Saturday, April 30, 2016

Rick Kriseman: the Mayor of St. Pete (Not Tampa Bay)

Rick Kriseman marched into the mayor’s office in 2014 by defeating what many saw as St. Pete's obstructionist-in-chief, Bill Foster. But Kriseman is feeling a little bit of the inside heat himself these days for not being more inclusive and liberal with the city’s rights to negotiate with the Rays.

Curtailing once to the pressure of newspaper editorial boards on the issue of the city's previously-ironclad contract, Kriseman cut a less-than-ideal deal with the Rays to look at possible stadium sites outside city limits. Still, Kriseman is learning: 1) you can’t please everyone…and 2) it’s not easy to preserve the city’s interests and financial equity in MLB (as predicted on this blog two and a half years ago).

Just this past week, Kriseman was hit with a Times article on the slow pace of “Baseball Forever” stadium discussions in St. Pete, a letter from a powerful Pinellas senator who wants to be involved in stadium discussions, then a Times editorial suggesting his administration is bumbling the process in more ways than one.

Look, the Times may be right about Kriseman putting St. Pete’s interests above the region’s, but as Bill Foster always said, the mayor was elected by the people of St. Petersburg to look out for St. Pete tax dollars and interests first. In hindsight, Foster may have actually done a pretty good job preserving the city’s leverage and keeping the Rays in-place for four years.

The Rays and the region have asked St. Pete to make a financial sacrifice to keep the team in the region long-term. Kriseman granted that wish. But he’s going to find it harder and harder as the demands for St. Pete’s sacrifices continue to grow.

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Monday, April 18, 2016

Rays Give Small Suburb the Time of Day; Media Celebrate with New Round of Speculation

Are the Rays really considering a possible stadium in Oldsmar?

Probably not, and it would seem to be a silly idea...but for argument's sake:

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Wednesday, April 13, 2016

Yankees Pinch Pennies, Produce Laughable Economic Impact Report Without Having to Hire Economist

So I finally got a hold of the Yankees' 2015 spring training economic impact "report" {see links at bottom of page}...and WOOOOOOOO, did I get a lesson in economics! As we'd expect from the Yankees: it's a lesson in bad economics.

The entire "report" consists of four pages, and similar to the Rays' laughable spring training economic impact report of 2014, the analysis isn't worth the cracker jack box it came out of.

First of all, the Yankees appear to have done the report themselves, rather than hire an economist or firm to analyze data for them.  Second of all, the team claims $162 million in economic impact last year...from 17 spring training games.

That breaks down to $9.5M in economic impact for each game...or $950 per person per game!?!?!?

Oh, but the bogus assumptions continue:
  1. Nearly 40,000 Yankees fans came to Florida last year for the primary purpose of watching baseball, staying for an average of 7.5 nights each, but going to just one Yankees game each.  Of course that's ridiculous, but acknowledging fans go to multiple games over the course of a spring diminishes all those economic impact claims!
  2. About 43,000 fans came to Florida for reasons other than baseball last year, but took in a Yankees game while they were here. Yet the team still counted their entire $90 million supposedly spent in Florida as spring training-related economic impact.  That represents 56% of the Yankees' claimed total impact.
  3. Not one single Yankees fan from outside the state attended more than one spring training game last year.  Ha.
Oh, the team didn't even survey fans themselves; they simply took out-of-state/in-state percentages from a 2009 statewide spring training study.  Which explains other discrepencies in the "report," such as how the team suggests on Pg. 4 that an analysis of spending receipts showed 27% of spring training fans (46,417) were from Hillsborough County...yet on Pg. 2, they estimated all but 39,747 fans came from outside the county.  Psshhhhttt....minor details!

The Yankees should be embarrassed to put out these numbers and the Tampa Tribune should be embarrassed to have relied on them in an editorial.

Meanwhile, the numbers may or may not have helped convince Hillsborough County leaders to give the league's most valuable franchise another $30 million or so in tax money.

All told, $30 million for a more than 20-year spring training contract extension isn't a bad deal these days.

But yes, the $13 million or so in Hillsborough County bed tax money could have absolutely gone toward a Rays Tampa's nearly-impossible task of financing a stadium just got a little bit harder.

Click on the four-page "report" to read the Yankees' economic claims:

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Sunday, April 10, 2016

Why MLB Loves Montreal (Hint: It's Not Why Expos Fans Think)

We see a lot of Montreal fans talking about recruiting the Rays from Tampa Bay...or convincing MLB to expand to 32 teams.  But those Montreal fans fail to see the league's rich history of deception...and how much more valuable they are to MLB owners without a team.

As Peter Gammons has explained, MLB's business model depends on having a city like Montreal to "blackmail" all other MLB cities with...and Denis Coderre couldn't play more perfectly into the league's hand:
MLB's leveraging is well-documented, including in a 2015 book by Frank Morsani, "Betrayed by Baseball."  Morsani writes how the league repeatedly mislead/lied to him in efforts to advance its own interests and get new stadiums built in existing markets.  Obviously, it worked.

But for a deeper dive into MLB strategy, I turn to a 2010 article in the Harvard Journal of Sports & Entertainment Law, which also documents how MLB leveraged its anti-trust exemption into billions of dollars worth of publicly-funded stadiums.

