Rhode Island asks for split of PawSox naming rights, team threatens to leave town again

As Rhode Island House Speaker Nicholas Mattiello suggested back in October, the state legislature is revising its proposal for a new Pawtucket Red Sox stadium to cut down on the $38 million in taxpayer subsidies that were in the initial plan. The new provisions:

  • The team would split naming-rights revenue 50-50 with the city, instead of keeping it all itself.
  • The amount of stadium bonds would be increased from $71 million to $85 million (since the initial bond estimate failed to take into account things like paying the bond lawyers), with the team now paying off $41 million and the city and state $44 million.

This doesn’t exactly sound like a worse deal for the team — the extra $6 million in public cost would almost eat up any of the new naming-rights money at the going rates for such things — but I guess the PawSox owners were counting on the public getting stuck with all of those bond financing costs, because they declared themselves “concerned” over the new provisions:

The PawSox, with the overwhelming majority contribution of $45 million, the commitment of 30 years, and the responsibility of ballpark construction cost overruns, are taking the most significant and likely risks to ensure that this once-in-a-generation project comes to fruition for Rhode Island.

We hope we can keep the PawSox in Pawtucket, and we have offered unprecedented private funds to do so.

I am so trying this move the next time I engage in salary negotiations: “I’m taking the most significant risk here! I hope to remain with this company, and I am making an unprecedented offer to do so! Now, can I have $44 million, please?”

In very related news, the Worcester Business Journal interviewed a bunch of stadium experts (including me) about how much Worcester should offer to put up to lure the PawSox to that town, and came up with the conclusion “not much.” (Holy Cross economist Victor Matheson, who is pictured in a lovely photo tossing a baseball in the air, figured $5-10 million was a reasonable maximum.) The best line, though, goes to University of New Haven business professor Gil Fried, who after noting that the economic impact of a stadium is about the same as that of a Walmart, had this to say about stadium economic impact studies:

An economic study conducted for Pawtucket and the PawSox found a proposed $76-million stadium would pay for itself through new revenue…

Those studies – often paid for by officials wanting to justify building a stadium – have their detractors.

“Those things are a piece of junk,” said Fried.

You said it, pal.

7 comments on “Rhode Island asks for split of PawSox naming rights, team threatens to leave town again

  1. I think Rhode Island is in strong position and should start reduce its subsidy offer.

    Like oh you don’t like our offer of $44 million? Lets make it $30 million, and you have a week to accept before it drops another $5.

    Though frankly even $30 million is a terrible deal.

  2. I don’t think there’s a single credible move candidate in New England for this team. Particularly after Hartford, cities and states have a harder time justifying this, given the split tax bases and difficulty in putting big bids together.

    If the Red Sox are willing to see them walk to the Carolinas or Texas, that’s one thing, but teams seem more and more to want the AA and AAA not too far away.

    I’m with the above–drop the bid and see what they do. 50/50 that they want to leave anyway.

  3. “The commitment of 30 years”.

    That’s an interesting term to use. Typically teams try to build a following in their home area… to which they might be naturally committed (fans didn’t used to be expected to both support the team with their after tax discretionary spending dollars AND funnel tax money to them as well).

    A “commitment of 30 years” in exchange for tens of millions of tax dollars sounds quite a bit like (apologies for the vulgarity) the kind of time/money based commitment a prostitute might be said to have made.

    “You will pay me money and I will stay for a prescribed period of time” is not a commitment, it is a transaction.

    • I think that’s a reach, and arguably unfair to sex workers.

      It’s not really “we promise we’ll be a viable franchise for 30 years.” It’s “we promise we won’t shake you down for money again by threatening to leave in the next 30 years.”

  4. $71m to $85m because the team forgot to include administrative costs and fees in the original estimate?

    That’s a 20% bump. Are they using the same three guys who fleeced Puerto Rico on their debt restructuring (and personally pocketed nearly a billion for doing the transaction)?

    Or is this the vampire squid again (and thus just the tip of the fee iceberg)?

  5. Why not just re-renovate McCoy Stadium at this point? Granted the question of “Who pays for it?” would still need to be answered but it has to be a cheaper option at this point.

  6. “The PawSox, with the overwhelming majority contribution of $45 million”
    Can anybody explain this line? Just above that the team’s contribution is stated as $41 million under this new plan. Their share didn’t decrease by $4 million when the bond total was increased, did it?