Baseball truth: You build it, they'll leave
On the same day the Florida Marlins paraded through Miami to celebrate their second World Series championship in six years, politicians from Miami-Dade County swallowed the young baseball team's corporate welfare bait.
County Mayor Alex Penelas and Manager George Burgess announced they were offering a whopping $73 million in bed tax revenue, plus a parcel of free land, to help build a new $325 million baseball-only retractable-roof stadium that the lucrative franchise desperately wants. (The Marlins' owners are unwilling to shell out more than $137 million for the venue.)
Baseball Commissioner Bud Selig– who as owner of the wretched Milwaukee Brewers wheedled more than $600 million from Wisconsin taxpayers to build the two-year-old Miller Park– immediately issued a statement that he was "extremely pleased and excited that the Florida Marlins have been able to transform their success, both on and off the field, to... significant movement toward the possibility of building a new ballpark in South Florida."
Selig has ample reason to be extremely pleased. He has made an art form out of fleecing taxpayers for billions of dollars. Like any successful con, the commish has learned the power of looking straight into the cameras and repeating, over and over again, the same easily disproved lie: that the baseball industry is suffering terribly and needs public handouts just to stay afloat.
Every year, Forbes publishes new estimates of baseball revenue that make a mockery out of Selig's claims of poverty. The magazine's valuations, on average, are $50 million higher than what the teams themselves report. The teams increased in value, on average, by 171 percent from 1992 to 2002, according to calculations by Forbes' Michael Ozanian.
In fact, the industry's sustained boom is due in no small part to municipalities' foolish willingness to pay for the construction of fancy new stadiums, dish out various tax breaks, and generally act like landlords terrified that their lone tenant might find a better deal across the street.
"Public subsidies pad the bottom lines of team owners and boost player salaries while offering no real economic benefit to the cities involved," the economist Raymond Keating wrote in a widely cited 1999 Cato Institute report on the "costly relationship" between major league sports and government. "They provide another example of government action whereby the few and the influential benefit at the cost of the many."
The Marlins in particular have perfected the gold-throated beg. The team's original owner, Blockbuster Video magnate Wayne Huizenga, convinced Miami-Dade to pay for nearly $30 million in road and utility upgrades around Pro Player Stadium before he brought baseball to South Florida. He also wangled an annual $2 million sales tax rebate for the next 30 years, which remains in effect for other business interests even though he's long since sold the team. Yet this wasn't enough– he wanted a new publicly funded stadium, even though Pro Player, which also houses the Miami Dolphins, was built as recently as 1987 (with the help of $85 million in city-backed tax-exempt bonds).
Like Selig, Huizenga pleaded poverty: He blatantly lied about his finances, and when the locals failed to reward his 1997 World Championship with the ballpark of his dreams, he engaged in what baseball economist Andrew Zimbalist has called "the most radical fire sale of players in baseball history," leading to a disastrous 54-108 record. He then sold the Marlins for a $65 million profit after just five years, in a deal that gave him incredibly favorable terms: 100 percent ownership of Pro Player, a hefty annual rent, and huge chunks of parking and concession receipts.
Huizenga's emotional blackmail of sports-mad taxpayers has hardly been limited to baseball. In 1996 he convinced Broward County to cough up $185 million to build the National Car Rental Center for the Florida Panthers, his National Hockey League team. The county and the team were supposed to divvy up arena profits 20/80, but after the first five years the Panthers had pocketed $53.7 million and Broward just $331,206, according to columnist Michael Mayo of the South Florida Sun-Sentinel.
Worse, the arena's most recent audit, by Deloitte & Touche, warned that "certain factors exist that may indicate that [the Panthers] will be unable to continue as a going concern for a reasonable period of time." Broward could soon find itself owning, and servicing the debt on, an empty hockey arena.
This is just a tiny part of the overall sports pork racket. As Keating estimated, "During the 20th century, more than $20 billion has been spent on major league ballparks, stadiums, and arenas. This includes a minimum of $14.7 billion in government subsidies that has gone to the four major league sports... including more than $5.2 billion just since 1989."
Further, "These numbers... exclude the billions of dollars in subsidies provided through the use of tax-free municipal bonds, interest paid on debt, lost property and other tax revenues not paid on facilities, taxpayer dollars placed at risk of being lost if the venture failed, direct government grants to teams, and the billions of dollars spent by taxpayers on minor league facilities."
The money quote from baseball's most nauseating bit of self-mythology, the 1989 Kevin Costner vehicle Field of Dreams, was, "If you build it, they will come." Like much of the national pastime's lore, the truth is actually much closer to the opposite: Build a stadium with tax money, and they will eventually leave.
The most recent example of this phenomenon was the October sale of the Triple-A Edmonton Trappers franchise to a Texas group headed by Hall of Fame pitcher Nolan Ryan. The team moved even though Canadian taxpayers paid for half the construction costs of the Trappers' Telus Field in 1995– and even though Edmonton held a 15-year lease.
Keating made the obvious but infrequently stated point in a March 2000 article for USA Today magazine: "Another major downside to government-built and -owned ballparks is that clubs are transformed from owners to renters. It is always easier for a renter to move to get a better deal. So, government officials who advocate taxpayer-funded sports facilities to attract or keep a team virtually ensure that teams will continue issuing threats and moving."
Here's a different approach: Tax-funded entities should immediately begin selling off all their sports venues. Why on earth should two-thirds of Major League Baseball parks be fully or partly owned by governments? San Francisco's glorious Pac Bell Park was the first privately financed stadium to be built since 1962; not coincidentally, it generates the most revenue in baseball. Private owners are far more likely to upgrade facilities, seek creative revenue-generating schemes, and stay put in their host cities.
A fire sale of stadiums and arenas would bring some much-needed revenue for cash-strapped cities and counties, even in the long term (in the form of future sales and property taxes, which frequently go uncollected on municipally owned properties). The city of Los Angeles, for example, projects a $180 million deficit in the next fiscal year, yet it continues to co-own and operate the nearly vacant Memorial Coliseum and Sports Arena while failing to fill the two-foot potholes in the street in front of my house.
Once cities get in the habit of disconnecting taxpayer monies from professional sports franchises, future subsidies will be all that much harder to justify, and the Bud Seligs of the world will have to go back to making money the old-fashioned way: by earning it.
Matt Welch lived in Central Europe from 1990 to 1997, co-founding Prognosis, Czechoslovakia's first post-Communist English-language newspaper, in 1991. He is an associate editor at Reason Magazine, where this essay was first published.