The Pittsburgh Post-Gazette ran a long article yesterday analyzing the connection between the Pirates‘ on-field performance and the city’s tax receipts, and found that when the team sucks (like now) and people don’t buy tickets (also like now), city ticket and parking tax receipts go down:
When the Pirates lose, attendance plummets, and city amusement and parking tax revenues tumble, according to a review of a decade of data by the Pittsburgh Post-Gazette.
This is, on the face of it, a no-brainer: Of course fewer people buying tickets means fewer people paying ticket taxes. Still, it’s the kind of dig-through-the-documents data journalism that gets a lot of play these days — the article goes on to detail how much city amusement tax receipts on Pirates games have fallen since the team started engaging in perpetual fire sales of its best players, even including a graph, because that’s what data journalism does:
If you’ve been following my harping on the substitution effect on this site, or even just my snarky tone in the last paragraph, you probably know what’s coming next: Okay, but if Pirates fans aren’t spending money at Pirates games, where else are they spending it? Specifically, are they spending it somewhere else that generates city amusement tax — which is charged at “any form of entertainment such as concerts, movies, night clubs, conventions, or sporting events.”
To figure that out, one would have to look up the total amusement tax receipts for each year, not just those generated by Pirates games. And, fortunately, the Pittsburgh controller’s office has those numbers handy on its website:
2012: $11,396,722.52
2013: $12,687,985.70
2014: $13,806,116.47
2015: $15,726,562.24
2016: $15,767,769.39
2017: $16,583,506.83
2018: $16,501,600.74
2019: $14,667,294.33
That doesn’t appear to show quite the same precipitous descent in revenues since the Pirates’ last postseason appearance in 2015 as the P-G article indicated. But here, let’s look at it in chart form:
So entertainment tax revenues went up when the team was good, then kept going up when the team got bad, then finally tailed off in 2019 when the team was really bad. In particular, in 2017 the Pirates’ amusement tax receipts fell by $700,000 when the team collapsed below .500, but overall city amusement tax receipts rose by more than $800,000. So clearly, it’s not that when Pirates fans stay away from the ballpark, they take all their spending money and stuff it under their mattresses; some may have chosen to go see more of the, er, great movies out that year instead.
I don’t want to get too down on the piece or its author, Mark Belko, who’s done good work before, and who I went back and forth with a bit over email yesterday about the substitution issue. Belko does include one more interesting piece of reporting further down in the article, an investigation of the Pirates’ ticket surcharge, a 5% fee that is charged on top of the amusement tax. According to the deal signed when the state helped fund the stadium (the one where a Pennsylvania legislator memorably quipped about tax increment financing kickbacks: “It’s not a grant. It’s not a loan. It’s a groan”), the Pirates owners keep the first $1.5 million a year generated by the surcharge, and only when it tops that amount does the city/county stadium authority get a cut. That threshold wasn’t reached at all from 2009-2011, when the Pirates were also terrible, and has begun falling off in recent years as well, with the result that the stadium authority has had to dip into other sources of public funding to do stadium maintenance.
That’s a terrible system for taxpayers, and could have been a great headline: “When Pirates Tank, Public Is Left On Hook For Stadium Maintenance.” Instead, the story the paper went with was “Moneyball: A losing Pirates season can impact city revenues, vendors, and even PNC Park itself” — which simultaneously overstates the value of a winning ballclub to the local economy while downplaying the way government negotiators created a perverse incentive for team owners to sell off their best players in order to fob off stadium maintenance onto taxpayers. This may seem like nitpicking, and it is nitpicking; but it’s the kind of nitpicking that’s necessary if we want news reporting that not only shines a light on stadium economic numbers, but best helps readers make sense of what it finds there.