Mirroring the disturbing trend of businesses which are struggling financially, the professional football and basketball teams in New Orleans expect to receive subsidies from the government of Louisiana. (http://msn.foxsports.com/nba/story/9205212/Louisiana-faces-Saints,-Hornets-cash-payments?MSNHPHMA) Even during an economic boom, one could expect antipathy to governmental contributions of cash to private entities, particularly to such unessential enterprises as professional sports franchises. Given the declining economy, such assistance offends many taxpayers to the utmost.
Although the deal with NFL's Saints and NBA's Hornets were signed during the governorship of Murphy "Mike" Foster, it now falls to Louisiana's Governor Bobby Jindal to handle to dilemma. Jindal is considered one of the rising stars among Republican office holders. He is facing a situation that will test his commitment to fiscal conservatism. His unequivocal statements about the dire fiscal situation of the state would not square with multi-million dollar remunerations to a franchise worth 937 million dollars in the case of the Saints (http://www.forbes.com/2008/09/10/nfl-team-valuations-biz-sports-nfl08_cz_kb_mo_0910nfl_land.html) or to the Hornets worth 285 million dollars (http://www.forbes.com/lists/2008/32/nba08_New-Orleans-Hornets_328959.html). He must weigh the loss of potential sales and income tax revenues from the presence of the two teams against the withdrawal of cash from the state coffers. Additionally, he must decide whom would he would rather alienate and risk losing their votes for his re-election: fiscal conservatives as opposed to die-hard fans of the Saints or the Hornets.
This situation demonstrates the folly of subsidizing any private business with taxpayers' money. The state's residents would rightfully howl in protest of this funding of entities whose most prominent employees receive a minimum 310,000 dollars annually as NFL rookies or 457,588 dollars for NBA rookies. The owner of the Saints, Tom Benson, has been subtly threatening for several years to relocate the team before Hurricane Katrina. The owners of the Hornets have already shown willingness to uproot their franchise as evidenced by their move to New Orleans from Charlotte. These and far too many professional franchises prefer to demand outside funding instead of generating more of their own profits then threaten to bolt elsewhere until a ransom is received.
As for a solution, Jindal and the legislature should pursue alternatives to a simple transfer of state funds to the sports franchises. Reductions of taxes that adversely impact the two teams' finances should receive consideration. These cuts could be on sales taxes on items sold at the teams' venues. The absurdly high prices on food and other items could be lowered enough by eliminating the sales taxes to entice more fans to purchase these items, thus driving up profits. Finally, Jindal must not cave into threats of relocation. These franchises are unlikely to find any other city willing to accept them and their hefty demands for public funding, especially now.