How Stadium Development Is Killing Loyalty In American Sports

This article originally published Feb. 4, 2017, but has been reposted due to its relevance in light of the Raiders' March 27 approval to move from Oakland to Las Vegas. 

Pandemonium will ensue inside NRG Stadium on Sunday. As the opening kickoff between the New England Patriots and the Atlanta Falcons sails through the air, 75,000 fans will be blinded by flashbulbs and deafened by their collective roar. 

But 1,500 miles away in San Diego, Qualcomm Stadium will be as silent as a graveyard, not just because the Chargers didn’t make it to the Super Bowl, but because the team will never play in the city again. The abandoned stadium stands as a solemn symbol of an NFL franchise system that exploits American cities and tosses away fans.

"The institutions create a system that is designed to minimize competition. That benefits the owners and the established league, but it harms fans and people who own lesser teams or want to own teams,” said Roger Noll, a senior fellow at the Stanford Institute for Economic Policy Research.

"The NFL has strategically excluded many potentially profitable mid-markets in order to create a monopoly among the many frustrated applicants," according to Vanderbilt sports economist John Vrooman. The threat of relocation maximizes public subsidies despite a lack of economic justification.

The league franchise system is a monopoly of billionaire team owners. It establishes territorial rights, and new teams enter the competition only by a vote of current members. Most other nations operate their sport leagues with a promotion and relegation system that allows teams to enter competition through the quality of their play and inspires strong, generations-long fan loyalty.

The difference in league management style is at the core of professional teams relocating and the use of public funds for stadiums. With little competition and plenty of leverage, the NFL is putting the squeeze on fans, cities and states.

Tommie Vaughn is the type of fan that every team dreams of. He has loved the Chargers since he attended his first game in 1961 while in the Navy stationed in San Diego. He's been a season ticket holder for decades. His daughter dated Chargers players. He passed his love of the Chargers through four generations (pictured) to his great-grandchildren.

But Chargers CEO Dean Spanos is leaving Vaughn behind.

“At first I was angry at the city government ... Build them a new stadium. I wanted my Chargers to stay. Eventually I matured on the issue. The Chargers weren’t negotiating. They put up a smoke screen while they packed their trucks to leave," Vaughn said.

The franchise system simply isn't set up to benefit or reward fans — it puts loyalty behind development, bond referendums and profit.

"The league franchise system makes the U.S. less favorable to fans than the British system," Noll said. "In the U.S., if you lose a team, it’s lost for a long time. Someone can’t just buy a semi-pro football team and get them promoted into the NFL. Once you lose them, they’re gone. Likewise, if you live in a city with a poorly run team, you’re forever doomed to support a bad team.”

Stadium development is the carrot that's mutated NFL teams from the pride of a city to a traveling road show.

"Because of the extensive revenue sharing in the NFL it doesn't really matter where you play as long as the club is playing in a shiny new luxury seat stadium," Vrooman said.

There have been eight NFL relocations since 1982, and about $7.5B of government dollars allocated to stadium development since 1995.

Twenty-nine of the NFL’s 31 stadiums have received public funds. St. Louis is still servicing $144M in debt for a stadium that’s now empty, Minneapolis forked over $506M in public funds for the Vikings' U.S. Bank Stadium, $444M for the Cowboys, $600M for the Colts, $424M for the Bengals. During the relocation derby between 1995 and 2000, the private share of stadium cost was a meager 25%.

Between 1990 and 2010, taxpayers contributed an average of $262M to each NFL stadium.

"At least $1B of the NFL’s $13B in current annual revenues is derived from public government subsidy of the world’s most powerful sports-league cartel,” Vrooman said.

Extorting public funds through the threat of relocation has become standard operating procedure for the NFL, and it is powerful even when the team stays put. More than $4B in public stadium subsidies were leveraged from the credible threat of NFL teams relocating to Los Angeles alone, Vrooman said.

“Stadium development has become critical even in the larger critical metro markets like DFW, where opportunistic owners like the Cowboys' Jerry Jones game the system. The Cowboys had no intention of ever leaving Northeast Texas but Jones played the relocation-extortion gambit among smaller satellite city governments before moving from Irving to Arlington, a small metro-locked government that subsidized 30% of $1.2B Jerry World in 2009. The economic architecture of AT&T Stadium is designed to hermetically capture all economic gains within the venue, there is nothing left for the host City of Arlington but congestion,” according to Vrooman.

Burned by the NFL, Tommie Vaughn has had enough. “At some point you have to say no — you’re not going to take the treasure of this city and put it into an NFL owners' pocket. At first I was angry at San Diego because I thought they were small-minded, now I think San Diego is a pioneer.” 

Once Philip Rivers and Antonio Gates leave the Chargers, he’ll stop watching.

Instead of wondering who will win the next Super Bowl, now Vaughn wonders how much longer the NFL will survive.

“When Mark Cuban said the NFL was going to kill themselves with their greed and all-consuming attitude, I laughed. Now I believe him. I believe with all my heart that soon the NFL will not be building larger stadiums, but smaller. The NFL is turning into a gladiator-type atmosphere, teams performing for the wealthy.”

As the revenue from TV contracts continues to soar, people like Vaughn matter less and less. Fan loyalty is becoming irrelevant.

If you love professional sports, heed the warning of fans in St. Louis and San Diego. If a professional team plays in your city, sooner or later you’ll have to ask yourself what that team means to you — in cash.