Baseball Prospectus - Chat with Neil deMause

Chat: Neil deMause

Welcome to Baseball Prospectus' Monday November 14, 2005 1:00 PM ET chat session with Neil deMause.

Neil deMause is an author of Baseball Prospectus.

Neil deMause: Hi everybody, and it's great to be back. I'll be here the next hour or two to take questions on what's often called "the business of baseball" - i.e., most everything that happens off the field. So if you're really dying to ask about, say, Bubba Crosby's PECOTA breakout projection, you'd be better off waiting till next week, when you can pester Steven Goldman. Also, I'd just like to get this out of the way before we start: Yes, I am aware that, contrary to what I said in my article last week, the Giants do in fact pay property tax on Pac Bell Park. (I even wrote about the team's reassessment squabble last winter on fieldofschemes.com, so I should have remembered this.) Judith Grant Long has been on the road the past week, but as soon as I can reach her, I'll attempt to clarify what her Pac Bell figures are all about. And without further ado, let's get busy gettin' busy...

Ron (Sacramento, CA): I was at the Ueckel Pizza Feed where Gary Huckaby presented his research on player contracts and revenue. I wanted to say that Gary and the BP guys, James, Tom and Ben were very friendly, and nothing short of brilliant. Is there a place on the website where I can find an electronic copy of the presentation, and Gary said that Nate Silver would be writing a book about the same topic. When will that be out?

Neil deMause: Hey, I know this one! The book in question is actually only about one-sixth by Nate - the rest is by other members of the BP stable, including yours truly - and is an attempt to answer some of the Big Baseball Questions, in the inimitable BP fashion of applying logic and plenty of mathematical gim-crackery. If I remember right, the working title of the chapter in question is "Is Alex Rodriguez overpaid?" and Nate's figures are, as you say, nothing short of brilliant, and go a long way toward answering that question once and for all.

The book should be out in March, right on the heels of BP2006. It should provide tons of fodder for next spring's Pizza Feed Q&As.

Rick (Shorewood, WI): Neil, Although I am a passionate baseball fan I am admantly opposed to public funding for stadia. However, I have often wondered if public funding can be justified if the economic region is small. For example, living near Milwaukee the Brewers under Bud Seling lied about the economic impact the new stadium would have on the city and the metropolitan area. Yet, since the late 1980's several minor league clubs have left the state for greener pastures. I often argue that the state of Wisconsin should have stayed away from funding Miller Park through a taxing district and instead helped the smaller municipalities such as Wausau and Kenosha fund new ball parks. My logic is that the smaller the city the more economic impact a team can have. The city of Green Bay is such an example. The Packers bring a substantial amount of revenue into the Brown County area. If the Packers were a Milwaukee team the economic impact would be negligable. Thanks. Rick Shorewood, WI

Neil deMause: The question isn't how much revenue a team brings in - even the Brewers swamp Wausau or Kenosha in terms of fans spending - but where that revenue comes from. If ticket buyers in Wausau are all spending their money there instead of (frantically checks Google Maps for nearby funny names...) Kronenwetter and Mattoon, say, then yes, that's a net benefit to Wausau.

On a state level, though - and it's state money you're talking about spending - there's almost no economic impact from a minor-league team, because the people buying those $6 tickets would undoubtedly be spending their entertainment dollars somewhere else in the state if the team didn't exist. From Wisconsin's perspective, it's just rearranging the deck chairs.

tylernu (Chicago): How in the world is MLB going to market the World Baseball Classic as a serious endeavor if there are enforced pitch counts? I thought they built up some momentum during the postseason with the All-Latino Team, but trivializing the event with pitch counts is not going to win over the fans. Any idea how much tickets to the games are going to cost? I loved your article about the hidden costs in stadium leases. Keep up the great work.

Neil deMause: Thanks! I haven't been able to find anything about ticket prices, though given this is MLB, I wouldn't be surprised to see some sort of deal where you have to buy a block of tickets to a Padres-Rangers series in June in order to get into the WBC finals. As for pitch counts trivializing the event, I doubt it would any worse than the constant parade of substitutes during the All-Star Game, and people still watch that, kinda.

