Economic Development

Skybox Skeptics

Many traveling salesmen have met the fate David Samson encountered in Portland, Oregon, a few months ago. When the Florida businessman ventured to town to...
by | February 28, 2007

Many traveling salesmen have met the fate David Samson encountered in Portland, Oregon, a few months ago. When the Florida businessman ventured to town to hawk his goods, he was greeted with a curt "No, thank you" and a metaphorical slam of the door. Salesmen get used to that. What makes Samson unusual, however, is that his product wasn't a line of clothing or some useless gizmo. It was a product one would expect to generate a good deal of excitement: a major league baseball team.

Samson, president of the Florida Marlins, went to Portland to discuss relocation of the two-time World Series champions. If the goal of his trip was either to pressure Florida legislators to chip in money toward a new stadium or to find a new home that would, he failed spectacularly. Tom Potter, Portland's mayor, not only reasserted his opposition to public financing of a stadium but insisted he spoke for most of his constituents. Asked whether most Portlanders "couldn't care less about a baseball team," he replied, "That's my very strong sense."

Although Potter's bluntness is unusual, his perspective is not unique. Local and state governments are putting up increasing resistance to the idea of paying for new baseball stadiums. The Minnesota Twins have spent a decade trying to win public funds for a new ballpark but have been rebuffed by the legislature every time, most recently last year. The Marlins began seeking new suitors after the Florida legislature refused to contribute state money to build the team a new home. And the District of Columbia's City Council has already demanded, and won, multiple renegotiations of the deal that brought the Washington Nationals to town last year.

Public funding for stadiums has not exactly dried up. Since 2000, the average new major league baseball stadium has been built with 54 percent public funds, compared with 55 percent for new professional football stadiums. But the trend clearly seems to be moving in the other direction. The one ballpark completed in the past two years, in St. Louis, was built almost entirely with private money.

Communities are playing hardball with the national pastime largely as a result of two developments. First, elected officials have begun to accept academic research showing that the economic benefits of subsidizing stadiums doesn't justify the costs. Second, threats by team owners to leave town are losing their potency because it is widely known that there are very few attractive markets for them to move to. Against this backdrop, baseball's supporters may have to turn to a different argument: that the sport is worth subsidizing simply because it is integral to a community's quality of life.

Negative Numbers

Until recently, baseball teams didn't worry much about strategy when they sought public money for stadiums. They talked about economic development, and assumed (correctly) that few would question them. This was especially true when teams sought subsidies from new territory they were hoping to enter. To begin with, owners argued, the construction of a stadium would be a plentiful source of jobs. Then, once it became operational, hundreds of thousands of fans would pour in, patronizing restaurants, bars and retailers in the area before and after games. As a result, a new stadium could serve as the linchpin to the revival of an entire community.

Business groups and other stadium backers still make this argument, but they are facing increasing skepticism. In the past decade, economist after economist has lambasted the idea that governments are making a prudent choice when they invest in stadiums. Their central point has been that most people have relatively fixed entertainment budgets. That means a dollar spent on baseball is a dollar not spent elsewhere in the local economy. Many academics are also skeptical that stadiums can revitalize neighborhoods. When a new stadium goes up in any city, says Villanova University's Rick Eckstein, "you can see for yourself, even if you're a lay person, that there's not much going on there except on game days."

Many elected officials who oppose subsidizing stadiums make ample use of the economic data. John Marty, a Minnesota state senator, argues that the issue should not be whether the subsidy produces some tangible benefit but whether the benefit is equal to the cost. "If I give you $150 million, it's going to stimulate the economy, I guarantee it." Marty says. "But $150 million doesn't come out of thin air."

The shift in sentiment has hit baseball harder than it has hit other sports. Despite pro football's popularity, few teams ever argued seriously that an NFL stadium could spur an economic revitalization. With only eight regular-season home games per year, there simply weren't enough game days to boost area businesses. Major League Baseball, with a home schedule in each stadium of 81 games per year, did make this argument. So baseball had more to lose if the economic reasoning came into question -- and that is what is occurring now.

