Yankees’ purchase of Scranton affiliate a “losing proposition” for taxpayers?

The excellent River Avenue Blues has a report on the proposed sale of the publicly owned Scranton/Wilkes-Barre Yankees to the parent franchise in the Bronx and Mandalay Entertainment, a deal that’s so complicated that it’s surprising the infield fly rule doesn’t come into play. As RAB sums it up:

  • Lackawanna County, which owns the franchise, would sell it to the Yankees and Mandalay for $14.6 million. However, the county would then be required to put that entire amount into stadium renovations — including tearing down and replacing the entire upper deck — while the state of Pennsylvania would chip in another $20 million. (Another $5.4 million in renovations would be paid for by … it’s not exactly clear.)
  • The Yankees would agree to a 30-year lease on their stadium, keeping all stadium revenues and paying $750,000 a year in rent. (They’d also pay $4 per each fan for attendance over 320,000 a year, which at current rates could amount to another few hundred thousand a year.) Without seeing the current lease, it’s hard to say how much of a sweetheart deal that is, but it won’t come anywhere near paying off $34.6 million in public expense.
  • The Yankees can still pull their franchise out of Scranton, with Lackawanna County only having the right to buy back the team for “fair market value,” which is likely to be way more than $14.6 million.
  • Luzerne County, which helped pay to purchase the team back in 1986, is suing Lackawanna for a share of the sale proceeds; Lackawanna is countersuing for its own baseball expenses. Half the sale money will be held in escrow until all this is worked out.

Given this whole mess, you really have to wonder whether Scranton wouldn’t have been better off keeping ownership of the franchise — there would be the threat the Yankees would move, yes, but minor-league franchises are easy to come by, and the Yanks have a built-in incentive to stay, given that Scranton is the nearest available AAA city to New York. (The whole reason they moved their top minor-league affiliate there from Columbus, Ohio in 2006.) RAB declares that “the deal is looking more and more like a losing proposition for the taxpayers of Pennsylvania,” which seems a fair assessment: In the best-case scenario, the county loses an asset and is barely made whole on the purchase price by added rent, while the state throws $20 million down a hole. The Yankees, meanwhile, end up with a new stadium for perhaps a million dollars a year in added rent, but get all the revenues from new suites and such — and can still walk if things don’t go well. Can’t anybody here play this stadium negotiation game?

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One comment on “Yankees’ purchase of Scranton affiliate a “losing proposition” for taxpayers?

  1. Triple A Embarrassment

    IÔøΩm new to the area and wanted to continue my interest and support of m
    Minor League Baseball. We have purchased ticket packages from our local team for years and anticipated an evening of entertainment and better baseball than our low A franchise had offered and looked forward to the AAA Yankees; what a disappointment!

    Where were the fans? Where was the noise? Where was the entertaining organist who kept playing between batters with appropriate shorts? Where was the on field master of ceremonies who got the fans involved with the various contests and sing alongs? Where were the kidÔøΩs teams, school groups, business outings; all with their names on the score board? Where were the give aways by local businesses? Where was the on field contest between innings? Why wasnÔøΩt the upper deck open?

    I observed more uniformed policeman than vendors, ushers and ticket takers. Why? With the excitement and crowd involvement being suppressed they should have used them to wake up the spectators. Only our usher tried to make a difference.

    Now IÔøΩm reading about the rift between the counties, owners, and management. Seems they think an expenditure for renovations; spending millions on brick and mortar. Folks thatÔøΩs not the problem! Hire true professions who have been successful at this game. Go to Lakewood, NJ to learn what it is all about. Go any day and see groups having cook outs, kids running around to the inflatables, and music, and partying around the field, some even hours before the game. Where is the excitement, Irish night, ethic festivals and other promotions that would bring in groups and their families?

    If the purpose of Mandalay is to keep the price of the buy out down they have succeeded but they donÔøΩt deserve 40 million in public funds for a new stadium.

    W Boyd, Gouldsboro

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