Subsidies and Lies

How baseball came back to D.C.


Few corporate welfare tales are filled with as many tawdry lies as the return of professional baseball to the nation's capital.

On April 14, the Washington Nationals, who have spent the previous 36 seasons as the Montreal Expos, will play the first Major League game in D.C. since the hapless Senators limped off to Arlington, Texas, in 1971. The game and season will take place at RFK Stadium, which was renovated for baseball over the winter with $18 million in taxpayer-backed bonds. Starting in 2008, the team will play in a new waterfront stadium projected to cost as much as $584 million, paid for by a cash-strapped and notoriously mismanaged city council, which swears that it will get private investors to pay for up to half of the costs.

The publicly financed stadium boom of the last 15 years may be drawing to a merciful close, but the Nationals' history of mendacity is a textbook case of billionaire shamelessness that could inflict serious damage for years to come on a city that can hardly afford it. As always with Major League Baseball, lying in the defense of leeching hundreds of millions of dollars is no vice.

Lie #1: Baseball is hemorrhaging money and needs to downsize. In November 2001 Major League Baseball Commissioner Bud Selig announced that the 30-team league was too large to be financially sustainable and needed to be pared down to 28 to enhance "competitive balance." MLB, he testified to Congress, lost more than half a billion dollars in 2001 alone. The likeliest stragglers to be culled were the Expos and the Minnesota Twins, franchises that generated "insufficient local revenues" to compete.

All of Selig's statements were false. In fact, league profits had grown 17 percent a year since 1995, according to baseball economist Andrew Zimbalist, with franchise valuations increasing by 250 percent in just half a decade. Attendance and television revenue were at all-time highs. Small-market teams, far from being unable to compete, actually thrived in 2002, with the tiny-revenue Oakland A's making the playoffs for the third of four consecutive years. Even the contraction-targeted Twins won their division for the first of three straight seasons.

Most important, there were myriad contractual and legal barriers to downsizing the league, making it likely, as Zimbalist wrote in his recent book May the Best Team Win, that the talk of contraction was a gambit through which "the owners were seeking leverage in the stadium and players market." By threatening to reduce the number of Major League cities, Selig increased the likelihood that anxious taxpayers would approve subsidies to remain in–or join–the baseball club. When contraction inevitably fell through, the Expos became lame ducks in Montreal, and the new cities competing to land them were put on notice that the most generous public financing package would win.

Lie #2: Major League Baseball won't take over management of the Expos. That's what Selig said on November 26, 2002. On December 6, Expos owner Jeffrey Loria bought the Florida Marlins from John Henry, who went on to buy the Boston Red Sox for $750 million. On December 23, MLB took over management of the Expos, which it has yet to relinquish (though sales talks were intensifying at press time). Running the Expos gave baseball maximum control in conducting a relocation bidding war.

Lie #3: Teams can't compete without a publicly financed stadium. Selig has maintained this, repeatedly and with great success, for a decade. It remains rubbish. The San Francisco Giants have thrived in the standings and at the gate with a handsome, revenue-generating stadium that was 100 percent privately financed. Across the bay, the A's have excelled in one of the sport's crappiest stadiums.

Still, the commissioner made it clear early on that the Expos' new home would be selected based on the size of local subsidies. Washington, D.C., won the booby prize in September 2004 after offering to fund a $400 million park. For one thrilling week in December, the D.C. Council threatened to scotch the deal unless private financing covered half the costs. Once again, Selig threatened to move the franchise away, and by the end of the month the council approved an astonishing $535 million in municipal bonds to bring baseball back to the capital.

As in the 1950s and '60s, the Washington team will probably stink. But this time around, overtaxed locals will be left holding the bag for decades to come.?