A New “Value Proposition”

As July nears its end, the 2020 Major League Baseball season has finally begun.  Teams are playing before empty ballparks to try to avoid further spreading the coronavirus.  Soon the NBA and the NHL will be playing, also with no fans in the arenas.  And if the NFL and college football start up, the teams will almost certainly be playing in front of thousands of empty seats.

471768148.jpgCOVID-19 has obviously affected our lives in more ways than we can count, but one of the interesting potential effects will be a changed perspective on the value of large, taxpayer-funded stadiums and arenas in towns with major league sports teams.  In the B.C. (“before coronavirus”) years, professional sports team owners argued that there was a significant “value proposition” in professional sports venues that made them worth the investment of tax dollars.  But the assumed presence of thousands of fans in the stands was a crucial element of the “value proposition” equation.

Fans were supposed to come in from out of town, fill up the hotel rooms, and pay the absurdly inflated hotel guest taxes into city and state coffers.  Fans were supposed to buy merchandise and food and beer — lots of beer — at the stadiums and arenas, paying sales taxes and creating jobs for hundreds of security guards and concession stand workers and parking lot attendants and fan entertainment teams, who would also pay taxes.  And, after the games were done, the happy fans were supposed to go out to restaurants in the city to celebrate their team’s victory, and the disappointed fans were supposed to drown their sorrows in a cold one — Keeping the city’s food and entertainment and hospitality sector healthy, and paying still more taxes.

Now games are being played with no fans, and who knows when fans will be permitted back to cheer on their teams.  None of those contemplated tax revenues are being paid.

COVID-19 might be a once-a-century pandemic, or it might be the harbinger of a new norm of social distancing and mask wearing and fewer fans in seats — if any are permitted at all.  The next time a professional sports team owner tries to convince a city to spring for a new, even more lavish venue, how receptive are city officials going to be to the “value proposition” message?

Heading Toward A Settlement

On the eve of the 2013 regular season, the National Football League and lawyers representing certain players have reached a preliminary settlement of claims concerning concussions and other head injuries.

The player lawsuits alleged that the NFL had hid information about the effect and potential dangers of head trauma.  In the proposed settlement, the NFL doesn’t admit any liability, but agrees to pay $765 million.  The money will be spread among more than 4,500 players and payments of the money will be made over 20 years, with half of the settlement proceeds being paid in the first three years.

According to the New York Times story linked above, the NFL makes about $10 billion a year, so the payment of $765 million over 20 years — while not exactly chump change — is likely to be only a tiny fraction of the League’s revenue during that time period.  The players, however, get certainty and immediacy, rather than the prospect of continued litigation over the next few years and an uncertain result, which is important if you are battling neurological problem or other issues that you claim were caused by concussions you received during your NFL career.  On the other hand the NFL, which is the most PR-savvy of the professional sports leagues, avoids the sad and unseemly spectacle of crippled and addled former star players parading before a jury to show the degree of their mental injuries.

The American public loves football and loves the big, bone-jarring hits that the NFL provides; it’s why the NFL is easily the most popular sport in the country.  Those who played the game received lucrative salaries and adulation, but paid a high price.  It’s very troubling to see men who were once premier athletes hobbled, mentally and physically, to the point where they cannot walk unaided or remember what they have done during the day.  I’m not sure that any amount of money is really adequate compensation for what those men have lost.