Gaining Public Sector Buy-In

Jones believes that a new stadium with a neighboring entertainment complex would be an extension of the Cowboys "personality."

This massive undertaking is currently being pitched to cities throughout the greater Dallas-Fort Worth area and would not only include the stadium, but would also include hundreds of acres of retail and entertainment space, as well as office space, residential housing, and even a Cowboys Hall of Fame.

In an effort to draw tourists year-round to this Cowboys' branded experience, Jones believes he needs significant public financing if the project is to be completed by the end of the decade.

Although corporations of all sizes periodically receive government subsidies or other incentives such as tax breaks, nowhere is the topic of corporate welfare as hotly debated as it is throughout sports.

Two primary reasons exist for why billionaire owners have succeeded in securing subsidies usually in the form of taxpayer-financed stadiums. Sports leagues control the supply of, and demand for, teams. Essentially, leagues can manufacture demand by restricting the number of franchises available. Next, teams routinely control the timing of when the stadium discussion takes place. By threatening to relocate or even go out of business, teams have the ability to dictate the terms and timing to municipalities because they are more agile than their public-sector adversaries.

Although having a brand that is strong enough and positioned favorably enough to leverage public dollars takes many years to accomplish, many heavy hitters throughout the business world have done so successfully.

Consider the Boeing Corporation, for example. In 2001, Boeing, which had its headquarters in Seattle, announced it was going to move its headquarters to Chicago, which won a bid of Olympic (city bidding) proportions over Denver and Dallas.

Based on an economic impact study commissioned by the city and conducted by Arthur Andersen, it was estimated that Boeing, which generated $51.3 billion in revenue in 2000 and would qualify as Illinois' biggest company, would have an estimated $4.5 billion economic impact on the city.

This was not unlike those economic impact studies routinely commissioned by sports teams to convince voters to support a stadium financing bill. As is regularly the case with public sector financing of stadiums, economists were quick to point out that Boeing would have a marginal economic impact and many of the economic benefits that would be generated would be reaped by Boeing and its employees more than the city itself.

Boeing, like the majority of its counterparts in professional sports, prevailed and was eligible for up to $41 million in state incentives and $23 million in city donations, including money to build the corporation's hangar at Midway Airport.

Unfortunately, exactly one week after Boeing moved into its Chicago headquarters, terrorists attacked the World Trade Center and the Pentagon. This development, when combined with the lack of demand in the aircraft industry, led Boeing to announce plans to reduce its workforce by as much as 30 percent, or 30,000 workers. Toward the end of 2002, the company said it was still on target, having cut more than 24,000 jobs nationwide.

Sports fans can relate to this as they wait years and years to finally get a team only to learn that it will be a longer road to success than originally thought.

As for Jones, following the terrorist attacks, he took a slightly less in-your-face approach and demonstrated finesse in his media dealings and public relations.

When asked about stadium project delays in light of the terrorist attacks, Jones was quick to put his professional interests in perspective relative to world events. He noted that the world had become a different place and that the timing was inappropriate to consider the specifics of any proposed stadium deal. Nonetheless, Jones will revisit the issue of public sector buy-in as early as appropriate in an effort to further improve the team, the fan experience, and by extension, the franchise's value.



On the Ball. What You Can Learn About Business from America's Sports Leaders
On the Ball: What You Can Learn About Business From Americas Sports Leaders
ISBN: 013100963X
EAN: 2147483647
Year: 2003
Pages: 93

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