Baseball Welfare

Will the Marlins soak Miami taxpayers yet again?

Last night's World Series Game 3, in the dreadful cavernous box of Miami's Pro Player Stadium, was yet another demonstration of why professional sporting venues and municipal financing are a toxic mix for fan and taxpayer alike.

The scrappy Florida Marlins came into existence just 10 years ago, during Major League Baseball's penultimate round of expansion. The sport, which features some of the queerest non-market economics of any industry—employees can be forced to play for their original organization for as long as 13 years, big-spending teams pay a "luxury tax" to penny-pinchers, gazillionaire owners claim poverty while pocketing a $120 million profit in just five years of management—has mastered the art of touching off bidding wars between cities desperate to bribe their way into the big leagues.

The Marlins' original owner was the now reviled H. Wayne Huizenga, who to this day continues to receive baskets of taxpayer-financed goodies (including a $2 million annual tax rebate from the State of Florida), for his philanthropic act of bringing pro baseball to Miami.

Huizenga was also (as of January 1994) 100 percent owner of both the Miami Dolphins and what was then called Joe Robbie Stadium. The facility's 16-year history is drenched with public money—from the municipal and county bonds the Dolphins failed to convince residents were needed to upgrade the beautiful Orange Bowl stadium, to two other failed attempts to raise Miami taxes for repairs, to the National Football League's refusal to hold Super Bowls at the Orange Bowl until a stadium enhancement was settled, to the city's 1985 decision to let Joe Robbie issue $85 million in tax-exempt bonds to build a new home.

Despite owning the fancy new stadium, the two pro-sports franchises that played in it, and the Marlins' cable broadcast company, Huizenga immediately started whining to Miami-Dade County residents about needing a retractable-roof stadium to keep out the rain, and being too poor to finance it himself. In an act of crazed petulance, he shelled out millions to field what became a World Champion team in 1997, complaining all the while that the fans didn't appreciate what terrible financial pain (a $30 million one-year loss!) he was suffering for their gain.

Baseball economist Andrew Zimbalist has successfully demolished Huizenga's ludicrous claims, arriving at a 1997 operating profit of nearly $14 million. No matter—Huizenga punished his allegedly unappreciative customers by conducting, in Zimbalist's words, "the most radical fire sale of players in baseball history, lowering the Marlins' payroll from $53 million in 1997 to $13 million in mid-July 1998."

He then sold the team to John Henry (now owner of the Red Sox), for a $65 million profit after just five years of supposed poverty. And the terms of his sale were incredibly favorable, mostly because Huizenga still owns the stadium, and is charging extortionate rent. According to the South Florida Sun-Sentinel, "The Marlins pay rent and the cost of stadium ushers, custodians, ticket takers and security. The team receives 70 percent of the net revenue from the sale of food, beverages and souvenirs and just 37.5 percent of the $9 parking fee. The team gets none of the revenue from [luxury] suites." Huizenga gets everything else.

As the Palm Beach Post and Los Angeles Times have both reported in some detail, the lease terms prevent the Marlins from earning enough to leave the ugly, dual-use stadium, which is one of the last baseball parks to share space with the NFL. In an act of still more irony, Huizenga's infamous behavior, coupled with the team's resurgent success, might lead to yet another round of tax money for yet another new stadium.

"Voters and politicians are more amenable to giving [the new owners] a subsidy because now people like the Marlins instead of hating them, which is what Huizenga accomplished," Zimbalist told the Post. Baseball Commissioner Bud Selig, himself an incompetent, bull-spewing team owner, is greedily eyeing Miami-Dade's till. The Marlins owners, Selig told the Times, are "quite optimistic, and I hope they're right. They believe [the club's current success] is really helping them to get the stadium they obviously need."

Shockingly, as the valuable baseball economist Doug Pappas has shown, the majority of Major League stadiums are still at least partially government-owned. Unsurprisingly, cities are much worse at managing huge facilities than self-interested private owners—the San Francisco Giants' gorgeous Pac Bell Park, the first privately financed baseball stadium since 1962, uncoincidentally generates the most revenue of any ballpark in the game, Pappas found.

Cities make lousy stadium owners, as any lonely football fan in Los Angeles can tell you. Yet L.A, in addition to San Francisco, may be generating hope for advocates of pro-sports welfare reform. Despite its size, and local politicians' delusions of grandeur, city residents have refused so far to shell out tax breaks and other sweetheart deals to lure a football franchise back to town. League officials need L.A. more than L.A. needs them.

If only less-confident regions could learn the joys of just saying no.