The result is that longstanding stadium foes -- critics on the right who see public financing as an impetus for higher taxes and critics on the left who view it as welfare for billionaires -- have more influence than they did in the past. The recent spats in Florida, Minnesota and D.C. have shown that political opposition, in conjunction with budgetary pressures, can turn the tide against public financing. "Local governments have enormous needs and those needs are increasing each year and they're becoming more complicated and more expensive," says Ian Yorty, Miami-Dade County's tax collector and negotiator of the Marlins stadium deal that the legislature failed to ratify last year. "If you don't have a direct mandate from the voters, it's hard to find enough money to throw at a sports stadium."

No Place to Go

Baseball owners have one other serious credibility problem, especially when it comes to cities with existing franchises: They frequently talk about moving out of town, but they almost never do. The Montreal Expos, who became the Washington Nationals last year, are the only team to change cities in the past three decades. In the Expos' case, it took years of miserable attendance before the team finally left.

Football teams switch cities far more frequently, and the reason isn't difficult to understand. Filling a stadium eight times a year is a test even small cities can meet if given the chance. Green Bay, Wisconsin, with a population of 101,000, sells out Lambeau Field for every Packers game. It could never support a baseball team, nor would any baseball owner ever consider locating there. That is true of other cities several times the size of Green Bay. In fact, some observers doubt whether any locale that doesn't already have a major league baseball team -- Portland, San Antonio, Las Vegas and Norfolk, Virginia, are mentioned most frequently as possible destinations -- could support a franchise. "Market size is important to baseball in a way that it isn't to any other sport," says Neil deMause, an author who is critical of public financing of stadiums. "The NFL can put teams anywhere they want."

The lack of attractive destinations hasn't stopped owners from threatening relocation, but it has made the threats much less effective in recent years. The Twins have been rumored to be heading out of town for much of John Marty's 20-year tenure in the Minnesota Senate, and at one point Major League Baseball publicly contemplated folding the franchise. "They kept hyping it so much," says Marty. "They were going to contract the team, they were going to move the team, they were going to sell the team, but after three or four times people realize it's bogus."

Supporters of public funding for a new Twins stadium continue to warn that the team might actually leave in the absence of a new ballpark, noting that the Expos, did, in the end, move to Washington. But the widespread perception that Twins threats have been idle has encouraged lawmakers to take a stance against public funding. Last year, the legislature failed to give approval to a plan for a new stadium, even though the public costs would have been borne exclusively by Hennepin County, which approved the funding package. A court ruled last month that the Twins are not bound to stay in their current stadium, the Metrodome, beyond this season, a decision that may put pressure on lawmakers to make a final decision.

In Florida, the threat of a Marlins departure also backfired. After team officials met with Las Vegas representatives to discuss a possible move there, Florida Senate President Tom Lee, rather than seeking additional state money to keep the team in town, accused the Marlins of "blackmail," declaring that "I don't negotiate with terrorists." Later in the year, the team reached a deal with Miami-Dade County officials that was predicated on the legislature kicking in $60 million in state money. Legislators balked at that sum and the measure stalled.

More Like a Museum

If baseball teams can no longer make a persuasive claim that they are engines of economic development, or pressure communities by threatening to leave town, what might they use as a strategy for obtaining public money?

Mike Opat, a commissioner in Hennepin County, Minnesota, thinks he has the answer. Opat, a sponsor of the Twins funding proposal that the legislature rejected, makes an analogy between stadiums and cultural amenities such as museums and theaters: No one argues for a new museum on the grounds that it will create jobs or revitalize a neighborhood. But people enjoy museums, vibrant communities have them, and citizens come to expect them.

Opat acknowledges that, from an economist's perspective, publicly financed stadiums aren't always worth the price, but wishes there was more focus on the qualitative benefits of a new ballpark. "I can't put a dollar value on the number of seniors or young people who follow the team," he says. "There are just a host of intangibles."

The question going forward is whether this "quality of life" argument will be enough to sustain support for public financing -- whether the situations in Florida and Minnesota are aberrations or a sign of more resistance to come. Baseball is only a quality of life issue as long as people care about the games. In this regard, there are some disturbing omens. World Series audience ratings have dropped dramatically over the past two decades, which seems to suggest that Potter's assessment of fan interest is true in many places beyond Portland. But, if baseball has been anything over the course of its history, it has been resilient. That trait may be more necessary than ever in an era in which public financing will not be easily won.

Josh Goodman
Josh Goodman  |  Former Staff Writer

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