Sunday, November 2, 2014

Columnist: MLB Should Just Pay its Way Out of Rays Stadium Stalemate

Howard Megdal, writing for USA TODAY, offers up two ways for MLB to "solve" the Tampa Bay Stadium Saga "problem":
One is a league-sponsored initiative to build a stadium, centrally, in Tampa/St.Pete. The other is to pay enough money to get the Rays out of their lease and move them to Montreal. Both methods should manage to invest properly in making one of the franchises less dependent on revenue sharing for survival. It's good business practice and good for the overall perception of the game.
The flaw in this logic, however, is that neither of these options are in MLB's best financial interests.  Spending $100M+ to relocate the Rays and reduce their profit sharing by a few million a year makes zero sense.

And spending $400M on a new stadium makes even less sense.  Remember, stadiums are only profitable if you get someone else to pay the bulk of them.

There is no doubt a price that would get the Rays out of their contract with St. Pete...but since the goal is apparently to help the Rays generate more profits, compensating the city doesn't really seem to have ever been on the table.
Disclosure: USA TODAY is owned by the same company, Gannett, that owns my station


  1. Why are people so obsessed with moving the Rays when there are other franchises with similarly low attendance that don't get mentioned? White Sox and Indians are prime examples.

  2. I don't know why anyone thinks the Ray's/MLB would have to buy out the cost of the stadium in order to break the lease. Its preposterous. St. Pete built the stadium on its own, with no team even in the loop. The most St. Pete could ask for in terms of compensation is the $70 mill in infrastructure improvements St. Pete and the Rays agreed to at the time of signing the lease and potentially any subsequent costs by the city. But to think the cost of the entire stadium would be born by the Rays is laughable.

    But the reason why the Rays are being talked about being moved instead of the Indians and White Sox are for 2 significant reasons. 1. Both those teams have stadiums that aren't considered eye-sores. 2. Typically those franchises have drawn well when they're competitive. The Rays have never drawn particularly well. They've been last or 2nd last in the AL in 12 of 17 seasons. And only cracked 2 million in their first year. And sadly MLB sees the Rays attendance numbers are going to take a hard hit. The Rays have only been able to draw 17-20k, during their peak years. What happens when they finish sub-.500 for 3 or 4 years in a row? What will they bottom out at: 12k? 10k?

    1. Because David, if you signed a contract and it turned out to be a bad are still legally bound to that contract.

      If you signed a deal to buy a home, and you are still bound to the contract. If a construction company agrees to build a road for a certain amount of money...they're bound to that contract.

      Just because the Rays don't like the contract they signed doesn't mean they get to tear it up and walk away scot-free.

  3. So if I rent an apartment and sign a year lease, but leave 6 months early I need to pay for the entire cost of building the apartment building. Makes sense.

    1. The Rays agreed to pay for any and all damages if they break their lease. When Sternberg bought the team in 2005, he knew the terms.

      And that's why the team is stuck trying to amend its current contract - without an amendment, they're stuck at the Trop.

    2. Wow, just think of all the damage incurred if the Rays left. St. Pete will be left in the exact same state they were before they signed the agreement with an empty stadium hosting the occasional monster truck rally. What horrible damage that must be.

      At Scott, you really think they signed a lease saying that if they break the lease they will pay the entire construction cost of a crappy building that was already obsolete and sat virtually empty for the previous 5 years.

      You both must realize that this isn't about breaking the lease and paying everything. This is about getting out of the lease and not paying ANYTHING. Because as soon as they do that, they intend to turn around with their hands out and ask for more public money to fund a stadium. How can the Rays pay 20-40 mill to break the lease (which would realistically be all that St. Pete could reasonably ask for) then ask Tampa to fork over 250 mill? How much public support do you think they'd get in Tampa to basically have the tax payers pay off St. Pete. Where this gets interesting is Tampa would care a great deal about that, but Montreal wouldn't. St. Pete is holding on tight to the Rays, because they know the Rays can't move to Tampa until 2027, not because of the contract, but because of the public outcry in Tampa of the Rays paying St. Pete to break the contract, and then asking Tampa for a crap ton of money for the new stadium. So really since St. Pete won't budge, Montreal is actually more of a likely home if the team breaks the contract early. Its a matter of land availability and Montreal's appetite for publicly funding a stadium. I'm sure the Rays and MLB will be closely watching the exhibition series again.

    3. You make a lot of sense, David.

  4. David,

    If you are dumb enough to sign a year lease that states if you leave 6 months early, then you have to pay for the entire cost of building the apartment, then yes!

    I don't know how the Rays contract with St. Pete reads, but whatever they signed up for they are on the hook for.

  5. The Montreal dates are more for extending the Jays brand into Quebec by Rogers and a payday for Evenko.
    2 dates per year isn't a realistic gauge for sales over 6+ months of openings for years to come. If large crowds don't come after 10 years without the product - that would be a story.