WRAL in North Carolina this weekend uncovered the financing plans for a new publicly funded stadium for an as-yet-theoretical MLB expansion team in Raleigh, and while it didn’t publish the legislative language itself, the TV station’s coverage did make clear that the project could cost taxpayers a whole lot more than just the $700 million in state development funds that was previously floated:
- The stadium is projected to cost $1.7 billion, despite not having a site or a design, a number that the funding document reports “came from independent financial models,” per WRAL.
- The state would provide $500 million in cash — presumably from its Economic Development Project Reserve slush fund, though the news report doesn’t specify.
- Additional funding would come via “local revenue sources” (city and county taxes? WRAL doesn’t say), “sports gambling taxes” (a la Ohio Gov. Mike DeWine’s so-far dormant plan for funding a Cleveland Browns stadium), siphoning off of income taxes from players and performers at the stadium, and “the creation of a sports and entertainment taxing district” — the last of which sounds like a TIF, though again, no specifics are provided.
The combined public money would, apparently, be enough to pay the entire cost of a $1.7 billion stadium, which would make it the most expensive stadium subsidy in baseball history. (The bill would leave the cash on the table for four years, after which it would be withdrawn if no team materialized.) It’s possible North Carolina could charge a prospective expansion team owner rent to recoup part of the cost — but given lame duck state senate leader Phil Berger, who is the lead sponsor of the stadium bill, said last week that “my understanding is most of the professional leagues discourage interest in localities that basically say, ‘We’ll take it, but only if the stadium is paid for by the owners,'” probably best not to hold your breath on that one.
Of course, maybe best not to hold your breath on any of this, since, as noted here on Friday, state house leaders hate Berger’s plan and are keeping it out of the state budget, for now at least. Still, even an abortive attempt to offer $1.7 billion for a free stadium in order to land an MLB expansion team would be quite the opening bid, and would likely make Berger’s prediction that MLB will demand massive stadium subsidies in order to consider any expansion candidates into a self-fulfilling prophecy. There are lots of signs that some MLB owners aren’t actually that interested in expansion — it would come with juicy one-time checks, but in exchange for diluting existing owners’ shares of TV and streaming revenue — but if free stadiums are being dangled, that could get enough owners salivating to tip the balance.
North America has reached peak baseball — and, for that matter, peak sports. There are no new terrains to be conquered around these parts, let alone any new fanbases to be cultivated, which is why all four “major” leagues are going all out on international reach. Even the NBA’s currently expansion efforts revolve around one market where a team previously existed for some 40-odd years.
The owners are fully aware that expansion isn’t the short-term cash grab that much of the media has portrayed it to be; in reality, it’s a long-term play where any payoff in terms of a potential fanbase and a second windfall for ballpark renovation (or rebuild or replacement) could take as much as 30 years to be realized. Some of the current ownership cohort won’t ever live to see how expansion ultimately turned out in places like, say, Charlotte and SLC; hell, some might not even make it to see the ending of the A’s and Rays’ sagas.
The nature of how the Charlotte’s and the Nashville’s and the Raleigh’s of the expansion carousel developed into major population centers — driven almost entirely by transplants moving in by the literal millions — means any new teams there will functionally operate under small-market status indefinitely… kind of like how Tampa Bay and South Florida, both of which are larger than all of the cities above, are effectively small market franchises based in medium- to large-market towns.
Probably more peak sports. The NFL has definitely reached a point where there is no domestic market that is worth dividing the pie even more for.
MLB kind of has a “Carolina” shaped hole it geographically, but does adding it help the league enough the divide the pie and dilute the talent. Not to much that it would require adding another team in Salt Lake City or Portland
I wonder if some of the “indifference” to expansion cash is down to not only the available market sizes, but the fact that in many leagues a significant number of teams have changed hands fairly recently.
Expanding just to rake in the cash only makes sense for existing owners if a significant percentage are planning to sell. If you are keeping your team indefinitely and are under 50 years old, lets say, the up front benefit of the expansion fees pales in comparison to diluted TV money over the next 3 decades.
If there were untapped mid range markets one could argue that enough new fans will be created in the new markets to offset the loss of TV share. But particularly in the case of MLB – with lots of game day tickets to sell – the available markets aren’t very good.
The NBA might do ok bringing back Seattle and adding Vegas, but lets not forget they have some poor cousins already in the fold that don’t really drive any significant league revenue. MLB doesn’t really have any ‘can’t miss’ markets to go to. There are certainly viable smallish markets they could explore/return to. All of the available ones will be permanent bottom half revenue clubs (along with half a dozen existing locations), though.
Are those markets really worth the trouble?
It’s certainly true that you can’t run a league just having the five or six largest markets playing each other all the time. However, there is an opposing tenet as well… if the biggest and best teams can’t play each other often enough to drive rivalries and revenues, then the benefit the smaller clubs get from having the big teams in town comes at the expense of league revenues overall.
In simple terms, it’s easy to see why the Marlins or Rockies would like to have the Cubs or Dodgers in town more often. They won’t sell out, but they will sell significantly more tickets than for most other opponents. But if that benefit comes at the expense of scheduling fewer Cubs/Cardinals or Dodgers/Giants games, is MLB really better off overall?
The notion that every team should visit every market at least annually is flawed. Regardless of sport, you have no guarantee that fans in any given market will get to see Ohtani, Trout, Crosby, McDavid or Wemby on the night their teams visit. In trying to make that happen (or at least more likely to happen), I think that leagues are doing themselves long term harm.
NC had its chance to get the Twins many years ago and they voted down tax to build the ballpark. I don’t see how it would work when its higher by a factor of 8
I was living in Greensboro when the notorious Blue Sox proposal was put before the voters. Upon reflection, it was a gesture to capture the good will surrounding the temporary relocation of the Whalers->Hurricanes to GSO and see if there were suckers, er, popular support for more or different. The Triad was and is caught between larger populations centers in Charlotte and the Research Triangle, attracting many fewer (but not zero) transplants from sports-centric cities elsewhere. True locals were very content to have the ACC Tournament in the Coliseum as their “big league” event; given the tax base and general willingness to support sports-y boondoggles at that time, their feelings were wisely proportionate.
In the end, while the Blue Sox dream was stillborn, the ballot measure did sharpen the focus upon improving the city’s minor league facility at the War Memorial Stadium, which I believe is used by NCA&T now, and constructing a new park before the MiLB cabal forced their hands.