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?

Yankee repairs at the AAA level

The New York Yankees may have their own set of problems with the new Yankee Stadium, but trouble may also be brewing at the lower tier of the Yankee empire. Calls for renovation of their AAA Scranton, Pennsylvania facility were reported yesterday.

The Scranton Times explains that about $13.3 million in repairs will be needed to revitalize the 20-year-old stadium, including $4.5 million in electrical system replacements.

Lackawanna County is responsible for maintenance of PNC Field (not to be confused with PNC Park in Pittsburgh), but in a situation similar to the old Yankee Stadium, work can be arranged by SWB Yankees, the team owners, and charged against county stadium revenues.

The Yankees minor league franchise deal ends in October, prompting the predictable non-threat to move, something that is pretty standard in opening negotiations, with team president Kristen Rose saying “we’re still happy here.” If the shakedown model in most cities follows, Scranton officials and/or reporters are likely to highlight the potential for a move to another city, and tax dollars will fund whatever renovations and repairs the team wants.

The amounts are small in the grand scheme of things, but Lackawanna county is likely to have a number of other uses for $13.3 million. No word as to whether Dunder Mifflin paper products were used in the publication of this Scranton Times article or if they currently serve as a sponsor for the local team.