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.
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.
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.
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:
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!
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 asspring training-relatedeconomic impact. That represents 56% of the Yankees' claimed total impact.
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!
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 stadium...so 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:
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 Rob Coderre couldn't play more perfectly into the league's hand:
Manfred: MLB working w/MTL in case "some club gets to point where its impossible to get MLB-quality facility built." https://t.co/BfBjfeoKyB
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.
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.
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 invest...in getting new publicly-funded stadiums built here in the U.S.
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:
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:
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."
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."
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.
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.
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.
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."
With the Jays and Red Sox kicking off a 2-game exhibition in Montreal, you can expect another round of defeaning "we have 106,000 fans here, so move the Rays to Canada!" rhetoric, just like last year.
No doubt, Tampa Bay's radio waves will be filled with fearmongering (whatever drives listeners). And Montreal will ride the momentum into a newly-released plan to land an MLB team.
But will that plan include how the city plans to pay for a brand-new stadium? Or how the city intends to make the logistical and legal hassle of a franchise relocation worth MLB's trouble?
I thank loyal Shadow of the Stadium reader Patrice Derome for keeping me in the loop on the French-Canadian media's reporting, which have been enough to keep Expos faithful and conspiracy theorists alike plenty busy:
In case you missed it, the Diamondbacks, who entered the league the same year as the Rays, also think it's time to start talking about replacing their stadium.
St. Petersburg is keeping it's stadium campaign public, vetting 15 proposals from well-known companies to redevelop Tropicana Field - with or without a baseball stadium. One team I'm keeping an eye on - Stantec, one of Jeff Vinik's big Channelside developers, who listed the Tampa Bay Lightning's Rob Canton as a project consultant for the potential Trop job.
A Trib editorial made some nice points about Spring Training's economic impact by drawing out-of-state tourists, especially compared to the much higher costs of a full MLB stadium, which tend to target locals.
Hillsborough Co. Commissioner Ken Hagan, the self-appointed lead negotiator on the Rays-to-Tampa talks, promised to be totally transparent with his peers on commission regarding any stadium negotiations...except for that pesky issue of where the Rays want to put a stadium...which means conversations about funding in specific parts of town may remain secret too.
Of course not. Which makes it all the more interesting to track his shifting stances on how many tax dollars the Rays will wind up getting.
First, Hagan's 2010 pledge: "I am certainly not talking about public financing."
But six years later, Hagan flipped his stance to "no new tax dollars," opening the county up to paying for infrastructure projects related to a new stadium, as he successfully pushed for in the controversial Bass Pro Shop deal back in 2013.
He tried to rewrite history in a recent interview with my WTSP colleague, Mark Rivera, saying he's always been open to using public dollars for the Rays:
OK, so Hagan's current stance is that he doesn't want to raise taxes. But he hasn't talked about where the existing tax money for a stadium would come from. The county has an $9.7 billion transportation deficit right now (according to Hagan), so adding new highways around a stadium rather than fixing the county's broken roads will be a tough sell.
Furthermore, the much-repeated Hagan claim of "no new taxes" would also seem to apply to taxes on rental cars and hotel rooms, which have both been mentioned by stadium proponents as possible new revenue streams for a Rays stadium.
Here's some more of that interview with Mark Rivera, where Hagan claims the Rays are an economic engine worth hundreds of millions of dollars, then says St. Pete has lost hundreds of millions of dollars in opportunity cost by keeping the team (WHAT!?!?!?):
Claiming St. Pete's valuable land is better off without a baseball stadium - but that Tampa's would be better with one - ignores just about every economic principal in the book. {See this chart for more}
But then again, if we didn't ignore economics, we wouldn't be talking about funding new palaces for our teams in the first place!
UPDATE - MAY 31, 2016: Hagan suggests a number of different funding sources could be used to pay for park, including many which would be new to Hillsborough County.
In case you missed the story here last year, Hillsborough Co. Commissioner Ken Hagan, the self-appointed lead negotiator for the county, is a big fan of how the Braves' deal with Cobb Co. went down - quickly, secretly, and with little public scrutiny:
“The Atlanta model was very different,” he said. “That is encouraging to me, that with all the due diligence we’re doing on the front end, once we’re given the opportunity to sit down with the team, it will not take as long as it historically has to determine a location and a fundraising package.”
Well, now that Hagan's had a chance to sit down with the Rays, he confirmed yesterday he will no longer be providing the public - or his fellow commissioners - with updates. All the while, touting how transparent the process will be?!??
I can appreciate Hagan's desire to keep any potential land acquisitions secret for leverage purposes. The more people know, the more expensive it could get.
Which is EXACTLY why pro teams like keeping stadium negotiations secret. The more the public knows, the more it costs them.
You just have to shake your head - if we've learned ANYTHING from the Marlins' stadium financing debacle in Miami, it's that taxpayers lose when we keep conversations about subsidies and funding a secret!
Another year, another big (estimated) fortune made by the owners of the Rays, according to Forbes.
