All of the new buildings that have gone up since the 1986 federal tax code update (which shifted the way municipalities could charge owners for debt payment and put the onus of paying the bills for the facility on the taxpayers) also gave owners an excuse to hike ticket prices. The new places became malls complete with a sporting event, restaurants, shops and some new places included a Ferris Wheel or a swimming pool. In a 2000 interview, long time basketball executive John Nash, talking before Nets game at the Meadowlands, wondered if ticket prices for sporting events became too high.
"Cost is obviously a factor and it is directly related to players salaries," said Nash who was the General Manager of the New Jersey Nets at that time. "The players get 53 percent of the gross revenues by virtue of the agreement they made with the NBA. And as their salaries go up, the revenues streams necessarily have to go up."
In 2000 Nash and other sports executives were asking the same question. Were ticket prices hitting a plateau? The answer was no as ticket prices continue to escalate shifting the culture and social class inside of the arena to a high income "fan" and leaving behind the real sports lovers.
"That's a great question and I think every year teams have to decide for themselves," Nash said. "What has happened in many cases is that corporations have become our top customers as opposed to the everyday fan who cannot afford either the time commitment of 41 games or the cost."
In two weeks, NBA players may be locked out by the owners over money issues.
Politicians are willing to invest hundreds of millions of dollars to build sports stadiums and arenas and in some cases go the extra mile and hand owners money so their cities can be considered big league.
This is the culture of sports and Lebron James is part of that culture.
There is a National Football League owners led work stoppage taking place right now. On July 1, there could very well be an owners-led National Basketball Association work stoppage. Looking down the pike, the possibility of a Major League Baseball work stoppage exists as the Collective Bargaining Agreement between the owners and players expires in December. That National Hockey League owners and players CBA ends in the summer of 2012.
Since the Nash interview, the three NBA franchises have been relocated. Vancouver lost the Grizzlies franchise when Michael Heisley went shopping for a better arena deal in 2001. Heisley took an offer from Memphis. George Shinn relocated his Charlotte Hornets franchise in 2002 to New Orleans also in search of a better arena deal. The Oklahoma City-based owners of the Seattle SuperSonics took the franchise to Oklahoma City in 2008 after Seattle officials refused to build a new arena for the team some 13 years after the city rebuilt the municipally owned arena that housed the NBA team. The owners left despite having two years remaining on the lease between the city and franchise.
New Jersey will be losing the NBA Nets soon as that team will relocate to Brooklyn.
Allegedly 22 of the NBA’s 30 teams are losing money.
National Hockey League owners locked out their players in 2004 and shut down the business for an entire year. The NHL figures to approve the relocation of the Atlanta franchise to Winnipeg in a few days. Glendale, Arizona is paying $25 million a year for the privilege of having an NHL franchise in the Phoenix suburb.
Hawaiian officials are questioning why they are paying the NFL $4 million annually to host the league's annual all-star game, the Pro Bowl.
Businessmen in the Los Angeles area are demanding Los Angeles taxpayers kick money into a stadium for a National Football league team. In Sacramento, police, firefighters, teachers and other municipal employees are getting fired but Sacramento Mayor Kevin Johnson is determined to spend taxpayers dollars to build an arena for the Maloof brothers Kings NBA franchise and keep the team in town.
Stadiums and arenas are costly projects and sports owners are smart enough to know that they don't want to build one on their own dime if possible.