By Scott Myers, Contributor
What if your brother-in-law offered you this investment opportunity? Participation in a deal that costs $51 million per year and returns $20 million per year. Would you say yes? Would you jump at the chance to be part of an investment group that will lose $31 million per year?
Well that is pretty much what is going to play out, if the new Rays stadium gets built in Ybor City for $892 million (not including cost of land). To finance that amount of money over 30 years at 4% interest will cost $51 million per year.
What is particularly depressing is that our elected leaders and local officials continue to be eager to put public money towards this high-risk investment. If it were their own money, they would have ‘left the building’ long ago.
Recall that the math did not work when we were under the expectation that the new stadium would cost just a paltry $600 million. Now that the cost is up to $900 million, it is totally ludicrous.
If the Rays, MLB, and local 1-percenters want to invest their money in this endeavor, that is certainly their call. The Rays are a private enterprise and can do whatever they want with their money and any other private money that they may round up. However, it is totally obscene to put even one public dollar towards this project.
Maybe, it makes sense for the Rays to build a new stadium at this high cost. MLB would be well served to continue to have a franchise in the 13th largest TV market in the USA and pay for whatever portion of cost that the Rays will not.
When you divide the debt load over 29 other teams, it quickly becomes chump change. And, if indeed, attendance jumps up and maintains, the $20 million per year in increased Rays revenue should reduce the amount of revenue sharing that the Rays are receiving now from many of the other teams.
There is no doubt that MLB can shake a few pennies loose. MLB is on pace to pay $720 million for players on the ‘disabled list’ for the 2018 season, which translates to a 24% ‘absentee’ rate. Dozens of stupid, long–term, expensive player contracts have much to do with this high ‘absentee’ rate.
These stupid contracts also include many wasted dollars being paid to players after they are no longer on MLB rosters because of career ending injuries or simply because of no longer being of MLB caliber. Even so, MLB is chugging along with rapidly growing revenues, paying a declining percent of total revenues to players, and experiencing ballooning team valuations.
Another data point that shows the incredible wealth of MLB is its player pension plan benefits. A 10-year veteran can draw $210,000 per year starting at age 62, or if he is very impatient, can draw $66,000 per year as early as age 45. See graphic below.
What a tragedy that 65% of the cost of stadia over the last 27 years has been paid by taxpayers! Tampa can do the whole nation a huge favor by stopping this nonsense.
Of course, you will hear the Rays and local leaders/officials expound on the great economic impact that an MLB team has on the region. That is mostly horse feathers. Consider that when you spend $100 at a Rays game, you are not spending that money at your neighborhood Macaroni Grill. or anywhere else locally.
And that $100 spent at a Rays game goes almost entirely to the Rays with most of it leaving Tampa Bay never to be seen again. You will hear that fans of the visiting team travel here to attend games. Keep in mind that Tampa Bay folks travel to attend road games as well. During yesterday’s televised broadcast of the game in Minneapolis, there were sightings of Rays fans sitting in the stands.
You will hear stadium proponents say that using tourist tax money is fine, since most of it is paid by visitors to the area, not local taxpayers. Horse feathers once again! Regrettably, by law, tourist money has to be used for touristy things and/or enriching professional sports franchise owners. That money should be used to improve the lives of the taxpaying citizens that live here, not to enrich billionaires and/or to create more low paying hospitality sector jobs.
Most importantly, Hillsborough County can no longer afford to divert any more public money to private enterprises. We all know that education, transportation, infrastructure, etc. are being woefully neglected.
It is a disgrace that many hours of effort will be expended by publicly paid ‘leaders and officials’ to continue to try to allocate public money towards the new stadium effort. What a colossal waste of tax payer money!