It's Not Your Father's Ballpark Anymore

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New York, New York

Strolling through the Waldorf Astoria's ornate cocktail room during the International Tennis Hall of Fame's (ITHF) annual fundraising gala, one could be forgiven if the scene conjured up images of an Arab shuk, or market, albeit with tuxedo-clad and gowned tennis enthusiasts.

The auction is in full swing, and the highest bidders win signed rackets, celebrity vacations, and golf outings with favorite players. All that's missing is the headscarf-wearing trader tugging at your sleeve, whispering under throaty breath his greats deals in Palm Springs. Maybe Stan Smith could play this role next year.

It may be no shuk trader, but the ITHF needs the auction proceeds almost as much. On a small scale, the $480,000 raised that mid-September evening represents only the latest front in the ongoing battle for public funds in sport. That's money the Hall could not squeeze out of the public till.

Since the halcyon days of public funding ended nearly three decades ago, sports has found the public sector frugal, whether because of more conservative government or resentment toward perceived greedy owners and players. Higher price tags for amenity-filled venues play a part, as do questions about the economic returns generated by sports facilities.

Several miles to the north of the ritzy Waldorf, perhaps sports most fabled team, after two decades of fruitlessly demanding government handouts, gave up the ghost and is footing an $800 million tab nearly on its own, The Yankees will stay in the Bronx. And again, the New York Jets were to play in a stadium built in part with public money a few dozen city blocks to the west of the hotel. That effort also lost, and the Jets and New York Giants are now planning a more than $1 billion privately financed building in New Jersey.

By the time the new Yankee Stadium opens in 2009, Derek Jeter will be over the disappointment of losing the 06 MVP Award to Justin Morneau.

"There has been a growing amount of public concern, particularly after 2001 (when terrorists attacked New York and Washington, D.C.) about public subsidies for sports," said Andrew Zimbalist, a Smith College professor who writes frequently on the topic of sports business.

According to research Zimbalist recently finished with Harvard's Judith Grant Long, the share of public sector financing for stadiums and arenas reached 82 percent in the 1970s, then fell to 60 percent in the 1980s, and slipped again, to 59 percent, in the 1990s. They project the share will once again fall this decade, albeit modestly, to 58 percent. And that only accounts for projects like a new Yankee Stadium, not the small fry stuff like halls.

But the news is not all a one-way street. First, the trend is not a universal one. Marc Ganis, a sports consultant with clients including the Yankees, says the smaller the market, the greater the public subsidy.

Places like California and New York offer vast populations that are too valuable from which to relocate, so threats to move are laughable. But the smaller the market, the greater the need for assistance because the people and companies in these cities can not afford the high ticket, club seat, luxury suite and sponsorship prices necessary to fully fund a building, Ganis says. And if New York is building these revenue gushing stadiums, the Green Bays and Baltimores need them too. Both those cities, as well as ones like Phoenix and Dallas, have picked up big tabs for their football teams.

Also, even in larger markets, municipalities allow teams to sell bonds tax free. And two of the major leagues – baseball and football – have generous programs that help teams construct stadiums. The NFL has doled out nearly $800 million since 1999, and the Jets and Giants could get as much as $300 million combined.

Meanwhile baseball allows teams to deduct stadium interest expense from their revenue sharing payments. For a team like the Yankees with by far the meatiest revenue sharing tab in MLB, Zimbalist calculates the Yankees will save $280 million.

Back in Newport, Rhode Island, the financial calculations of big city pro sports teams certainly seems distant to the ITHF and its $4.8 million operating budget. The shingles of the more-than-century-old Hall needs repair, and its men's tennis tournament in early July will have to jack prize money 10 percent, or $38,000, to conform with new ATP guidelines. The gala contributes only 10 percent of the Hall's budget, the remainder aced from the tournament, museum fees, tennis court rentals and its Hall of Fame weekend.

Occasionally the ITHF does petition local and federal authorities for money, but the amounts are minimal. The state's tourism board recently rejected a $25,000 advertising grant. "We could have brought another 1,000 people to Newport," said Mark Stenning, the ITHF chief executive officer. But in truth, he added, "We have spent very little time chasing public money,"

No, rest assured, next September the tennis bazaar is open for business at the Waldorf.