How To Beat a Billion-Dollar Sports Boondoggle

Virginia wins, and the Capitals and Wizards are staying in Washington.

Photo credit: All Pro Reels

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Late last year, I lamented that we are all now living in the era of billion-dollar sports boondoggles, a time in which professional sports team owners will regularly demand and receive that once mind-boggling level of public funding for new stadiums and arenas. My piece was motivated by Ted Leonsis, the billionaire owner of the NBA’s Washington Wizards, NHL’s Washington Capitals, and WNBA’s Washington Mystics, making a handshake deal with Virginia Gov. Glenn Youngkin to move the Caps and Wizards out of the District of Columbia to the Northern Virginia suburbs in exchange for about $1.35 billion in taxpayer subsidies and control over a new entertainment district.

But last week, a rare thing happened: The deal collapsed. Leonsis will be keeping his teams in D.C.

As I’ll explain below, some of the reasons for this outcome are unique to the particular situation in Virginia and Washington, D.C., but there are others that provide useful lessons for future debates over stadium subsidies and economic development more generally. I don’t want to go so far as to call what happened in Virginia a template for defeating ill-conceived stadium and arena deals — because again, some circumstances will not be replicable in other locales — but there’s certainly a bunch of useful things for advocates organizing against publicly-funded sports stadiums in their own communities to consider, especially as the price tag for sports deals continues to spiral upward.

1) A longer process helped local organizers. First, residents of Alexandria, Virginia, alongside D.C. residents and a healthy group of community, state, and national groups, all organized very quickly to oppose the deal once it was announced in December last year, and kudos to them for getting it together so fast. Disparate folks concerned about cost to taxpayers and quality of life in the area around the arena joined ideological opponents of stadium subsidies from the left and right to present a solid groups of folks who could annoy elected officials. The speed, cohesion, and political savvy the “no” coalition had is often not achieved in community organizing efforts.

But I think it’s undeniable that the deal having to go through the Virginia budget process, thus giving opponents several months and a set of concrete hurdles to manage, such as committee hearings and budget deadlines, helped defeat the deal. Compare this to the Buffalo Bills stadium deal in New York, which went from proposal to passing the legislature in a little over a week, by design. New York Gov. Kathy Hochul set up the process to be quick and opaque, whereas Youngkin, out of hubris, incompetence, or likely a bit of both, gave opponents a much longer timeframe to work with, and they took full advantage. (More generally, this is Exhibit A in why corporate subsidy boosters want a quick, quiet process: More time for organizing means less chance a deal sails through.)

2) An elected champion emerged. The person most individually responsible for the deal’s collapse is Virginia State Sen. L. Louise Lucas. Chair of the powerful Senate Finance Committee, which oversees the budget, she emerged early as a key opponent of publicly funding the arena, and simply refused to advance money for it through her committee. Lucas and her team clearly saw political advantage in opposing the deal, as evidenced by her social media crew sending out nonstop memes celebrating her opposition.

It was also useful to the cause that Lucas represents Norfolk, Virginia, a city several hours away from the D.C. metro area that was not going to benefit at all from anything associated with the arena, and that she is a key Youngkin antagonist at the best of times. As quick reminder: The consensus among everyone who has honestly studied publicly funded sports facilities is that they provide none of the promised economic benefits. Anyone claiming widespread prosperity will result from a sports facility is lying, in the tank for stadium boosters, or likely both. And there will certainly be no benefits miles and miles away for Virginians in Norfolks, even as they shoulder some share of the cost, which helped Lucas get on the correct side of this proposal.

Finding a well-positioned elected leader who sees political benefit in opposing the deal has been a key part of other successful efforts to stop corporate subsidies, most prominently in New York, where State Sen. Michael Gianaris’ opposition helped kibosh Amazon’s “second headquarters” there. Wisconsin Gov. Tony Evers’ opposition to his state’s Foxconn deal also comes to mind. It’s kind of an obvious point, but useful to state nonetheless: For future stadium subsidy opponents, finding the person in a key position of power who has political reasons to take the opposite side of a governor, corporate titan, or both, should be one of the very first organizing tasks on the list.

3) Leonsis and Youngkin committed political malpractice. Numbers one and two above are at least somewhat replicable for stadium subsidy opponents everywhere, but Virginians opposed to the arena were also blessed with some incompetent foils in Leonsis and Youngkin.

Youngkin, for his part, somehow thought it wise to publicly degrade Democrats as unAmerican monsters, and threaten to veto their legislative priorities, at the very same time that he needed a Democratically-controlled legislature to approve what would be a legacy-defining arena deal. That was never going to fly, especially because Youngkin is term-limited and headed for the exits next year.

Leonsis, meanwhile, failed to meet with key Democrats, including Lucas, until it was already too late, and for some reason decided his son was a key messenger for the deal, when the opposition campaign was explicitly based around not putting Virginia at risk in order to provide public subsidies to a billionaire (and his billionaire children). The whole thing reeked of hubris and a class of rich dudes who didn’t understand the actual day-to-day necessities of politicking. They assumed their “dealmaking” acumen would win out, and they got out-hustled, out-organized, and out-played by the actual politicians and community organizers.

4) D.C. still got hosed. For all that, though, Leonsis will still, much to my chagrin, be receiving more than $500 million from Washington, D.C., to renovate Capital One Arena, where his teams currently play. It’s a bit baffling to see D.C. Mayor Muriel Bowser and the city council provide half a billion in funding to a billionaire that the neighboring state just told to go pound sand. At this point, where else is Leonsis going to go? He’s getting bailed out of his own bizarre political predicament by a council refusing to use the leverage it so clearly has, in a city where there are serious and significant budget problems.

It’s especially annoying to see this particular deal cut because the D.C. attorney general, in an attempt to stop Leonsis moving to Virginia, claimed Leonsis’ lease prevents him from moving his teams out of the District until 2047. The new deal extends his lease contract all the way to … 2050. Three years for half a billion is pretty good businesses for Leonsis and crew. It’s a sad ending to an otherwise very encouraging story.

I’ll add that Virginia’s win isn’t the only good news regarding stadium politics recently: On Tuesday, Jackson County, Missouri, voters resoundingly defeated an effort to extend a sales tax in order to pay for a new stadium for Major League Baseball’s Kansas City Royals and renovate the stadium where the Kansas City Chiefs play. So for this week at least, we get to spike the ball and celebrate an at least momentary pause of the sports subsidy machine — and hopefully, future communities are able to take this playbook and use it to chalk up wins for themselves too.

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SHAMELESS SELF-PROMOTION: I had the distinct honor and privilege last week to attend and speak at the University of Maryland Baltimore County’s first Sports Economics Conference, organized by Prof. Dennis Coates. The opening day of the conference was largely focused on stadium subsidies and the intersection of sports and public policy. You can read a live-blog of the day’s proceedings provided by Neil deMause at Field of Schemes here, and listen to a recording of my panel on sports subsidy media coverage and political organizing here.

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— Pat Garofalo