Home Business Governance The Real March Madness

The Real March Madness


For those who aren’t keeping score at home, the month of March is featuring something called March Madness and it has absolutely nothing to do with a college basketball tournament. That tournament is nothing more than fluff entertainment and a chance to bet on college students playing a game—something which officially should not happen, according to the solons who hold office in Washington.

The madness is how local politicians in Atlanta and in Sacramento are planning to give sports owners probably a billion dollars of taxpayers’ money to fund the building of what basically can be described as plants for their sports business. It is not just limited to Atlanta and Sacramento, though.

In Florida, a number of politicians are supporting a referendum that will determine whether the National Football League’s (NFL) Miami Dolphins’ owner, the well-heeled real estate mogul Stephen Ross, should get a quarter of a billion dollars to renovate his football stadium to bring it up to a more modern standard.

Ross claimed the team has never asked for money for stadium upgrades. But Ross has a $60 million tax rebate from the state that all Florida big league sports teams get, a $2-million-a-year gift that lasts 30 years. Ross’s lobbyists are always pushing for another state bill which would kickback $3 million a year for a 30-year period to his team but all of the other Florida major league sports teams.

Jet Blue Park in Ft. Myers, Fla.

While Ross is pitching both state legislators and local voters, Major League Baseball (MLB) is making noise that some of the Florida spring training homes just aren’t good enough anymore, even though, those bases are less than two decades old, such as Houston’s Kissimmee stadium, Toronto’s Dunedin facility, Detroit’s Lakeland complex and Washington’s Viera complex.

There is some thought that the Nationals’ ownership might want to move to a stadium abandoned by the Boston Red Sox in Fort Myers because the Red Sox’s ownership wanted a new Fort Myers stadium to replace City of Palms Park. Fort Myers politicians thought this was a good idea and invested $80 million into a new Red Sox spring training base. On top of that, there was a $42.5 million upgrade at the Minnesota Twins’ Fort Myers facility.

After plunking down $122.5 million for two spring training complexes, Fort Myers may not have enough money in the till for a third MLB, publicly funded, spring training facility. The Atlanta Braves organization currently trains by Walt Disney World in Kissimmee, but its lease expires in 2017.

A Florida Republican state senator, in a state where Republican-led cutbacks in taxpayers’ social services is the norm, has decided that state monies should be used to help local municipalities placate baseball owners in Houston, Toronto, Detroit, Washington and in New York and St. Louis (those teams can leave facilities in St. Lucie and Jupiter, respectively, if the South Florida’s east coast doesn’t have enough teams). State Sen. Jack Latvala wants the state to spend or give local municipalities a share of state monies coming out of a $5 million pot to either build new facilities or renovate existing ballparks to keep the teams in place or entice them to move.

Latvala, because of the accusations that the state monies would equal corporate welfare, says he thinks the money would be an investment. There probably is some economic value to having spring training in Florida but it is overestimated. People go to Florida for the same reason teams train in Florida–to get away from the cold weather in the north. They are there anyway. Spring training does create some part time jobs and some people who are baseball fanatics do go to see their favorite teams train.

It is also possible for teams to pull in 92 percent of the revenue generated in the stadium and give only eight cents on every dollar spent in the facility back to the local municipality to pay down the debt on the building/complex. That is permissible under the changes in the federal tax code in 1986.

Sen. Latvala had some facts wrong in pushing for his sports owner welfare plan. The Clearwater Republican claimed that all 30 Major League Baseball teams trained in Florida in 1998. That was untrue. Major League teams have been in Arizona preparing for the season for more than six decades. Only 20 of the 30 franchises had a Florida presence in 1998.

