Strike One for New Jersey
December 27, 2012
By Bruce Marshall
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Right about this time of year near the end of the 1984 NFL regular season, news broke from Philadelphia that Eagles owner Leonard Tose was close to moving the Birds to Phoenix. Tose, of course, was a well-known inveterate gambler who frequented the Atlantic City casinos. Still, no fans in Philadelphia were expecting that he would be willing to move their beloved franchise several time zones away to help cover his mounting debts. Quickly, the city mobilized and restructured the Eagles' lease terms at Veterans Stadium; the Vet would get 50-plus penthouse suites, to be built at the top of the 700 level, by the 1986 season; all revenue would go to the team; the Birds' lease was reworked and extended; and the city would defer collecting $800,000 per year in rent for up to 10 years, after which the money would be repaid plus interest. The city would also build two practice fields and an indoor workout facility. Tose agreed to drop plans of a move to Phoenix, thinking he had found an answer to his financial woes.
(Only it wasn't so; Tose ended up selling the Eagles the following year to Norman Braman for $65 million. Due to all of the leveraging Tose had done with the franchise, he only netted $5 million from the sale, and not long after had squandered all of that profit, too.)
Three years later, Bud Adams threatened to move his Houston Oilers to Jacksonville unless the city and Harris County made significant improvements to the Astrodome. To appease Adams, 10,000 new seats (eliminating the Dome's popular "exploding" scoreboard) and 65 new luxury suites were added, funded by an increase in local property taxes and a doubling of the hotel tax. Within a few years, however, Adams was asking for more, railing for even more-expensive accommodations, all at taxpayer expense. When Houston balked, Adams shopped his team, moving it to Nashville (with a one-year stopover in Memphis) only a decade after extracting those first concessions from the Astrodome.
Not long after Adams moved the Oilers, Denver Broncos owner Pat Bowlen was making similar threats in the Mile High City, with some not-so-thinly-veiled warnings that he might consider relocating the Broncos to Toronto in his native Canada unless the city could provide a new facility to replace the aging Mile High Stadium. Fear of losing their beloved Broncos helped convince the voters in a six-country area comprising metro Denver to pass a stadium measure on the November 1998 ballot.
During roughly the same period of time, Art Modell, faced with some Leonard Tose-like debts, moved his Cleveland Browns to Baltimore, which was offering a sweetheart deal on a new stadium. Of course, Al Davis' Raiders (twice!) and Bill Bidwill's Cardinals also abandoned their home bases. Bob Irsay transferred his Baltimore Colts to Indianapolis in the dead of night. The New York Giants and Jets both moved out of the Big Apple for New Jersey and a new sports complex anchored by a racetrack. Other owners, through threats of relocation, have intimidated many locales into building new stadiums for their teams. And the Spanos family was able to extract a staggering ticket-sale guarantee from the city of San Diego when similarly rattling the relocation saber. The list goes on, but you get the idea.
While pro football owners are hardly the only businessmen on the lookout to make better deals for their enterprises, we mention the instances above as examples of the NFL's history of effectively extorting municipalities (and, by extension, countless taxpayers) with stadium deals and sweetheart leases in order to help pad their coffers. Which runs counter to much of the league-generated p.r. which often portrays the NFL as a pillar of integrity...especially with its decades-long public stance against sports gaming.
We have never subscribed to the notion that the NFL ownership, in particular, is populated by a group of Little Lord Fauntleroy types. There have always been exceptions, but its ranks have long included various objectionable sorts, some of whom historically being involved in industries (horse racing, bookmaking, waste management, etc.) hardly confused with the Peace Corps.
And we are compelled to remind readers of these past inconsistencies because last Friday, the NFL (in tandem with the NHL, NBA, and NCAA) was able to score a preliminary legal victory, which was not wholly unexpected, in its attempt to block New Jersey's proposal to implement sports wagering at its existing race tracks and casinos. In denying New Jersey's request to dismiss the lawsuit filed by the sports organizations, U.S. District Judge Michael Shipp agreed that the leagues have standing to file the suit because expanding legal sports betting to New Jersey would "negatively affect perception of their games."
Judge Shipp cited studies offered by the leagues that showed fans' negative attitudes toward game-fixing and sports gambling. Which makes about as much sense as condemning the automotive industry because criminals use cars to escape from bank robberies. U.S. Rep. Frank Pallone Jr., D-N.J., who has worked in the House to change the 1992 federal law which prohibits sports gaming in all but four states, also decried Shipp's decision. "It is absurd for the professional sports leagues and the NCAA to claim that they will suffer injuries as a result of the legalization of sports betting in New Jersey," Pallone said. "That these organizations claim that the sports they represent will somehow have their reputation impacted is naive at best and assumes that illegal gambling is not currently occurring in lieu of legal sports betting. The fact is that the presence of illegal betting and the crime that goes with it has a far greater impact on the legitimacy of sports organization."
