Ralph Nader: Baseball's Stadium Shakedown
/Originally Published in the Washington Post Sunday, July 13, 2003; Page B07
By Ralph Nader
Though it has hit a few bumps in the road recently, Major League
Baseball still expects to shake down the District of Columbia. Many in
the city want a team -- but we don't have to give in to baseball's
demands to get it.
Major League Baseball, made up of 29 individual owners or ownership
groups, owns the Montreal Expos collectively. The league plans to move
the Expos to a more lucrative market, sell the team to new owners for a
considerable profit and stick taxpayers with the tab for a new stadium.
The Washington metro area, by far the largest in the nation without a
team, is preferred by baseball as a place to relocate the Expos. But
Major League Baseball is demanding tribute before it will do what is in
its own interest. No locale can become the Expos' new home, baseball's
titans have decreed, unless the public pays for most of the cost of a
new stadium.
The result: Washington, its Northern Virginia suburbs and Portland,
Ore., are engaged in a race to the bottom that would limit resources
for other pressing public services to subsidize a stadium for wealthy
owners.
Look no farther for the success of baseball's squeeze than the
District: Mayor Anthony Williams offering $200 million, then $275
million, then $300 million, then $339 million in corporate welfare to
big-league baseball.
Fortunately, Jack Evans, chairman of the D.C. Council's finance
committee, where the stadium bill now sits, has jumped in front of the
mayor's runaway gravy train. Evans has gained widespread support
throughout the city by calling baseball's bluff and promising that no
stadium bill will go through his committee until baseball commits to
the District. "Anything short of that, we've got nothing here," Evans
said.
Evans's action is certainly a step in the right direction, but he isn't
challenging the core concept of a stadium subsidy. Even if baseball
commits to come to the city, the stadium bill will still be grossly
inappropriate.
Williams claims that because a stadium would be financed by bonds and
repaid through taxes outside the general fund, it wouldn't take money
from schools, libraries, parks, police, health care, housing, drinking
water, public transit, children's programs and other city-funded
services.
But there is no free money; Williams should leave the Enron accounting
to Arthur Andersen. Floating bonds might defer the day of reckoning,
but if the city chooses to spend hundreds of millions of dollars on a
stadium, that money will eventually come at the expense of the city's
taxpayers, allocated either to reduced city services or increased
taxes. The only other alternative is that the investment will generate
growth that raises overall tax revenue. But a wealth of experience
makes clear that won't occur.
As Smith College economist Andrew Zimbalist wrote this year, "There are
very few fields of economic research that produce unanimous agreement.
Yet every independent economic analysis of the impact of stadiums has
found no predictable positive effect on output or employment. Some
studies have even concluded that there is a possible negative impact."
One such study, by Robert Baade of Lake Forest College, examined 30
cities over 30 years and found that 27 experienced no significant
impact from new stadiums, while three experienced a negative economic
impact.
One segment of society does benefit from stadium subsidies. Team owners
enjoy windfall profits when they turn around and sell. The favored
ownership group for the District is the Washington Baseball Club, a
team of investors reportedly worth $3 billion and headed by Fred Malek.
A veteran of these conversions, Malek formerly owned the Texas Rangers,
with George W. Bush among others. In 1991 Malek's group demanded that
Arlington, Tex., taxpayers provide $135 million for a new stadium. The
group threatened to move the team if the ransom wasn't paid. After the
stadium was built and the Rangers' value had tripled as a result of the
taxpayer subsidies, Malek's group sold the team.
There is an alternative to the baseball shakedown. The District,
Northern Virginia and Portland should all tell baseball that they are
ready to bid based on fan enthusiasm, transportation lines and other
such factors, but not on the size of the public subsidy for a stadium.
They should tell baseball that there will be no subsidy, especially in
this time of extreme financial hardship for city and state governments.
Meanwhile, Major League Baseball should sell the Expos to new local
owners for the amount it paid for the team -- $120 million, not the
$250 million or more it will demand. The savings could be used by the
private owners to build a new stadium or renovate an existing one, such
as RFK, covering part of what baseball is now trying to squeeze from
taxpayers.
Entertainment should be given the first privilege of surviving the tests of a free market.
The writer is a consumer advocate and author. He is the founder of League of Fans, a sports industry watchdog project.