Baseball Prospectus - Chat with Neil deMause

Chat: Neil deMause

Welcome to Baseball Prospectus' Wednesday June 01, 2005 1:00 PM ET chat session with Neil deMause.

Neil deMause is an author of Baseball Prospectus.

Neil deMause: Hello, Cleveland!!! I've very pleased to be here for my first-ever BP chat. There's a ton of baseball business stuff to discuss, so let's get right to it ... yes, you in the back row, with the stripey shirt.

tomjoad (East Bay, CA): Is there any hope that the new owners in Oakland will get a stadium built here without resorting to the shenanigans seen almost everywhere else in the game? We'll never vote yes on it after the Raiders, but you've highlighted ways that other owners have screwed taxpayers without having to get thier consent. Also, do you think the A's could actually survive in (yuch) San Jose?

Neil deMause: Hey, everybody gets shenanigans - it's part of the package deal for being a Major League City. While Lew Wolff hasn't tipped his hand yet, some of the more popular off-the-rack items include: tax increment financing (kick back sales and property taxes on the stadium, and often a wide swath of land around it, to pay for construction); land-for-construction-debt deals (Wolff builds the stadium in exchange for the development rights to everything west of Lake Merritt); "ballpark villages" (build a whole bunch of crap along with a stadium, and hope no one figures out who's paying for what).

As for San Jose, it's worth noting that it's not actually all that big - it's lumped in with SF and Oakland for TV-market purposes, but in terms of metro area size, it's 29th, which is behind every existing MLB market other than Milwaukee. I think the A's could probably do about as well there as in the East Bay - not that it matters much, since Peter Magowan would demand a king's ransom to allow it to happen, especially after the indemnation package that the other Peter got in Baltimore.

Kranepool (NYC): Neil, I've always felt that the NY Mets missed the boat when they did not consider Coney Island for a new major league stadium instead of a minor league one. What do you think?

Neil deMause: Despite all the vacant land, there's not actually a lot of room in Coney Island for an MLB-sized stadium, unless you wanted to put it on the beach or have Surf Avenue run under the infield. Also, C.I. isn't all that easy to get to, especially by car, compared to Shea. And they'd risk annoying their fan base in Queens/Long Island/Connecticut... I don't see much upside there, as much as it'd make it easier for me personally to get to games.

SaberTJ (Cleveland): Any more news on Steinbrenner getting his new stadium paid for?

Neil deMause: Last August, when the word of his latest stadium plans first leaked, they were supposed to be finalized in a matter of months. Then a Memorandum of Understanding with the city was supposed to be coming "before Opening Day." Then it was by May 1. Now the latest is "in a couple of weeks," supposedly because Steinbrenner has been distracted by the Yankees losing. (If that's the criterion, we could be waiting forever.)

I suspect you won't see much movement on the Yanks (and Mets) plans until the Jets and Nets facility controversies are resolved, which could be a while. Also, New York could be electing a new mayor in November, which would make things interesting - Freddy Ferrer, one of Bloomberg's leading opponents, was a vehement opponent of George's earlier stadium plans, but his protege and successor as Bronx borough president is in favor of this deal.

wmcdonal56 (iowa): Whats the latest on the Kansas City stadia situation?

Neil deMause: As you may recall, last fall K.C.-area voters rejected a sales-tax hike to fund new stadiums for the Chiefs and Royals. More recently, the Missouri legislature rejected spending a smaller amount of money ($10m a year) on renovating Kauffman and Arrowhead stadiums.

Since both teams have "state of the art" clauses in their leases, this means they could threaten to move if the state doesn't upgrade the existing stadiums. So far the Chiefs have rattled that saber, the Royals haven't - but as 2007 nears, don't be surprised to hear contraction threats bandied about again, and not just when Joe Sheehan is picking on the Royals.

lyricalkiller (Los Angeles area of Anaheim): Is it too early to see if it's working? Do you see any indication yet that Arte Moreno's name-game will pay off/not last?

