Cash Rules

But for all the focus on the racial dynamics of the game, we often lose sight of capital. The Golden State Warriors were purchased for $450 million in 2010 and are now worth $1.6 billion. Little more than a decade ago, Dan Gilbert purchased an 85 percent majority stake in the Cleveland Cavaliers for $350 million — the team is now worth $1.1 billion.

In 2014, ESPN and ABC agreed to pay the NBA $2.6 billion annually, a 180 percent increase from the terms of their previous deal. The deal is so large that some suggest American consumers will pay at least two dollars more per month for cable because of it.

We often lose sight of these dynamics. It’s usually only when players negotiate contracts that we think of how much money is at stake. But as good as the NBA is as an entertainment product, it behooves us to think a bit more about how the capital associated with basketball shapes the fortunes of people who may be removed from the game itself.

More specifically I think it might be interesting to think about Detroit and Baltimore, two cities whose stakes in the game are deeply tied to the fortunes of the teams’ owners, perhaps even more so than Cleveland and Oakland.

Over the past several years Gilbert has amassed so many properties in downtown Detroit that some have started to call the area Gilbertville. In order to protect the properties, often purchased for pennies on the dollar, Gilbert established not only his own five-hundred-camera surveillance system, but he’s also created his own private security force.

Kevin Plank is the founder and CEO of Under Armour, which has expanded so much over the past several years that it’s outgrown its current downtown Baltimore headquarters. Plank has asked Baltimore to provide $535 million in tax-increment financing (TIF) to build a new office headquarters, which given the scale and the design — including well over a dozen buildings, plans for at least two new schools and a fire department, several new streets, and a light rail system — would probably be better characterized as downtown Baltimore 2.0.

These moves would seem to make sense given the condition of the two cities.

At one time Detroit was one of the five largest cities in the country, home to 1.9 million residents in 1950, but less than 700,000 by 2010 . By 2013, its circumstances were so dire Michigan placed it under emergency financial management, stripping all political power from the city’s elected officials.

The mayor — Pistons basketball legend Dave Bing — kept his office, as did the members of the City Council. But Bing couldn’t make a single hiring decision, couldn’t draft a single city budget.

The City Council could hold meetings, but couldn’t pass any binding laws. These powers and more were placed in the hands of one (unelected) man, who, right after he was appointed, filed for bankruptcy. At the time, this was the largest bankruptcy filing in American history.

Although Baltimore wasn’t ever as large as Detroit, it suffered from many of the same challenges. Its population has dropped over 30 percent since 1970, while the percentage of poor residents increased significantly.

In April 2015, Freddie Gray died after a fateful encounter with Baltimore city police, spurring what many call the Baltimore uprising. Gray’s murder — the latest in a long series of questionable police actions — placed the contentious relationship between Baltimore residents and its police department into stark relief.

Many see Gilbert and Plank as heroes, as corporate leaders who’ve responded wonderfully in times of great crisis. Gilbert invested in Detroit before, during, and after the city was placed under emergency financial management.

Where many saw a dysfunctional husk, Gilbert saw opportunity: the chance to remake one of the most important cities of the twentieth century into one of the most important cities of the twenty-first century. And he did so working with, rather than against, civic leaders.

Plank’s been a Baltimore booster for years, deciding to open Under Armour’s headquarters there when the smart money would have had him go elsewhere. When Mayor Stephanie Rawlings Blake and Representative Elijah Cummings walked the streets after the uprising, they did so proudly wearing Under Armour apparel. The few fires created during the uprising were swiftly put out by the Baltimore Fire Department — many wearing donated Under Armour footwear.

Plank was one of the most forceful civic leaders to call for change after the uprising. His stance makes sense: the demographic largely responsible for skyrocketing his basketball apparel to its current position is the demographic most likely to be surveilled by the police.

These crises however were neither generated by the cities themselves nor (primarily) their political leaders.

The Bondsmen

For a brief period in the mid-to-late sixties the federal government gave resources directly to urban communities hard-hit by the changing economy, a direct response to black militancy. With the election of Richard Nixon (third string guard for Whittier College’s football team oddly named “the Poets”) it transitioned to “revenue sharing,” which returned a portion of the revenue cities (but not communities within them) paid in taxes back to them, but dictated instead by political officials rather than community activists.

Simultaneously though, we see the rise of the belief that free-market approaches should rule government activity at all levels, and Ronald Reagan — who played the Gipper in Knute Rockne, All-American — was able to garner support for this program from Americans in part through racist rhetoric.

One of his first campaign speeches — in Neshoba County, Mississippi, not far from where white supremacists brutally murdered three civil rights workers — emphasized his support for “states’ rights” which for many white southern voters meant support for Jim Crow racism.

However, it also meant decreasing the federal government’s responsibility for states and local municipalities. Revenue sharing was one of the first casualties of the Reagan administration. In fact in his first year in office Reagan reduced federal spending on domestic programs by more than $35 billion dollars.

Nixon’s and Reagan’s initiatives interacted with a far broader set of public policies designed to aid and abet migration out of urban centers. The National Interstate and Defense Highways Act made it possible for businesses and labor to move quickly across further distances, and the GI Bill gave veterans the resources to get inexpensive home loans as long as those homes were built in the suburbs.

These federal policies — designed both to increase the United States’ ability to survive a nuclear attack and to decrease the power of local governments — significantly reduced cities’ ability to collect revenue, forcing them to rely more and more on market forces. Cities began to use the market itself — by floating bonds — to raise revenue.

