baseball

Stadium Boondoggles Spread to the Minor Leagues

In Prince William County, Virginia, just south of Washington, the board of supervisors is about to decide whether to issue $35 million in bonds to build a new baseball stadium for the Potomac Nationals, a Class A affiliate of the Washington Nationals. The board just rejected a proposal to let the taxpayers vote on the issue.

Art Silber, the retired banker who put up $300,000 to buy the team in 1990, estimates that it’s now worth $15 to $25 million. But

“Right now, we have the worst ballpark in the league and one that probably ranks in the bottom 10 of organized baseball’s 160,” he said. “At the new ballpark, the visibility will be extraordinary. Naming rights alone will pay for a lot of the stadium.”

He can only imagine what the team will be worth.

Seems like an excellent profit opportunity for a business worth tens of millions of dollars. But he has a better plan: If the county doesn’t pony up, he will sell the team, and new owners will move it.

The county found a consulting firm to produce, as it has done for many governments, an optimistic economic analysis: It suggests that a new stadium would generate 288 jobs, $175 million in economic impact, and $4.9 million in tax revenue over a 30-year lease. Similar studies have proven wildly optimistic in the past. In 2008 the Washington Post reported that Washington Nationals attendance had fallen far short of what a 2005 study predicted. As Dennis Coates and Brad Humphreys wrote in a 2004 Cato study criticizing the proposed Nationals stadium subsidy, “The wonder is that anyone finds such figures credible.”

Academic studies have consistently found few if any economic benefits of subsidies for stadiums, arenas, convention centers, and the like.     

Several Cato studies over the years have looked at the absurd economic claims of stadium advocates. In “Sports Pork: The Costly Relationship between Major League Sports and Government,” Raymond Keating finds:

The lone beneficiaries of sports subsidies are team owners and players. The existence of what economists call the “substitution effect” (in terms of the stadium game, leisure dollars will be spent one way or another whether a stadium exists or not), the dubiousness of the Keynesian multiplier, the offsetting impact of a negative multiplier, the inefficiency of government, and the negatives of higher taxes all argue against government sports subsidies. Indeed, the results of studies on changes in the economy resulting from the presence of stadiums, arenas, and sports teams show no positive economic impact from professional sports – or a possible negative effect.

In Regulation magazine (.pdf), Dennis Coates and Brad Humphreys found that the economic literature on stadium subsidies comes to consistent conclusions:

The evidence suggests that attracting a professional sports franchise to a city and building that franchise a new stadium or arena will have no effect on the growth rate of real per capita income and may reduce the level of real per capita income in that city.

And in “Caught Stealing: Debunking the Economic Case for D.C. Baseball,” Coates and Humphreys looked specifically at the economics of the new baseball stadium in Washington, D.C., and found similar results:

Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.

A Great Year for Cato at the Supreme Court

The Supreme Court’s term is over, with 75 cases having been argued and decided. It’s safe to say that the most significant ones were those decided this week, on the politically fraught subjects of affirmative action, the Voting Rights Act and gay marriage. I’m extremely proud that Cato was on the winning side of each of these issues. In fact, we were the only organization to file briefs supporting the challengers on each one (Fisher v. UT-AustinShelby County v. Holder, Windsor v. United States Perry v.

Play Ball! But Not With Taxpayer Money

As we enjoy the opening week of the new baseball season, we should reflect on the dastardly organization that spends too much money and raises the price of baseball for everyone.

No, it’s not the New York Yankees: it’s the United States government.

The Mudville Revolt

The Wall Street Journal reports, “From New York to Florida to Arizona, some taxpayers are opposing agreements to fund baseball projects after a decadeslong boom in publicly financed ballparks. The fights are complicating plans for stadiums, pitting residents against one another and driving some local governments to turn to U.S. stimulus programs.”

Opening Day at Judiciary Park: Sotomayor On Deck

The first day of the Sotomayor hearings yielded many baseball references but little in the way of home runs and strikeouts—or surprises. Democrats lauded Sotomayor’s rags-to-riches story and career achievements. Republicans questioned the “wise Latina’s” commitment to objectivity, whether she would be a “judicial activist” and—most interesting to me—whether she planned to use foreign law in helping her to interpret the Constitution. These would clearly be the lines of attack and counterattack.

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