10 to 20 years from now when these stadiums are ready to be rebuilt,” said Swangard. “You just can’t start over.”