The whole thing is worth a read, but one citation worth highlighting includes a passage from Mark Rosentraub's "Major League Losers: The Real Cost of Sports and Who's Paying for It":
Like any business, professional sports teams can increase their profits if they reduce or eliminate competition. Most businesses must accomplish this objective by producing the best possible product at the lowest price. The professional sports leagues, however, have been able to establish a protected environment and eliminate competition while maintaining the illusion of a free market. All the professional sports leagues are, in reality, cartels or private business associations insulated from the competitive pressures of a free market. These cartels control the number of teams that exist, allowing association members to extract subsidies and welfare from state and local governments that want one of the controlled franchises located within their borders.
In short, even if Stu Sternberg wanted to move to Montreal or sell to investors there, the league must sign off on it too.  And even if Montreal wants to fund a new franchise, it doesn't mean squat unless MLB wants to risk feeding more hungry mouths through revenue sharing.

Then there's this excerpt from noted economist Andrew Zimbalist, written in 2003 for the Brookings Institution:

Baseball’s monopoly allows it to restrict artificially the number of franchises and to dally with cities that have no team—to hold out to them the elusive promise of a franchise, pressuring existing host cities to build new stadiums or otherwise do MLB's bidding. As a consequence, cities and states compete against each other, leading to exorbitant stadium-financing packages and sweetheart leases. Cities have attempted on their own to include lease provisions that deter team relocation and provide a more equitable sharing of the facility returns. But usually only the largest cities have sufficient bargaining leverage to accomplish even part of these aims.
Don't you see it, Montreal fans?  MLB loves you for the time and money you're willing to getting new publicly-funded stadiums built here in the U.S.

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Wednesday, April 6, 2016

4 Quick Rays Links Worth Your Clicks

Hopefully you're caught up on the must-read links you needed before Opening Day, because here are the four must-read links you need after Opening Day:
  1. Rob Manfred said all the typical things you'd expect a commissioner to say at a Tropicana Field opener, plus one thing you'd never catch his predecessor saying: "Deadlines aren't helpful on issues regarding new stadium negotiations."  The video is worth a watch, check it out here:
  2. Another quick watch worthy of your time is Stu Sternberg's annual opening day comments:
  3. The Trop somehow placed just 15th on a (probably poorly-sourced) list of "most affordable stadiums in MLB"; cited "higher than average" ticket prices in placing them smack in the middle of the list of affordability.
  4. And finally, if you needed any more reminder to be skeptical of all those spring training economic impact reports and stories, has a really harsh takedown that's worth reading.  It makes you wonder why Florida constantly trips over itself to hand MLB more money...and why the economic impact reports are never worth the cost of the paper they're printed on.
Go Rays!

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Saturday, April 2, 2016

All the Rays News You Need to Read Before Opening Day

Apologies to my Canadian friends (you guys still have the world's best anthem), but this blog aims to provide perspective on all things sports business, so that includes the dreams of Montreal baseball expansion. It's not an impossible dream...but it's certainly not imminent.

To expand, MLB would need two markets that wouldn't drain revenue-sharing, and even if you think a national Canadian TV deal is a given and Montreal would pull it's own weight...we're a long way from having a second market like that.  And of course, the Rays are contractually bound to Tampa Bay for the next 12 years. So MLB-in-Montreal is quite unlikely in the next decade.

Nevertheless, we're seeing lots of news this week for those who just can't get enough of the speculation:
  1. Jon Paul Morosi penned a predictable - but fair - column about Montreal's baseball future, but he says all the important questions the city must address are pressing issues because in the next two years, "the Rays should know whether they're staying or leaving Tampa Bay."  I'm not sure I agree, for as I wrote last year (in much more depth), "because of the legal issues, there's no chance the Rays leave Florida in the next five, six, seven, or eight years.  Maybe longer."
  2. Great "5 questions regarding MLB's return to Montreal" piece in the Toronto Star, including "MLB is using Montreal’s interest to try and leverage concessions for the Tampa Bay Rays out of three levels of local government in Florida. And only when the Rays stadium issue is resolved will there be any talk of expansion."
  3. The Tampa Bay Times' annual Opening Day editorial focused on ways Commissioner Rob Manfred could/should keep MLB in Tampa Bay, including: acknowledging the region's commitment to working together (even though they aren't right now on the Stadium Saga); acknowledging the high TV ratings & interest; and by paying for much of it himself.  The paper also echoed this blog's call for more revenue sharing since the league could not be more flush with cash.
  4. The Tampa Bay Baseball Market blog has a great interview with new Rays Chief Business Officer, Jeff Cogen, who shares inside info on how the team is addressing some of the "attendance struggles", including ideas on converting TV-watchers to ticket-buyers.
  5. Gary Shelton points out Miami fans continue to get hosed by a crappy Marlins team.  Oh, and the team's been unable to sell naming rights to their new cathedral for $5M/year.
  6. And finally, let's look back at this 2004 Washington Post story from Steve Fainaru, which offers evidence of why "private investors" aren't going to fund a half-billion dollar stadium in Montreal.  Bud Selig, on whether a stadium's revenues can outpace revenues: "Can a ballclub build a stadium and survive? No."

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