Bilk the Taxpayers Slowly

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Writing in the Wall Street Journal, Alan Barra, author of Yogi Berra: Eternal Yankee, kvetches about the cost of going to a ball game at the new Yankee Stadium. The average cost for a family of four at the new, improved park, Barra writes, is somewhere in the range of $400—up 50% over last year's average. As a result, attendance is down and some of the more expensive seats—which were previously on the market for around $4,000 a pop—aren't selling. Barra points out that the Yankees and Mets, both of whom moved into new ballparks this year, purposefully attempted to limit supply by building smaller stadiums:

This is the free market, the natural result of supply and demand. What the Mets and Yankees were counting on was a market that they would be free to manipulate. New York City has the biggest fan base in the country to draw on. However, these teams deliberately built smaller parks. The new Yankee stadium has about 5,000 fewer seats than the old one. The Mets' new Citi Field has 15,000 fewer seats than Shea Stadium. The strategy was to tell the fans, "Hey, how can you blame us for charging more for these tickets? There's fewer of them and they're more in demand." Except that they're not so much in demand.

Perhaps. But as Barra notes, when those tickets didn't sell the Steinbrenners were forced to significantly lower prices. And while the Journal's headline writers hint at it (subhead: "Taxpayers helped George Steinbrenner raise ticket prices"), Barra misses the biggest scandal of all: the combined $1.8 billion in stadium subsidies provided to the Mets and the Yankees.

When New York City Comptroller Bill Thompson slapped Mayor Michael Bloomberg for promising even more subsidies to the Yankees, a spokesman for the mayor shot back that "The deal leverages a federal program and will result in New York City getting back more tax revenue than it will cost and the South Bronx getting thousands of new jobs and more than $1 billion in private investment."

Where have we heard that before? Well, we hear it every time a sports franchise prostrates itself in front of an economically illiterate city council, arguing that funding the on-field exploits of Nook Logan and Lastings Milledge will be a panacea for struggling local economies. The only problem with this line of reasoning, as Nick Gillespie pointed out in the video below, is that it suffers from the small disadvantage of not being true.

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  1. I’ll give the MFY a pass here. They need every bit of that $1.8 billion taxpayer subsidy to compete with the Rays down in Tampa, what with their unfair practice of fielding younger, better and cheaper players. There oughta be a law.

  2. “The only problem with this line of reasoning, as Nick Gillespie pointed out in the video below, is that it suffers from the small disadvantage of not being true.”

    Never let the truth get in the way of a good story…

  3. Brandon,

    LOL! It’s still a bit early but . . . DRINK!!!

  4. There is nothing wrong with a business artificially producing less of a product to make a higher profit. Businesses made decisions based on marginal cost versus benefit. Maximum profit doesn’t always mean maximum production.

    What is wrong is getting the tax payers to subsidize your business. The problem is the Mets and Yankees stealing billions from New York tax payers, not building smaller stadiums.

  5. If baseball were subject to a free market it would no longer exist.

  6. “If baseball were subject to a free market it would no longer exist.”

    Wow! Stupid in every thread.

  7. If Tony were subject to a free market it would no longer exist.

  8. Actually, Tony’s got a point. If every single penny that has ever gone to professional sports leagues was taken away, what do you think would happen?

    Same thing with anti-trust. Take that away from even the NFL and it would soon be Not For Long.

  9. Wow! Stupid in every thread.

    Well, Tony has the same common denominator in every thread he posts: his same stupid self.

  10. The Orlando Magic and billionaire Rich DeVos ripped off the city of Orlando in a similar way, despite a strong grassroots anti-arena campaign. I generally don’t care for basketball one way or the other, but I am rooting for the Magic to lose as much as possible now.

    The douchebag mayor of Orlando also strongly supported a light rail boondoggle, and said that the “forces of evil” had won when it failed to get through the State Senate. Fortunately, some people around here aren’t idiots.

  11. If every single penny that has ever gone to professional sports leagues was taken away, what do you think would happen?

    Not much. Professional sports teams existed, even in their own stadiums, before taxpayer subsidies. The stadiums would be less grand, profits and payer salaries would be lower, but it would still be a healthy business.

    Same thing with anti-trust. Take that away from even the NFL and it would soon be Not For Long.

    I doubt it. The NFL’s only anti-trust exemption allows it to collectively bargain its broadcast rights.

  12. Absent all of the subsidies and the anti-trust protection, please educate us as to how Major League Baseball and the National Football League, in their current form, would survive intact?

