Major League Baseball Caught Stealing

"This is a great day for Washington," Mayor Anthony Williams rejoiced at a press conference on September 28. "After 30 years of waiting and waiting, lots of hard work, and more than a few prayers, there will be baseball in Washington in 2005." Charlie Brotman, once an announcer for the old Washington Senators, crowed: "Happy days are here again!"

Americans ought to be pleased to see a major league baseball team again gracing the nation's capital, 34 years after the faltering Senators left town. Too often between 1901 and 1971, Washington was "first in war, first in peace, and last in the American League."

Before the "great day" can become reality, however, 75 percent of the 29 major league team owners have to approve the move of the moribund Montreal Expos to Washington. D.C.'s City Council has to pass a $440 million financing package and explain who will pay this bill and what material benefits the public will gain from it. The $440 million would renovate the R.F.K. Stadium as home for the former Expos, now renamed Nationals, for the first three seasons, and then build a new ballpark on the Anacostia waterfront.

In his "Message from the Mayor" on October 1, Williams claimed that "the ball park will be 100% financed by the team owners, those who use the ballpark, and by DC's largest businesses ... our residents will not be asked to pay one dime of tax dollars toward the ballpark." The Nationals will be renting the stadium for 30 years at an initial annual rent of $3.5 million, but they will not be paying for its construction. The rent may (or may not) ultimately pay for the stadium but to launch this income-producing venture, the owners and players do not have to risk any capital of their own.

Taxes for the financing of the stadium will be levied on the fans that patronize the Nationals, specifically on ticket purchases, concessions, parking, and all merchandise bought on the grounds. A "ballpark fee" will be imposed on the District's largest corporations but in reality paid by their owners and employees, whether they are Washington residents or not.

The D.C.'s office for economic development predicted that the Washington Nationals will "create 360 jobs earning an annual total of $94 million." That defies credibility, however, because every one of those jobs would pay $261,111. Consultants hired by professional sports have long been touting the theory that building a stadium and attracting a franchise produces economic growth, specifically income and jobs.

Scholarly research, however, has shown that, according to the CATO Institute, "the net impact of professional sports on Washington, D.C., and on 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." By patronizing pro sports offerings, consumers tended to shift their spending away from other products. Lodging, food, and recreational businesses--the alleged beneficiaries from pro sports franchises--gained little or even lost income.

The Major League's profits come as capital gain in the value of the franchise. Forbes magazine reported that in March 2001 the Montreal Expos were worth $92 million, but $145 million in April 2004--a gain of nearly 58 percent in 3 years. It pays to move unproductive franchises.

Few American communities are more in need of money for schools and social services, and can less afford a $440 million financing package for millionaire baseball owners and players, than the District of Columbia. For its political leaders, however, entertainment has a higher priority.

It continues to remain true what I wrote in 1995 when the Coors Brewing Company got a similarly profitable deal for a baseball stadium in Denver, Colorado: "Let nobody doubt that America is the land of opportunity, especially for people who know how to get taxpayers to subsidize their grand ambitions."

Wolf D. Fuhrig	Home	12-05-04
Major League Baseball Caught Stealing
"This is a great day for Washington," Mayor Anthony Williams rejoiced at a press conference on September 28. "After 30 years of waiting and waiting, lots of hard work, and more than a few prayers, there will be baseball in Washington in 2005." Charlie Brotman, once an announcer for the old Washington Senators, crowed: "Happy days are here again!" Americans ought to be pleased to see a major league baseball team again gracing the nation's capital, 34 years after the faltering Senators left town. Too often between 1901 and 1971, Washington was "first in war, first in peace, and last in the American League." Before the "great day" can become reality, however, 75 percent of the 29 major league team owners have to approve the move of the moribund Montreal Expos to Washington. D.C.'s City Council has to pass a $440 million financing package and explain who will pay this bill and what material benefits the public will gain from it. The $440 million would renovate the R.F.K. Stadium as home for the former Expos, now renamed Nationals, for the first three seasons, and then build a new ballpark on the Anacostia waterfront. In his "Message from the Mayor" on October 1, Williams claimed that "the ball park will be 100% financed by the team owners, those who use the ballpark, and by DC's largest businesses ... our residents will not be asked to pay one dime of tax dollars toward the ballpark." The Nationals will be renting the stadium for 30 years at an initial annual rent of $3.5 million, but they will not be paying for its construction. The rent may (or may not) ultimately pay for the stadium but to launch this income-producing venture, the owners and players do not have to risk any capital of their own. Taxes for the financing of the stadium will be levied on the fans that patronize the Nationals, specifically on ticket purchases, concessions, parking, and all merchandise bought on the grounds. A "ballpark fee" will be imposed on the District's largest corporations but in reality paid by their owners and employees, whether they are Washington residents or not. The D.C.'s office for economic development predicted that the Washington Nationals will "create 360 jobs earning an annual total of $94 million." That defies credibility, however, because every one of those jobs would pay $261,111. Consultants hired by professional sports have long been touting the theory that building a stadium and attracting a franchise produces economic growth, specifically income and jobs. Scholarly research, however, has shown that, according to the CATO Institute, "the net impact of professional sports on Washington, D.C., and on 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." By patronizing pro sports offerings, consumers tended to shift their spending away from other products. Lodging, food, and recreational businesses--the alleged beneficiaries from pro sports franchises--gained little or even lost income. The Major League's profits come as capital gain in the value of the franchise. Forbes magazine reported that in March 2001 the Montreal Expos were worth $92 million, but $145 million in April 2004--a gain of nearly 58 percent in 3 years. It pays to move unproductive franchises. Few American communities are more in need of money for schools and social services, and can less afford a $440 million financing package for millionaire baseball owners and players, than the District of Columbia. For its political leaders, however, entertainment has a higher priority. It continues to remain true what I wrote in 1995 when the Coors Brewing Company got a similarly profitable deal for a baseball stadium in Denver, Colorado: "Let nobody doubt that America is the land of opportunity, especially for people who know how to get taxpayers to subsidize their grand ambitions."

Wolf D. Fuhrig

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12-05-04

Major League Baseball Caught Stealing