Facts vs. fiction on new Fenway
By Derrick Z. Jackson, Globe Staff, 04/12/00
In anticipating the whining from the Red Sox for local and state taxpayers
to foot half the bill for a new $600 million Fenway Park, Mayor Menino has
"I just want to be sure we get a return on our investment. I am not ruling
out using city bonds as long as we have a demonstrated way to get back the
"The city would have to make money or at least be sure we would get our
money back. The city can help pay for the site as long as we have a revenue
stream that allows us to be paid back. There are no grants on the city's
part. We are looking for a return."
Menino has said the Red Sox have yet to show how Boston would recoup its
costs to make the land habitable for a new stadium. As the pressure builds on
Menino, Governor Cellucci, and the Legislature to fork over between $250
million and $300 million to a family trust just so they can pay millionaire
athletes even more millions in the out-of-control bidding wars of Major League
Baseball, taxpayers should be clear on a few things.
The odds are overwhelming that the Red Sox will not guarantee any return to
the taxpayer worth the welfare. This will not be a deal the state and city can
remotely call an "investment." Anything the public gives to the Red Sox is a
grant, a gift, a giveaway. Any claims the city will get anything significant
in return (other than higher prices for tickets, parking, and beer) are
ridiculous, rapacious, and a red herring.
Every major recent study and policy paper on stadiums, including those
sponsored by the Brookings Institution and the Cato Institute, say that
taxpayer money for stadiums should be considered money gone forever. They
create no "economic impact" because entertainment dollars are dollars that
would otherwise be spent on other forms of entertainment.
A recent study of 37 metropolitan areas by economists at the University of
Maryland, Baltimore County, even found some net drops in per capita income
associated with stadiums. Stadium building is one of the most outrageously
inefficient ways to create jobs, costing 20, 30, and 50 times more money to
create a single job than it would cost a state employment agency.
American taxpayers are in the process of throwing $14 billion at stadiums
and arenas since 1989. Yet not one stadium has produced a "revenue stream" or
a "return" to the taxpayers that remotely makes up for the original welfare.
Such returns are impossible since most teams not only get the stadium, but
also most of the revenue generated by the stadium's ticket sales, luxury
suites, parking, concessions, and advertising.
A classic example is the ballpark that boosters of taxpayer-funded stadiums
cite as the citadel of success, Baltimore's Camden Yards. The public built the
park for $210 million. Ever since its opening in 1992, it has played to
But even though the tickets and luxury suites provide the Orioles with one
of the largest player payrolls in baseball, the taxpayers make only $3 million
a year in job creation benefits and tax revenues, while losing $14 million a
year for having built the stadium, according to "Sports, Jobs, and Taxes,"
written by Roger Noll and Smith College economist Andrew Zimbalist and
published by the Brookings Institution.
Combine that with a worse deal at the new stadium next door for the Ravens
football team. The Ravens' stadium brings in only $1 million a year in public
benefits while losing $14 million in capital costs. Thus, Maryland taxpayers
pay $24 million a year so team owners can pay millions more to their players.
"To get the Browns to come to Baltimore (which became the Ravens), the
state of Maryland virtually handed the keys to the treasury to Art Modell,"
said economist Dennis Coates of the University of Maryland at Baltimore,
co-author of the 37-city study. "The return to taxpayers is none at all."
The Red Sox say they will build a stadium themselves, but the money they
will probably want from taxpayers to finish the project is alone equivalent to
the cost of a new stadium. This makes it even the more suspicious why they
floated their stadium plans nearly a year ago and yet said nothing about what
the public would get back for its $250 million or so, other than wild claims
of "economic impact" that have already been refuted by MassPIRG.
The Red Sox say nothing because they hope to offer nothing. Their boosters
keep telling us about the team's charities. But let us not forget how the team
tried to squeeze the Italian sausage stands off Yawkey Way. The Red Sox
charities of a few million dollars a year pale next to the $15 million to $40
million taxpayers are paying a year for stadiums.
In an analysis for the Cato Institute, economist Raymond Keating last year
wrote that "The lone beneficiaries of sports subsidies are team owners and
players." For that reason, Menino should immediately stop talking about
getting a "return" on public funds for a new Fenway. Unless he has a deal
unlike any other before it, any promise of financial returns to the public
make Menino look like a fool and takes the rest of us for fools.