What does it cost to play Monopoly in the nosebleed seats? Last year, the average Twins ticket cost $20.68 – but as Minnesotans have learned over the last fifteen years, playing Monopoly costs a great deal more than that.
We've had an intensive education over the last fifteen years
in the business of professional sports. In the fall of 1993, the North Stars
left town. In 1995, the City of
The public participation isn't about sports. Stadium discussions start with topics such as sight lines, the given sport's traditions, and general claims about economic activity associated with arenas. By the end, the tone shifts to focus on the generation of revenue streams, how much is distributed to the team franchise, and how much the team's value will appreciate with a new facility. Frequently, the specter of the team's potential relocation to another part of the country is invoked.
Last week, the Vikings franchise leadership addressed a cash-strapped and deeply anxious public to lambast Governor Pawlenty and suggest that a new football stadium deserves to be a top legislative priority this session. The proposed investment for state taxpayers is $700 million out of a nearly $1 billion monument. Predictably (see the previous paragraph), calls for subsidies are now coupled with threats of relocation.
Minnesotans pay a hefty ticket price via subsidies, whether or not they patronize games. Isn't this part of living in a vibrant community? Indeed, we fund purposes such as arts, roads, and schools that we don't all use in equal measure. The fundamental difference is that the costs we pay as a community to host professional sports are distorted by the professional leagues' preferred treatment as monopolies. We pay via ticket prices – and particularly through subsidies – for a service whose actual market value is substantially less than what is "charged" in these two forms. As scores of economists have observed in recent years, and the Wall Street Journal noted last month, rarely do the subsidies produce economic benefits promised by stadium subsidy advocates.
Leagues are allowed by statute or case law to severely restrict the number of franchises and the number of communities allowed to host them. As in any monopoly, the limited supply of the product forces a higher price than would be available under open competition.
At the end of the day – or in the ninth inning, third period, or fourth quarter – the professional sports market needs to be reopened for trade. Investors must have the ability to establish teams in markets they believe are promising, and the monopoly must be broken to restore a healthy market for the professional sports product. When Congress removes the monopoly protection afforded sports, banned in other industries, the prices we pay via public subsidies will fall.
In the meantime, we continue to pay increasing rents on the properties we pass in our ongoing game of Monopoly.