A View of Bailout Field from the Capital

Mets CEO Jeff Wilpon and CitiGroup demurred when asked if taxpayers–now part owners in CitiGroup after the federal bailout–could participate in re-naming the new Mets Stadium. The “public” in public financing of new stadiums has been abused for decades by MLB, Inc. It is a radical idea, but maybe the financial meltdown is a unique opportunity for baseball fans to ask for more than just naming rights–to ask also for a say in where and how the National Pastime is played.

The Mets’ new Citi Field cost $880 million of which $485 million came from public funds–more than half. In this instance the Mets ownership and MLB, Inc. were hugely beneficent. Many stadium deals are supported almost entirely by by public funds. Nationals Park, for example, was a $610 million construction project all of which was done with public funds. Purchase of the site increased the total cost to $688 million, again provided by the taxpayers.

MLB, Inc. has played off fans against taxpayers in city after city to get new stadiums built by threatening to leave town. Until the Expos were moved to Washington in 2005, no team had relocated since the Senators left DC in 1971. But the threat has worked in Minnesota, Seattle, and many other major league cities. In every instance baseball was using its monopoly status, holding fans hostage until the ransom of a new stadium was paid to owners for next to nothing.

Stadiums are financed with tax-free state and municipal revenue bonds. The bonds are paid off with annual rent and other revenues generated by the stadium. The revenues are controlled by the teams, however. At the end of the first season in the new stadium, the Washington Post announced that the ownership of the Nationals–the Lerner family–were refusing to pay $3.5 million in rent for the stadium. There was a short-lived public outcry, but what DC fans did not understand is that the Lerners are not alone in refusing to pay stadium rent.

In his book Baseball and Billions , Andrew Zimbalist relates how the Yankees used legalisms to prevent repaying public financing of Yankee Stadium renovations in 1975-76. There is no information on how many other teams similarly renege, but given these two examples, it seems likely that too often general revenue funds–your tax dollars–go into paying off tax-free stadium bonds each year in lieu of the rent and sales tax payouts that were promised up front.

As I write, school funding and public infrastructure costs are being slashed across the country because taxpayer revenues are shrinking in this imploding economy. So how can wealthy baseball owners justify refusing to pay the rent? The owners of the Nationals–the Lerner family–claim that the stadium was not complete. It is quite simply a litigation stance to stiff the “public.” The Yankees argued many of the same things in the late 1970’s and early 80’s when they left the people of New York holding the bag. In both cases the work was complete enough to support 81 home games where ticket revenues, concessions and other loot went to the owners. But when it was time for the Lerner family in DC to pay their part, to pay back the taxpayers who put them in a position to make the money, they offered only a nasty lawsuit as support for local schools.

As the public bailout of large capitalist ventures of every make and size moves forward, Congress has stepped to the plate for the taxpayer. They have demanded from the soup line of CEO beggars that government receive an equity share for the funds that are being provided. Congress has said that in return for mortgaging of our children’s futures, private benefactors from the $700 billion bailout must provide an equity share equal to the size of the bailout. As the corporations return to health and public shares rise in value, the national treasury can be repaid.

Why do baseball fans–as taxpayers–get bupkis for public support of their teams? Should we be thinking how we can get more out of wealthy owners who threaten to pull up stakes if we say boo to them?

When bankers and automakers come begging, lawmakers can say that the US economy provides other affordable choices for American consumers. So automakers and banks have to provide something in return for taxpayer bailouts. The monopoly nature of baseball means that consumers–humble fans living in American cities–have few choices. MLB, Inc. says “your money or your team,” and then gets into the limo and drives back to the estate with the loot.

What hurts even more is that baseball fans have no voice in the game. A few short-lived Commissioners interpreted their “Best Interests of Baseball” clause to mean that they represented the fan’s interests. Such idealism was put to rest when the owners, upon naming Bud Selig, removed the clause. The court of last resort for fans has been Congress, but MLB, Inc. employs lobbyists and when a baseball issue is before Congress, free box seat tickets flow down from owners like a mighty stream.

As this downturn deepens in coming months even baseball may be forced to pay attention. There may be a day of reckoning waiting over the horizon for the game. During the Depression minor league teams in the Mississippi Valley League were forced to retrieve foul balls from the stands and wash them for use the next day (Gregory, R.; Diz; 1992). Baseball has prospered behind an appeal to corporate interests and the affluent in general. Belt tightening may not get as bad as it did in the Mississippi League, but attendance is almost certain to be off at the end of 2009. Corporate revenues will no doubt be more difficult to come by as well and the tidy profits that baseball owners say they never see may be down for the first time in more than a decade.

There is one group that has nothing to lose in this situation–the fan–because, “when you got nothing, you got nothing to lose.” As we move into the next season and the worsening crisis, it is important for baseball fans to remember that they are taxpayers as well. It might be handy for fans to remember how Congress was able to force the titans of industry to provide a measure of accountability when providing public support. Could a more aggressive Congress finally force baseball’s owners to provide a modicum of similar accountability to fans?

The Marlins are trying to get a new stadium built in Miami. Who better than Jeffrey Loria–Bud Selig’s favorite franchise blackmail too–to pay some rent up front. More boldly, perhaps Mr. Loria might want to provide the City of Miami and their taxpayers with an equity share in the team proportional to the infusion of capital. The same deal would certainly work in Tampa-St. Pete. Then the next time someone threatens to move one of the Florida teams in the middle of the night, the limited partners might be the fans. Limited partners losing money can cause an ugly legal fight, but fans with an actual stake in their team–you don’t even want to think about it.