It is undeniably the job of sports league commissioners to serve the interests of the very rich people who pay their very large salaries, so it should be no surprise when they do so, over and over and over again. But MLB commissioner Rob Manfred has a certain — style? panache? what’s a word like “panache” only without implying any actual skill or ability — that is unbeatable. In the past, he’s rambled robotically about how Oakland should agree to an A’s stadium deal or else “the relocation process” “will take on more pace, threatened incoherently that unspecified bad things would happen if Milwaukee didn’t cough up renovation money for the Brewers, and just generally been an awkward mess about anything and everything. It’s his brand at this point: He’s not really any different from other sports commissioners, just much more Manfreddy.
Yesterday, Manfred spoke to the 2024 Associated Press Sports Editors Commissioners Meetings, which is a junket where the nation’s sports editors gather to be, among other things, talked at by commissioners, and while there Manfred said the following, according to Dayn Perry of CBS Sports:
“There has been a long history of public financing of not just baseball but sports venues in general. Expenditure, public funds that people have seen as justified as part of the quality of life and entertainment opportunities available to residents in particular cities, as well as an economic driver. Certainly on the latter point, I recognize this is something that some will debate, but whatever the merits of it across the board, investment in baseball facilities is the best of the (sports) investments because of the number games. It just drives more people into the market for entertainment than any other sport just based on sheer volume. I do think that in today’s world, almost all projects, whether they be new stadiums, major renovations, all of those types of projects, almost without exception — and this is different than it was a couple of decades ago — are public-private partnerships with owners of teams making really substantial, hundreds of millions of dollars, investments. I think the Las Vegas project is a great example of that: it’s a billion-and-a-half dollar project where the public financing, I think the number is $380 (million) and the rest of that investment is going to be made by the owner.”
I know Dayn Perry, and I’ve heard Rob Manfred, and I don’t doubt that this is a verbatim transcript, even down to “because of the number games.” But some of it, even by Manfred standards, is just wow:
“[Baseball] drives more people into the market for entertainment than any other sport just based on sheer volume.”
What does “drives people in the market for entertainment” even mean in Manfred’s mind? Does he think that there are people who normally don’t spend anything on being entertained, but as soon as there’s a baseball game they can go to, they open their wallets and begin throwing tub dubs around? If so, several decades of economic studies have some news for him.
“All of those types of projects, almost without exception — and this is different than it was a couple of decades ago — are public-private partnerships with owners of teams making really substantial, hundreds of millions of dollars, investments.”
There’s a great chart in that big meta-analysis paper by J.C. Bradbury, Dennis Coates, and Brad Humphreys that sheds some light on this one:
There are some caveats here, like the fact that with stadiums in the 1960s and ’70s and ’80s cities recouped more of their costs via team rent payments than they do today, so those deals look worse in comparison. But the trend worth paying attention to is the dotted line vs. the dark gray bars: Even if you credit team owners with putting in a bigger share of costs than in olden times, the public is still being charged more and more money per stadium — because stadium prices are going up at a staggering rate. (And yes, those are inflation-adjusted dollars above.)
On top of that, there are all sorts of ways that team owners can recoup their costs these days — naming rights, luxury seating, personal seat licenses — none of which are typically shared with their public partners. So if there’s a trend, it’s that owners are requesting larger and larger sums of taxpayer money, while spending on increasingly lavish digs whose proceeds they keep all for themselves.
“The Las Vegas project is a great example of that: it’s a billion-and-a-half dollar project where the public financing, I think the number is $380 (million) and the rest of that investment is going to be made by the owner.”
It’s actually $600 million in public money counting tax breaks, and “the rest of that investment” is still very much TBD. But sure, let’s point to a stadium project that is currently on hold where the public has put up $600 million and the owner has put up bupkis as an example of how successful public-private partnerships can be.
To his credit, Perry points out a lot of this himself, including linking to a FoS post as evidence that the $380 million figure is too low. And his kicker is 
, so let’s give him the final word:
Very likely, the response to questions such as the one posed to Manfred won’t change – it will remain a mix of obfuscation and evasion. You, though, have the power to acknowledge the facts and not believe what you’re being told, no matter how many times you hear it.