Neil deMause: Yes, too early. What Moreno's after are TV-rights money and sponsorship dollars, and it's going to be a while before things shake out to where we can tell if "Los Angeles Angels" sells better on Madison Avenue. (Or wherever ad agencies are really located these days.) For that reason, not to mention saving face, I don't expect Moreno to back off from his plan anytime soon, barring a court order, that is.

shall14 (Boston): Neil you seem to come down hard on most, if not all stadium plans that come down the pike. Is it fair to say that you would support a european style open league which would not artificially cap the number of pro teams, thus lessening the urge for municipalities to build facilities for teams?

Neil deMause: Promotion and relegation would be great fun in baseball, but I'm not sure how much it would do to stop stadium shakedowns - after all, team owners already complain how "We can't afford to compete without a new megapark," so imagine what they'd say if demotion to the International League were at stake? Heck, college sports teams successfully levy stadium demands, and they are 1) in no threat of moving and 2) in a "league" that's effectively dozens of times larger than MLB. Breaking up the cartel would help, certainly, but probably not all that much.

reedjohnmiller (DC): What's your current prediction for the new DC stadium? Is it going to happen? Where's it going to be and when will it be done?

Neil deMause: You know, every time I think the rails are greased on this one, another potential roadblock pops up: The stadium cost estimates are getting dangerously close to where D.C. is legally required to look for a cheaper site, and an anti-eminent domain ruling by the Supreme Court (due to rule on the big New London case in a month or so) could entirely blow up the plans to acquire land at the Navy Yard site. My guess is that none of this will happen, and the stadium will open right where Selig wants it in 2008 (or so), but I wouldn't bet the farm on it.

jpdaly (Kansas City): Do you think that the limited funds in most state budgets these days will signal a tide toward the St. Louis Cardinals-type public involvement and away from the Washington Nationals-type subsidies for stadium financing. How long might that last and what are the long-term ramifications of this?

Neil deMause: I thought this two years ago, but the Nationals deal and the possible Twins deal have convinced me otherwise, since they're as subsidy-heavy as anything from the bad old days of the '90s. Being able to deduct stadium costs from revenue sharing certainly gives team owners more leeway to spend their own money on stadiums. But as Carl Pohlad has made clear time and time again, being able to afford it doesn't mean you have to spend it, not if you can get someone else to foot the bill.

TGisriel (Baltimore): Are there any statistics on which teams spend the highest and lowest percentage of their local revenues net of revenue sharing? For example, we all know the Yankees have the hghest payroll, but is it high in relation to their high revenue stream? Similarly, there have been accusations of certain owners simply pocketing revenue sharing money rather than spending it on their team. Is there any light in this fog?

Neil deMause: The best figures we have for this are from Forbes, which while not infallible - they still rely on team self-reporting to a large degree - are better than nothing.

(I'm going to try an HTML link here, let's see if this works: Forbes listings for 2005)

Just looking at a single year is a bit misleading, though, since so much of baseball spending is geared toward next year's season ticket sales, or the next cable-TV contract. This area is really ripe for further research - just one of the many gaping holes we've had for the last year and ten days, since we lost Doug Pappas.

Citizen (PA): Any words for the friendly local government of York, PA, who want to drop $24 million into a new ballpark for an Atlantic league team... despite rising crime, despite a budget crunch, despite everyone being against it, and despite a similar ballpark/team 45 minutes away in Lancaster?

Neil deMause: "Just because you saw it on TV and all your friends have one does not mean you really need it."

Neal Schiff (Springfield, Virginia): Any thoughts on how citizens/taxpayers can turn things around so governors, mayors, city and county council members, are not able anymore to hoodwink us into getting sucked into paying millions and millions of dollars for professional sports castles? How can they be stopped? Thanks. Neal S.

Neil deMause: The usual, boring stuff: Write letters to the editor. Call your elected officials. Push for campaign-finance reform, so that team owners and other local big-business owners don't hold such sway over local officials. The folks at Save Fenway Park! did a great job of learning the organizing lessons of groups like Save Our Sox and the Tiger Stadium Fan Club that went before them, which is why Fenway Park looks now to have been saved - drop them a line if you want more ideas for your own community.

