Sport Management
Facility Management
History of Public Facilities
1. Stadiums
 Professional Baseball became popular in the
early 1900’s
 Open fields and parks were inadequate
 Team owners began to construct stadiums
 Since owners paid for them…teams stayed
in their home cities for years
 Era of team movement didn’t begin until the
late 1950’s and 1960’s.
 NFL founded in 1923…increase in
popularity…need for larger stadiums grew
History of Public Facilities
1. Stadiums (cont.)
 MLB and NFL became partner tenants in
stadiums originally built for baseball.
 Quirks for football 
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End zones too short
Poor sightlines
Today stadiums also host –
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Concerts (big enough to fill a stadium)
Use Parking Facilities for…
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Fairs/Carnivals
Drive and Buy Car Shows
Circuses
History of Public Facilities
2. Arenas
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NHL started in 1927…became very popular
Hockey owners followed baseball owners
and built arenas for their teams.
NHL season 1/3 the length of baseball (back
then 50 games per season compared to
baseball’s 154)
Dark Nights! – empty nights in an arena
Hockey owners had more empty nights to fill
their arena with events.
History of Public Facilities
2. Arenas (cont.)
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What filled dark nights?
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Originally, boxing (but occasional fights were not
enough)
NHL owners founded Ice Capades – skating
variety show (still not enough)
Basketball
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Originally capitalized on college basketball
Then the NBA came along…
NBA and NHL became partner tenants
History of Public Facilities
2. Arenas (cont.)
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Today arenas also host –
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Indoor soccer
Arena football
Lacrosse
Concerts
Ice Shows
Family Shows (Circus, Wiggles, Sesame Street)
Graduation (like PHS uses Stabler)
History of Public Facilities
2. Arenas (cont.)
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Recent trend in arena construction  adjacent
practice facility for prime tenants
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Availability of the main arena is critical for
maximizing revenue because it increases the ability
to book events!
Nationwide Arena, Columbus, OH (home of NHL’s
Blue Jackets) opened in 2000 with an attached
NHL practice rink
FedEx Forum, Memphis, TN (home of the NBA’s
Memphis Grizzlies) opened in 2004 with an
attached basketball practice facility
Modern Era of Public Facilities
1. 1960 and 1970’s
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Baseball and football team owners realized
they could save money by having their host
city build their stadium rather than building it
themselves.
Cities complied to keep teams enthusiastic
about staying in their city.
Cities still built for 2 prime tenants  justified
the investment.
Modern Era of Public Facilities
1. 1960 and 1970’s (cont.)
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Civic Centers and Arenas also sprang up
Cities competed for sport teams by building
new facilities
Summary: City leaders believed publicly
built sport facilities were a good investment.
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Contributed to the city’s quality of life by
providing entertainment to the citizens
Spin off benefits to the local economy
Modern Era of Public Facilities
2. Today
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Trend over the last decade  Single
Purpose Stadiums
Specialization has extended into soccer
Besides the design benefit, teams want
single purpose facilities for their REVENUE!
Revenue from single purpose facilities do not
have to be shared – desirable!
Modern Era of Public Facilities
2. Today (cont.)
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Team owners seek lucrative stadium leases
to provide revenue from sources like..
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Preferred Seating (PSL’s, luxury seats, club
seats)
Parking
Concessions
Sponsorships (signage, naming rights)
This revenue helps teams compete for free-agent
players and boost their own profits!
Modern Era of Public Facilities
2. Today (cont.)
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The lore of lucrative stadium leases has
resulted in “Franchise Free Agency”
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Cities often entice teams to leave one city for
another promising stronger revenue streams
through lucrative lease terms.
Facility Financing (Public vs. Private)
Will The Facility Be Financed Publicly or
Privately?
 Argument #1: Any “for profit” enterprise, like
a professional sport team, should build its
own facility.
 Argument #2: Sport facilities provide
significant economic benefits, and teams are
a source of civic pride and community spirit.