Maury (Baseball Wonderland): Hey Neil, With the CBA coming up, Baseball is going to find itself backed up into a bit of dilemma of its own making. Namely, by allowing clubs to write off annual revenue sharing obligations if they plan on paying for new stadium construction MLB will find a revenue sharing pie considerably smaller by this loophole in the CBA. Question... do you feel other clubs, namely Pohlad and the Twins, or Loria and the Marlins may try to go this route given the stellar results they've encountered so far?

Neil deMause: Hi, Maury! I'm not sure it's quite a "dilemma" - even if the Yanks and Mets join the Cards and Giants in taking advantage of the revenue-sharing break, there's still plenty of money sloshing around. The bigger question is whether the small-market teams start yelping during the next CBA talks about the fact that they're helping to pay for new stadium in St. Louis and New York.

As for Pohlad and Loria, even with a 40% discount from the revenue-sharing break, they seem determined not to let go of a single dollar unless absolutely necessary. A better bet for next in line for the revenue-sharing break would be Lew Wolff in Oakland, though even with the break he's still looking at an awfully big funding gap.

Neal (Springfield, VA): Neil... About a lease for a new stadium in Washington, DC: If there is no owner, how can a lease agreement be approved and signed? Obviously MLB owners own the Nationals. But those owners are not going to agree to any lease on any new stadium because they, themselves, don't want to pay any rent. So, how can there be any kind of agreement and signatures of there's no owner of the Washington Baseball Club? Thanks. Neal S.

Neil deMause: The Nats do have an owner - it's called Major League Baseball. After one of Bud Selig's flunkies gets through forging his signature, whatever new owner the team gets will be forced to live with it, the same way Steve Swindal will be stuck with the rest of the lease on Yankee Stadium if George Steinbrenner is hit by a bus tomorrow.

Which, of course, is why the holdup, as I see another reader just asked. MLB wants as generous lease terms as it can get, so that it can jack up the price of the Nationals accordingly. The issue under contention is whether the team gets to pay a portion of stadium revenues as rent, as MLB wants; or whether they have to pay a flat fee, as D.C.'s bankers want, to guard against a strike, hurricane, tsunami, or what have you.

The irony here is that whatever deal D.C. negotiates, the beneficiaries won't even be the Nats or their new owners, but rather the Other Twenty-Nine, who would increase their windfall profits.

AlexCarnevale (East Village New York City): Hey, Neil, I enjoy your more creative work as well. If you were in charge of the next Mets stadium, what kind of ballpark would you build? It seems the Yankees won't be mucking around much with the layout of their new stadium...will the Mets go in a different direction?

Neil deMause: The Yankees may not be mucking around with the field dimensions, but they absolutely want to muck around with the seating bowl: Their design for a new stadium has a shrunken upper deck pushed back about 30 feet farther from the field, replacing the current stacked-deck look with a more spread-out, Comerica Park-type structure. (See cross-sections here.) They haven't been playing this up in their press statements, unsurprisingly.

The Mets, meanwhile, don't seem to be as far along with their design, beyond having switched from their old "Ebbets Field with a retractable roof" trope to a "convertable from Olympic format, just like Turner Field!" one - and now that the 2012 Olympics are going to London, who knows if that will stick? As for what I'd want, rebuilding Ebbets Field would be nice, especially if they put it where the old Ebbets Field was, so I could walk to it from my house. But somehow I think the Wilpons are going to want some luxury boxes for their money. Not to mention a press box.

KJF (NYC): Neil, If you were one to throw out odds, what would you say the odds on the new Yankee Stadium actually being built would be??

Neil deMause: I am one to throw around odds, but it's really hard to say at this point, when the public debate has barely begun. We should know more after the next week, with a Bronx "town meeting" this Thursday and the local community board voting on the project next Tuesday - it's an advisory vote, but it could put pressure on the city council, which gets to give the actual thumbs-up or thumbs-down next spring.

The Jets stadium in Manhattan looked like a fait accompli at first, too - every stadium does, at first. True, there's no Cablevision to jump in here and spend big bucks fighting the deal, just a bunch of local residents really angry about losing their public park to the Yankees. I guess if I had to put my money on anything, it'd be that the ultimate decision rests on something that's not even on the radar now - a lawsuit, rising construction costs in the post-Katrina economy, etc.

