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January 27, 2015
Last Sunday, the Green Bay Packers came within minutes of defeating the Seattle Seahawks and earning a berth in the Super Bowl. Were it not for a miracle comeback by Seattle, the Packers would have made their 14th appearance in the NFL’s title game. With 13 world championships, the Packers have far more than any other football team. They are arguably the most successful franchise in American professional sports history. But the most remarkable thing about the Green Bay Packers is that in an industry controlled by parasitic owners who leech billions of dollars off taxpayers, they are 100% publicly owned and operated for the benefit of their community.
The Packers are extremely profitable and completely self-sustainable. Last year, the Packers brought in $25.6 million in profit from operations on record revenue. This comes after two prior years with operating profits of $54.3 million and $43 million, respectively. When the Packers needed to raise capital for a stadium expansion in 2011, the team sold shares of stock for $250, with no one able to purchase more than 200 shares. They easily raised $65 million needed to complete the renovations to storied Lambeau Field.
Green Bay, with a population of slightly more than 100,000, is the smallest market in U.S. professional sports. If they can financially support their team, imagine how easy it would be for a city the size of New York or Chicago.
The Packers prove that there is no reason for private ownership of sports teams. They also prove there is no need for government ownership either. To save the bankrupt team in 1923, community members mobilized in a grassroots effort to purchase the franchise and turn it into a nonprofit organization. As later stock sales opened up ownership to the broader public, measures were taken to ensure no one was able to obtain a controlling interest. The team would belong to everyone, and together they would make decisions democratically on how to operate it.
The Green Bay Packers are essentially an anarchist organization. Everybody involved has a stake. No one’s voice is dominant. The franchise is run democratically for the public good. According to its bylaws, the Packers are “a community project, intended to promote community welfare.” Concession operators are volunteers, many part of local nonprofits who raise money for their charities. When the field needs to be shoveled after a snowstorm, there is never a shortage of volunteers to help out.
The Packers model closely resembles anarcho-syndicalism, an anarchist theory concerned with workers’ freedom from exploitative labor conditions. Ruth Kinna writes in Anarchism:A Beginner’s Guide that “Co-operating in unions, or syndicates, workers were organized both to fight against employers and to develop the skills required for them to assume direct control of their factories, workshops and land. In other words, syndicalist – or union – organizations were intended to provide a framework for anarchy.” Packers’ shareholders are a syndicate of fans organized to run their team, without the mediation of any private or public authorities.
It is not an accident that the NFL would later prohibit charitable organizations. (The Packers are grandfathered in.) The primary purpose of the NFL – like MLB and other professional sports leagues – is not to provide enjoyment for fans and increase community solidarity, but to serve as a vehicle for extremely rich men to line their pockets by extracting money from taxpayers.
Sports teams exist because of the loyalty of their fans. The fans pay for tickets, hot dogs, beer and merchandise. They watch on television, creating the market for massive amounts of advertising revenue. Fathers watching games with their sons and coworkers talking about the stats at the water cooler are the reason that sports teams are cash cows that can virtually print money like the Federal Reserve.
Sports leagues are enormous enterprises, with franchise values of hundreds of millions or in some cases billions of dollars. They have become monopolies. Major League Baseball even enjoys an antitrust exemption that would prohibit any competing league. While football and basketball don’t enjoy the same exemption, good luck trying to start a football league to compete against the NFL. The league has a slight head start over any potential rivals, already pulling in revenue of more than $9 billion per year.
Professional Sports as Rent-Seeking Monopolies
Monopolies are an inherent feature of capitalist socioeconomic systems. The fact that capitalism destroys the planet, necessitating the extraction and burning of fossil fuels at a wildly unsustainable rate, is another less than ideal feature. Unchecked growth of businesses will always produce companies that achieve superiority over their competitors and obtain monopoly status. With no fear of competition, companies are able to extract a rent from the state.
In the same way that giant oil companies are able to gain extremely favorable leases over public lands and television networks over leases of public airwaves, private sports owners are able to extract handouts from taxpayers. This rent-seeking forces municipalities and states to extend sports teams various tax breaks and subsidize the stadiums they play in.
Private owners seem to believe they have a right to corporate welfare. They tout the economic benefits of jobs and development of the community. In reality, a handful of peanut vendors and parking attendants don’t create growth. The costs to cities are always understated while the benefits are always overstated.
According to Judith Grant Long: “Governments pay far more to participate in the development of major league sports facilities than is commonly understood due to the routine omission of public subsidies for land and infrastructure, and the ongoing costs of operations, capital improvements, municipal services, and foregone property taxes.” She calculates that for all the stadiums in the four professional sports, the underreported costs to taxpayers totals $5 billion.