Facility Financing (Public vs. Private)
 Financing has fluctuated between public and
private over the years
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Early years – team owners built their own
facilities
Public building boom of multipurpose facilities
in the 1960’s and 1970’s
Recently – single purpose facilities – some
funded privately, and some publicly
Facility Financing (Private)
 Joe Robbie Stadium, now Dolphin Stadium, is
a good example of private funding of a single
purpose facility
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1980’s - Joe Robbie, owner of the Miami Dolphins
Unhappy with the Orange Bowl, proposed a new
stadium
Not approved for public financing by Florida voters
Novel solution – pledged stadium revenue as
collateral to bankers and privately funded the
stadium
 Other’s followed, even with privately funded
arena construction
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Palace at Auburn Hills – Detroit Pistons
Facility Financing (Private)
 But private financing is not a perfect world for
owners  it takes revenue away from profits
 remember, teams need more revenue to
pay the high salaries that resulted from Free
Agency
 So…to maximize revenue, owners pushed for
public financing of single purpose facilities
The idea was that the team controls the facility
revenue without the heavy debt of financing
building
Facility Financing (Public)
 The cities of Baltimore and Cleveland are
good examples of public funding of single
purpose facilities
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Both cities decided to construct in downtown
areas to attract teams and revitalize decaying
areas of their cities
Both were successful and benefited
economically!
Facility Financing (Public vs. Private)
 Summary
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Today the trend is public funding of single
purpose facilities.
Owners push for it to maximize revenue that
doesn’t have to be shared with another tenant.
This revenue is used to pay athlete’s
expensive salaries, which ensure a winning a
team.
Winning teams attract fans, which keeps the
revenue flowing in.
Private Financing Mechanisms
1. Facility Revenues (like Joe Robbie did)
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Preferred seating… concessions… parking...
rent from other tenants
2. Corporate Sponsorship
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Naming Rights
Pouring Rights
Outright Donations
Public Financing Mechanisms
1. Bonds
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The most typical way of obtaining public financing
Issued by cities, counties or states
Promise by the borrower (bond issuer) to pay back
the lender (bond holder) a specified amount of
money, with interest, within a specified period of
time.
General Obligation Bonds – backed by the local
government’s ability to raise taxes to pay off the
debt (very safe for investors)
Revenue Bonds – backed by the facilities ability to
generate revenues, which must cover annual
operating expenses and debt repayment (riskier)
Public Financing Mechanisms
2. Taxes
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Imposed on local residents
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Imposed on visitors
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Property Taxes
Occupational Taxes
Hospitality Tax
Rental Car Tax
Taxes affecting both local residents and visitors
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General Sales Tax
Sin Tax
Meals and Transportation Tax
Private Management Companies
With most facilities owned by the local
government, would you want your facility run
by government employees, who know nothing
about sport management?
 Facilities are meant to be run profitability, so
management is crucial.
 Most large facilities use Private Management
Companies
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Spectacor Management Group (SMG)
Global Spectrum – subsidiary of Comcast Spectacor
Private Management Companies
Benefits of Private Management Companies
1. Dedicated Corporate Staff – otherwise staff
would have come from municipal
departments
2. Network of Facilities –
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Makes it easier to cultivate relationships and
increase bookings
Provides purchasing leverage for supplies
and maintenance items
3. Career Opportunities – growth and
advancement for employees willing to
relocate
Current Issues
1. Security
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Has become a big issue since 9/11/01.
Bag checks, pat downs, and metal detectors
are now normal.
Barricades or fencing around the perimeter
of facilities are used to create a “moat” effect.
Every event must be evaluated for security
risk. Consider…
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Who the performer is
Crowd profiles
Anticipated media coverage
Current Issues
2. Americans with Disabilities Act (ADA)
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Enacted in July, 1990 by President George
Bush.
Intended to prevent discrimination against
people with disabilities in employment, public
services, transportation, telecommunications
services, and public accommodations.
ADA requires new and renovated facilities
must be accessible to people with
disabilities.