Major League Losers
The Real Cost of Sports and Who's Paying for It
By Mark Rosentraub
New York, Basic Books, 1997
This is the book to read if your local sports team is threatening to leave town unless you, the taxpayer, will fork over the cash to build a lavish "state of the art" stadium. Beware of the Public/Private Partnership! A good definition of a public/private partnership is "something public is about to disappear into something private, usually someone's pockets."
The Cleveland Indians, owned by David and Richard Jacobs, needed a new stadium to replace the Mistake by the Lake. Local government proposed a public/private partnership, and put a proposal on the ballot. The voters were told that the public would put up about $169 million to build a new home for the Indians and a new arena for the Cavaliers; the public money would come from a tax on alcohol and cigarettes. The two sports teams combined would put up $174 million. Roughly, a 50/50 split. If the proposal were defeated, the Indians would probably leave Cleveland.
The measure actually failed to pass in the city of Cleveland, but the voters in suburban Cayahoga County carried it through by a slim margin. Basically, they were voting for a pig in a poke. There were no development plans, no stadium plans or designs, no leases or agreements with the teams. The Gateway Project, as it was called, eventually cost $440 million, with the teams paying about $120 million and the public getting socked for $320 million. The Indians owners received all kinds of sweetheart deals -- for instance, the public built and furnished a $5 million stadium restaurant and turned over to the Jacobses, who operate the restaurant and keep all the proceeds. (Incidentally, the Jacobses already owned quite a bit of real estate in downtown Cleveland, so they got the side benefit of increasing their property values.)
In Denver, the Coors Brewing Co. paid $15 million to put their name on the new public stadium, but the owners of the Colorado Rockies pocketed the money. The voters there had approved a measure which anticipated a 70/30 public/private partnership, but the Rockies share as calculated by Mr. Rosentraub turns out to be somewhere around 12% -- and this is only if the team continues to draw four million a year for 22 years, because the team's payments are based on a sliding attendance scale. The Texas Rangers came up with $21 million as their share of The Ballpark at Arlington, plus $2 million a year in rent. The public sector's share was $135 million, derived from an increase in the Arlington city sales tax. The ballpark belongs to the city, but virtually all the revenue goes to the ballclub -- including all the advertising, all the parking, all the luxury seating and all the concession profits.
Yes, Jacobs Field, Coors Field and the Ballpark at Arlington enhanced the image of downtown Cleveland, Denver, and Arlington. But the author argues that most of what the public receives in such deals is intangible. Does a new stadium bring jobs and have an economic impact? In Suffolk County, Massachusetts (Boston) for example, professional sports employed 761 people in 1992, less than a quarter of one per cent of all jobs. If figured in terms of payroll the percentage would be higher, but much of that goes to the athletes, many of whom live somewhere else in the off-season, so all their money isn't going into the local economy. A major sports franchise, even in a small city like Arlington, Texas, is just not substantial enough to drive a local economy. Sports teams, most with revenues under $100 million per year, are basically small businesses.
What about all the restaurant and hotel business that are generated by a sports stadium? Rosentraub writes of Cleveland, "$320 million in public funds to create twenty or so restaurants, a hotel, and even an office building cannot be considered an example of an extensive urban redevelopment." What about all the tax revenue generated by a stadium? It's doubtful they will ever equal the amount expended.
The crucial factor in a community's decision is often the feeling that Podunk must have major league teams or else it's a hick town, that nobody will want to live here if we lose the Podunk Polecats. Sports owners are able to manipulate these feelings to obtain sweetheart deals for new stadiums, in what amounts to welfare for the rich.
The reason to own a baseball team is not in the year-to-year "bottom line" (which we can't see anyway), but in the astronomical rise in resale value. Check the selling prices of these two teams:
1981 $13 million
1988 $89.5 million
1992 $106 million
1979 $12 million
1989 $70 million
1993 $173 million
Both astronomical, but what happened to make the Orioles suddenly worth so much more than the Mariners? Oriole Park at Camden Yards, built by the taxpayers of Maryland, is a money-making machine for the ballclub. If you were an Orioles fan, you could thank your government for charging everybody taxes to finance the stadium that gave a sweetheart deal to the ballclub so it could pay top dollar for the ballplayers who currently have the team in first place. If you were a non-baseball fan you would be wondering why your tax dollars are now ending up in Peter Angelos's pockets.
A Note on the So-called CurseThe otherwise meticulous book When the Boys Came Back contains the following line:
"Some said, and not entirely facetiously, that the Sox had been laboring under a curse ever since they'd sold Babe Ruth to the Yankees..."
I still hold to the view that the so-called Curse of the Bambino was concocted by Dan Shaughnessy in 1990 for commercial purposes. It is "invented folklore" as inauthentic as a Navajo blanket made in China. While it was obvious to any 1940's baseball fan that the Red Sox could not have won pennants for awhile after Harry Frazee sold all the team's stars to New York, it is ludicrous to suggest the idea of a "curse" existed in 1946, when Babe Ruth was still alive.
The so-called curse has been used to explain the eerie run of misfortune experienced by the Sox in the World Series of 1946 and 1986, the playoffs of 1948 and 1978, the pennant races of 1949 and 1972. None of these things had happened yet during the 1946 regular season. At that point the Sox had made a few close runs at the Yankees before the war, but had not yet been stung by cruel twists of fate.
When the Boys Came Home also has this line:
"Other players used to joke that when the Sox left their hotel for the ballpark, it was 'twenty-five guys, twenty-five cabs.'"
The sentiment may have been there in 1946, but I believe the 25-cabs line was coined by utility infielder Frank Duffy around 1978. And if it was like that in '46, how come Williams, Doerr, and Pesky are still close friends after 50 years?
Major League Losers contains the following hopeful note for Bostonians:
"Residents of Boston have long had to live with the repeated failures of the Boston Red Sox, which many link to the [sale] of Babe Ruth to the hated Yankees in the 1920's. That legacy, however, has had little negative impact on the rise and fall of Boston's economy over the years, and the (continuing) staggering importance of its education, health, and finance centers."
See, even though we're doomed superstitious bumpkins, our economy flourishes!
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