Fact-Checking Rays' Revenue Sharing Campaign

After a quick chat with Field of Schemes' Neil deMause this week, it seems we both came to the conclusion that some of the MLB criticisms heard at this week's Stu Sternberg/Matt Silverman/Tampa Bay Partnership discussions may be off-base.

According to the Tampa Bay Times, prominent businessman and Tampa Bay Partnership chair Chuck Sykes said Sternberg and Silverman reiterated MLB's growing frustrations with how much money they have to share with the Rays:

Sykes said it was interesting to hear that the Seattle Mariners and Cleveland Indians used to be recipients of revenue-sharing, "then over time, as they worked with their various initiatives and new stadiums, they're now a payer into the system."

That was news to our ears, and deMause wrote this morning:

According to Forbes, as of two years ago the Indians were recipients of the biggest revenue-sharing check in baseball; and since then, the team’s attendance has actually gone down. And even if somehow they’ve made a miraculous turnaround since then, it’s hard to see how this can be credited to a stadium that opened in 1994.

It looks like this is going to be the Rays’ PR strategy, though: Yeah, we’re winning ballgames, and making money, but we’re doing it with the help of this revenue-sharing program that MLB specifically set up to help low-revenue teams win ballgames and make money, and there’s no way they’re going to let that continue. To which the sensible response would be: What, so MLB thinks the Rays wouldn’t be revenue-sharing recipients if it moved them to Charlotte or something? But then, sensible responses aren’t the game that MLB is playing — nor, it would seem, is the Tampa Bay Times.

Those comments came within minutes after I posted my dissection of what seems to be MLB's silly revenue-sharing argument.  But at the very least, its comforting to know I'm not the only one who thinks the Rays' campaign to reduce Yankees/Red Sox revenue sharing isn't terribly convincing. 

After all, even if the Rays climbed out of the bottom-10 in revenue, another team would simply take its place and we'd still have the 10 richest teams cutting checks to the 10 poorest teams to preserve some semblance of parity...

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....

Referendum Questions: From St. Pete to Sacramento to Tampa

With the referednum on continuing to build a new St. Pete Pier going down in flames this week, the topic of referendums seems to be coming up quite a bit.

And, depending whom you ask - especially given the pier problems - voters may not always know best.  In fact, there are probably at least a few Rays fans who wish there would have been more support for the canceled "sailboat" stadium referendum in 2008.

But there's an interesting take from the New Ballpark blog on the importance of putting stadium subsidies to a vote:

1. Public money for stadia in the form of cash, loans, or bonds – whether or not secured by upfront taxes or fees – should never happen in this day and age.
2. All new or renovated venues that do not require public money are generally good, as long as they don’t come with significant kickbacks for the team and developers.
3. Any public assistance that goes beyond processing permits or planning work (providing land, money, or other benefits) should require a public vote over the terms of the deal.

New Ballpark is especially critical of the Sacramento arena efforts, which are intentionally avoiding a voter referendum - presumably for the same reason the Rays yanked theirs off the table in 2008 - because true democracy doesn't always produce what elected officials consider the best results.

The post continues:

Are these people nuts? Have some respect for your citizens, politicians. Allow for campaigns. Allow the citizens and fans to be fully educated on the issues. You owe them that much. Sure, campaigns are expensive. The billionaires and millionaires who want these projects can afford campaign costs, they’ve seen and done it before. Chances are that they’ll outspend opponents 10:1. They have the resources. That’s fine. That’s the way the process works.

Eventually, we may see the process repeat itself in Tampa Bay....where a recent poll shows voters have no interest in approving a taxpayer-subsidized stadium.

And a Letter to the Editor in this morning's Times (3rd one down) echoes the sentiment of many residents here, it seems:

We are paying enough for problems from the past -- reservoirs under repair, nuclear energy plants that will never be built, a section of an expressway under construction, and now a section of road just three years old leading to Tampa International Airport...We must learn from our many mistakes. Any plans to build a new baseball stadium must not include any citizen funding and must be approved in a referendum in the 2014 elections.

There's a reason referendums are not part of the standard blueprint for stadium campaigns.

