Noah Pransky points us (via Twitter) to this must read at Field of Schemes and the quest for a new Rays stadium. Here is the home run swing:

To sum up: If everything broke right, a new Rays stadium might bring in enough money for the team to turn a profit on it, barely. The only way for the Rays to get a windfall, then, would be to have the public pay for it — and even then (since they’d lose their stadium deduction), about a third of the new revenue would get siphoned off by MLB revenue sharing. So taxpayers are effectively being asked to foot the bill for $30 million in annual stadium subsidies, so that the Rays can get maybe $20-30 million more a year in net revenues.

In even simpler words: The Rays wouldn’t make money on the stadium. They’d make money on the subsidy. And that, in a nutshell, is what’s driving the new-stadium game: not obsolete stadiums, but the desire for public cash.

We have no idea how close the numbers in the article are to reality. But if the math is even in the neighborhood, the suggestion is that the Rays would actually turn a profit if they footed the entire bill for the stadium. But it would not be very much. No, if the Rays want to really cash in on a new stadium, they need the subsidy. And if the taxpayers do pay up, a percentage of their money must be kicked up to MLB’s revenue sharing program.

And the rich get richer.

 
 

9 Comments

  1. Gus says:

    The City and County should offer, in 2016 when the main debt is paid off, to give the stadium to the Rays. Then they could decide to see if it was more profitable to play in the old park, renovate or build a new one. They could develop the land around the park as they see fit. They could employ a profit motive to the whole operation. The net savings of $30M a year in the new ballpark costs might have everybody rethink how terrible the place is (it is not). Could also re-do the roof in a way with no catwalks, or whatever else you want to dream up. All of those payments are deductions from revenue-sharing if they ever became a high revenue team.

    The citizens would get out of the long-term committment, get some property tax back on the rolls and hopefully keep the team in the market. They should play in Tampa Bay because they want to play there and it is a good market for them, not because of a lease.

    • Justin says:

      This idea would cripple the city–of St. Petersburg, or Tampa–in terms of cost.

      You’re arguing to build a new stadium with tax dollars… as an experiment?

      No way.

      Look, the Rays have a profit motive already. The thing is, baseball team owners know that citizens are often willing to pay for stadiums. Using this leverage, they are often able to reduce costs by getting others to pay for their facilities. It’s a scam; pay or we’ll leave.

      If the citizens build a stadium, then the Rays should pay the city rent.

      Baseball owners want to shove the risk on to someone else. Imagine investing in a stadium, and not pulling in enough return.

      • Justin says:

        I think I misunderstood–you’re not saying build them a new stadium, you’re saying just give them the land?

        So the city of St. Petersburg gives up the entire Trop property, meanwhile the Rays are playing in Tampa. The city of St. Petersburg gets screwed big time.

        The rest of my above post still applies.

  2. Beth says:

    I don’t get what is so noteworthy about this article. It’s just saying that a new stadium will be more profitable for the team if someone else (e.g. the public) pays for it. This is news? The other part of the analysis just points out the pernicious incentives created by the revenue sharing system, whereby becoming marginally profitable can actually hurt a franchise’s bottom line. But that’s a craziness that transcends the question of a new stadium.

    By the way, I like Gus’ idea!

    • Well said, Beth. That’s exactly what I was thinking.

      I think the main reason this article is garnering attention (I’ll ask my co-worker Mr. Pransky later) is because of the suggestion that Hillsborough and/or Tampa can’t afford to put any taxpayer money into a stadium, therefore the Rays have to stay in St. Petersburg. I think that’s why St. Pete is playing hardball w/ the ABC group and the Rays. They don’t think the Rays can build a stadium in Hills and/or Tampa.

      However, this ownership group is very smart and like to think outside-the-box. They didn’t get rich by doing what everyone else does. I have a funny feeling that they’re going to figure out a way to get to the other side of the bridge and be profitable. I’m not saying they’ll take taxpayer money, but that doesn’t mean they can’t lobby to get that craziness w/ the revenue sharing changed. What’s one more loophole?

    • Cork Gaines says:

      It is somewhat newsworthy for 2 reasons:

      1. Some say the stadium can’t get built without taxpayer money. But this article says any taxpayer money would not go towards the new stadium. Rather most of it just goes straight into the Rays pockets. And the rest goes into MLB’s revenue-sharing fund.

      2. Stu always says the Rays can’t pay for a new stadium because they can’t afford it. But this says the stadium pays for itself. If that is true, the Rays shouldn’t have any problem getting a new stadium financed without help.

      Now, none of this will surprise some people. But I think it goes against the most common perceptions of the stadium issue.

      • Justin says:

        Point 1 is eye-opening.

        As much as I love the Rays, there is no way I can support the public paying for a new stadium. We need to move away from the idea of government/public funding for more things, because it clearly isn’t working.

        Keep in mind, the Ray Jay isn’t even paid off yet.

    • Justin says:

      Socialism sucks, even in baseball.

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