Grade F: The Math Simply Fails for a Stadium Relocation

 

Rendering of taxpayer-funded Sternberg playpen.

By Scott Myers, Contributor and Jim Bleyer

What we’ve known for months has become official: Tampa Bay Rays owner and public trough addict Stu Sternberg has blessed an Ybor City site as the location of a new stadium.

Cost estimates are around $700 million but should never be trusted. These corporate subsidies are subject to massive cost overruns after the public has been suckered.

Main drivers of the stadium are Hillsborough County Commissioner Ken Hagan who has enriched his developer friends during his 16-year tenure in office, and the Tampa Bay Times that has at least two “investors,” Jeff Vinik and Darryl Shaw, who will make a real estate windfall into the hundreds of millions.

Hagan and Paul Tash, Times publisher, are wielding sharp shears. Hillsborough citizens should prepare to get fleeced.

Tampa Mayor Bob Buckhorn was all in for the project but his fandom has cooled after being marginalized by Hagan during the negotiations. Buckhorn brandishes only small embroidery scissors on the local sheep.

Let’s assume the new stadium yields an increase of 10,000 fans per game, which two years ago is what Tampa Bay Rays president Brian Auld said was needed for the Rays to be viable.

Auld also said that would translate into about $20 million per year in additional revenue.  The Rays opening day payroll for the 2017 MLB season was $70 million, and MLB average team payroll is $138 million. So the Rays are $68 million below the MLB average.

Adding $20 million revenue is not going to make the Rays more competitive, especially when you consider that it will cost $34 million per year (30 years/4%) to build the $600 million stadium.

Is there a credible, independent study that will prove the Ybor City location will draw an average of 10,000 more fans than Tropicana Field in St. Pete?  There isn’t and anyone that believes the difference will be more than 3,000, if any, is naive and uninformed.

The only way the Rays can get near an average team payroll is for MLB to be much more aggressive in revenue sharing. So the premise that a new stadium will make the Rays more competitive is fallacious. And for the Rays to average 25,000 year after year is not within the realm of reality.

Besides, Sternberg has shown a penchant for stinginess so there’s no guarantee that increased revenue will translate to a competitive payroll.  What the new stadium is guaranteed to accomplish is boosting the value of Sternberg’s franchise when he cashes out in five years.

An on-going national tragedy is that taxpayers continue to pay for sports venues for billionaire sports franchise owners (MLB, NFL, NBA, NHL, and now MLS).  This is a transfer of wealth from the taxpayers to the super-rich at about a $2 billion per year rate.  This travesty needs to be investigated and discussed by a major news show and there is no show better to do that than ’60 Minutes’.

—-MLB is becoming increasingly more profitable as revenues grow rapidly.

—-MLB franchises are becoming increasingly more valuable.

—-MLB is paying a declining percentage of its growing total revenues to the players. even though it provides many long-term player contracts that are just plain stupid.  In 2017 there were 103 players with $50 million or greater long-term contracts, 47 of which are over $100 million.  Six of these players did not play a single game during the 2017 season.

Giving even a dime of taxpayer money to MLB to build or renovate stadiums is akin to providing publicly funded scholarships for the children of Bill Gates and Warren Buffett.

Important links:

5/24/2017
https://www.linkedin.com/pulse/case-more-public-money-major-league-baseball-scott-myers

5/27/2017
https://www.linkedin.com/pulse/price-delusion-mlb-continues-grow-scott-myers/?published=t

6/1/2017
https://www.linkedin.com/pulse/11-7-mlb-starting-pitcher-worth-155-million-over-65-years-scott-myers?published=t

11/8/2017
https://www.linkedin.com/pulse/mlb-mediocrity-fragility-quite-expensive-scott-myers/

 

 

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