Issue 70 • Week of May 21, 2023
Something that has never happened in America is occurring this Sunday in England, as it does every year. Three top tier professional sports teams are vying to keep their spots in the league. Two squads out of Leeds United, Leicester, and Everton will not play in the Premier League next year. Southampton has already been sent packing to the UK equivalent (but more prestigious version) of the minors. Three clubs from the level below including Burnley and Sheffield United will be promoted to the top tier.
Ensuring final games still count for something keeps fans engaged and revenue flowing for teams on the brink, so the prize for playing in the Premier League is more than just pride. Brentford in its first season since 1947 at the highest level just generated £30 million in profit for team owners – more than the past 30 years combined.
Without a promotion and relegation system in any top league, the US has its fair share of perennial losers. Most are still moneymakers. All NFL and NHL teams are profitable – even the 9 football teams who have never won a championship in 419 seasons and the 12 hockey teams who have played a combined 341 seasons without raising the Stanley Cup. The Brooklyn Nets were the only NBA team to lose money last season, though their valuation continues to rise.
When it comes to baseball, profits are slightly less guaranteed. That has not bothered the Seattle Mariners. The only MLB team never to have appeared in the World Series is currently the most profitable in the league with operating income of $86 million. Five of the other six ball clubs with the longest droughts totaling 272 seasons netted $243 million last season. The Oakland Athletics lost over 100 games last year while raking in $62 million and will likely leave for Las Vegas for an even better deal.
Fans are of course welcome to continue spending their money rewarding poor play, but this anti-competitive system comes at great cost to citizens regardless of whether they follow sports.
Taxpayers have subsidized team owners with about $2 billion per year of public funding of private stadiums since 2000. In that time, US sports clubs have increased their revenue from $10 billion to over $32 billion in 2021 and have never proven the public ROI of subsidies for new venues. Nearly every modern stadium proposal estimates economic impact rather than benefits because study after study has found that new profits are rarely generated. Instead, revenue is simply transferred from elsewhere in the city.
Losing teams, however, do have adverse effects on communities' economies and their overall psychology while other cities are also routinely denied the chance to compete through backroom deals rather than the merit of their clubs' performances or the dedication of their fan base.
How can we make professional sports more competitive and save money at the same time?
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