December 23, 2003

Cards to finance own share of stadium

The St. Louis Cardinals finally revealed the "investors" behind the private share of their $387.5 million stadium plan, and it turns out to be - tah-dah! - the St. Louis Cardinals themselves. Apparently unable to find anyone who wanted to own a major-league baseball stadium - gosh, we can't imagine why - the Cardinals have decided to put another $30 million in cash into the stadium project, while selling $200 million in private bonds to finance the remainder of the construction cost.

The final tally, then, has the costs of the new facility breaking down like so:

• $42.7 million in state funds to pay for infrastructure and the demolition an replacement of an interstate ramp;
• $3.4 million a year from the elimination of a city ticket tax, which should pay off $42.9 million worth of bonds;
• $90 million in cash from the Cardinals;
• $200.5 million in private stadium bonds, to be paid off by the team at $15.9 million a year;
• a $45 million county loan, to be repaid by the team with interest - though the Cards can instead choose to simply hand over the stadium after 30 years, which they almost certainly will.

So while involving substantial public funds - somewhere between one-quarter and one-third the total construction cost, depending on how you count that loan - the new St. Louis stadium will still involve the second-most private money of any baseball park of the last 30 years, after the San Francisco Giants' Pacific Bell Park, which was 90% privately funded. And it will leave the Cardinals with a fair bit of debt to pay off: even after the ticket tax rebate, the team will be left with $12.5 million a year in bond payments, plus the need to recoup a return on their $90 million in cash outlay. Given that the Cards are already one of the more profitable teams in MLB, increasing revenues by $15 million a year or so for the next 30 years could be a challenge - sports business experts have estimated that the Giants will need to draw crowds of 30,000 or more a night for 20 straight years to pay off their $18 million a year in mortgage payments.

In all, the stadium finance plan is a large outlay of public money, but a much better deal than most other cities have gotten on new stadiums (and far better than the Cards' original proposal), while posing a sizable financial risk to the team. For the final score on winners and losers, check back in 30 years...