Sternberg Speaks to Tampa Bay Business Group

Michael Sasso from the Tampa Tribune has the latest on Stu Sternberg's relationship with the Tampa Bay business community (hint: it's pretty good):

On Wednesday, Rays principal owner Stuart Sternberg and team president Matt Silverman gave an informal talk to the (Tampa Bay Partnership), which is a group of area businesses and local governments that tries to market the region to employers. The press wasn't allowed into the chat, but afterward Sykes provided the Tribune with a synopsis of what happened.

The partnership took no formal action on the stadium issue Wednesday.

As he's said in other venues recently, Sternberg told about 60 members of the partnership how Major League Baseball is frustrated with the slow pace of progress in the stadium stalemate with St. Petersburg.

Few other details were available about the meeting, but Sykes indicated some of the limited participation from interested local business groups was because of St. Pete's threat of legal action. 

Nevertheless, the business communitiy remains one of Sternberg's biggest allies and could ultimately help break the current stalemate should the Rays and St. Petersburg fail to find a friendly medium during direct negotiations.

The $1 Million Reason College Football Season Starts with Blowouts

Good post from the Priceonomics blog as to why there are so many lousey NCAA games to start the football season:

The main consideration in scheduling cupcake games is that the NCAA has no rules about playing an equal number of home and away games - or how you share revenue with visiting teams. So, universities like Ohio State that sell out their 100,000 person stadium for every game gladly pay teams like Buffalo to give up one of their own home games to play at Ohio State.

The weaker opponent may be less of a draw for ESPN and television networks, but universities are largely shielded from the financial consequences of scheduling patsy opponents as they split television revenues with their conference. Colleges pay cupcake opponents $400,000 to over $1 million because an extra home game brings in as much as $4 million to $5 million in additional revenue for the biggest programs. And during a mediocre season, that extra victory could be the difference in earning six wins and a profitable trip to a postseason bowl game.

In return, small programs receive increased exposure, a pipe dream of victory, and a check for as much as two thirds of their football budget and 20% of their athletic budget in a single game. (Head coaches are sometimes literally handed a six or seven figure check after the game.)

Despite the opulence of elite college football programs, the financial logic of the exchange is just as necessary for the elite teams as their cupcake opponents. As Priceonomics wrote in a prior article about the NCAA:

University presidents overwhelmingly view the high cost of athletics as a problem and athletic directors are busy cutting their budgets - a process only accelerated by the recession. Just over half of elite football and basketball programs turn a profit. Only 14 out of 120 athletic departments in the upper tier of Division I cover their costs. The remainder run a median deficit of $10 million.

Of the schools in the top conferences, only a quarter play a balanced schedule of 6 home games and 6 away games. The remainder schedule a guarantee game in order to play 7 home games or a game at a neutral site where they can split ticket revenue with their opponent.

The small school players may often be victims on the field, but their administrators are in the position of power. Every major program wants to schedule their guarantee games in September as the pollsters that rank teams and influence bowl placements give less credence to early games. That means the supply of small schools with amenable schedules is limited. Ohio State’s athletic director told USA News "Sometimes they've got you over a barrel.”

What the St. Pete Mayoral Election Results Mean for the Rays

Nothing.

Tuesday's St. Pete primary, which eliminated Kathleen Ford from the race, does nothing to shift the Stadium Saga.

That's because the two men with slightly different visions of how to handle the Stadium Saga are still in the running for the mayor's office.  Incumbent Bill Foster (41% of votes) will face former City Councilman Rick Kriseman (39% of votes) in a November run-off, which could be much more consequential to the Rays.

Flashback: Foster's 2009 mayoral victory was considered a "win" for the Rays at the time

Orlando Outrage Continues (From Just One Person??)

Jeffrey Billman from the Orlando Weekly has been banging his head against a wall lately, wondering why he's the only guy in town who seems outraged over the continued subsidies offered sports teams and stadiums in Orlando.

This week, he penned, "If you’re not pissed off, you’re not paying attention: What Orlando could learn from St. Petersburg’s war over The Lens."  An excerpt:

Here’s the thing: This isn’t a fight over public spending or corruption or anything nasty or sordid. It’s a battle—an entrenched, vituperative battle—over architecture. Architecture!

