Friday, August 30, 2013

Crazy Simplistic Thoughts on the Stadium Saga & a Foolish Revenue Sharing Argument

Some simplistic thoughts following this week's private Stu Sternberg & Matt Silverman chat with local business leaders:
  • Everyone seems to acknowledge MLB's problem with Tampa Bay is that the Rays are sucking a lot of money out of the revenue sharing system.  In fact, Tampa business leader Chuck Sykes even confirmed to the Tampa Bay Times that was the key takeaway from Sternberg/Silverman.
  • So MLB teams such as the Red Sox, Yankees, and Dodgers are upset they have to pool together some of their enormous profits to keep teams like the Tampa Bay Rays (and Pittsburgh Pirates, Oakland A's, etc) competitive on the field.  Of course, the uber-rich NFL shares way more revenue between teams, but I digress....
  • Let's not forget MLB created this revenue-sharing system because it was making so much money in big markets that it needed a way to preserve some sort of competitive balance (because it refused to enact a salary cap).
  • And because the Red Sox, Yankees, and Dodgers want to send less money to the Rays, they are pressuing Bud Selig to expedite the new stadium process in Tampa Bay.
  • Meanwhile, MLB & the Rays don't want to pay for the majority of a new stadium itself, because that wouldn't increase their revenues.
  • Therefore, MLB's "intervening" means pressuring the local community to tear up (or at least alter) it's existing contract with the Rays and spend public funds to build a new stadium so MLB can profit more.
  • In exchange for St. Petersburg agreeing to tear up its current contract with the team/league (I doubt that would ever happen if Evan Longoria decides he doesn't like his contract), MLB promises Tampa Bay that it will receive indirect financial benefits, like a rejuvenated downtown (even though Downtown Tampa is thriving regardless right now).
  • So Tampa Bay municipalities would spend between $25-35 million a year in public subsidies for a new stadium.  And this would - in theory - increase revenues at a stadium by $10-15 million a year.
  • Of course, those revenues don't really allow the Rays to spend more on players; they simply reduce the amount of revenue sharing the team receives from the Red Sox, Yankees, Dodgers, etc.
So in summary, we are talking about spending $25-35 million a year in public subsidies to help the Red Sox, Yankees, and Dodgers pocket an extra $10-15 million a year.  And, of course end the threats from MLB for another 20 years (hopefully)....

Sure, Tampa could enjoy some new additional benefits Downtown if the project is done right in the perfect location...but this line of thinking should also beg the question: how much public help is really worth it?

Given these numbers, there's also the question of whether Tampa Bay would just be better off cutting the Rays a check for $10-15 million a year for the next 20 years, which they could just direct sign over to the Red Sox, Yankees, and Dodgers.  At least that would satisfy MLB into not threatening relocation or contraction for a decade or two....


  1. LOL, more bullshit assumptions!
    "MLB's problem" MLB likes revenue sharing because it keeps more people more interested in their favorite teams, and for longer into the season, which all aspects of interest translates into more overall revenue for baseball...
    "don't want to pay for the majority of a new stadium itself, because that wouldn't increase their revenues." First, NO ONE ever said the Rays said how much they were going to pay for a new ballpark, AND how dumb of a opinion to think a new ballpark wouldn't increase revenue.
    I know you (NO'ah) like to pity St.Pete, but it's not the Rays fault it's a city of a low pop. that's mixed with lot of snow birds, not many big businesses, and are subjected to playing in a old tent surrounded by water! You pity St.Pete to try to make YOUR case to the public just like the Rays use St.Pete to make their case to the public, I believed that's called being "hypocritical"!
    If St.Pete gets their money from the Rays then what's the beef? St.Pete should just be thankful & grateful the Rays existed to fill the void of the Suncoast Dome, helped inject a shot-in-the-arm financially for 20 years, when the didn't deserve it as far as size & relevance for a US city!
    And, saying Tampa doesn't need MLB in it's backyard, is like saying you couldn't use double the pay. And as far as money going in and out of pockets, I know your more of a doom-n-gloom person, a glass-half-empty person, a Nancy-negative person, and I know anything can be spun, but to think more self sustained revenue for a better team, and a better business with Tampa Bay isn't a good thing is asinine...

    1. And Tampa doesn't have MLB "in its backyard" today? Message: Arlington is no closer to Dallas than the Trop is to Tampa. Neither the Rangers nor the Cowboys seem to have any revenue problems.

    2. Newsflash smart alec, Arlington is sandwiched between the #9 & #16 biggest cities by population in the United States of America...
      And, Arlington, TX is #50, while St.Pete is #78 w/ a good part of their pop. being "snow birds"!

    3. Dufala, your optimism is refreshing.

      But if the Rays/MLB were willing to pay a fair price to buy out their contract and pay for the majority of a new stadium, this stalemate would have been settled long ago.

    4. Probably because 5 years ago or more, it might of been more profitable to stay put then pay a UN"fair price" St.Pete might of been asking for at the time. Plus, Channelside was a different place then, not including the panic in the development & investment business at the start of the recession. That's like asking why didn't MLB solve it's PED problem a long time ago. It's profitable to have the Rays in your backyard, that's probably why St.Pete been playing hardball with the lease...

  2. B. Dufala,

    You state:
    "If St.Pete gets their money from the Rays then what's the beef?"

    There will be no 'beef' if that money is well north of $100 million to break the Trop contract.

    1. (though no knows for sure how much it'll take to break the lease)(though it won't be much by 2018 or 19) LOL, "$100 million" for a dome that only cost $130 mill in the late 1980's that wasn't even built for, or because of the Rays's...

    2. The Rays bring $200+ million a year to Tampa Bay, according to the Tampa Bay Rays.

    3. Hah - hah.
      You know, I guess it's the truth, right? I mean, why would they lie about something that stands to enrich them insanely ? I'm so thankful that they're bestowing such an economic windfall on my city. Why, money rains from the sky every time they pull within 2 games of 1st in the division!

      These bloodsuckers can either:
      1) Pay up on the remaining balance of their contract, and then hope that it's approved
      2) Shove it.

      They've already alienated the majority of casual fans in the area with the threats, insults and lying.

  3. "The Rays bring $200+ million a year to Tampa Bay, according to the Tampa Bay Rays."

    According to their "books" that they refuse to open for audit ;)