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St. Louis' plan to keep the Rams is a $400 million mistake

St. Louis: do not build this for the Rams.
St. Louis: do not build this for the Rams.
(HOK)

Last month, St. Louis Rams owner Stan Kroenke announced plans to build an 80,000-seat stadium in Los Angeles, presumably in order to move the team there — the city in which it played from 1946 to 1994.

St. Louis city and state officials countered with their own plan to build a 64,000-seat stadium downtown, to entice the Rams to stay. Today, Missouri governor Jay Nixon is announcing a deal with a rail agency and utility company to move train tracks to accommodate the new stadium. If it's built, it will cost between $860 and $985 million, with half the money coming from public funds.

The facts here are clear: building this stadium would be an absolutely terrible idea, even by the low standards of publicly-funded pro sports stadiums.

new rams stadium

The site plan for the new stadium, just a few blocks away from the old one. (HOK)

The project would mean paying a huge subsidy to a very profitable business that provides minimal benefits to the public — at the same time the city continues to pay off the debt from building the old Rams stadium, completed in 1995. It would take away millions away from public programs, and give them to a man worth an estimated $5.8 billion. Last, it would devour a large parcel of vacant land downtown, right on the Mississippi waterfront, to be used just ten times per year.

None of this is a particularly novel argument. But cities all over the country continue to give out absurd subsidies to pro sports teams, and get little in return. As long as it keeps happening, the same arguments stay relevant. Here's why St. Louis is better off letting the Rams head to Los Angeles.

The Rams have extorted St. Louis over and over

edward jones dome

The Edward Jones dome, built for the Rams in 1995. (Michael Thomas/Getty Images)

This is not the first time the Rams have squeezed money out of Missouri and St. Louis. They've been doing it since before they arrived in 1995.

In order to lure them from Los Angeles in the first place, the state of Missouri spent $300 million to build the Edward Jones Dome. But repaying the loans taken out to pay for it will end up costing the state, county, and city an estimated $720 million. They've also committed to paying all upkeep costs for the facility in perpetuity. In exchange, the Rams agreed to lease the dome for $500,000 per year for 30 years.

But the lease came with a particularly sweet clause for the Rams: starting in 2015, if the dome wasn't among the top quarter of NFL stadiums (in terms of "quality"), the team could opt out of its lease at any time. That's how we ended up where we are now — the city and state will continue to pay off the costs of building the dome (almost exclusively used for football) until 2021, when the team will probably be long gone for Los Angeles.

Now, St. Louis has tried to keep the dome up, spending another $30 million on upgrades in 2009. Last year, to convince the team to stay, the city offered to spend as much as $124 million for more extensive renovations. But the team demanded far more — in the range of $700 to $800 million — a sign that owner Stan Kroenke, who took control of the team in 2010, was probably never interested in staying past 2015.

los angeles stadium

A rendering of the proposed Los Angeles stadium. (HKS Inc.)

To put all this in context: the Rams are a for-profit business, and a very profitable one. They don't open their books, but one NFL team (the publicly-owned Green Bay Packers) does, and they generally make between $25 and $50 million a year.

What's most infuriating about this is that the reason the Rams were able to opt out of their lease — the relatively-new Edward Jones Dome no longer being a top-notch facility — is entirely due to the fact that other NFL teams have ripped off cities just as successfully.

Since the dome was completed, in 1995, 18 other cities have used public money to pay for NFL stadiums, paying for an average of 56 percent of the building cost. Often, teams have extracted this money by threatening to move to Los Angeles themselves, and have been rewarded with increasingly elaborate, luxury-box filled stadiums.

But this doesn't change the fact that the Edward Jones Dome — though admittedly a pretty charmless stadium — is a perfectly fine place to watch football.

The research is clear: sports teams aren't worth it

rams helmets

(Thearon W. Henderson/Getty Images)

All this might be understandable if NFL teams were a major boon to the cities they played in. But research consistently shows that new stadiums provide fairly meager economic benefits.

Despite the claims of stadium boosters, independent analyses almost invariably find that the actual economic impacts are smaller than the public money spent for the stadiums. The only real exception is Los Angeles' Staples Center, which generates a fair amount of money for nearby businesses — because it's used about 250 days per year (it's home to two NBA teams, an NHL team, and a WNBA team). Despite the NFL's popularity, NFL stadiums are a far worse deal than other sports', because they're larger (taking up more real estate) and because NFL teams only play ten home games per year.

So in exchange for being saddled with another underused downtown stadium, St. Louis is desperately offering the Rams $500 million — while the city and state continue to pay off debts on the old stadium.

So why are cities so desperate to keep pro teams?

new st louis stadium

An illustration of the proposed new stadium. (360 Architecture)

There are no economic benefits that compare with the hundreds of millions of public dollars spent on pro teams. The only plausible explanation for them that I can think of is the illusion of relevance.

A St. Louis with an NFL team, the thinking goes, is a nationally-relevant city. For the politicians who run St. Louis, that's an appealing idea, and one that leads them to make financially irresponsible decisions to keep the team there.

And I get it. For better or worse, I'm a huge NFL fan, and I spent the last decade terrified by the idea that my team (the hapless Buffalo Bills) might leave my hometown. I'm also a former St. Louis resident. I get why city officials are desperately presenting new stadium plans to forestall the inevitable. But Los Angeles has been without an NFL team for nearly 20 years now, and is still doing fine. This idea of relevance is an illusion.

The simple fact is that buying stadiums for pro sports team is not a business our governments should be in. And if they all resisted it, the cycle would be broken — these teams, after all, can only extract money because there are other cities out there willing to give it to them.

Let the Rams move to Los Angeles. Spend the money on St. Louis.


Correction: This post originally said that a pair of rail agencies made the deal with the state to move the tracks, rather than a rail agency and a utility.