By Jim Bleyer
It was a very good week for Stu Sternberg, billionaire owner of Major League Baseball’s Tampa Bay Rays.
His team won six of seven games vaulting itself into third place in the American League East and into the thick of the wild card chase.
But Sternberg got even better news when the U. S. Supreme Court last Monday cleared the way for states to legalize sports betting. The 6-3 decision struck down a 1992 federal law that had prohibited most states from authorizing sports betting.
The suit was brought by the State of New Jersey and virtually ends Nevada’s sports book monopoly.
Prior to the ruling, Forbes magazine pegged the worth of the Rays franchise at $900 million in April rankings. Despite high-profile Dallas Mavericks owner Mark Cuban crowing that legalization of sports betting will double the value of major league sports franchises, a consensus of analysts pegs the number closer to a still robust 50 percent appreciation.
That would put a $1.35 billion tag on the franchise. Sternberg purchased the Rays in 2004 for $200 million.
The next set of television contracts will tell the story of how to accurately gauge a franchise’s appreciation. There is little doubt stadium attendance and television viewership will mushroom in states where sports books are legal.
Major League Baseball is notorious for its “profit sharing” leaving no doubt that teams located in states without sports betting will also wet their collective beaks. That’s good for Sternberg because Florida is the least positioned of any state except Utah to legalize sports books in the near future.
Sternberg, who like most sports owners loves to feed at the public trough, now has far less reason to do so. And his political stooges, Tampa Mayor Bob Buckhorn and Hillsborough County Commissioner Ken Hagan, abetted by the corporatist-favoring Tampa Bay Times, will have to embellish their fairy tale as to why Sternberg needs taxpayer subsidies to build a stadium in Ybor City—-or anywhere for that matter.
Sternberg’s political cronies and their real estate allies have been perpetrating the fraud that Sternberg cannot finance the stadium himself. The grifters, profiteers, and hustlers who stand to gain hundreds of millions from a new stadium in Ybor City have been trying to cobble together a taxpayer financed package for Sternberg.
That’s a much tougher sell now and the public backlash will grow more fierce than ever. Buckhorn and Hagan have avoided calling for a referendum on the Sternberg subsidy, knowing full well the public would soundly defeat the proposal.
More than a billion in capital appreciation over the years, let alone annual profits, probably won’t be sufficient motivation for Sternberg to pay for the stadium himself as long as he can string along his political puppets. Sports leagues and their owners have never viewed that omnipresent trough as large enough to accommodate their greed.
Professional sports leagues opposed the gambling extension “to protect the integrity” of their sport. Now that it’s legal, the leagues are prepared to fully profit.
For example, states that quickly legalize sports gambling will have an inside track on convincing established major league teams to relocate. This would be accomplished through “integrity fees,” another money grab for professional sports leagues who are used to holding up cities and states for subsidies and other assorted financial enticements.
Las Vegas, always teed up as a MLB destination, now can expect competition from cities like Portland, Charlotte, and San Antonio.
With more potential cities in the mix, the Rays are more salable despite the increased price tag and are more likely to relocate to another state. Sternberg, although perfectly financially capable of building a stadium without public assistance, has a more powerful blackmail arsenal.
Floridians won’t be able to make sports bets in-state for awhile. A proposed constitutional amendment in November needs 60 percent voter approval for any expansion of casino gambling. Sports betting is considered casino gambling.
Complicating the picture is that the Seminole tribe will weigh in for a cut in the action should the longshot amendment meet the required threshold and pass.
Bottom line: Florida is more likely to lose a sports team than gain one because of the sports betting windfall projected in at least 17 other states.
Besides Sternberg, Jeff Vinik had a good week as well. Using the same formula, the Tampa Bay Lightning’s value increased by $195 million. Forbes valued the franchise at $390 million in 2017.
The Lightning performed well on the ice as well. Down two games to none in the battle for a berth in the Stanley Cup finals, the Bolts won three games in the past six days. A win tonight in DC propels the team into the finals.
Even the Glazier family got into the act. Forbes said the Tampa Bay Buccaneers were worth $1.95 billion in 2017 giving them a now estimated value of almost 3 billion.
We can expect Sternberg’s avaricious allies, eyeing a taxpayer-funded bonanza for personal enrichment, to downplay the inflationary effect of the expansion of sports betting on the Rays franchise.
In the world of professional sports, Sternberg is just another billionaire with a beggar’s cup.