Field of Schemes: Leggo my ego

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December 19, 2004

Leggo my ego

There's a truly amazing article by Lori Montgomery in today's Washington Post, recounting the battle of MLB's stadium dealings with D.C., a tale frought with miscommunication and hubris. Some of the highlights:

Last year, when Williams suggested that the city would be willing to build a ballpark by using two-thirds public funding and one-third of the money coming from the team, The Washington Post reported that Reinsdorf responded: "Two-thirds/one-third is fine. But three-thirds/no-thirds is more of what we had in mind."...

Convinced they were fighting to keep alive their bid, D.C. officials gave Major League Baseball "the sweetest of sweetheart deals," in the words of one prominent baseball executive. The team would get a free ballpark, the right to choose its location and nearly all the revenue, including tens of millions of dollars from naming rights.

News of the deal "spread through baseball like wildfire," said the executive, who spoke on condition of anonymity. "It really was too good," he said, laying the foundation for a public backlash.

One of the hallmarks of Bud Selig's reign as baseball commissioner is that he's a shrewd bargainer but a horrible diplomat. Selig may have miscalculated here, as kicking in even a few tens of millions of dollars - which would amount to a million or two per MLB team - at a key moment could almost certainly have gotten a deal done. For the man who cancelled the World Series and but for the grace of Judge Sonis Sotomayor would have started a season with scab players, though, it's always nose-to-spite-your-face season.

Baseball officials put Reinsdorf on the phone with Cropp to explain their objections, but he did nothing more to woo her or the council. "We believed the mayor to be the representative of the city council negotiating the deal," said a high-ranking baseball official, who spoke on condition of anonymity.

If this is true, baseball owners are even bigger dimwits than we've been giving them credit for. Everybody on the planet knew that MLB, seeing the new stadium-funding-hostile council on the horizon, was rolling the dice by cutting a deal with Mayor Anthony Williams before stadium legislation was passed in the council; hell, it was the council's refusal to pass a stadium deal before the team was awarded that had held up the award of the team to D.C. for almost two years. If MLB really bought Williams' promises that he could muster the votes for whatever baseball demanded, no problem, then they truly have only themselves to blame for what transpired.

Then the council came to focus on Item 7: If the city failed to build a ballpark for the former Montreal Expos by March 2008, it would have to pay the team as much as $19 million a year to cover lost profits.

From Major League Baseball's perspective, that was a big concession to the city. The stadium agreement places no limit on the city's liability if the ballpark isn't ready by 2008.

To certain council members, however, Item 7 looked like a hoax -- a big, fat thumb in the eye of an unsuspecting city. If baseball were offering to cap lost profits at $19 million, the members said, then $19 million must be exactly what baseball expected to receive all along. Besides, why should there be a late fee of any kind? The city's paying for the whole stadium.

Item 7 wasn't a concession, it was an insult, they contended. Cropp agreed and plunged the deal to bring baseball back to the nation's capital into crisis.

Another place where MLB apparently badly miscalculated. In the face of a $400-million-plus stadium subsidy, a $19 million late fee (no baseball stadium in recent memory has opened more than one season late once construction started) is a mere drop in the bucket. Once it was clear that this was the straw that broke Linda Cropp's back, MLB officials could have quickly moved to renegotiate that provision - instead, Bob DuPuy drew a line in the sand and ordered Cropp to toe it.

As for what happens now, while there are rumors of a possible meeting between Cropp and MLB, the rhetoric is all still on orange alert: DuPuy reiterated yesterday that "we have no intention of extending the [December 31] deadline. We have a few options, but we're not even going to look at that until the deadline comes and goes." The top option, according to ESPN's Peter Gammons: Pulling the team out of D.C.'s RFK Stadium, and instead moving it to Norfolk's Harbor Park, a Triple-A facility that would be hard-pressed to meet major-league standards by Opening Day. Of course, this is coming from Peter Gammons, a man who never met an unattributed rumor he didn't like; it's also a bit hard to take seriously an article that refers to RFK Stadium as home to the NFL's Washington Redskins and to the MLB commissioner as "Bug Selig."

I CANNOT understand how and why public monies are used for sporting event stadiums.....

Unless the city is going to benefit financially....WHY??

What is it with people and their obsession with sports???

Why would any city pay for a stadium where theÝprofits go into the pockets of the fat assed owners.... I think public money should be spent to benefit the people......like education, medical and whatever makes the standard of living higher for the public.....HOW??? does building a stadium help the public....

it only lines the pockets of the ego-maniacs who run sports....It isnt a game anymore....It is big business... the public is being duped.....Jerry Reinsdorf will go down in history as the man who ruined sports.......along with his croonies....The public is being raped....something like the dirty old man giving the child candy......then doing a lewd act upon them.....

Posted by judith reinsdorf on December 19, 2004 06:45 PM

well its not so much the fact that stadiums are bad investments (which they are) its the fact that the public is unaware of this notion and can do nothing to stop the construction of one (the colts, cowboys, cardinals, vikings probably soon or they'll move to LA, are all getting or will get new stadiums in the next few years, with all incredible lease deals.) I hope the city doesn't want to get screwed anymore like it does with the redskins and their amazingly good lease, (which is why they have the greatest resell value of any franchise in american sports) so they decided to actually take a stand with the crook Bud Selig.

