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to their communities. The increasing demand for professional
football teams gave rise to an increasing willingness on behalf
of State and local governments to provide public sector financial
assistance to team owners. That is, in order to attract a
professional football team to their communities, State and
municipal governments were becoming more willing to contribute
large amounts of financial assistance to team owners. Financial
assistance was commonly conveyed through subsidized stadium
leases underwritten by the public sector.
Stimulated by the competition to secure and retain
professional sports teams, State and municipal governments
entered the stadium facility business and began offering those
facilities and related benefits as inducements to team owners.
These inducements took various forms, including: (1) The
construction, renovation, or expansion of stadiums at the expense
of the public sector; (2) public sector financing of luxury
suites, stadium clubs, and other forms of premium seating the
revenues of which could be assigned to the resident team; and (3)
the assignment to the resident team of the right to operate or
profit from cash-generating functions of the stadiums, such as
parking garages and concessions and souvenir stands. Inducements
of this nature were particularly valuable to team owners because
of the growth of stadium revenues and the preferred treatment
accorded stadium revenues and related assets under the NFL's
revenue-sharing rules and team debt limitations.
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Last modified: May 25, 2011