Contrast that to Orlando City Hall this morning, where we had yet another round of glad-handing and civic boosterism dressed up as a city council workshop. The performing arts center folks talked about how close they are to finishing this magnificent structure, just $25 million more, please. The Citrus Bowl backers promised the sun and the stars—NFL games! NCAA championships!—if only we’d add $12 million to their coffers. And then there was Orlando City Soccer, brandishing its $1.2 billion in economic impact and an MLS franchise if only taxpayers helped them build a spanking-new stadium.
...
And yet, there’s no outrage, no movement for change...not one commissioner questioned the fundamental wisdom of having taxpayers subsidize professional sports facilities (of course, that horse left the barn the day the Amway Center opened) or blinked an eye at Orlando City’s economic impact assertions, even though economists are nigh-unanimous in thinking such studies—commissioned by the team, for the team—are hogwash.
...
To be more specific, 85 percent of economists oppose taxpayer-subsidized stadiums. That, my soccer-loving friends, is a consensus, and it’s backed up by (most of) the economics literature. You don’t have to like the facts, but they are facts nonetheless.
...
I’d love to see the city’s media (especially on TV) do something more than parrot the team and mayor’s talking points. I’d love to see this town get actually pissed off about the fact that our glut of tourist tax money can go to hundred-million-dollar venue after hundred-million-dollar venue while our schools are substandard, our city is quantifiably dangerous, and our public transit system is a mess.

I’d love to see us be half as enraged about that as St. Petersburg is about its pier. I’d love to see something other than apathy.

New Poll: Public Subsidies for Stadium in Tampa Unpopular

A new poll shows that while Tampa Mayor Bob Buckhorn is wildly popular in Tampa, his idea of public dollars going toward a new Rays stadium may not be.

According to SaintPetersblog, 584 randomly-chosen Tampa voters - weighted to account for citywide demographics - said they opposed taxpayer dollars going toward a stadium by a 56%-36% margin.  The survey had a 4.1% margin of error and polled all voters; not just likely voters.

A follow-up question asked how voters would prefer to spend the city's $100-$150 million in soon-to-be-available dowtown TIF money.  Only 12% of voters chose the stadium option, trailing homeless solutions (31% ), transportation projects (27%), and police/fire (13%).  It's a bit of a misleading question, however, since the TIF money is quite limited in how it can be spent and can only go toward Downtown Tampa projects.

Now, I haven't seen the actual poll yet and don't know the exact questions, so its tough to draw conclusions.  Especially since - much like you can make statistics say anything you want - you can often determine a poll's outcome by the phrasing of the question.

For example, a series of 2012 polls asked Atlanta residents if they favored tax dollars going toward a new Falcons stadium.  About 70% of residents opposed it.  But when it was explained the tax dollars were from tourist taxes, which came mostly from out-of-towners, the opposition dropped to almost 50%.

The voter opposition didn't matter in the grand scheme anyway, because Atlanta's city council made the decision to subsidize a stadium without voter approval.  But I suspect a few more Tampa voters could be convinced to support a taxpayer-subsidized stadium if the money was coming from tourist or rental car taxes (even though, of course, that money could be used in a host of other ways across the city).

UPDATE - The entire poll is posted here.  The exact question was "Do you believe that taxpayer dollars should be used to help pay for a new Tampa Bay Rays baseball stadium in Tampa?"
Interesting: more Republicans favor tax dollars for a Tampa stadium than Democrats.  Support for stadium subsidies was stronger among white and younger voters; weaker among black and older voters.

New Week, New Reading Material

A few links for your Sunday reading pleasure:

• Mayor Bob Buckhorn says a Sulpher Springs stadium idea is all well and good, but a new Rays home has to be Downtown Tampa
• The Orlando Magic may get some more subsidies from the City of Orlando...but the Orlando Weekly asks, "Can we please stop pretending the Orlando Magic are doing us a favor?"
• How well can you play the Stadium Naming Rights game?
• Colts owner Jim Irsay tells fans they aren't getting ripped off by having to buy preseason tickets; that's just the price you pay to own season tickets

UPDATE: Rays Supporters Cast Votes in St. Pete Mayoral Election (with Checkbooks)

Following up an Aug 1 post about Rays-related campaign contributions in the St. Pete mayoral race, candidates just filed their final reports before Tuesday's primary and there are a few interesting contributions for each of the frontrunners:

Mayor Bill Foster:

• $500 from Thomas Sansone, minority owner of the Tampa Bay Rays
• $500 from the St. Pete Chamber PAC, one of Pinellas' pivitol players in the Stadium Saga
• $500 from David Feaster, former president of grass-roots Rays boosters, The Clutch Hitters
• $100 from Dick Greco, former Tampa mayor

Challenger Rick Kriseman:

• $100 from Bob Byelick, chairman of The Clutch Hitters
• $250 from Harry Cohen, Tampa city councilman

Ironically, Feaster had previously donated to Kriseman and Byelick had previously donated to Foster.

