Governments operating more like businesses....

This gets discussed a lot, positively by business types, and negatively by nonprofit types. But there is an intersection point, where the business types don't like having government act in a business-like manner with regard to how governments deal with businesses.

Sports stadium deals are a case in point.

A few weeks ago, Gary Imhoff in themail wrote about how Attorney General Peter Nickles got the Washington Nationals to pay their back due rent for 2008 by giving the Nationals $4.25 million in return for the $3.5 million owed. (Don't you wish your landlord would pay you back more than 100% of the money you owe?) Read the settlement agreement here.

The New York Times reports, in "For Sports Teams, Mayors Play Ball at the City’s Expense" that New York City has a different kind of arrangement with the Yankees, that the Yankees pay based on revenue, and that the Yankees often misreport expenses. HOWEVER, the City audits the Yankees, and misrepresentations are corrected, and proper amounts paid...

Anyway, it is typical in shopping malls for rent to include both a base amount as well as a percentage of sales. Having high sales also helps focus the shopping center management on getting great tenants, and on keeping the tenants on their toes as they can get into a situation when their leases aren't renewed, if they aren't making enough money.

Sports teams should pay a base rent plus a percentage of revenue/profit, and the books should be able to be audited annually by the municipality. The municipality, putting up most of the money for a stadium, should benefit from the upside of high revenues. If the team thinks it can generate extranormal profits that it doesn't want to share, then it should build the stadium on its own dime, a la the Jack Kent Cooke built Redskins Stadium in Landover.

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This is related, discussing creating proper economic incentives, to the blog entry I wrote about Michelle Rhee, "I think I just figured out how to fix the DC Public Schools" and how a goodly portion of her pay should be based on maintaining and increasing student enrollments. Instead, from last year to this year, the school system experienced an almost 15% drop in enrollment. Given that represents more than $20 million in revenue, I say chop her salary--a lot!

(I really don't understand why some of the greatest entries, with really provocative thoughtful ideas, generate little discussion.)