    Please be specific and comprehensive. So far, Tony is clobbering JB, Kindle and Brandon.

  13. R C, how is that working out for the Phoenix Coyotes?

  14. I don’t know squat about baseball, but … Wouldn’t the absence of antitrust regulation mean that baseball is more subject to a free market?

  15. R C-

    Or the Montreal Expos?

  16. Since I don’t think the art museum nor the zoo deserve taxpayer subsidies, you can probably figure out where I stand on playing fiels for millionaires.

    My entertainment consists of expensive whiskey and cheap floozies. Where the hell is my subsidy?

  17. JP-

    Yes. I am not pretending to know what would happen. Just asking questions. The individual teams and the leagues themselves certainly do want the subsidies to be taken away. I think it would be interesting to see how they would fare without the subsidies. I think that R C makes a good point in that sports did exist prior to the subsidies. OTOH, I don’t doubt that there would be fewer teams and as R C speculates, the stadiums would not be so big and same for the salaries.

    If you haven’t noticed, I usually do not agree with Tony. I just think he raises a good point to the extent his contention is ‘let’s see how they would do without the welfare.’

  18. Worth noting: that $400 figure is based on the “Fan Cost Index”, a bogus stat which overstates the real cost.

    The FCI adds up the cost of: two average-priced adult tickets, two average-priced children’s tickets, two small draft beers, four small soft drinks, four regular hot dogs, two programs, two baseball caps, and parking for one car. How many people buy all that stuff every time they go to a game?

  19. In one of the endless H&R items decrying stadium subsidies (every one of which I agree with), it was estimated that the average city that pays out major league protection money is taxing itself $40 a head.

    Whether it was per capita or per taxpayer, I’m not sure, but the sad fact is that, either way, the average sports fan is happy to pay $40 a year to keep a major league team in town, and also happy to offload the $40 bucks a year on poor schmucks like me who don’t give a damn. When you add to that the fact that every big city mayor wants his name on something big, well, the temptation becomes overwhelming.

    NYC is particularly outrageous case, because where are the Yankees going to move? The El Paso Yankees? Doesn’t fly, definitely. It’s Bloomberg’s ego that really made it happen.

  20. Absent all of the subsidies and the anti-trust protection, please educate us as to how Major League Baseball and the National Football League, in their current form, would survive intact?

    1. The NFL, NBA and NHLhave no antitrust exemption. Competition with the established leagues, complete with bidding wars for star players has occurred as recently as the USFL, WHL and ABA.
    2. A quick and dirty on MLBs antitrust exemption provided by me some time ago. [note: the link is now inop, go here instead.] As you can see, it really doesn’t mean shit to anyone anymore. Anyone is free to start a professional baseball league outside of Major League Baseball’s auspices.
    3. If communities stopped making extortion payments to the owners of franchises, the leagues would survive but players and owners would make less and ballparks would lack some of the amenities that big city mayors and county commisioners have gotten accustomed to.
    Tailgate parties would still happen, towns would still go nuts when ther team won a championship and everybody’s tax burden would be lessened in major league cities.

    None of the above is opinion. It’s all fact.

  21. Speaking as a fan, I wouldn’t mind at all if baseball in particular and sports in general had to scale back a bit. It’s always been a business, but it’s presently so industrialized and commercialized that the aesthetic joy of the game is diminished. For me at least.

  22. If baseball were subject to a free market it would no longer exist.

    If I have to choose between a free market and professional baseball, I think I’d somehow manage to cope without baseball. In fact, I’d probably go watch or even participate in neighborhood leagues.

    -jcr

  23. I’ll give the MFY a pass here. They need every bit of that $1.8 billion taxpayer subsidy to compete with the Rays down in Tampa, what with their unfair practice of fielding younger, better and cheaper players. There oughta be a law.

    Easy to draft great players when you are one of the four or five worst teams in the league. Perhaps if the Yankees weren’t forced to cough up their revenue to fund last place teams like Kansas City and Tampa, they wouldn’t have bothered asking for the bonds.

  24. Mokers, that’s crap. Baseball is not basketball or football, where draftees have the potential to play – even start – immediately. Baseball scouts and GMs have to project years into the future, even with draftees from college teams. There’s a reason why the minor leagues have 4 levels – (rookie, A, AA, AAA).

    As a result, high draft picks don’t mean nearly as much in baseball. The NBA has what – two rounds? The NFL has seven? Baseball has 50 rounds. Since they get up to 50 players every year, they obviously expect less from any particular player.