Elaine (San Diego): What do you think of the A's announcing that they will be closing apart of their third deck? I read somewhere that smaller stadiums wind up with better attendence (all other things being equal) than bigger ones. Is this because fans by tickets in advance when there is a concern of selling out?

Neil deMause: That's the "artificial scarcity" argument, yeah. It certainly worked on me back when Camden Yards opened: I remember buying tickets to a September Yanks-O's series in the dead of winter, because I didn't want to be shut out. Of course, by the time September came along, one team or another was long since eliminated from the pennant race, and I had better things to do then drive down to Baltimore to see a ballgame, so I ate the tickets.

From what I can tell, though, what the A's are mostly after is to cut down on walkup sales, so that they can plan ahead how many ticket takers, hot dog salespeople, and so on to hire for that evening. If it helps goose ticket sales by creating a fan panic that the games will sell out, though, more the better for them.

ElAngelo (NY, NY): Is baseball in any danger of pricing fans not only out of tickets, but also all the ancillary stuff (concessions, apparrel at the park, etc.)?

Neil deMause: Is the souvenir bubble going to pop, you mean? Apparently not anytime soon. There appears to be an unending supply of people with money burning holes in their pockets, for $80 replica unis as well as for $800,000 Manhattan co-ops.

jpyuda (Alexandria, Va.): How does your discussion of the Milwaukee stadium square with your blanket opposition to the D.C. stadium -- a stadium to be paid for by the District but which is likely to draw most of its fan base (and entertainment spending) from Virginia and Maryland?

Neil deMause: I'm not blanketly (blanketly?) opposed to a D.C. stadium - as you point out, that's actually the best scenario for a city in terms of siphoning off entertainment dollars from its neighbors instead of itself. The problem is that with a $500-million-plus public price tag, you'd have to convince the entire state of Pennsylvania to camp out in Lafayette Park to make your money back. D.C., because of its special circumstances, probably could have done okay with even a 50/50 public/private split, but unfortunately Mayor Williams blinked first in his negotiations with MLB.

Bubba (Charlotte): Do you think there are any viable cities left for relocation of a current team?

Neil deMause: Define "viable." Portland would fit well on the bottom rung of the current MLB markets, but the city isn't eager to subsidize a stadium, so if you're the A's or the Twins, why relocate to a smaller city only to be stuck with the stadium tab anyway? Las Vegas has similar stadium-funding issues, and is even dinkier in terms of media market, though that could change in five or ten years. San Jose or Brooklyn could probably do it, but the existing teams would demand a king's ransom to allow their territorial rights to be breached. Hmm... Montreal?

ssimon (Pelham, NY): Neil, perhaps the Red Sox were forced by external factors to make so many changes to Fenway, but because Boston was so successful with those renovations, do you see a future where teams with older ballparks renovate rather than tear down and rebuild?

Neil deMause: If I close my eyes and squint, I can see it, yes, yes. Also, I can see bomber jet planes riding shotgun in the sky turning into butterflies above our nation. And me getting a pony.

I thought renovation was going to be the wave of the future after the Cubs rehabbed Wrigley back in the '80s, but clearly I was wrong. I still think the Yankees could do better emulating the Red Sox than tearing down and building anew - even with the revenue-sharing deduction and city land subsidies - but what can you do, people like shiny things.

ssimon (Pelham, NY): Neil, pretend you're the owner of a team with an eight-year-old publicly subsidized stadium: Now that many of your colleagues have caught up to you with good deals of their own, what's your plan to get even more out of taxpayers?

Neil deMause: Lobby the legislature to transfer naming rights to me, so that I can sell them to U.S. Cellular? Whattaya mean, that one's taken?

Ed (Chicago): Hi Neil, do you have any opinions/facts on the financial impact to a CITY for it's baseball team winning the World Series (as opposed to the impact of a city just having a baseball team)?

