OK, I was gonna take a breather until the end of the year, but my friend Derek sends along a very thought provoking e-mail on the D.C. baseball situation (a.k.a. Bud Selig's latest and greatest clusterf***). He lives in metro D.C. and sends along a link to this article.
Here is Derek's e-mail with my responses following "Chicken:"
Russ,
How can you pass up posting on this, it is the intersection of your
three most prominent interests: politics, business and baseball. Here’s
the set-up: the EXPOs are moving (duh) and everyone wanted them
including DC, Northern VA and Southern VA. DC got them, but to do it they
(the mayor) had to give away the farm. The deal was *very* lopsided in
favor of MLB. The (commie pinko leftist) DC city council voted on the
deal, but at the very last minute a council member (Linda Cropp) tacked
on an amendment (that DC only have to pay for ½ of the stadium) that
cause MLB to choke. The amendment was such a deal breaker, that DC was
suspended from engaging in promotional and franchise opportunities. Now,
Cropp got some concessions from MLB and the Mayor and the deal is back
on. There are many nuances of this deal that you’ll have to read
about.
Talking points:
1. The deal was really bad for DC. Rumor is that DC gets none of the
gate money, nor naming rights, nor concession money and has limited
access to their newly built stadium (that they had to pay for). The fact
that other cities wanted the same deal means that it was the going rate
for a team. Question: What is it worth to have an MLB team in your
city? Is it worth it just to host a team?
Chicken: There is a guy I've see on ESPN's Outside the Lines on occasion who has done studies on the economic impact of sports teams. I believe this may be him. Also, here is another link on the topic. If I remember correctly, his research notes that sports teams do not produce the economic windfall that proponents claim. I can't vouch for the research, so I don't know if that's true. Or rather, I don't know the extent to which it is true or not.
My basic thought is that there is some value to being a "major league city." The costs of a baseball stadium has to be higher than any other pro-sport given the frequency of the games, but I don't know that for sure. However, I do believe that businesses do like to move to cities with some pro sports teams. Many businesses do use those sports franchises as a "sales" vehicle whether its free tickets to customers or bringing in major league players for a charity event (NOTE: I use "major league" to mean any of the big professional sports, not just baseball.) And we've seen the importance of luxury boxes as revenue producers for stadiums which leads me to believe that businesses really do invest in professional sports and that does trickle down. There is a reason that Turner Field here in Atlanta has a Delta Box, a Coca Cola Box, a Home Depot box, etc. The big local businesses treat the sports franchise as a focal point of their stature in the community.
Then there is the shared love (or hate) of the local team that creates a civic bond. It drives talk radio, and sales advertisements on talk radio. It sales newspapers too. And provides many a water cooler talk. I don't mean to get all sappy, but it really does bring people together. It creates some sort of a bond between people of all generations, male and female, black and white and so on. Again, I'm not meaning to be sappy, but I really believe there is some tangible civic impact of professional sports teams on a local community. So, while I haven't run the numbers my hunch is that a pro sports team does have a positive business impact and a positive civic impact (except maybe in Detroit).
But, a "positive" impact is a vague expression. I don't know how to quantify the amount of that impact. As I noted above, it's the extent of the impact that I'd defer to those studies on. Is it worth the entire costs of a stadium and forgoing any revenue for the city (i.e. the taxpayers)? That I'm much less certain of. I do think cities have a stake in kicking in some financing, but to essentially give a stadium away seems way overboard. So, I don't really hold it against the D.C. city council for balking at MLB's "deal." Of course, the flip side of that is that if MLB thought they had a "deal", the I can understand their anger at the terms of the deal suddenly (and radically) changing. But, as is befitting Bud Selig's reign as commish, he didn't think things through all the way. How inconvenient for him that democracy reared its ugly little head.
Lastly, you say that "other cities" wanted the team but I'm not sure that's totally correct. To my knowledge, no other city or state has ponied up the stadium deal that D.C. had. And the stadium deal is only part of the picture. The owner also needs to be worthy. And there has to be some guarantee of long term viability and, while Vegas is intriguing, I think the idea that Portland, Oregon or Norfolk, Virginia as viable baseball towns is a huge gamble. It'd make more sense to put a 3rd team in New York before trying one of those towns. D.C. is the only current city without a baseball franchise that meets all the prerequisites for a baseball town (even with it's prior failures).
2. Some people have accused Linda Cropp of grandstanding and trying to
jump start a ’06 mayoral campaign. Keep in mind that 70% of DC
residents are against the deal [yeah, I can’t figure that one out either] and
this was very popular with her constituents. However, the rest of all
3+ million of us in the DC area wanted to drown her in the Potomac.
She literally stood in front of a freight train and demanded more money
(et al) for DC. Question: Was this action a demonstration of the
largest set of balls ever seen in the history of politics or simply
grandstanding for self serving reasons?
Chicken: Last part first. Grandstanding for a future election doesn't take balls. It's a bare minimum requirement for politics. When I think of having a set of 'em, I think of Dubya's entire first term; Reagan, from the 1960s on; Thatcher taking care of the Falklands or telling Bush Sr. not to go "wobbly", Kennedy telling Kruschev where he can stick his missiles as long as they don't go on the island of Cuba, and Truman deciding to hasten the end of the war in the Pacific theater (remember when Democrats were good on foreign policy?), Gore suing in 2000, or even Bill Clinton's abuse of his office in fighting off a perjury charge (to name a few).