The publication estimated the franchise to be worth $650 million in this their annual value estimations, a $25 million increase (4%) increase from a year ago.
That figure ranks the Rays 30th out of 30 MLB teams, another $25 million behind the 29th-ranked Marlins ($675 million) and a bit further behind the top-ranked Yankees ($3.4 billion).
Before you shed a tear in your beer for Stu Sternberg & the minority owners of the Rays...realize they paid about $167 million for the franchise in 2005. That's a 289% return during a period where the stock market appreciated just 70%.
Oh, and even last year's estimated slow 4% growth is twice what the average homeowner will make in an average year on the purchase of a home. Forbes estimates the average MLB franchise appreciated by a modest 7% last year.
The University of South Florida has had a number of recent highlights on the athletic fields and courts, standing tall against some of the biggest NCAA powerhouses in the country. But it's getting harder for USF to compete, at least financially, according to the latest report on WTSP-TV.
The exhaustive analysis of last year's USF athletics budget reveals growing expenses and shrinking revenues, forcing students and the USF Foundation to balance the budget. It's a growing problem for schools in the "Group of Five," as they try to keep up with the athletic programs in the "Power Five," but without the robust television and NCAA revenues.
"There are financial challenges at USF," said Yulander Wells, the program's chief financial officer. "(But) there are financial challenges for other schools in the 'Group of Five.'"
USF students get free tickets to all home athletic events -- and thanks to successes in sports such as women's basketball, men's golf, and men's tennis -- USF enjoyed its highest finish in the Learfield Director's Cup standings last year (73rd), which takes into account dozens of varsity sports.
But in the sports that matter most to USF's budget -- men's basketball and football -- years of struggles are taking a toll on the department's revenues.
Other findings from the analysis include:
Five years of football struggles decimated ticket sales and contributions revenues;
The split of the Big East - and fall from an NCAA power conference - dealt a big blow to USF's television and NCAA revenues;
The loosening of NCAA rules on paying athlete cash stipends costs USF about a million dollars a year;
Head Coach Willie Taggart's contract extension costs another million dollars a year;
A football stadium on-campus is as much of a financial risk as it would be a possible revenue-booster.
Wells is right - a lot of newer athletic programs share the same problems. But the difference between the NCAA's "haves" in the Power Five and the "have-nots" in the Group of Five is growing.
Team officials met again with Hillsborough and Tampa officials Friday...and apparently decided selling more tickets to corporations would be a good idea.
The Braves continue to meet with officials & developers in Sarasota County regarding a new spring training home, but conveniently - they got all sides to sign confidentiality agreements to control the dissemination of information, thus we don't know how Sarasota will pay for the stadium. The Blue Jays have a similar confidentiality agreement with the city of Dunedin; the trend isn't very good for taxpayers.
The Rays' Chris Archer didn't hear back from President Obama regarding his Havana dinner offer, so he reached out to First Lady Michelle Obama. All fun and games, right? Except for the fact that Archer's marketing value stands to gain a few million dollars from the international exposure a photo op with the Obamas would bring.
Tomorrow's Rays exhibition in Cuba will likely draw a crowd upwards of 55,000...so just go ahead and make your Rays-to-Havanastadiumjokesnow.
Actually, an exhibition crowd of 55,000 qualifies you for a new MLB franchise now...right Montreal fans???
Pinellas County has a lot of tourism money coming in this time of year...and for some reason, their politicians feel like they must spend the revenue on sports facilities.
But which franchises capitalize on the bed tax bonanza is yet to be decided.
We know that the Braves liked the idea of Toytown in Pinellas County, but they also told the county they basically wanted the whole thing paid for. So that has the team now talking to Palm Beach Co., Sarasota Co...and maybe Yeehaw Junction for all we know.
But if the Braves don't get those Pinellas dollars, the Blue Jays certainly would be interested. Whether it's a new ballpark in Dunedin or moving into Bright House Networks Field with the Phillies, talks are ongoing about the team's future.
But as this blog has detailed since 2010, it makes sense. The Grapefruit League is in legit position to steal a team away from the Cactus League, as the Brewers wouldn't mind "coming home" to their Wisconsin base on Florida's West Coast.
Of course, any county money spent on Spring Training takes away from possible dollars available for the Rays - regardless of what elected officials say - so there's a race among interests to lock up a deal before anyone else gets any ideas of how to spend bed tax money.
"Hurry up and get it approved before anyone has a chance to propose a better use of those tax dollars!" https://t.co/FHrSJMOOCR
And right now, the team closest to a stadium deal...isn't a baseball franchise, but the Tampa Bay Rowdies soccer club. Team owner Bill Edwards hasn't kept many secrets about his vision of an 18,000-seat MLS stadium - with someone else picking up most of the $70M tab - and St. Pete Mayor Rick Kriseman is now talking about putting it on the city's ballot this fall. Even if the MLS dream may be more difficult than Edwards indicates.