At the same time, a nationwide survey conducted by New Jersey's Fairleigh-Dickinson University showed that a majority among those polled were in favor or making sports gambling legal everywhere.
The specifics of the New Jersey plan, as championed by Gov. Chris Christie, were outlined in depth on these pages in our aforementioned editorial from two months ago. And while the reaction of the sports leagues and NCAA, and even Judge Shipp, have been predictable, we remain perplexed why the mainstream sports media continues to treat the subject of sports gaming so benignly.
As we mentioned in October, the stakes in this debate are a lot more significant than they might have been in years past. With a listing economy desperate for job creating-opportunities, and various government entities faced with potentially-draconian budget cuts, any enterprise that could create viable employment and revenue-generating streams to pad the public purse cannot be summarily dismissed. Especially since the sports wagering activity that the leagues and NCAA deem so onerous has long been conducted mostly underground, unregulated and untaxed, as Rep. Pallone mentioned. Except in the few states in which sports gaming is legalized, Nevada in particular, where the industry not only generates jobs and revenue for the state, but also provides transparency and helps serve as an important industry watchdog to identify the sort of chicanery to which Judge Shipp referred.
What still perplexes, however, is how so many major media outlets are either parroting the time-worn NFL/NCAA anti-gaming diatribes, or just ignoring the subject completely. It's as if the storyline is such a hot potato that media concerns do not wish to run afoul of the NFL or NCAA, even by just setting a framework for reasonable debate. Although ESPN counts a number of respected sports journalists among its ranks, it has rarely tackled the subject in a significant manner. We have occasionally come across some probing material on the web pages of Yahoo Sports, but can still count on one hand the number of serious editorial pieces from all sources.
We have also never encountered any domestic sports piece that drills just a little bit beneath the surface regarding Rupert Murdoch's all-powerful NewsCorporation, under whose umbrella are the Fox Networks (which televise NFL and MLB games in the states) and, overseas, BSkyB. Sky's subsidiaries also include SkyBet, a heavyweight sports wagering company based in England that accepts various wagers on American sports.
Nothing wrong with NewsCorp's Sky holding an interest in SkyBet, although we would like to hear NFL Commissioner Roger Goodell argue with a straight face about the evils of sports gaming when it is a peripheral enterprise of one the league's broadcast partners.
How, then, can the public get better educated? Indeed, we suspect the lack of an articulate and coherent voice on behalf of sports gaming in the states is one main reason the sporting public is at all influenced by the predictable commentary from the NFL, NCAA, and others. On the rare occasions a platform has been granted to the pro-gaming argument, it is often some football tout who has trouble stringing together a couple of intelligible sentences, reinforcing the stereotype of "dems and dese" characters in contrast to the well-scrubbed images of NFL and NCAA interests. In that context, the pro-gaming argument is rarely going to be portrayed in a positive light.
Just why the NFL, NCAA and others on the anti-gaming side remain so adamant in their opposition continues to amaze, too. It's not as if the electorate is dictating this policy slant. Indeed, the greatest number of those who find sports gaming truly objectionable would be counted among moral conservatives and evangelicals, a far-right constituency that has been mostly marginalized, if not downright vilified, by the mainstream media. How can these sorts be driving a debate and effectively embraced by supposedly "progressive" entities as the NFL and NCAA?
There are a couple of answers, of which one is pure ignorance on the part of the sports leagues and NCAA. Although that argument is hard to buy. There are other theories, some expounded upon by TGS founder Mort Olshan in his well-received 1975 book Winning Theories of Sports Handicapping. When time and space permit we will speculate further.
What's next? New Jersey has said it plans to license sports betting as soon as January, and in October it published regulations governing licenses. But Gov. Christie also agreed that New Jersey would give the leagues 30 days' notice before it grants any licenses, and hasn't done so yet. The tentative January start date appears to be up in the air, especially in lieu of last week's court decision.
Judge Shipp's preliminary ruling last week also means that New Jersey is now going to have to defend itself in court against the pending lawsuit from the leagues and NCAA. And that's not too far over the horizon, as Shipp ordered that a date for oral argument on that issue will be issued after Jan. 20. Christie, however, is hardly ready to surrender, having assembled his own heavyweight legal team headed by Ted Olson, a former United States Solicitor General. Stay tuned for further developments.
For the moment, however, we instead challenge the mainstream sports media to address the issue instead of cowering from any pro-gaming related content. It's time that somebody speak up about the the sports gaming sector being a potential contributor to sustainable economic growth with substantial export value, with the potential to create thousands of new jobs and countless revenues and taxes. We'll even offer ourselves as spokesmen.
As for a proper venue for discussion? How about the business channels such as CNBC, Bloomberg, or Fox Business, which spend almost all of their days dissecting the vicissitudes of those "harmless" entities known as the financial markets.
Let the debate commence!