Wednesday, March 4, 2015

"Sometimes Public Funding is Necessary" for Public Stadiums

Devout reader Scott Myers put this on my radar a few weeks back, but I'm only now catching up on it:  Former Cincinnati Mayor Jerry Springer and Keith Olbermann discussing public subsidies for stadiums.

Springer admitted "there's no economic reason" for a city to build a stadium, but "sometimes public funding is necessary" to build them because they are legit civic assets.

Olberman agreed, adding if building stadiums made economic sense, owners would just build stadiums themselves and keep the profits.  But alas, "that's what voters are for," he explained:

This weekend in the Tampa Tribune, columnist Joe Brown summed up Springer's post with, teams should stop "play(ing) the economic-development card," and focus on their real benefits to the community, a sense of identity:
When a team is winning, it’s hard for most local residents not to get swept up in the enthusiasm, as the championship runs of the Bucs, Rays and Lightning have shown. It’s something that can unite a community as few other things can.

Nobody in St. Petersburg is asking for an economic impact study for the city’s new pier. It will be built because it’s considered a part of its beautiful waterfront, something to enhance the quality of life here, just like a city park or a museum. The same applies to Tropicana Field.
“Generally communities say this is something they want even if it doesn’t make economic sense,” said (St. Pete Councilman Karl) Nurse on the funding of a new ballpark for the Rays.

True. So now the city council will have to decide what’s in the best interest of St. Petersburg and the Tampa Bay area’s baseball fans.
“Are the Rays willing to accept the fact that they are located in a growing television market which, no matter where you put a stadium, is going to be inconvenient for a third or 40 percent of the region?” asked Nurse.
As they often say on TV, stay tuned.


  1. Four fairly obvious counter-arguments to Joe Brown's points:
    1) public parks/piers typically do not cost taxpayers 500M to 1.5B
    2) public parks/piers are typically not leased out for private profits
    3) when public spaces are leased, they are typically not leased to the total exclusion of the public (Shake Shack in Madison Square Park or a restaurant on the Pier versus buying a ticket/parking just to enter a stadium you paid to build)
    4) Public parks have quantifiable economic value.

    "Identity," LOL. There are cheaper ways for a community to "find itself." 1 million people in Pinellas County. Rays request $500M (conservatively). $500 per capita. Let's put that money instead toward a group trip to India or a group vision quest in the Dakotas. Then we can both find our identity and learn something about a different place. And when we return, we don't have to come back to the heartburn of having a terrible tenant.

  2. The people that complain about paying for a stadium are the people that move down here from up north and don't care about the team.
    Just like the old people that move down here and think it's not right that they have to pay a school tax.

  3. On 2/9/2015 Brian Auld addressed the weekly Economic Club of Tampa meeting.

    Sandy Murman (a sitting Hillsborough County Commissioner) introduced Brian saying that she will do anything she can to make sure the Rays stay in Tampa Bay. I winced when I heard that.

    I think Brian shared a significant data point - that attendance needs to increase by 5,000 to 10,000 per game for the Rays to continue to be viable. That would translate to about $15 million to $20 million per year in revenue (profit?). Presumably that would enable the Rays to increase player payroll accordingly.

    So some simple math shows the following:
    To build a new stadium for $600 million will cost $38 million per year for 30 years at 5% ($48 million per year for 20 years).
    $38 million is greater than $20 million
    If the Rays are to increase payroll once they are in the new stadium, the money will have to come from increased TV revenues, increased luxury suite revenue, increased corporate sponsorship, and most certainly from the taxpayers who will be expected to pay for most of the new stadium cost - IMHO
    Bottom line, if it comes to pass that the Rays build a new stadium in Tampa Bay, whichever county 'wins' loses.

    It is clear that building a new stadium makes no economic sense for the taxpayer or the Rays as a standalone business. It may make sense from MLB's perspective so that they can continue to have a healthy franchise in the nations' 13th largest TV market (and just 12,000 households behind 12th ranked Detroit and 11th ranked Phoenix) - see So I am all for the Rays and MLB footing 100% of the cost for a new stadium, if it ever gets built.

    We taxpayers should not have to pay for MLB's broken business model, whose two main defects are:
    1. Not enough revenue sharing from the richest to the poorest teams
    2. Players being paid much more than they contribute to the bottom line of their teams. The reason that team owners can and do overpay players is because they are spineless when negotiating with player agents like Scott Boras and can afford to be, because on the other hand, local politicians are spineless when dealing with the owners regarding public funding of stadiums.

    I like that Tampa Bay has an MLB team, and go to about 4 games per year - doubt that would change much if and when a new stadium gets built. But if you give me the one of these three choices:
    1. do not increase taxes
    2. increase taxes to fix or replace the broken down school buses on which my special needs son rides
    3. increase taxes to pay for a new stadium for the Rays whose only guaranteed effect will be to increase the value of the Rays by the amount that taxpayers put up
    I will take '1' first and '2' second and '3' not so much.

    The Stadium's value may well go beyond economic impact, but the MLB and/or local teams can easily afford to pay for 100% of any new stadium. Let's end 'stadium stamps' for the rich!

  4. Hahaha, "stadium stamps." Great phrase. The Rays and the Mayor will probably not release the new document ahead of time for review. They need to push it through on very short notice, same as the effort in December. Rushed municipal contracts do not pass the sniff test. This process makes one wonder what kind of i-banking the Rays management worked on. Maybe the Rays should ask S&P to throw a AAA-rating on the MOU before they try to sell it to the public. Or they could have a german shepherd excrete the MOU in a dog park.

  5. What a combination, 2 prime examples of why watching is such a waste of time.
    A failed politician who didn't have the sense not to pay for a hooker with a check that could identify him!
    And a narcissistic whiner who's leading the biz in getting fired. I've dealt with him and the phrase "never met a mirror he doesn't love" always comes up.
    Both of these guys have and are "working" in TV facilities that are at least in part taxpayer subsidized and neither of them are returning their checks back
    because "the voters" footed some of the bill.

  6. Let them look in Tampa, settle on a site, and let's play ball already. Build this stadium where it has the potential to pull more fans from all across central Florida, and let it be done. St. Pete council needs to sacrifice their pride in order to allow our team to remain in the area long-term. This is turning in to a nasty divorce where St. Pete wants to have couples therapy after years of a unsatisfying marriage and the Rays just want to finalize the divorce, move on, and live a better life. Settle on the numbers, and let's move forward. Stop stalling St. Pete council.

  7. "...Let them look in Tampa, settle on a site, and let's play ball already.,,"
    Written like a person who has no idea of what they are pontificating about.
    Sports industry addicts/customers are the most naive simpletons.