Soundings

Jonathan Foreman
The Stadium Game
Summer 1998

Many New Yorkers are balking at Mayor Giuliani’s proposal to build a taxpayer-financed stadium for the New York Yankees on Manhattan’s West Side. They may have a point.

Yankee boss George Steinbrenner’s blackmail no stadium, says he, then maybe goodbye Yankees hasn’t helped warm New Yorkers to the proposal. Why should multi-millionaire Steinbrenner reap the biggest individual benefit from the project? And isn’t this unnecessary corporate welfare? If we’re going to pay for a new Yankee Stadium, why not build Kmart a warehouse or Morgan Stanley a skyscraper office?

Of course, public officials don’t treat sports franchises as ordinary businesses: a beloved team becomes part of a city’s identity. These days, too, people seem to believe that stadiums won’t get built anywhere in America without public subsidy.

But Europeans may have found a better "and more market-friendly" way to build and renovate stadiums. Since Margaret Thatcher’s free-market England during the 1980s, and then spreading to statist France and Italy more recently, soccer franchises have been going on the stock market. A 1989 tragedy turned U.K. soccer teams to the market in earnest. Soccer hooligans had provoked a stampede across a stadium "standing area," crushing scores of fans. Officials subsequently banned standing areas from most soccer stadiums, reducing the number of fans who could attend a game and thus making teams less profitable. To renovate and build seated stadiums with corporate boxes and better facilities, a number of teams hit upon the Thatcherite solution of issuing publicly traded debt or selling stock to the public. Nineteen teams including storied Manchester United now list themselves on the London Stock Exchange, as well as the smaller Alternative Investment Market; more teams are preparing to go public in the future. Though soccer-team shares bounce with team fortune, investors have mostly favored them.

Why can’t Steinbrenner and other owners, instead of clamoring for taxpayer subsidies, raise money for better facilities on the financial markets like the owners of any other big business?

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