  25. If Obama had to choose between no government but with baseball, or a government and no baseball…

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  27. “If every single penny that has ever gone to professional sports leagues was taken away, what do you think would happen?”

    The pro leagues would likely have not have expanded so aggressively as they did in the past couple of decades, so there would likely be fewer teams. On the other hand it is likely that teams would not be threatening to move as much as they do as moving would involve giving up and making some significant capital investments.

  28. I’m glad that okc passed the stadium tax so we could get an nba team. I realize this makes me a total sellout but that’s just the cost of doing business sometimes…and it’s fucking oklahoma city! I mean come on!!

  29. more taxpayer bilking…in our most cash strapped state, no less

    Air board pays 75k for Thomas Friedman rehashed, youtube available speech

  30. Perhaps if the Yankees weren’t forced to cough up their revenue to fund last place teams like Kansas City and Tampa, they wouldn’t have bothered asking for the bonds.

    Hold it! Who, exactly, “forced” the Yankees “to cough up their revenue to fund last place teams”? I’ve always gotten the impression that MLB policy is pretty much dominated by the “rich” teams.

    If every single penny that has ever gone to professional sports leagues was taken away, what do you think would happen?

    Smaller leagues, more modest stadiums and arenas and lower salaries, among other things.

    Just as I wonder who developers thought were going to buy million dollar two bedroom condos, I wonder who team owners think are going to spend $400 to take the family to a ballgame.

    The Orlando Magic and billionaire Rich DeVos ripped off the city of Orlando in a similar way, despite a strong grassroots anti-arena campaign.

    Is there something in the Orlando drinking water, or what?

    Oh, and Sunrail is not “light rail” it’s heavy commuter rail.

    Orlando plus Orange and Seminole Counties killed the monorail light rail about ten years ago.

    Sunrail was supposed to run passenger rail care on the CSX line from Deland to Kissimmee. The fact that it’s a single track with hardly any grade separations That cannot possibly be used for that purpose without billions of dollars worth of improvements escapes everybody.

    I think it’s unlikely that Orlando will get any rail transit system. It has only one of the three conditions required, an office of at least one major national engineering firm, at least one major national unionized construction company and a strong local construction trades union presence. Without all three you just won’t get the kind of lobbying effort to promote it.

  31. American sports leagues are socialist anyways, the best teams have to share revenue with the wort – that’s bullshit.

    Soccer is the true libertarian sport. Teams keep their revenues and don’t have to share them with leeches and if a team sucks they are relegated.

  32. Last place teams like the 2008 AL East Champions?

  33. When the Nats draft Strasburg, who’s supposedly the greatest pitching phenom in decades, that stadium just might become viable.

    At least, every fifth game.

  34. Not only did the Yankees and Mets get stadium subsidies, they also get some sort of protection from having another MLB team set up shop in the NY Metro area.

  35. OTOH, I don’t doubt that there would be fewer teams

    I do. The number of teams, sans subsidies, would be based on demand. MLB, knowing the demand is high, is trying to limit the supply of teams (just like the supply of seats) so that the existing teams can charge more. 90 years ago there were essentially 4 major leagues (AL, NL, AA, PCL) with about 8 teams each. 32 teams – and a smaller population. And that’s just the major leagues, we’re not even talking about the minor leagues.

    Perhaps the NHL is oversized thanks to subsidies – even subsidized teams like the Coyotes are going bankrupt. But I’m not sure – Canada could probably support 3 or 4 more NHL teams (Winnipeg, Hamilton, Quebec City, a second team in Montreal). The NHL’s problems are mostly due to having a bureaucrat as commissioner – The NHL has made move after move to increase its geographic footprint in the US in order to increase it’s ability to get more US network TV money – and every move has resulted in a reduction of US network TV money. With that track record, I have no doubt Gary Bettman’s next job will be CEO of the Detroit Public School system.

  36. “The number of teams, sans subsidies, would be based on demand. MLB, knowing the demand is high, is trying to limit the supply of teams (just like the supply of seats) so that the existing teams can charge more.”

    Exactly right. If there were two or more rival leagues, they would be competing to get into new markets (cities). Under the current system, you can’t start a new team sports franchise without permission from (and 9-figure payments to) the existing franchises; otherwise many entrepreneurs would be rushing to get into this lucrative industry.

    In the 60s & 70s, new rival leagues were formed in all four major team sports. How long until someone tries again? Pro basketball seems especially ripe.

  37. In the 60s & 70s, new rival leagues were formed in all four major team sports. How long until someone tries again?

    What rival baseball league started?

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