Baseball and Basketball Stadium Ownership and Franchise Incentives to Relocate
Gerard C. S. Mildner and James G. Strathman
Over the past four years, seven major league sports franchises have moved and several more relocations have been proposed. 1 This mobility of sports franchises has created a political uproar in the cities that have lost their sports teams and has led to calls in Congress to regulate the location of teams ( Vader, 1995; Malkin, 1997; Norton, 1995). Cities desiring to acquire or retain sports franchises have invested millions of dollars in building stadiums, constructing parking facilities and other infrastructure, and even guaranteeing ticket sales to make their city more attractive to potential teams.
These investments and subsidies represent a transfer of resources from city taxpayers for the dubious benefit of supporting a segment of the entertainment industry and maintaining a city's "major league" reputation ( Federal Reserve Bank of Cleveland, 1991). In fact, analysts have concluded that the net economic benefits for a city to have sports franchises are much more limited than voters and political leaders have assumed ( Baade and Dye, 1988, 1990).
A different set of studies have looked at the motivation of sports franchises to relocate and the role that local governments play in attracting and retaining teams ( Shropshire, 1995; Euchner, 1993). What is clear from these studies is that stadium ownership plays an important role in the decision to relocate.
In an earlier paper, we examined the factors leading Major League Baseball franchises to relocate using data from 1950 to 1995 ( Mildner and Strathman, 1996). In this chapter, we extend our analysis to look at the National Basketball Association from 1960 to 1995. Our intent is to extend this line of research to cover the other major league sports, but we present here the data for these two sports along with some location data for professional hockey and football. The chapter proceeds as follows: our model of the team relocation decision process is specified; our data set is