Some simplistic thoughts following this week’s private Stu Sternberg & Matt Silverman chat with local business leaders:
- Everyone seems to acknowledge MLB’s problem with Tampa Bay is that the Rays are sucking a lot of money out of the revenue sharing system. In fact, Tampa business leader Chuck Sykes even confirmed to the Tampa Bay Times that was the key takeaway from Sternberg/Silverman.
- So MLB teams such as the Red Sox, Yankees, and Dodgers are upset they have to pool together some of their enormous profits to keep teams like the Tampa Bay Rays (and Pittsburgh Pirates, Oakland A’s, etc) competitive on the field. Of course, the uber-rich NFL shares way more revenue between teams, but I digress….
- Let’s not forget MLB created this revenue-sharing systembecause it was making so much money in big markets that it needed a way to preserve some sort of competitive balance (because it refused to enact a salary cap).
- And because the Red Sox, Yankees, and Dodgers want to send less money to the Rays, they are pressuing Bud Selig to expedite the new stadium process in Tampa Bay.
- Meanwhile, MLB & the Rays don’t want to pay for the majority of a new stadium itself, because that wouldn’t increase their revenues.
- Therefore, MLB’s “intervening” means pressuring the local community to tear up (or at least alter) it’s existing contract with the Rays and spend public funds to build a new stadium so MLB can profit more.
- In exchange for St. Petersburg agreeing to tear up its current contract with the team/league (I doubt that would ever happen if Evan Longoria decides he doesn’t like his contract), MLB promises Tampa Bay that it will receive indirect financial benefits, like a rejuvenated downtown (even though Downtown Tampa is thriving regardless right now).
- So Tampa Bay municipalities would spend between $25-35 million a year in public subsidies for a new stadium. And this would – in theory – increase revenues at a stadium by $10-15 million a year.
- Of course, those revenues don’t really allow the Rays to spend more on players; they simply reduce the amount of revenue sharing the team receives from the Red Sox, Yankees, Dodgers, etc.
So in summary, we are talking about spending $25-35 million a year in public subsidies to help the Red Sox, Yankees, and Dodgers pocket an extra $10-15 million a year. And, of course end the threats from MLB for another 20 years (hopefully)….
Sure, Tampa could enjoy some new additional benefits Downtown if the project is done right in the perfect location…but this line of thinking should also beg the question: how much public help is really worth it?
Given these numbers, there’s also the question of whether Tampa Bay would just be better off cutting the Rays a check for $10-15 million a year for the next 20 years, which they could just direct sign over to the Red Sox, Yankees, and Dodgers. At least that would satisfy MLB into not threatening relocation or contraction for a decade or two…
Cross-posted from Noah Pransky’s Shadow of the Stadium blog.