Sunday, February 17, 2013

Trib: Why Won't Rays Open Their Books?

Yesterday was the Rays' annual spring Fanfest, which drew more-than-the-usual amount of fans to the Trop (25,000).  Principal owner Stuart Sternberg even said, "We're staying in Tampa Bay. We're not going anywhere. I've always been clear about that, I want to remain clear about that. We'll figure out a way to get something done."

So of course, we can count on the typical weekend stories about how baseball fans in Pinellas think the Trop is just fine and Hillsborough/Polk fans think a stadium should move closer to them.  The Tampa Bay Times delivered. As did WTVT-TV.

But over in the pages of the Trib, there was Michael Sasso's watchdog piece, "Sports teams woo investors but keep finances in the shadows."

There's great value in a story explaining how reluctant the Rays are to "open their books," because - as I wrote in 2011 - the people of Tampa Bay haven't seen a single piece of evidence that the Rays have an actual financial need for a new stadium.  Sasso explains:
Maybe only in professional sports can a private business request so much money from the community and offer so little proof it even needs it.

At least six years into the Tampa Bay Rays stadium saga, few politicians or business leaders have called on the team to open its books or prove that a new stadium would help it survive in the long term.
(Editors' note: this blog takes great pride in the wide-acceptance of the term "Stadium Saga," as well as the headline of Sasso's article referencing a "shadow," even if the reference was purely unintentional.)
Consider if the Rays were seeking money from a bank or investor, though. Whoever puts up the money would require the Rays to turn over a few years worth of financial statements and provide its projected future revenues, bankers say.

Sports teams largely have been given a free pass from taxpayers and seldom have opened their books. Given the Rays' own questions about the strength of the Tampa Bay market, can the community be sure even a new half-billion-dollar ballpark would keep the team here in the long term?
Sasso mentions how both Mayor Bill Foster and his paper have failed to get answers about the team's willingness to share its financials.  He also points out the unsual lobbying from local business groups to support a new stadium even though they (presumably) haven't seen any financials yet either.

The story contends nowhere else in the business world would we be talking about financing a new capital project like a stadium without having thoroughly examined current - and potential new - revenue streams.  Yet when I asked Sternberg recently about what kind of revenue a new stadium could mean to the Rays, he said the team hadn't looked into it yet.

But isn't that what the entire Stadium Saga is about?  Creating new revenue for the team so it can better-compete?

Sasso goes on to explain how the Astros, Mariners, and Twins all shared financials in order to get their new stadiums built.  But he also included the disclosure that a pair of sports consultants - who have done work for governments (another important disclosure) - say it's not always necessary.

It's a good read...and after some recent missteps, the Trib shouldn't allow anyone write about the Stadium Saga other than Sasso and columnist Joe Henderson.


  1. At this point, sports owners seeking new stadiums are kinda like Nigerian princes, except their tactics actually work.

  2. Regarding the Rays' financials, for the 2011 season they are available at which show:
    • Owner: Stuart Sternberg
    • Championships: 0
    • Price Paid: $200 M
    • Year Purchased: 2004
    • Revenue2: $161 M
    • Operating Income3: $26.2 M
    • Debt/Value4: 36%
    • Player Expenses5: $64 M
    • Gate Receipts6: $34 M
    • Wins-to-player cost ratio7: 185
    • Revenue per Fan8: $29
    • Metro Area Population: 2.7 M
    The Rays drew 1,529,188 in 2011. With gate receipts of $34,000,000, this translates to $22.23 per fan per game.

    For 2008 attendance was 1,780,791 with ticket revenues of $39,000,000 (from the info in Mike Sasso’s column) which translates to $21.90 per fan per game.

    Assuming that the Forbes 'gate receipts' represent the same measurement units as 'ticket revenues', it looks like the Rays generate about $22 per head per game. Does this include concessions?

    In any case, the NY Yankees present quite an interesting contrast for the 2011 season.

    With gate receipts of $292,000,000 and attendance of 3,653,680 they generate $79.92 per fan per game. With twice as many fans at almost 4 times revenue per fan, it is indeed a quite un-level playing field. And then of course there is the disparity in TV revenues.

    It would really be good to hear Stu Sternberg say what constitutes success for the Rays with specifics such as:
    How much does the player payroll have to be?
    How much profit does he have to make?

    Then we can figure out possibly what gate receipts need to be. Then it is a matter of how to price tickets to get to that number, keeping in mind that, for example, 30,000 per game at $20 per fan yields less than 25,000 per game at $25 per game.

  3. I find it odd about people being fine with cities spending money to attract teams, but want no public money to improve/replace facilities for existing teams.

    A relatively knowledgeable and educated friend has no problem with Quebec City spending 100% to build a new arena, with which it hopes to attract an NHL franchise, but thinks the Oilers should pay 100% to replace the arena in Edmonton.

    On another note, I think too much time has been spent discussing where people in Tampa Bay live. Really what should be looked at is where people with disposable income are within an hour or 2 of game time.