In the grand scheme of things, the best way to stop shakedowns by both sports teams and other local corporations is for Congress to pass legislation taxing local subsidies as income, as Minnesota Rep. David Minge suggested a few years back. But as you may have noticed, Congress has other things on its mind at the moment.

RJM (Virginia): You mention that the Royals could be contracted. What other teams are in danger?

Neil deMause: I'm a contraction skeptic, so I don't actually think any teams are seriously in danger - it'd just be too expensive and legally complicated for MLB to buy out franchises. Once the agreement with the union not to contract expires after 2006, though, I expect you'll hear the C-word used in conjunction with pretty much any team looking for new digs - the Royals, the A's, the Marlins and Twins if they don't have stadium deals yet, maybe even the Blue Jays.

The team that makes the most sense to contract, really, is the Devil Rays, but they have a lease that would be near-impossible to break, so you don't hear them mentioned as much.

Jim Bowden's lost humility (MASN land): Do you regard the DC ballpark deal in the same light as you regard other stadium "shenanigans," or do you think that perhaps the pecularities of the region justify a bit of a different analysis?

Neil deMause: The D.C. deal is so much worse than other recent stadium deals, I don't even know where to begin. Well, okay, I do: with the article I wrote last fall on this subject. Suffice to say that no region, not even our nation's capital, could possibly be peculiar enough to justify $500-million-plus in stadium subsidies. The citizens of D.C. are going to be paying for this one for a long time to come.

Maury (Portland): Neil, What's your thoughts on the provision with the Twins/Hennepin Co. deal that requires that Pohlad share in the profit of a sale, which starts at 18 percent of the gross sales price and declines by 1.8 percentage points annually? It's being touted as something fairly new that could at least provide the public with some monies should an owner do a quick sale after the value of a franchise spikes with a new facility.

Neil deMause: Hi, Maury!

The public getting a share of a Twins sale is a nice touch, but as clawbacks go, it's a tiny drop in the bucket. Assume Pohlad sells the team after four years - he'd have to kick back 10.8%, which would be, what, $30-40 million? Considering he'd be getting $378 million in county tax money, that's a small price to pay.

Mike W (Chicago): The thing that drives me nuts about these stadium issues is, if a proposal/referendum is voted down, well, just try again next time. So the public gets careless/stupid once, and voila - a new park. Can the asymmetry of this situation be dealt with somehow?

Neil deMause: Barring some sort of federal legislation that makes subsidies unprofitable, it's going to be tough. The best model appears to be the Bay Area, which finally said "no" to the Giants enough times that Peter Magowan agreed to fund Your Bank Name Here Park with (mostly) private money.

As someone who's been listening to George Steinbrenner bleat about a new stadium since I was in high school, though, I share your frustration.

jpyuda (Alexandria, Va.): Neil, you've made it abundantly clear that you're not at all up to speed on the political and economic layout of the DC area, nor with the complexities of where suburbanites spend their entertainment dollars down here. Why should we take you seriously with regards to the DC stadium deal -- or indeed any stadium deal at all -- if you can't do the basic research to learn the situation?

Neil deMause: I was a bit glib with my previous answer, so let me go into a bit more detail on this: Yes, I know that D.C. stadium proponents say that a new stadium will be bringing in folks from MD and VA to throw around their filthy suburban lucre. But some - not all, but some significant percentage - would be spending that money in D.C. anyway. For the remaining portion to spend enough for their sales-tax receipts to pay off $30-40 million a year in construction debt... sorry, I just don't see it.

At one point in the D.C. stadium debates last fall, the mayor's office suggested that the fact that the Navy Yard stop on the Metro didn't have the capacity to carry 40,000 baseball fans at once was a good thing, because it meant that fans would have to mill around the ballpark after games and buy beer at local sports bars. This is the sort of argument that economists refer to as "grasping at straws."

Neil deMause: I've been here over an hour, so I should probably log off and get to work on that article I promised to Joe and Jonah. Thanks for all the excellent questions, and I hope we get to do this again soon.