The Rams were lured away from Los Angeles in 1995 through the promise of a new, $280 million domed stadium in downtown St. Louis.
On Wednesday, only the stadium remained. After more than two decades, Stan Kroenke and his Rams are headed to Southern California. In a 29-page relocation application to the NFL, released last week, Kroenke did not mince words about why he wished to move the team:
“St. Louis lags, and continues to lag, far behind in the economic drivers that are necessary for sustained success of an NFL franchise.”
Of the city’s plan to build a new $1 billion riverfront stadium, which would include $355 million in public funds, the application had this to say:
“Any NFL club that signs on to this proposal will be well on the road to financial ruin, and the league will be harmed.”
For two decades, NFL teams have used the threat of moving to Los Angeles to secure new stadiums. Kroenke finally broke the ice, although he could be followed in by either the San Diego Chargers or the Oakland Raiders, which are both using a possible move to entice their cities to replace old stadiums.
Threats like these lead city and state governments to contribute significant sums toward the construction of modern day coliseums. In addition, many owners are given discounts on land, stadium naming rights and leases that allow them to demand upgrades or terminate the deal whenever an owner wishes to do so.
The setup is unfair for taxpayers, especially so for those in smaller cities, which often take on a larger financial commitments.
MetLife Stadium in East Rutherford, N.J., was financed completely by its occupants, the New York Giants and New York Jets.
“New York has market power,” Anthony Yezer, a professor of economics at George Washington University, said. “The NFL has to be in New York and New York knows it. But there are substitutes for a city like Indianapolis, and those cities pay.”
Indianapolis certainly paid: $620 million of the $720 million price tag for Lucas Oil Stadium, the new home of the Colts that opened in 2008.
“The cities where there isn’t much market power, that’s where it’s going to be expensive,” Yezer said.
For these smaller cities, the payments do not end with construction costs. The lease for the Cincinnati Bengals states that the public must pay for upgrades to scoreboards and locker rooms. Pittsburgh taxpayers picked up the tab for 61 percent of Heinz Field’s $280 million cost in 2001, and the Steelers showed their gratitude by taking the city to court in 2013 to ask that the city pay for two-thirds of a $39 million renovation.
Teams often try to justify these public expenditures by claiming they will create jobs and improve the local economy.
“Those claims they make with their silly economic models, they’re bogus,” Yezer said. “An NFL club entering a market without a team brings a few positive economic benefits to that city. But simply building a new stadium, certainly if it’s in the same area as the old one, does nothing.”
Teams often claim that they need a new stadium to remain competitive, and they’re right in a sense, said Norm O’Reilly, a professor of sports administration at Ohio University.
When NFL owners claim they must “stay competitive,” O’Reilly said they mean in a business sense. Essentially, it helps them bring in more profit.
The building boom of the early 20th century was spurred by a desire to increase game-day profits and provide teams with more favorable deals.
“The old stadiums are huge and outdated,” O’Reilly said. “The new ones have fewer seats, so ticket prices are higher, and the teams want state-of-the-art technology to attract fans and especially sponsorships.”
“If the owners pay for it, that’s one thing,” he said. “But as a taxpayer, it’s crazy to see stadiums being torn down after 20 years.”
Dan Snyder, the owner of Washington’s pro team, has hired an an architect to design a stadium to replace his 19-year-old field in suburban Maryland. The region’s large population makes leaving the city outright difficult. Snyder will play Virginia, D.C. and Maryland off each other to ensure the best deal.
Yezer said the NFL is able to do this because is has a monopoly on football. The league decides which city gets a team and restrict the number of teams. Any team move must be approved by 24 of the NFL’s 32 owners.
“Imagine instead there are only 30 golf courses in the country, and all the others are closed,” Yezer said. “Local governments would be competing to cover the cost of construction, and green fees would be much higher. That’s why bad teams can still get new stadiums and charge high ticket prices.”
His solution would be to follow the European model for soccer. Anyone can start a team at the lowest league level. Good teams are promoted and bad teams are demoted, which keeps prices down and helps prevent monopolies.
“If the NFL operated under the same rules, there would already be five teams in Los Angeles,” Yezer said.
But that would mean a major hit to NFL revenue, which was near $9 billion in 2013, according to a Bloomberg estimate.
Despite the Rams departure, $24 million in public funds will go toward paying off the vacant Edward Jones Dome each year until 2021. Given the Rams’ distaste for the building, it is unlikely a pro football team will occupy it again.