As for the Linda Cropp, from what I can tell, she pulled a power play that had the benefit of being politically popular. That tells me she's no dummy. Would it be a long term bad thing for D.C. if it had scuttled the "deal"? Possibly, but I don't fault her for playing politics. Not that "playing politics" is always a good thing, but it is to be expected when we're talking about, you know, politicians.
As for the rest of metro D.C. being pissed at her, be careful where you go with that. Big cities are always trying find ways to extract revenue out non-residents who frequent the city. By saying that metro D.C. has a right to be pissed at the city councils' decision gives credence to the argument that metro areas "owe" the big city they "depend" on. The fact is that D.C. was footing a very expensive bill while not receiving much in return. As a stalwart federalist, I believe the D.C. city council has absolutely no responsibility to metro residents (and vice versa).
While I'm certain D.C.'s city council is probably made up of people I wouldn't agree with on hardly anything, I don't fault them using the mechanism of government to get a better deal. That's democracy for ya.
As for the D.C. residents not wanting to foot the bill, even if that risks losing the team, I'm sure there is a complex set of reasons behind it and it differs from citizen to citizen. I'm sure there is a mixture of class envy/warfare, race (I shouldn't need to mention the race of the city's populace and the general popularity of the sport in question among that race), good ol' fiscal conservatism, and maybe even some desire for responsible government, or just sticking it rich guys cliaming poverty (being anti-corporate welfare isn't necessarily a bad thing, even if its liberals who are leading the charge).
3. Above it says that 70% of DC residents were against a stadium. Now,
this deal involved *no new personal taxes.* The stadium was going to be
financed via tax on concessions and merchandise at the stadium and
higher business taxes. The business community stood up and said “Hmmm...
70,000+ people coming into DC and buying our stuff 60 times a year…gee
let me think…YES! we’re all for it, we’ll foot the bill.” Question is
this an example of why DC should not have representation in congress or
is it valid concerns from people with deteriorating infrastructure?
Chicken: Easiest answer of the day. D.C. doesn't have representation in the Congress because that's the way the founders intended it. It's in the Constitution. 'Nuff said.
4. If you ever wonder why it takes 600 Million to build a 200 Million
dollar stadium, you need only look at this deal: union only labor, no
competitive bids, this councilman gets a new library, this one gets a
rec center, that one gets new computers, etc. etc. etc. Question: Is
this corruption or the proper way for a councilmen to get what matters to
his/her district?
Chicken: When you let the city finance the deal, then don't gripe when they want their rules imposed upon how the money is spent and who benefits. That last sentence BTW, can be applied to any number of issues: health care, education, an on and on. It's the beginning point of how the nanny state can lead to tyranny. But I digress.
Is it the proper way for a councilman to do what matters to his or her district? When democracy runs rampant, so does pork.
5. The Expos sucked, they didn’t draw jack. The Redskins are the most
valuable franchise in all of sports (yes, there is a TEN YEAR waiting
list for Redskins tickets –not season, regular game). Question, how
will the Nationals fare on the field? I’d ask about the balance sheet,
but with this deal, that seems to be a no-brainer.
Chicken: Depends on the owner. They still don't have an owner, which is a joke in and of itself. The handling of the Expos franchise is the single biggest screw-up by MLB under Bud Selig's leadership (and yes I mean that though I'm well of aware of the other screw-ups). If they had sold the franchise within the first year of taking it over, the new owner could have had a shot at signing Vladimir Guerrero, Orlando Cabrera, Javier Vasquez, among others. They still had a decent farm system too. After nearly three years of neglect, the franchise is in miserable shape. It all depends on the owner and depends on his management team (look to Oakland to see what good management can do even for a cash strapped franchise). The team should have a decent amount of revenue off the bat. But, I figure they have a 5 year window to establish some sort of winning tradition. They'll get two or three years to ride the "newness" wave and then another couple of years from the new stadium effect. After that, I have no idea how they'll do. They should do OK. I don't believe, from a revenue standpoint, they'll be naturally any better off than Atlanta, Houston, Cleveland or Philly. Unless the owner has deep pockets and wants to win baseball games more than he wants a stellar business model. Remember, sports franchises are equity investments more than they are meant to be successful businesses from a profit/loss perspective. Don't think the Redskins value is indicative of the Nationals future value/success. At least part of the Redskins value is due to the fact that its stadium was financed privately (thus was an asset) AND the fact that it was the only game in town (with apologies to the Wizards and Capitals). D.C. is an NFL town first and foremost and the Nationals will have a long way to go overcoming that. In fact, the Redskins success (financially that is) could even hurt the Nationals. Remember they both compete for the same entertainment dollar.
6. This stadium is a mile away, right across the Anacostia from me.
Question: Will Derek make it to all of the day games or just most of
them?
Chicken: I don't know but I may need to visit.
Wow, I wrote a lot. Lets see what you can do….
-Derek
Chicken: I think I outdid ya. Literary volume is my strength. Clarity is the bigger challenge. Good stuff. Comment early and often.
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