`Public Investment Insuring Private Profits' A Conversation about Baseball with Bob Costas
Bishop, Ed, St. Louis Journalism Review
Major League Baseball--the national pastime and St. Louis' secular religion--is in trouble. A combination of sky-high free-agency salaries for ballplayers and vastly unequal incomes for owners is threatening to tear the business of baseball apart.
In fact, the very concept of one city's team competing against another city's team in the hope of eventually ending up in the World Series is all but myth under current conditions. Clubs in smaller markets can't afford the salaries of established superstars. In the last few years, only the teams on the list of top 10 revenues have played in the World Series.
One of the stopgap solutions proposed by owners across the country is the building of new, publicly financed stadiums. The owners argue that the public must put up millions of dollars if they want a competitive team. In other words, the owners want public investment to insure their private profits. Here's why.
Baseball franchises have three basic revenue streams: ticket sales, the sale of broadcast rights and miscellaneous income from such things as parking, concessions and the sale of T-shirts and caps. The big variable here is the sale of broadcast rights. In huge markets, like New York City, the revenue from broadcast rights is huge. In small markets, like Kansas City, the revenue from broadcast rights is small. So far, the big-market franchises have refused to share broadcast revenues with the small-market franchises. So owners in small and medium-sized markets have asked local governments to pay for new stadiums with luxury boxes that increase revenue from ticket sales dramatically. The owners say that without this new income they can't compete in the free-agency market.
Eight or nine of these new, publicly financed stadiums have been built. And, now, the owners of the St. Louis Cardinals want one too. Their proposal has caused a fierce debate throughout Missouri.
This debate is bigger than a normal sports story. It has ramifications throughout American society. It smacks of socialism for rich people. One example is what happened in Texas. President George W. Bush invested $600,000 in the Texas Rangers. Then he helped talk public officials into building a publicly financed stadium for the team. The new stadium so enhanced the value of the team that when it was sold Bush's share of the profit was $15 million.
One of the leading voices nationally for economic reform in baseball and for revenue sharing is Bob Costas, who lives here in St. Louis. In his book, "Fair Ball--A Fan's Case for Baseball," Costas explains the recent economic history of baseball and argues for massive reform in the structure of professional baseball. He also discusses the Cardinals' situation in the book.
Costas recently sat down with SJR to discuss the local situation.
SJR: Someone estimated that if the Yankees drew the same percentage of the New York metropolitan area as the Cardinals draw in this region, Yankee attendance would be 27 million per season. I guess my question is: What's wrong with the Cardinals' current stadium? The fans seem to like it.
Costas: As I've said many times, if baseball had a sane economic structure, there would be absolutely nothing wrong with the Cardinals' situation. If baseball fans and politicians around the country had been farsighted enough, if they'd had the guts to see beyond their local situation, if somehow there had been a national consensus on this, they would have seen that all of these new publicly financed stadiums are insanity. Then all these communities would have said we'd consider a reasonable public-private partnership only when baseball has reformed its internal economics. Until then, it's just throwing good money after bad.
SJR: So wouldn't public financing for this new stadium only exacerbate existing financial problems in baseball?
Costas: Well, the trend is already set. I understand the public reluctance and skepticism about a new stadium for all the reasons people point out. …