• "Government doesn't solve problems, it subsidizes them."
• "Party like it's 1773!"
• "Separation of Business and State"
• "Vote the pirates out in 2010.  It's the spending Stupid!"
• "Stop buying votes with public money."
• "The problem with socialism is that you eventually run out of other people's money."

Economists Dennis Coates and Brad R. Humphreys call it "The Stadium Gambit". The owner of a sports franchise will declare an existing facility unsuitable -- too small, too old, lacking luxury boxes, or lacking in some such characteristic. Some mention is made of the fact that another city would build a stadium if the current one does not. This real or implied threat to move the team leads to the construction of a plush new facility at little or no expense to the owner.

Sonicsless in Seattle?
The situation in Seattle is this: The SuperSonics of the National Basketball Association play home games in Key Arena, a remodeled version of the Seattle Coliseum. The Sonics have played there most of the time since their inception in 1967. There were a few years when they played in the Kingdome and in the 1994-95 season they played in the Tacoma Dome. The remodeling occurred in 1994 and 1995, during the time the Sonics were at the Tacoma Dome. The City of Seattle contributed over $70 million to the project and the team contributed $20 million. The city used rental income to handle its financial obligation for the arena. For a while this was looking like a good deal for both the team and the city. "The Key" was hailed as "state of the art" when it opened on October 26, 1995.

Trends were already working to make it "obsolete" however. Bigger arenas were being built in other cities. These competing cities were also finding new methods to gain revenues from these newer arenas, making it difficult for the Key to be competitive. The lease is up for renewal in 2010. Sonics owners, led by Howard Schultz of Starbucks fame, have been requesting an upgrade of the facility. The Seattle City Council, reflecting public weariness with recent stadium gambits by both the Mariners and the Seahawks, had been balking at the idea. Seattle Post-Intelligencer sports columnist Art Thiel wittily summed up the public mood a few years ago when he referred to Safeco Field (Mariners) as "the Guilty Pleasure".

The Sonics' situation came to a head last year, when local owners led by Howard Schultz of Starbucks fame sold the team to an Oklahoma City group led by Clay Bennett. Now that the owners are no longer local, the situation has taken on new urgency.  If the Sonics can't find the facility they desire in Western Washington, perhaps they can find it elsewhere.  The new ownership is pursuing a plan to build a new arena in Renton, Washington at a cost of $500 million. There was a proposal before the Washington Legislature that would entail public funding of about $300 million toward that cost. The legislation was never acted upon at the last session because legislative leaders determined there was a lack of support.

The Issues.
I can't ignore the sentimental issue, so let's put that on the table. I do not like the idea of the Sonics leaving town. As a fourteen-year-old, I did not like losing the Seattle Pilots (now the Milwaukee Brewers) in 1970. I also remember that it was great to have the Sonics around at the time. Sad as I was to lose Tommy Harper and Mike Hegan of the Pilots, it was great that we had Tom Meschery and Lenny Wilkens on the Sonics. I could go on, but let's just say that the Sonics and I go way back. I can even go on about the Mariners, successors to the Pilots, but maybe some other time.

There is another issue that can't be ignored, however. Is it right to use public money to finance a private business operating in the entertainment industry? Some of us, i.e. basketball fans, even consider the National Basketball Association to be a particularly important type of entertainment. Public money comes from all of us however. We shouldn't tax all to take care of a desire that is important only to some. The definitive principle of good government at stake is best stated in the preamble to the U.S. Constitution. It states that an objective of the Constitution is "to promote the general welfare". General welfare is in contrast to specific welfare. When government subsidizes the particular activity of professional basketball it is promoting specific welfare. This principle applies to all levels of government, as indicated in Article I, Section 12 of the Washington State Constitution, which prohibits special privileges and immunities.

Ah, the counterargument goes, don't sports teams bestow economic gains on a community, thereby working for the general welfare? A flaw in this argument is that it ignores the entirely realistic possibility that people who spend money on a basketball game would have spent it on something else, perhaps bowling, seeing a movie, or some other form of entertainment or non-entertainment. If the effect of having a professional team is merely to redirect money that people would have spent anyway, can we expect there to be any economic impact? Even with tourists from out of town, aren't there other things tourists would spend money on in the absence of a basketball team?

The consensus of academic economic literature is that professional teams have no measurable economic impact on their localities. This is according to Coates and Humphreys, economists who were referred at the start of this posting. Coates and Humphreys go further than this consensus, however. Their study finds that professional teams actually have negative economic impacts.

If the principle is that government should be promoting general welfare and not specific welfare, spending $300 million for a basketball arena makes no sense at all, especially when taxpayer are already facing a debt of $1 billion for the Seahawks' and Mariners' new facilities. The late Senator Everett Dirksen of Illinois said that "a billion here and a billion there" is "real money". If he said that about federal spending, what can we say about local spending?

Ob La Dee, Ob La Da . . .
The worst case scenario is that Seattle will lose the Sonics. If we do the sun will nevertheless come up the next day. Or at least we'll be able to see the clouds. This is Seattle. Remembering 1970 when the Seattle Pilots became the Milwaukee Brewers, there is at least one thing that sticks out in my mind more than memories of any baseball team. That was the year of my scout troop's fifty-mile hike in Mt. Rainier National Park. We had a great time, viewing the mountain from many angles. We enjoyed Mystic Lake, Mowich Lake, and Indian Henry's Hunting Ground. The point is life did go on, with or without the Seattle Pilots. Life would go on with or without the Sonics. There may be an element of grief, but in that case, taking a good long walk may be just the thing to do!