This is a fun reminder that building infrastructure in the United States has skyrocketed relative to the rest of the developed world. Why has it increased? Some has to do with wage laws, but experts also cite NIMBYism from wealthy residents and farming out basic engineering and administrative duties usually handled by municipal and local government agencies to contractors. Strangely, attempts to formally study the issue and determine if graft and incompetence from domestic constructors plays a role keeps getting scuttled in Congress.
So rest assured folks – not only are you paying way more for stadiums and related infrastructure projects, you get far less back in return than they do in Europe! The 2020s are a grand time.
https://www.vox.com/22534714/rail-roads-infrastructure-costs-america
https://www.npr.org/2023/07/21/1189450206/why-public-transportation-is-especially-expensive-to-build-in-the-u-s
Phoenix has 2 examples of how poor planning can drive infrastructure costs sky high. The PHX Skytrain was built to connect the airport terminals to the light rail, which nobody other tha a handful of employees use, at a cost of a billion dollars. Then Phoenix discovered that there is far more traffic to the rental car center, in the other direction. Another billion dollars. Despite extremely low population density for a large city, Phoenix believes that light rail cures everything. Therfore the obvious way to connect Central and Baseline ( for those who aren’t familiar with Phoenix,
don’t waste your time going there, unless you’re on your way to South Mountain Park) to downtown, 5 miles away isn’t BRT, it’s light rail again. Ripping out and relocating all those utilities in the middle of the street so there room for light rail tracks, another $1.5 billion. Stadiums aren’t the only way dumb politicians waste taxpayer dollars on wasteful infrastructure projects.
We stopped through for a day on our way from northern Arizona to Sierra Vista (where we have family), and the Phoenix children’s museum was pretty nice
And when the operating costs of light rail eat up transit dollars, the city responds by cutting back bus service. Working people get screwed so a handful of yuppies can ride the train when they want to.
From MLB’s POV, a “partnership” where the costs are socialized onto the public “partner” while the revenue is privatized into the bank accounts of the private “partner” iz indeed very very gud.
Baseball’s financials seem pretty shakey. No doubt the Dodgers and Yankees are on solid footing, but the bottom 2/3s of MLB seem to either have poor/cheap owners that will only get worse as the local tv money goes away or the team is located in a city that just has no shot of ever competing regularly without stadium subsidies, revenue sharing and a ton of luck.
At least in terms of revenue, MLB has never been better – I think they pulled north of $11 billion in 2023. Even when John Fisher claimed his team was losing $40 million a year, he was still millions in the black annually because of revenue sharing from the league. I think the economics of MLB, which lacks a salary floor but also no “true” cap, incentivizes cheap owners because they keep wages down. Even when having to pay out tens of millions to a cheapskate like Fisher, the other owners figure they’re saving more money in the long run because he’s not dropping $250 million contracts that reset the market.
https://www.forbes.com/sites/maurybrown/2023/09/11/as-financial-details-reveal-john-fishers-claim-of-40-million-losses-for-2023/?sh=2ecdc7656627
I do not believe there is a single club today losing money, and I am confident that a decent chunk of teams crying poverty could actually afford to spend tens of millions more on payroll and still be profitable. Most teams never want to admit that they’re making their owners rich, because then they’ll never get to demand subsidies. They will use every accounting trick possible to maximize their expenditures while obfuscating their revenue streams. The massive disparities in competitiveness between MLB clubs is more due to owner choices and incompetence than it is in revenue.
The potential issue of local TV money and a potentially looming bubble burst in sports broadcasting rights is valid, but I don’t think that’s solely a baseball problem. MLB needs to un-fuck all of their idiotic blackout agreements that make their otherwise excellent mlb.tv platform useless to huge swaths of the country. If they sort that out, they could absorb the assets from those collapsing RSNs and soften the blow.
Structurally though there’s a handful of teams that are truly valuable and make crazy money, and the owners are all their own little fiefdoms. There’s no incentive to pool together local broadcast rights.
Local tv is more of a baseball problem than other sports. The NBA and NHL make the bulk of their broadcasting money via national deals, the local revenue is nice but doesn’t put the big markets at a huge advantage.
The schedule fillers seem to have less and less reason to exist if they aren’t getting public subsidies, or any local tv money.