Where would the teams go? Arizona which picked up five teams since 1998. But Arizona has found out the hard way that hosting spring training is not all that it seems to be. Spring training is a big money loser for taxpayers who have put up money for facilities, according to an Arizona Republic newspaper investigation. It found:

  • Mesa has lost an average of $1.47 million annually over the past five years hosting the Chicago Cubs at Hohokam Stadium and Fitch Park.
  • Phoenix lost an average of $1.7 million over five years hosting the Oakland Athletics at Phoenix Municipal Stadium and an additional $1.8 million annually at Maryvale Baseball Park, the spring home of the Milwaukee Brewers.
  • Peoria lost an average of $1.63 million annually over the past five years hosting the San Diego Padres and the Seattle Mariners.
  • In four years of operation at Camelback Ranch, Glendale has lost an average of $18,882 annually. The Chicago White Sox and Los Angeles Dodgers are responsible for most day-to-day operations there. In 2012, the city’s revenue agreement with Phoenix kicked in, and Glendale made $57,804.

The 92/8 percent take may be a major factor in the financial bleeding. Major League owners have a commodity with a perceived perception of interest. Politicians see the perception and think having a team in the community is worth the cost at any price.
Arizona Sports and Tourism Authority, a mechanism set up by local politicans to hand out spring training ballpark money, has experienced financial problems despite getting baseball teams to Arizona.

Meanwhile in Glendale, where the local government has been sinking cash into the National Hockey League’s Phoenix Coyotes, the city council has decided it might be a good idea to give the Bidwill family about a half million dollars to relocate the NFL’s Cardinals pre-season facility from Flagstaff to Glendale.

Flagstaff will lose, according to a report, about $10 million annually in economic impact with the move to Glendale, where the Cardinals’ home field is located. The Glendale politicians think having the Cardinals in town will generate $15 million. Generally, those estimates are thoroughly overblown. It doesn’t appear that the transfer of money from northern Arizona to Glendale really is going to have much impact on the state’s coffers.

Austerity may be the Republicans mantra on a national level but throwing money at Spring Training businesses, which pay employees an average of $3 million annually, seems to be the norm.

However, it is not just limited to Republican policy makers. A Democrat in Sacramento has been trying to throw hundreds of millions of dollars at the owners of the Sacramento Kings National Basketball Association (NBA) team since he assumed office in 2009.

Mayor Kevin Johnson, a former NBA player who is married to a “champion” of education reform, Michelle Rhee, wants to keep his city in professional basketball. His latest gambit is to put up a quarter of a billion dollars to build an arena with maybe as much as $200 million from investors who hope to buy the team from the present owners, the Maloof brothers.

A couple of problems exist here. One, the Maloofs have a deal to sell the team to Seattle interests. Secondly, the arena funding will seemingly come out of parking revenues–that money goes to a fund to pay municipal workers. This kind of thinking has created problems in places like Hamilton County, Ohio, where the Cincinnati Reds and Bengals stadiums are causing financial headaches, Indianapolis and Chester, Pa.

Despite evidence that stadiums and arenas are not financial engines that grow economies, Sacramento City Manager John Shirey came up with an explanation that has been discredited over the years.

“This is a monumental project that will redefine the Downtown Plaza and revitalize our urban core,” he said. “This project is about providing a regional attraction and creating economic development opportunities that will retain and create thousands of jobs, bring people downtown, increase property and sales tax–all of which will contribute to our city’s vitality.”

Shirey ought to ask Cleveland officials how well the city’s redevelopment went with a new baseball park, a new football stadium, a new arena and the Rock and Roll Hall of Fame. Cleveland is still looking for the magical elixir to fix economic woes.

Finally, there is Atlanta, where local politicians seemingly gave a blank check to Falcons owner Arthur Blank to build a new facility partially funded by local tax dollars. That money could end up being more than a half billion dollars for a new stadium to replace a stadium that is barely two decades old.

March Madness is here. Look for it to extend into April, May, June, July, August, September, October, November, December, January and February, as long as there are gullible politicians. As long as they believe sports is an economic engine, there will be a line of owners with their hands out looking for public dollars.

Evan Weiner, the winner of the United States Sports Academy’s 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and sports columnist. His latest e-book, “America’s Passion: How a Coal Miner’s Game Became the NFL in the 20th Century” is available at www.smashwords.com, iTunes, nook, kobo, Sony reader and Diesel. Weiner can be reached at evanjweiner@gmail.com.



Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.