And it should be noted: while the St. Pete mayors race is a non-partisan affair, many contributions tend to fall along party lines, rather than stances on a stadium.  Nevertheless, there was little support for candidate Kathleen Ford's campaign from those involved in the stadium debate.

 

The maximum allowable donation in this race is $500.
The polls close at 7 p.m. Tuesday night, with the top two finishers facing off in November.

St. Pete Chamber Chair Fires Back Across Bay

The chairman of St. Petersburg's Chamber of Commerce, David Punzak, penned a Letter to the Editor in response to Cathy Peek McEwen's Op-Ed earlier this week entitled, "MLB has duty to help free Rays from financial prison."

There was one seemingly glaring factual inaccuracy in the story about Rays ticket-holders, but Punzak was even less impressed:

As a 16-year Rays season-ticket holder and the current chairman of the St. Pete Area Chamber of Commerce, I was very disappointed to see the above-referenced article printed in the Tribune. I recognize Cathy Peek McEwen’s column appeared in the Other Views section, so her words are not the position of the newspaper. That is good news.

The article is close-minded, factually inaccurate and deliberately inciteful. It is the baseball equivalent of race baiting. It was written to include many material inaccuracies, and many regional myths perpetuated by these types of articles.

What disturbs me most about this article is that it dredges up a lot of very bad, decades-old history between the Tampa and St. Pete communities. I thought we were past that. As business leaders, it is our job to move past this unhealthy rhetoric. We’re working hard with our partners and leaders at the Greater Tampa Chamber of Commerce to help reshape the conversation about baseball.

We all need to look forward, not backward.

In order for Major League Baseball to succeed in the Tampa Bay area (whether in St. Petersburg or Tampa), it is going to take the collective goodwill, buy-in and economic contribution of people living in all communities in the Tampa Bay area.

Parochial, mean-spirited views, like those of Ms. McEwen that intentionally malign nearly half of the entire Tampa Bay area community, do nothing to ensure the continued success of MLB in this area.

The St. Pete Chamber, which teamed up with the Tampa Area Chamber to research stadium financing last year, hasn't exactly been supportive of a Tampa stadium replacing the Trop.  However, it should be encouraging for stadium supporters to hear the suggestion of "economic contribution of people living in all communities in the Tampa Bay area."

Could multi-county contributions be in the region's future?

Buccaneers Hire New Lobbyists

According to Saint Petersblog, the Tampa Bay Buccaneers have hired lobbying firm Corcoran and Johnson.  The team also retains GrayRobinson and RSA Consulting as representation.

So while there's no indication what issue(s) the Bucs will be pushing in Tallahassee, it was just a few days ago I wondered out loud when the Rays might hire their own lobbyist.

Maybe they two franchises can team up so the Rays can spend more on players and the Bucs can spend more on locker room cleaning?

Orlando Soccer Stadium Idea Making Headlines

Public subsidy opponents may not oppose public subsidies as much as you think.  It's just that being a watchdog means watching out for the public's investment.

In Orlando, there's great momentum to build an $85 million soccer stadium for a minor-league-but-hopefully-soon-major-league team.  But as upwards of $55 million in public money is being discussed for the deal, Orange County commissioner Pete Clarke is suggesting the city secure a share of ownership in the team in exchange for the money.

So rather than just handing the money off to another entity, the city would become an actual investor and actually benefit from the real profit of a stadium generates (ticket sales, stadium revenues, etc).

Now, since Major League Soccer isn't a bunch of individual businesses, but a single business entity (the league owns the teams and the players' contracts), Clarke suggests instead the city guarantee itself a share of new stadium revenues.

Deadspin called it “the best idea for stadium financing I’ve ever heard.”

And Field of Schemes author Neil deMaus sent the following critique to the Orlando Sentinel:

That looks like a great idea. As I’ve always said, the problem with the current stadium business isn’t that the public is putting up money, it’s that the public is putting up money without getting anything back. If Orlando could get an actual share of the stadium revenues – and it’d have to be gross revenues, mind you, not net profits, since it’s too easy for clubs to cook the books with the latter – then this could actually be an investment, and not just a gift.

