FRESNO - In a number of columns in these pages the editors have presented facts and figures about the true cost of stadium building in communities like Fresno where public financing has been involved in private for-profit ventures.
Recently, Reason Magazine's Rick Henderson looked at these public boondoggles.
Henderson writes that in October 1995, one of his childhood dreams came true when he attended his first postseason baseball game. That was game five of theAmerican League Championship Series pitting the Seattle Mariners against the Indians (game five of the World Series).
That series was played in the one-year-old Jacobs Field, one of baseball's new showplaces, along with the Ballpark in Arlington (Texas), Coors Field in Denver, Turner Field in Atlanta and the stadium that started the 1990s run of "new traditionalist" ballparks, Baltimore's Oriole Park at Camden Yards.
These new retro stadiums mix features of the turn-of-the-century parks (asymmetrical field designs, exposed structures, seating close to the field) with high-tech luxury boxes, ubiquitous TV monitors, concession areas with full-service restaurants that overlook the action, expansive pedestrian walkways circling the field, and abundant, clean restrooms.
These new structures had heavy price tags. For Jacobs Field the final cost more than $176 million. Indeed, Cleveland's Gateway complex--the downtown area which houses Jacobs Field, may eventually cost $1 billion, much of the money coming from taxpayers.
Henderson was not aware that taxpayers footed the bill for the stadiums he was sitting in at the time. He writes '...Had I known the magnitude of the subsidies at the time, I still would have enjoyed the games (especially since the Braves won the Series). But that knowledge might have tempered my euphoria just a tad.'
But, that story has already been told by the dean of the School of Public and Environmental Affairs at Indiana University at Indianapolis, Mark S. Rosentraub, in his documentary Major League Losers [New York: Basic Books, 513 pages, 1995, $27.50]
Rosentraub's analysis reveals the closely guarded business and environmental fact that every taxpayer should know. Namely, that municipal stadium building constitutes an extravagant new form of corporate welfare in the United States.
The cost of obtaining professional sports franchises (or keeping them in place) is skyrocketing. Before the Ballpark in Arlington was constructed, for instance, the estimated value of the Rangers franchise was $101 million, the 16th most valuable Major League Baseball team.
Here's the clincher. After the new stadium opened in 1994 [even though the Rangers had never played a postseason game] the team's value had jumped to $157 million, increasing it's owner's equity by nearly $57 million at taxpayer's expense.
In spite of this fact, or because of it, 'At least five communities now provide or have proposed providing at least $250 million in subsidies for professional sports: Baltimore (and Maryland), Cincinnati, Cleveland, St. Louis (city and county partnership with the state of Missouri), and Nashville..." Rosentraub writes.
As Fresno observers have noticed, franchise owners and their political allies often justify subsidies by crying poverty and by claiming that their teams have a major impact on the local economy and deserve tax money for that reason alone.
This typical 'poor-mouthing by team owners is a favorite spin used to delude local government leaders and tax payers. In fact, teams are doing quite well without sweetheart deals owners can pressure local mayors and council members officials to give them to get and to keep a team.
Rosentraub points out, for instance, the Dallas Cowboys earned more than $75 million from ticket sales and luxury-seating revenue at Texas Stadium alone. The New York Yankees get more than $50 million a year from broadcast, cable, and other media sources. And in the 1994 season, the Indianapolis Colts reported the lowest media income of any NFL franchise--$37.2 million. At press time, Los Angeles Dodgers owner Peter O'Malley is negotiating the sale of his team to media mogul Rupert Murdoch, who may pay as much as $400 million for the Dodgers and Dodger Stadium. 'It's little wonder...' Rosentraub writes, '... the potential owners of professional expansion teams must fork over upwards of $100 million in franchise fees to put an untested product on the field. Hardly the sign of a dying industry.'
Rosentraub debunks the popularized myth of sports franchises and local economies. Rosentraub uses U.S. Department of Commerce statistics to show that even in counties with the largest concentrations of jobs directly related to professional sports, the teams typically employ less than three-tenths of 1 percent of the local work force.
It is well for Fresno City Hall to remember in communities like Fresno minor league sports teams only pay, at best, less than one-tenth of 1 percent of total private-sector payrolls. Sports teams are small businesses.
As is often forgotten when minor league team owners are shouting 'Look at me! Hear me roar!' the real sports dollar is only a finite and narrow sector of the entertainment revenue competing against many others
For this reason Rosentraub warns those who will listen 'A large proportion of the spending on sports, or that which results from sports is merely a transfer of activity from one area [of town] to another.
Sports are not only small business, but that business was someone else's livelihood before the team or stadium existed...' driven out of business because the municipality decided to give a competitor a large handout of the new corporate welfare that has become so popular in downtown Fresno.
