In a better world, Chicagoans would have an extra spring in their steps these days, even people working two jobs to make ends meet, struggling to pay the babysitter or just aghast at food prices.
Whatever our challenges, we’re all big shots these days, at least in the view of two Chicago sports franchises. The Bears and the White Sox need billions of dollars from the public to get new stadiums in the city. It’s as if the average person suddenly has something in common with Jeff Bezos or Elon Musk. Chicagoans have what the teams need.
It’s too bad the citizen interest must be represented by politicians, who can be clueless, snookered and cowed by a sports team’s threats to leave town. People don’t have a voice to say what a tycoon would if asked for a billion dollars — “What’s in it for me?”
Why not give taxpayers who are partners in these private ventures an ownership share in the Bears and White Sox? We can start the discussions at 35%, board seats included.
This is not to suggest that some governor, mayor or agency should decide the White Sox roster or the Bears’ draft picks. Those arrangements couldn’t do much worse in wins and losses, but let’s let Jerry Reinsdorf and the McCaskey family keep taking the heat.
The real value of an ownership share is so the taxpayers can share the gains once these franchises are sold, as they inevitably will be. Bears matriarch Virginia McCaskey is 101. Reinsdorf, who runs the White Sox as chairman while owning a minority stake, is 88. Forbes has estimated the Bears are worth around $6 billion and that the Sox check in at more than $2 billion. Stadium deals could add to those valuations in a sports economy inflated by new money from gambling sponsorships.
League rules are a tall hurdle
Mention public stakes to those who value teams for a living, and the responses are that the concept makes sense but might never happen.
“The league rules are so restrictive,” said David Sunkin, partner in the law firm Sheppard Mullin and co-head of its sports industry team.
Sunkin said, however, that Chicago could have a decent negotiating position with the White Sox and Bears. Pro stadium deals in Los Angeles, one serving two NFL teams and the other for the basketball Clippers, were privately funded, and there are signs of a taxpayer revolt elsewhere. Voters in Kansas City rejected a funding package for their baseball and football teams, even though their Chiefs won this year’s Super Bowl.
Coming out of the pandemic, “Other cities don’t have the appetite or the resources to provide new money for stadiums,” Sunkin said.
Still, league rules are a tall hurdle. In an article for Sports Business Journal, Sunkin said the NFL is the most restrictive, limiting each team to 25 individual investors, although it gets around that by counting family companies and trusts as one. MLB, he said, has loosened its standards to allow for private equity but still requires controlling owners to have at least a 30% share. The leagues could not be reached for comment.
Author Neil deMause, who critiques stadium funding plans at his Field of Schemes website, recalled that Joan Kroc, widow of McDonald’s founder Ray Kroc, tried years ago to give the San Diego Padres to the city, only to be blocked by MLB.
“The sports leagues have made a concerted effort to head off the possibility of public ownership at every turn,” deMause said.
But rules can be changed. The NFL has a grandfather exemption for the Green Bay Packers, which is owned by its fan base. Baseball nearly had a public investment situation in Miami, where former Marlins owner Jeffrey Loria made a deal to reimburse local governments for stadium costs after selling the franchise. Accounting disputes ensued, what the local county called “fuzzy math,” and public entities got just a pittance.
Bears CEO Kevin Warren told the Sun-Times Editorial Board Thursday that there is “no plan, intent, desire, rationale for this team to ever be sold.”
A public trough, yet to be filled
When it comes to the Bears and the White Sox, Gov. J.B. Pritzker should lead the discussions. Pritzker knows his way around private equity.
In the meantime, he and legislative leaders have been cool to talk about subsidizing stadiums. Follow the bouncing ball on this, though. Stadium funding deals are the sort of legislative dishes cooked up after elections.
It’s been amusing to see the two clubs elbow for position around a public trough yet to be filled. Both thirst for the same funding source, a 2% tax on hotel stays that pays the bonds for Soldier Field and Guaranteed Rate Field. It’s only a matter of time before other funding sources enter the mix, such as a sales tax add-on. The Sox’ proposed stadium site already has access to part of $1.1 billion in tax increment financing, a diversion of property taxes.
For their part, the Bears are showcasing their best pals relationship with Mayor Brandon Johnson, who wants to open the city’s checkbook. We’ll see if the club knows mayors better than it does quarterbacks. The team’s stadium reveal this week laid out plans for $1.5 billion in infrastructure spending affecting DuSable Lake Shore Drive and the Museum Campus, property the team does not own.
The Bears at last became the Monsters of the Midway, just not in a good way.
David Roeder is a former Sun-Times business and labor reporter.
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