Attach Some (Payroll) Strings to Stadium Subsidies
I recently read “Field of Schemes” by Neil deMause and Joanna Cagan, which delves into the decades-long grift wherein billionaire owners bilk municipalities out of billions (it used to be millions) of dollars by having them finance stadiums under the threat of relocation. I read that book after reading Dan Moore’s terrific piece in The Ringer, in which he discussed how Camden Yards “forever changed professional sports.” In the article, Moore stated:
“In the 30 years since it opened, in the spring of 1992, Camden Yards has proved, beyond just beautiful or influential, illustrative of the more ignominious side of the political ecosystem that undergirds professional sports. The proof is in the funding. One of the worst-kept secrets in pro sports is that the people who run teams and leagues are sanctioned by the U.S. government to do so the same way kingpins run drug cartels: that is, as monopolies.”
Take the Money and Stay
There are many other thoughtful books and articles written about this topic, but the main takeaway is that public funding of professional sports stadiums does not provide the financial boon that the owners (and city council members and mayors and governors) tout when signing the legislation or cutting the ribbon. These payments are simply a boondoggle. That said, they appear to be here to stay. As of this writing, there are a total of three MLB stadiums that have not received some form of taxpayer funding (Fenway Park, Wrigley Field, and Dodger Stadium*). The amounts and the specifics vary – there are tax subsidies given directly to the team; tax-free bond issues; taxable bond issues; hotel taxes in and around the park; there are the granting of additional land for parking lots and entertainment complexes – the list is limited only by a legislature’s and an owner’s imagination. However you slice the pork, there is plenty of it to go around.
*This is only because the City of Los Angeles evicted more than 300 families to clear the land at Chavez Ravine for Walter O’Malley to buy.
As long there are civic leaders in the thrall of professional sports and their team owners, as long as there are mayors who want to throw out the first pitch or sit in a luxury box for Opening Day, as long as there are rich people willing to scratch powerful peoples’ backs, the public at large is going to continue subsidizing – if not completely paying for – ballparks. If we accept that to be true, it raises the following question for me: Do these clubs have a moral, ethical, and/or fiduciary obligation to put a competitive and enjoyable team on the field? Can owners pocket their constituent’s tax dollars plus their fellow owners’ revenue-sharing money, and continue to underspend and put a suboptimal product on the field. The answer to that question is obviously “yes.” The follow-on question is, “should they be able to.”
For starters, it is clear that no one can predict with any certainty winners and losers. Teams come out of the woodwork every season or two to shock the world. And, by the same token, money doesn’t buy championships (ask the Yankees). But, dunking on the Yankees thirteen-year fallow period aside, the Bombers nearly always put a viable team on the field.
However, for the last few years, certain teams have failed to even try. True, we live in a world where the Astros and the Cubs proved that “tanking” could be good for long-term success. But, does any bona fide baseball fan truly believe that the Pirates or the A’s are “tanking” to secure a better future?
The Orioles have some of the best prospects in baseball, and have for a couple of years now. They made great strides last season, winning 31 more games than they did in 2021. With that improvement, how much has the team’s dysfunctional ownership spent in free agency this off-season? Let’s take a look:
- Jordan Lyles (2/$17M)
- Kyle Gibson (1/$10M)
- Adam Frazier (1/$8M)
- Mychal Givens (1/$5M)
- Jesus Aguilar (1/$3M)
This largesse (less than what Justin Verlander will make this season) was spent after the Maryland Stadium Authority offered the Orioles a new lease, and made $600M in public funds available to improve Camden Yards. Yes, the same Camden Yards that received public funding to be built 25 years ago, and which has cost the state about $450M in debt service and interest on bonds originally issued to finance the stadium.
The A’s may be the worst offenders in the history of sports. They are currently in protracted “negotiations” with both the City of Oakland and Las Vegas about the team’s future. Candidly, the concept the A’s have designed for Howard Terminal is beautiful, and may bring a great many benefits to a city that badly needs urban renewal. But at what cost? According to CBS Sports, “the project includes a $1B privately financed ballpark, plus another $12B in private investment for residential and commercial space in the waterfront neighborhood. The A’s are also seeking $855M in public funds for infrastructure and to develop land around the ballpark.” Said differently, the A’s are looking for nearly a billion dollars of public money. What have the A’s done to deserve such a charitable gift? Well, they have been in the bottom six of payroll for 11 of the last 13 seasons. The have been about an 82-win team over those 13 years (which is helped considerably by two 97-win seasons), and have had three below-70-win seasons (including last year’s 60-win debacle). Ask any scout or front office executive, and they will tell you that the A’s are a Quad-A team, at best. And, for that, they want $855M in public funding.
PNC Park in Pittsburgh is one my favorite places to visit. It is sheer beauty. When it opened in 2001, it did so on the back of public funding to the tune of $216M. The Pirates lack of spending on their club has become known in baseball as “Nutting,” named for parsimonious team owner Bob Nutting. In the past 13 seasons, the team has been in the bottom six of payroll eleven times, while averaging about 76 wins (which is skewed by seasons of 98 and 94 wins). At what point do the fine people of the Steel City have the right to demand that Nutting field a competitive team; to try to win more than 63 games (their average over the past four seasons); to give a little a joy to Yinzers to go along with their tax bill? When does MLB have the right to make the same demand?
I was heartened when, at the beginning of the labor negotiations last year, MLB presented a salary floor (initial offer: $100M). Unfortunately, they tied it to a ridiculously low luxury tax threshold. The players dismissed it out of hand. According to The Athletic, there were seven teams with opening day payrolls under $100M in 2021; but according to Spotrac, that number was actually twelve. Either way, you had to know that those seven (or twelve) billionaires (except Stuart Sternberg ($700M) and Bruce Sherman ($500M)) didn’t truly want to be required to shell out additional payroll. Suffice it to say, none of those seven (or twelve) privately funded their parks.
This is truly a conundrum: Boycott the team, and the owner will claim less ticket and television revenue, and will use that as an excuse to spend less on the team, or demand more from the city (or another city). Continue patronizing your favorite or hometown club, and thus continue to put money in these miserly owners’ pockets in an (often futile) attempt to insure that the team doesn’t up and leave for more lucrative environs.
But I believe I have a solution. If MLB can have an antitrust exemption (Congress is currently looking at that…again), then they can also be subject to a federal law that states that if you receive any form of public subsidy for your ballpark, you are required to spend at least $X million on salaries for a period of time equal to the length of any public funding. The $X million could be calculated by taking the average MLB salary in a given season, multiplied by 26. Last year that would have been $114.66M ($4.41M x 26). There…problem solved. If these owners are going to take public money, they need provide a viable entertainment product. That isn’t too much to ask.
I know Kevin McCarthy has a lot on his plate, but one more congressional bill wouldn’t kill him. Get to work.