Neil deMause: Big events like the World Series help a bit in that they bring in out-of-towners - you know, stars of Fox sitcoms, that sort of thing - who otherwise wouldn't be patronizing your city. On the other hand, there's evidence that there's a "crowding out" effect, where people who would otherwise visit a city steer clear when there's a big event on, since they can't get hotel rooms, traffic is bad, etc. Add in that most of the new spending for the World Series goes directly into MLB's pockets without passing Go, and I'd say that while there's a net positive impact, it's not likely to be more than a couple million dollars. (I wrote more on this for the Village Voice a few years back.)

ElAngelo (NY, NY): What would you consider the "ideal" structure for new stadium construction, considering who should pay for the land, costs, etc.? Does such a thing exist?

Neil deMause: As I indicated in my article last week, it's not about who pays the upfront costs, it's about who comes out on top after all the lease payments are done. Every deal is different, but if the public either doesn't have to put up a ton of money, or gets a decent return on its investment - as with the Metrodome - I'd call that a good deal.

The problem is that it's a zero-sum game: Money used to repay the public can't go into the team owner's pocket. And with new-stadium prices what they are these days, it's nearly impossible to cut a deal where everybody comes out ahead. It's one reason why I'm high on renovation.

tcunning (St. Paul): Neil, I've enjoyed your articles on the true cost of publicly financed stadiums. How do you believe the stadium situation will play out in Minnesota if the state legislature refuses to cooperate with the Pohlads? Is moving the team a threat that MLB is willing to follow through on?

Neil deMause: Rumors of Reggie Jackson buying the team and hightailing it to Vegas notwithstanding, I'd say it'd leave us right back where we are every year, Pinky: With Pohlad harrumphing about making vague move threats, trying to throw a scare into the legislature for 2007. Though there is one new wild card to add to the mix, which brings me to the next question...

Jerry (Chicago): Is contraction dead?

Neil deMause: Not hardly. The owners agreed to shut up about contraction as part of the 2002 labor agreement, but they also got a loophole: In 2006, they have a window from April 1 through July 1 during which they can unilaterally decide to contract by two teams for 2007 - and they don't even have to say which two.

As you can imagine, this leaves the door open for all sorts of blackmail shenanigans, in which MLB flips the contraction trigger, then leaves cities scrambling to approve stadium deals so as not to be the ones left standing when the music stops. Even if, like me, you think that the owners would never actually go through with contraction, them throwing around the C-word again to scare both cities and the union is a pretty likely scenario.

George W. (Alexandria, VA): Is there any other U.S. sport that has such a disparity in revenues on a team-by-team basis as MLB does? Is the union ever likely to be convinced that a salary cap is a competitive balance issue?

Neil deMause: This is a problem of baseball's media-revenues structure, not one of its lack of a salary cap. This is a complicated subject, though, and is the subject of one of my chapters in the upcoming BP book, so if you can hold that thought until March I can provide a more fleshed-out answer.

Chuck (Tampa): Neil, who gets a new stadium first, the Marlins or Twins?

Neil deMause: Is this one of those "unstoppable force meets an immovable object" questions?

Wendy (Wisconsin): So the Yankees can pay the upfront costs for their stadium and then use those costs as a deduction on their revenue sharing bill? Can that strategy work for a small market team? Could Kansas City pay for a stadium and then get even more money in revenue sharing, or is it only an advantage for big market teams?

Neil deMause: They could indeed. Thanks to the wacky revenue-sharing structure agreed to in the 2002 CBA, in fact, the low-revenue teams actually pay a higher revenue-sharing "tax rate" than their rich cousins. (If I remember right, it comes to 47% vs. 39%.) So if the Royals built a stadium with their own money, they could deduct that from their stated revenue, making them look so poor that George Steinbrenner would have to personally cart over wheelbarrows full of uncut diamonds every spring.

The problem lies in the other half of the equation: What small-market teams like the Royals would get for their investment. If Steinbrenner builds a new stadium, he gets to sell naming rights, luxury suites, and so on, at top dollar, because he plays in the media capital of the universe. If David Glass does it, the new revenue streams are much less, because they're in Missouri dollars. So the revenue-sharing discount helps, but it still isn't necessarily enough to make the difference.

dokomoy (Los Angeles): Speaking of the Nats situation helping the 29 other teams, is Buds decision to give Peter Angelos a good chunk of the Nats TV money holding things back?