But politicians care more about enhancing their resume than doing a true cost-benefit analysis. They may even believe ownership’s propaganda about doing the city a favor by letting their team play there (while keeping all the money generated for themselves.)
In 1984, Baltimore Colts owner Bob Irsay literally moved his team overnight to Indianapolis after failing to reach an agreement on having the state pay for a new stadium. Eleven years later, when Cleveland Browns owner Art Modell found himself in dire financial straits – despite enjoying the use of Cleveland’s Municipal Stadium for $1 per year – Baltimore paid to build a new stadium to bring a football team back to their city. The passionate Cleveland fans for years harbored vitriolic rage towards Modell, who would have been trounced in a mayoral race by Satan.
Small-market teams like Cleveland have the least leverage, but even big-market teams can threaten the nuclear option of leaving town to extort money from the public. George Steinbrenner, convicted felon and New York Yankees owner until his death, cried wolf about moving the Yankees incessantly to try to shake down the city to build a new Yankee Stadium. Nobody in their right mind would ever imagine Yankees wearing pinstripes in Las Vegas or Charlotte, but Steinbrenner was able to get the city to give him $942 million in tax exempt bonds.
Former Assemblyman Richard Brodsky released a report, “The House That You Built,” in which he determined that the deal “created billions of dollars of new public debt with little transparency or control by elected officials and outside of existing debt restrictions. This is not in the public interest.” Brodsky also claimed that the issuance of this debt “may violate existing law.”
The only current stadium in the NFL financed entirely by private money is the New Giants Stadium in New Jersey, which cost $1.6 billion. But the Giants and Jets franchises who play there benefited from taxpayer subsidies for their previous stadium for years, which allowed them to afford such a gigantic expense.
Putting Private Interests Over the Public Interest
Some cities are unable to maintain even basic social services because of their obligations to pay for sports franchises. Glendale, Arizona spent hundreds of millions of dollars to build a stadium for the NHL’s Phoenix Coyotes. They now have to pay an additional $15 million per year to the team as a “management fee,” which is really just a gigantic welfare check. The city of Glendale, meanwhile, has had to layoff teachers, firefighters, and policemen. They nearly had to sell their city hall and police station as well.
“How municipalities acquire so much debt on buildings that have been torn down or are underused illustrates the excesses of publicly financed stadiums and the almost mystical sway professional sports teams have over politicians, voters and fans,” wrote Ken Belson in the New York Times.
Private owners have consistently taken advantage of the enormous leverage they hold over their fan bases and their cities to extract money from them. Almost without fail, local and state governments have put private interests over the public interest, enabling owners to socialize the risk of their businesses while privatizing the profits.
Governments have been unable or unwilling to represent the communities they derive their authority from in making decisions concerning sports teams. In 1997, Maricopa County Supervisor Mary Rose Wilcox was shot by a constituent after a council meeting. The man was upset with Wilcox for pushing through a massively unpopular sales tax to pay for a new baseball stadium for the Arizona Diamondbacks.
Former New York City Mayor Michael Bloomberg spent years in office trying to spend $2 billion of taxpayer money to build a football stadium on the West Side of Manhattan that was detested by a strong majority of New Yorkers. The proposal finally died when the International Olympic Committee chose London as the site of the 2012 Olympics instead of New York. As a result, the New York Times reported, “officials, developers and urban planners are embracing an unlikely notion: the Olympic bid’s defeat may have been one of the best things to happen for the city’s growth in recent memory.”
Government authorities have proven almost as incapable of incorporating community members into the decision making process as private individuals and corporations. There is no reason to think that bureaucratic control of sports franchises would be any better than private control. Why can’t communities figure out for themselves from the ground up how to own and operate sports teams, as they have in Green Bay?
Many other fan bases are equally as passionate and invested in their teams as Packers fans in Wisconsin. Sports should be a public good that allow fans to participate and have a stake in the teams they consider their own. Why should fans be at the mercy of private owners whose goal is to maximize their profit at the expense of their communities? And bureaucracies that are all too happy to give away the farm without allowing the people they are taxing any meaningful input?
The Green Bay Packers have demonstrated that local communities can own and control sports teams by themselves and be extremely successful. Using an anarcho-syndicalist model, similar to workers taking control of the factory and running it democratically, the Packers have shown anarchist principles can be applied to big business.
It’s time to start asking: why should this not be the model for the rest of professional sports? What value does the current ownership model, in which expenses are socialized while profits are privatized, provide? The answer, undoubtedly, is none. Beyond sports, why not look at applying the Packers model to manufacturing, banking, telecommunications, and even public administration? If the Packers are any indication, the results would be widespread participatory involvement, operational efficiency, and unprecedented community solidarity.