This was an old practice, and cities used the revenue gained from investors to pay for infrastructure development. But when their ability to collect revenue either from taxes or from the federal government was constrained, they increased their reliance on bonds, which caused more than a few problems.

The bonds themselves were rated by agencies. AAA bonds were solid picks that would likely earn the investor profits. The worst bonds were treated as junk. The rating agencies weren’t elected by or held accountable to local residents, and in fact in many cases didn’t even live in the same county, much less the same state.

Further, as they were primarily concerned with profit — rather than the public good — they rarely if ever gave high ratings to bonds designed to do anything other than provide downtown investment. It was much easier to generate interest in bonds for downtown development than it was to generate interest in those that would provide resources for struggling workers, much less for the long-term unemployed.

And as cities competed with other cities over their ratings, those that were resource-poor found themselves unable to compete with those who were resource-rich. It is much harder to generate solid bonds in places like Baltimore and Detroit, than in New York and San Francisco.

This dynamic shaped the way Baltimore, Detroit, and a host of other cities — including Cleveland — approach sports. Sports have long been a way to generate civic pride. But increasingly it’s become a vehicle to generate investment, albeit investment often subsidized by public revenue.

Baltimore’s two stadiums — Camden Yards, built in 1992 and home to the Baltimore Orioles, and M&T Bank Stadium, built in 1998 and home to the Baltimore Ravens — cost approximately $445 million together. Of that less than 10 percent ($24 million for M&T Bank Stadium, $9 million for Camden Yards) came from private financing.

Detroit currently has three stadiums: Comerica Park, built in 2000 and home of the Detroit Tigers; Ford Field, built in 2002 and home of the Detroit Lions; and Joe Louis Arena, built in 1979 and home of the Detroit Red Wings. They were built for a combined sum of $788 million, with approximately $270 million in public financing.

The Red Wings are now constructing Little Caesars’ Stadium, which will cost approximately $650 million, with a little under 50 percent of the price tag subsidized by the state. Further, Gilbert and Detroit Pistons owner Tom Gores are leading discussions to bring a soccer team to Detroit, which would require building another stadium downtown.

These teams are all highly profitable, worth far more than their purchase price, but the majority of their profits have gone to their owners, not the state or the taxpayers. At best, the taxpayers gain the civic pride of having a sometimes more than decent sports team, and in at least one case a very good one. (The Detroit Red Wings currently hold the US major sports record for most consecutive playoff appearances at twenty-four.)

What we’re talking about with Gilbert and Plank, then, isn’t necessarily abnormal — perhaps except for the scale. You’d be hard pressed to find a contemporary example of someone purchasing as many properties in a single major city as Gilbert has. Similarly, the TIF Plank is asking for is the largest one ever requested in the city of Baltimore.

So if it isn’t strange, then what’s the problem? Baltimore and Detroit are both in dire need of redevelopment, and both have seen far better days.

Well, both deals will exacerbate the gap between the rich and the poor. Baltimore and Detroit, like most other American cities, are largely bifurcated into two populations — one well-off and one not-so-well-off. And like some American cities, Baltimore and Detroit are also racially bifurcated.

The well-off population is smaller, and whiter, and the not-so-well-off population is black. 84 percent of Baltimore City Public School children qualify for free or reduced lunch. The Detroit metro area has the fifth-largest concentrated poverty rate in the country, and the seventh-largest concentrated black poverty rate in the country.

In an effort to generate public support for the Port Covington Project, Plank released a number of commercials featuring a racially diverse mix of Baltimore residents. But most of the models featured in the project’s mockups are white, symbolically reproducing the idea that the project’s benefits will be distributed unevenly.

Detroit’s black population is larger, percentage-wise, than Baltimore’s. Although George Clinton was thinking of Washington, D.C. when he wrote “Chocolate City,” he also had Detroit in mind. But you wouldn’t know it from the images of a Gilbert-centered New Detroit.

More importantly than the racial imagery though, both projects reinforce the troubling notion that the best solutions to pressing urban problems are private ones. Both projects shift local government priorities further away from social service provision and toward capital.

Gilbert’s real-estate purchases and the new Red Wings stadium come just as Detroit lost its ability to use government resources on behalf of its own residents. Retired city workers received pennies on the dollar as a result of the bankruptcy settlement.

Baltimore doesn’t have the money to pay for its recreation centers, and just a few months ago outgoing mayor Stephanie Rawlings Blake declared it couldn’t pay for the youth unemployment programs it created in the wake of the uprising. Yet it can still find the resources for Plank’s project (and police spending, which increased over 310 percent since 1990).

It’d be one thing if both developments at least had some sort of public debate. But in both cases the public has been the last to know. Plank had a series of meetings with the Baltimore Development Corporation, but they were closed to both the public and the media.

As I write this, the series is tied 3-3 with one game remaining. Golden State’s reliance on the three-point shot continues to amaze — they won Game 4 underperforming in almost every aspect of the game except for three-point shooting. And the James-Irving duo has been playing out of its mind. But the battle between Curry and James is the only one in doubt.

Regardless of the final score, Plank and Gilbert will both end up winners, while the majority of black and working-class residents in Baltimore and Detroit will be left in the cold.

A previous version of this article incorrectly stated that Under Armour CEO Kevin Plank held a series of closed meetings with the Greater Baltimore Committee, in violation of open meeting regulations. In fact, Plank held private meetings with the Baltimore Development Corporation — not the Greater Baltimore Committee. The Greater Baltimore Committee did not meet with Plank and, as a private organization, is not subject to open meeting regulations.