Suckers of the Day: Cleveland

(Not at all picking on the good people of that fine city. Just another installment chronicling one of America’s favorite pastimes – giving subsidies to rich people).

Michael Powell, who does terrific work for the New York Times has a column in today’s paper that is, by turns, edifying and infuriating.

Titled “Sports Owners Dip Into the Public Purse, Despite Billions in the Bank,” his piece looks at the largesse that the city of Cleveland has showered on its three major sports owners – Dan Gilbert, of the Cleveland Cavaliers, Jimmy Haslam, owner of the Browns and Cleveland Indians’ controlling owner Paul Dolan (first cousin to James Dolan. Note to self: OK, breathe).

Some of the maddening particulars:

1) last year, these clubs led an initiative to increase county-wide “sin” taxes, on cigarettes and alcohol. The purpose  – to raise additional funds to provide upkeep for the respective venues in which the Browns, Cavs and Indians play.

Powell writes:

Sweet deals for team owners are a distinguishing feature of pro sports capitalism. Costs are socialized, and profits remain private. Cleveland’s owners argue that this is only just: The stadium and the arena are publicly owned, and like any landlord, the city and the county should look after repairs and improvements.

Their logic does not apply more broadly. The team owners took control of the process of auctioning off naming rights for these public stadiums. The Browns sold their stadium’s rights for $100 million to FirstEnergy Corporation; the Indians will get $58 million over 16 years from Progressive Insurance; Gilbert’s home loan business paid a terrific sum to Gilbert’s team to name the place Quicken Loans Arena.

The owners shared not a penny with the hard-pressed city.

2) Meanwhile, Cleveland is a poor, cash-strapped city. Powell reports that its poverty rate is a whopping 37%, about two and a half times the national rate. Infant mortality is 13 per 1,000 live births, double the US figure. For kicks, that infant mortality rate puts Cleveland on a par with places like Moldova, Albania and the West Bank (data courtesy of the CIA factbook).

For more kicks, Haslam is worth an estimated $2.8 billion, the Dolan Family Trust (under Charles Dolan) which bought the team that Paul Dolan now runs, is worth $4.9 billion and Gilbert himself is worth an estimated $4.8 billion.

Those are some serious welfare princes.

3) there is no evidence that the sports teams and the public investment in them have generated a discernibly positive economic impact for the city. Of course, there virtually never is in these cases.

4) a citizen’s group tried to put a counter-initiative on the ballot – a three-dollar surcharge on sports tickets. The owners responded as you would expect:

“Proposing to punish Cuyahoga County families and sports fans by imposing a new, large ticket tax to pay for major repairs,” the owners complained in a news release, “is terribly flawed.”

A surcharge, they complained, would make it even more difficult for families to buy tickets. That argument has an out-of-body quality, as the owners set the prices. (The Cavaliers will raise ticket prices 15 percent next year, the first such hike in five years.)

5) The Cavaliers are not satisfied with their win in the tax referendum. They also want the city to split the costs of additional upgrades to their arena. Adam Silver, natch, supports the team in this effort.

As I said yesterday, heads I win, tails you lose.

Looking forward to the next heated debate on sports talk about greedy, “overpaid” and “entitled” ballplayers.

It won’t be long.


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