even if they do not actually attend games or buy sports-related products. A professional sports team, therefore, creates a "public good" or "externality"--a benefit enjoyed by consumers who follow sports regardless of whether they help pay for it. The magnitude of this benefit is unknown, and is not shared by everyone; nevertheless, it exists. As a result, sports fans are likely to accept higher taxes or reduced public services to attract or keep a team, even if they do not attend games themselves. These fans, supplemented and mobilized by teams, local media, and local interests that benefit directly from a stadium, constitute the base of political support for subsidized sports facilities. The Role of Monopoly Leagues While sports subsidies might ow from externalities, their primary cause is the monopolistic structure of sports. Leagues maximize their members' profits by keeping the number of franchises below the number of cities that could support a team. To attract teams, cities must compete through a bidding war, whereby each bids its willingness to pay to have a team, not the amount necessary to make a team viable. Monopoly leagues convert fans' (hence cities') willingness to pay for a team into an opportunity for teams to extract revenues. Teams are not required to take advantage of this opportunity, and in two cases--the Charlotte Panthers and, to a lesser extent, the San Francisco Giants--the financial exposure of the city has been the relatively modest costs of site acquisition and infrastructural investments. But in most cases, local and state governments have paid over $100 million in stadium subsidy, and in some cases have financed the entire enterprise. The tendency of sports teams to seek new homes has been intensified by new stadium technology. The rather ordinary cookie-cutter, multipurpose facility of the 1960s and 1970s has given way to the elaborate, single-sport facility that features numerous new revenue opportunitie...