Meanwhile, there are other thoughts coming out of Orlando.....alt weekly Orlando Weekly had some tough words for Bud Selig & MLB in its story titled "Stadiums. Don't. Work."

Here’s an idea: Bring (the Rays) to Orlando. Our local leaders have yet to meet a taxpayer-subsidized sports facility they didn’t love.
...
But the economics literature is clear: Taxpayer-subsidized stadiums are losers. Full stop. Anyone who says differently is either lying or woefully misinformed.
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The economic impact studies teams bandy about – Orlando City (soccer club), for instance, promises a $1.2 billion impact over the next 30 years – are hocus-pocus. They “overstate the contribution that professional sports make to an area’s community. … Specifically, because of sport- and stadium-related activities, other spending declines as people substitute spending on one for spending on the other.”

In the 37 metropolitan areas Coates and Humphreys studied, building a stadium had no discernable impact on the growth rate of real per capita income. Once you factor in the cost of building the stadium, per capita income actually decreases.

Needless to say, the story continues to quote numerous economists who have studied stadiums' (lack of) effects...which will obviously still fall on the deaf ears of some of this blog's readers, who I'm sure are anxiously awaiting the opportunity to debunk the evidence with independent economic impact studies of their own...

Possible New Stadium Locations: Anywhere There's a City Block & a Cell Phone

I've always said you could poll 100 Rays fans about where they'd like to see a new stadium built, and 100 would agree they'd like one built closer to where they live.

So it should be no huge surprise Hillsborough County Commissioner Victor Crist is floating the idea of a possible stadium in his district, near Sulpher Springs and USF, a little ways up I-275 from Downtown Tampa. 

He says the former Tampa Greyhound Track could be an ideal location, with ample land and I-275 exit ramps already built.  Crist says it would preserve valuable Downtown Tampa land for other uses, and even speculates the complex could also possibly include a new USF football stadium.

Of course, Hillsborough County doesn't have the money to pay for a new baseball stadium, let alone a football stadium too.  And if the stadium isn't built in Downtown Tampa, you can kiss the $100-$150 million in established TIF funds goodbye too.  Crist suggests a new TIF could be created in the currently blighted area, but with no track record, those funds would be much tougher to bond.

Tampa Mayor Bob Buckhorn seemed unimpressed, telling the Times: "I don't think anybody has really given it any serious consideration, because the model for Major League Baseball over the last decade has been stadiums in the downtown core...They want a stadium that's walkable."

Remember, location has never been as important in this discussion as financing.  And even Buckhorn admitted possible stadium locations are a dime-a-dozen.

"Anybody with a city block and a cell phone is going to try to put their property in play," he said.

A McEwen Op-Ed on Rays

I often wondered what legendary Tampa sportswriter Tom McEwen thought about the Rays' Stadium Saga - so I interviewed him about a year before his 2011 death.  He had an interesting perspective; his old-school mentality approached stadium-building much like a fan approaches his/her favorite team.  To Tom, cheerleading a cause like a new stadium was justified because of its benefit to the community.

Today, McEwen's former daughter-in-law and Trib sportswriter, Cathy Peek McEwen, penned an op-ed in her former paper calling on MLB to step in and fix its broken system in Tampa Bay:

Simply put, MLB is as much to blame, maybe more, on the Rays’ poor attendance as St. Petersburg and Pinellas County (which lag behind Tampa in providing behinds in seats, interestingly). Accordingly, MLB itself needs to atone for the sins of the owners who voted to imprison a franchise in a place their commissioner recognized could not be a major league town.
...
Agree to fund a meaningful share of a new stadium in a central location, one that can be easily reached by a critical mass of fans. That critical mass together with the Rays’ talented owners and local governments that value keeping MLB in the central Gulf Coast area will do the rest.

But McEwen also blamed St. Pete Mayor Foster for "trying to reinvent history" and claim his city needs to be compensated for what its owed on its investment.  Her contention is that St. Pete built the Trop without a baseball team and its not owed a baseball team now.

Except the one flaw in the argument is that St. Pete's residents have paid millions of dollars the last few decades for the right to have a baseball team.  And MLB, Vince Naimoli, and Stu Sternberg all agreed to a contract promising baseball to St. Petersburg until 2027.

Promises may be meant to be broken, but contracts can be a stickier subject...