Manfred, Sternberg Need to Think Outside Batter’s Box

 

 

Stu Sternberg

Rob Manfred

 

 

 

 

 

 

 

 

By Scott Myers, Contributor

The recent proposal by Stu Sternberg, with the approval of MLB, to pursue having the Tampa Bay Rays, beginning in 2024, play 35 home games per season in Tampa Bay and 46 in Montreal is fraught with challenges.

Assuming all the politicians, lawyers, planets, and stars align to allow this idea to go forward, what comes next is total uncertainty.  Two stadiums would have to be built with unknown costs and outcomes as to what future attendance in the new parks will actually be.

An apparently abandoned recent proposal to build a stadium in the Ybor City neighborhood of Tampa had a price tag of about $900 million, which works out to a cost of about $50 million per year for 30 years at 4% financing.  Increased revenues were estimated to be a MAXIMUM of $20 million (somewhat less would flow through to become profit), assuming average attendance would increase by 10,000 per game.  So that proposal would yield losses of over $30 million per year.

No wonder Stu Sternberg was looking for the taxpayer to pick up the lion’s share of the cost.

If building one stadium is a financial disaster, building two is an even dumber idea, even considering that a Montreal rich guy is going to pay for the new stadium in Montreal.

The sad fact is that not only is Tampa Bay next to last in average attendance per game (Miami Marlins are at the bottom), in 2018 they were dead last in average gate receipts per fan at $22.51. Compare that to the Yankees ($81.54) and the Red Sox ($76.32).  And, both of those teams draw almost triple the fans to their home games as compared to the Rays.

BTW, lousy attendance is not just a Tampa Bay Rays problem – it is an MLB problem.  Total attendance has declined over 12% from 2007 to 2018 (from 79 million down to 69 million) and 2019 is not on track to reverse this trend.

The revenue disparity between the Rays and the Red Sox/Yankees is extreme.  Yankees gate receipts for 2018 were 11 times higher than that of the Rays, and the Red Sox were 8.5 times higher.  A new stadium (or stadiums) is not going to make a dent in this huge gap.  So what to do?

How about a proposal that requires no new stadiums, allows the Rays to play 61 to 63 home games in Tampa Bay (instead of just 35), can be implemented next season (2020) and would generate over $50 million in increased gate receipts for the Rays?

You have to believe such a plan would be welcomed by Sternberg and MLB Commissioner Rob Manfred.

The proposal is simply to play the Rays home games against the Yankees and Red Sox in Yankee Stadium and Fenway Park, respectively.  If this plan had been in effect for the 2018 season, the Rays would have realized $31 million in additional gate receipts from the Yankee games and $22 million from the Red Sox games for a total of $53 million.  Considering that the Rays total gate receipts last year were $26 million, that would have meant a tripling of gate receipts, from $26 million to $79 million!  That would have moved the Rays from dead last in gate receipts to 14th of the 30 teams.

And it is a win for MLB and all three teams involved for the following reasons:

The MLB revenue pool grows by $53 million without investing a dime of capital investment.
The Rays will gain a significant portion of the $53 million to invest in making their team better.
The Yankees and Red Sox will have two less road trips per year to pay for and home field advantage for an additional 9 or 10 games per season.
The Yankees and Red Sox will do less revenue sharing back to the Rays because of the Rays increased gate receipts.

Rays’ fans and baseball purists will argue that a team can’t play their home games in the other team’s stadium.  But the obvious fact is that the Rays are barely on life support, if you believe Sternberg, so drastic action is called for.  This proposal is non-intrusive and non-disruptive and I have never known the MLB owners or the MLB commissioner to be against growing the revenue pie.

So come on Rob and Stu – get it done!

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