Neil deMause: I doubt it. Like Cristian Guzman, that's a sunk cost, and one that's already accounted for in the sale price. It's the lease squabble that I mentioned earlier that's holding things up.

Elephants in Oakland (Sacramento): The A's ploy to get a stadium in the city of Oakland; folly or piffle? Does San Jose even have a chance?

Neil deMause: Trial balloon? Shot in the dark? Pick your metaphor. Lew Wolff's the new guy in town, he has nothing to lose by hoping his new-guy aura helps him get a deal through the city council. It's a starting point for negotiations, if nothing else.

San Jose has a chance the minute Peter Magowan loses his mind and decides that, hey, with Barry Bonds on the verge of retiring, might as well punt the territorial rights, too, and see how fast he can default on those Pac Bell/SBC Park loans.

You guys are typing faster than me here, so I'm going to start making my answers shorter in an attempt to catch up...

kmdarcy (San Juan, PR): Hello there... What teams do you see moving over the next, say, ten years? Where? (I like the current number of teams and hope that contraction isn't a serious option.)

Neil deMause: I'd put it at 50/50 that any teams move in the next ten years. Though given that Florida could be underwater in ten years, maybe I should say 60/40.

Kirby (Minnesota): Neil, look into your crystal ball. In 10 years, where will the Twins be? In a shiny new ballpark in Minneapolis? Still in the Metrodome whining for public money? Playing in front of a sold out stadium in Portland or Las Vegas? Contracted?

Neil deMause: Neck and neck between a new ballpark and still whining, with Portland and "out of baseball" distant, distant runners-up.

Danny (Kansas City, MO): Neil, what's your take on the stadium issue with Kauffman Stadium? Would a new downtown park be a solution or would the rennovations be enough? Thanks for your time.

Neil deMause: Solution for whom? The issue here is whatever it takes to make the Royals sign a new lease, which is a matter for the negotiation table, not an issue of whether Kauffman is "obsolete" or other nonsense like that.

Amanda (St. Louis, MO): Who, hypothetically, would you say could be up for contraction? Thank you!

Neil deMause: Last time around the rumors included the Anaheim Angels, so clearly logic is out the window here. I half expect to see a New York Post editorial next spring saying the city needs to build a new stadium or the Yankees will be contracted.

Jason A (Sweet Home Chicago): Rank of teams in order of chances of getting new stadiums (Oakland, Minnesota, Kansas City, Florida, Tampa, Boston (plus both New York teams & the Nationals)).

Neil deMause: Nats, Mets, Yanks, A's, Twins, Marlins, Royals, Rays, Red Sox.

AL (Montreal): Can you put a dollar amount on how much the Blue Jays "lose" each year by playing north of Lake Ontario rather than south of it? The currency exchange, lack of stadium tax breaks and free-agent-scaring high income taxes must be a real handicap.

Neil deMause: An outstanding question, though of course you have to factor in the advantage of playing in a large metropolis like Toronto instead of, I guess, Rochester. If you're asking what would happen to the Jays if the U.S. decided to re-fight the French and Indian War with a different outcome, though, that's an interesting question, and one I'll put on my "future article topics" pile.

Ed (Chicago): Has there been any analysis done on the financial impact of the Wild Card round of playoffs? Is it anything more than a couple of extra home games? I'm hoping that if two teams do get contracted in 2007, it will at least result in the re-realignment back to two divisions per league and only two best-of-seven series ... any chance of these planets aligning someday?

Neil deMause: I think I'm going to call my pony "Wildfire."

Ashley (Wichita, KS): Do the Royals survive 10 years from now? Thanks:)

Neil deMause: You mean they're surviving now?

(ba-dum-tish!)

And on that note, I need to call it a day. Thanks for all the excellent questions, apologies to all those who I didn't get to, and go to villagevoice.com tomorrow to hear me gripe even more about the crummy Mets and Yankees stadium deals.

Neil deMause: Thanks for chatting!