Stadium subsidies scalp the public
By Ralph Nader, 03/27/00
Ever since the Boston Tea Party, public debate over whether to pay taxes
and how to spend those dollars has been a vibrant part of our democratic
process in Massachusetts and across the nation. The debate over taxpayer
subsidies for the stadium that is proposed to replace the venerable Fenway
Park is shaping up to be an epic battle pitting the public interest and the
public well-being against the well-financed powers that be.
Despite polls indicating that voters are nearly 2-1 against public
subsidies, a well-financed lobbying campaign is underway to support hundreds
of millions of dollars in state and local subsidies to benefit Major League
Baseball and the owners, developers, and financiers of a new stadium.
In Boston and around the nation, the professional sports cartel has sought
to increase its wealth by translating the popularity of sports into support
for government handouts. Ironically, it is because professional sports are so
popular that we should not tolerate their feeding at the public trough. Major
League Baseball is a business and should be treated no differently than a mom
and pop store or a software entrepreneur.
Some of the most effective influence peddlers, including George Mitchell,
the former Senate majority leader, and John Sasso, the political adviser, have
been hired to try to secure what would be an outrageous corporate welfare
handout to Major League Baseball and the owners of the Red Sox. While the Red
Sox have not yet unveiled a specific financing plan, close observers are
estimating that direct and indirect subsidies by state and local governments
could reach $300 million, one of the largest such subsidies in US history.
Proponents of taxpayer handouts for the stadium argue that public money
spent on a new stadium is a good investment. They could not be further from
the truth. Studies done by independent economists, not those paid for by
stadium proponents or the professional sports cartel, show that there is no
real economic benefit from public subsidies of sports stadiums. A study done
by Robert Baade of Lake Forest College studied 30 cities over 30 years and
found that 27 experienced no significant impact from new stadiums while three
cities experienced a negative economic impact.
A recent report done by the boosters of stadium subsidies has made wholly
unsubstantiated claims about the economic benefits a new stadium for the Red
Sox. A Smith College economist, Andrew Zimbalist, one of the nation's leading
experts on the economics of professional sports, called the report "fatally
However, stadium subsidies have benefited one segment of society. Team
owners enjoy windfall profits when they turn around and sell. Last fall, the
Cleveland Indians were sold for $320 million by Richard Jacobs, who had bought
the team in 1986 for $45 million. After a $136 million subsidy for the Texas
Rangers' new ballpark turned George W. Bush's $600,000 investment into
$14,000,000 when the team was sold, Bush said: "I think that when it is all
said and done, I will have made more money than I ever dreamed I would make."
Stadium proponents cloak their taxpayer-soaking schemes with promises that
the public will get a return on its investment. But no government has ever
recovered its investment in a baseball stadium, let alone seen any returns on
that investment. This project, the most expensive stadium project ever, will
be no different. If it were a good invesment, the team owners and their
financiers, like FleetBoston Bank, would not be seeking these outrageous
subsidies. They'd bankroll the stadium themselves.
These boondoggles are promoted as making things better for fans. Real fans
will end up being second-class citizens as ticket prices incease and
affordable seats are placed farther away from the field as luxury boxes become
a priority. Regular fans, families, and other noncorporate patrons will be
relegated to the seats above and behind the luxury boxes and club seats.
Last June, Thomas M. Finneran, speaker of the Massachusetts House,
presented eloquent testimony before the Senate Judiciary Committee on the
issue of taxpayer subsidies for professional sports. He said: "Far too many
teams have taken advantage of the unique loyalty held by many fans, who out of
a love of the game and of sport champion the cause of team owners who do not
share or reciprocate such loyalty."
As the Boston City Council and the state Legislature consider requests by
the Red Sox for subsidies, they should bear in mind that professional sports
is a business just like any other business. The lawmakers' job is to look out
for the interests of the people of the Commonwealth and the fans. The wealthy
owners of Major League Baseball teams can take care of themselves, without
becoming corporate welfare kings.