Posted by phil on December 19, 2004 11:09 PM

"What's with people and their obsession with museums." What a brilliant retort. Well, maybe the fact that museums are NON-PROFIT (that means that they're not run to make money, in case you didn't know) cultural institutions designed for the use and education of the public for a low admission fee, and pro sports are for-profit, private BUSINESS enterprises (run to make as much money as possible), would explain why public tax dollars are better spent on museums than sports stadiums.

Posted by Guy B. Jones on December 20, 2004 10:28 AM

It's obvious that 4 of you are not sports fans (or live in L.A.) but while it is true that profits from sports stadiums do not go the people, they bring jobs. Cities benefit from taxes on the hotels as well as general spending by visitors/fans. Sports stadiums are no different than and Intel plant in Phoenix or a GM plant in Detroit. I agree that there are HORRIABLE deals, but to pick on sports is a travesty to intellectual honesty. You should also be as demanding to ALL business that works in your city. BTW, I don't care about this disaster in DC (I hope is comes unglued because it appears Williams acted on his own without the will of the people), but once the people speak (Dallas, Seattle, Denver, San Diego etc...) the minority that lost should shut up and let the majority see what happens.

Posted by Bob on December 20, 2004 03:20 PM

Actually, the typical stadium deal comes in at about one new job per $250,000 in public expense - that's awful even by typical economic development incentive standards. (You want to come in around $5K-$10K per job. Alabama's infamous "corporate welfare" deal for Mercedes was about $100K per.) As for "the will of the people," voters in Seattle actually voted *against* the Mariners stadium in a referendum, but were overruled by the legislature. Not sure what being a sports fan has to do with all this - I've seen both sports fans and sports haters on both sides of this argument.

Posted by Neil on December 20, 2004 04:28 PM

what's with the attack in the article on peter gammons, a well respected baseball journalist? i mean, granted, mlb is offering a terrible deal, but why take a pot shot at gammons for writing about it?

Posted by Sammis on December 20, 2004 05:07 PM

The problem with Gammons is that he reports a lot of rumors that are just untrue. He will repeat anything that he hears, no matter who says it. ESPN puts a lot of pressure on him to get information and they expect to get it.

Bob, I am one of the biggest sports fans that I know, but I am against publically financing stadiums (from an economic standpoint). The money should be spent to help the public, not to help the billionaire owners make more money. Plus, the owner not only gets a free stadium, but also gets the appreciation on his franchise if he chooses to sell them. Public tax dollars should go towards helping the citizens that need it and other needs that the city has (EDUCATION).

Posted by Michael on December 20, 2004 05:23 PM

Well the city of Montreal and province of Quebec originally balked at a new stadium there, and I can guarantee that Montreal won't cease to be a great city.

People always find a place to spend their money. The city of Toronto just announced the hockey strike has had no overall effect on the local economy. It is nonsense to worry that there will be more or less business with or without a sports franchise.

I hope DC residents are able to hold out on this and either get a remotely decent deal, or go back to spending money on themselves.

Posted by Joel on December 20, 2004 06:32 PM

Bob, broadly speaking, yes, stadiums create jobs, (so does any private enterprise, for that matter) but the real issue is how many, and of what quality? Besides the millionares on the field, we're looking at minimum-wage earning beer-sellers and souvenir hawkers. The amount of income they will be earning and the tax revenue that the municipality will make on their income does not justify a $450-$500 million expenditure of public funds. It's a pathetic return-on-investment. Your comparison of a stadium as being no different from a plant run by Intel or GM is inappropriate. GM and Intel are giant corporations that have created thousands of high-paying jobs; it's absurd to compare that to the few hundred chump-change paying jobs that a stadium might create.

Posted by Guy B. Jones on December 20, 2004 10:39 PM

This is a bad deal for the people in Washington DC, and it will be a bad deal for people in other cities. This will be used as the model of what MLB expects.

At some point, some one is going to have to say "Enough!" and stop giving public money to billionaires. I am hoping the people of Washington DC are the ones.

Posted by James E. Powell on December 21, 2004 02:40 AM

Has anyone ever thought that if enough people in a city like baseball, that public expenditure of money- regardless of investment potential- should be used to enhance a cities' offerings?

Posted by Paul on December 21, 2004 03:16 PM

stadiums not only create jobs but provide a lot of direct and indirect tax revenue. however, i imagine there exists a lot of argument as to how much, and whether sports franchises create new tax revenue or merely cause a shift (ie Joe Average spent his money on the game rather than a few extra bowling nights). it also may be a matter of civic pride.

the only way to stop city governments from having to provide ridiculous incentives to sports franchises and other large companies would be national legislation. a city that stopped independently would soon find itself losing a lot of corporations and residents to competing cities.

Posted by Sam on December 22, 2004 02:42 AM