Saturday, November 27, 2010

Report: City is Not Turning Profit on Rays

After posting a Tampa Tribune article that indicates the Rays are able to turn profits at Tropicana Field if they work hard enough, Stephen Nohlgren from The St. Petersburg Times writes that - no matter how hard it has worked - the City of St. Pete has not turned an operating profit on Rays baseball:
Though city officials originally hoped the monetary benefits of putting on baseball games might defray the $6 million in annual payments for Tropicana Field, the opposite has occurred.

Operational costs have outpaced revenue, forcing the city to shell out more than $1 million a year on top of debt payments.
Unexpected insurance increases after Sept. 11 and the 2004-05 hurricane seasons were largely to blame (all Florida property owners felt that pain).

Nohlgren's article shows that the Rays' disappointing attendance costs the city just as much as it costs the team. However, by focusing exclusively on operating losses, it does not address the payback the city gets on its investment: an increase in visitors, spending, and national notoriety.

We should remember that governments routinely subsidize everything from roadways to sewer lines to other utilities. But St. Petersburg is paying the price for a poor contract negotiation in the 1990s, where the Rays got a large share of stadium revenue.

After all, "a contract is a contract."

No comments:

Post a Comment