Field of Schemes
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July 30, 2004

Yankees stay home?

Mass confusion strikes the New York media, as the mad scramble begins to cover the Yankees' new $1.2 billion stadium-plus-conference-complex proposal:

The New York Times reports that rather than the $450 million in subsidies reported by Crain's, "the city and state would probably have to spend around $100 million, officials said. Primarily, the city would be asked to create a string of ball fields and parks nearby." Furthermore, writes the Times' Charles Bagli, "the existing stadium, which opened in 1923 and has been the site of 33 World Series, would not be demolished, at least not most of it. It would be converted, possibly, to a multilevel parking garage with a soccer field on top, while retaining the ball field and the most recognizable elements of the structure." (At least somebody's getting their money's worth for that $5 million a year in design fees.)

Bagli further adds a possible explanation for why Yankee owner George Steinbrenner would suddenly be willing to pay $750 million of his own money towards a new stadium. The surprising answer: MLB's increased revenue-sharing.

The league's rules allow teams to subtract annual stadium costs from their revenue-sharing obligations. So the Yankees would pay, say, $40 million a year to repay the bonds, rather than handing it over to Major League Baseball.
"The team can shoulder most of the costs," said one person who has seen the Yankees' plan. "The beauty of this transaction is the fact that money spent towards stadium construction is viewed as an operating cost and isn't subject to revenue sharing."

(Well, maybe. According to an e-mail earlier this year from the late Doug Pappas, who was the expert in these things, "ordinarily I don't think construction debt would fall under 'Stadium Operations Expenses.'" If he was wrong, it means that the other 29 teams would be helping pay for a new stadium to make the richest team in baseball richer. I wonder what Larry Lucchino would have to say about that?)

Over at Newsday, meanwhile, the report is that the Yankees "are preparing another public plea for public funds. And New York City is preparing another rejection." The paper quotes a spokesman for Mayor Mike Bloomberg as saying: "The city has been talking to the Yankees about a new stadium for years, but a new facility will have to be built completely with private money. If there is accompanying investment in public infrastructure, it would have to pay for itself and wouldn't cost taxpayers a dime."

Of course, Mayor Bloomberg said similar things regarding the proposed Jets and Nets facilities, which combined are scheduled to eat up well over a billion dollars in public cash - justifying the expense by arguing that new fans following the teams across the Hudson would bring new city revenue. A Yankees stadium, by comparison, would merely move a team across the street, so the alleged economic benefits would be even more minimal than usual.

And finally, while I don't like to say I told you so: Did I tell you so or what?

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