The WSJ Singles on Sports Subsidies

The Providence Journal goes down looking.

The Journal has a pretty good story today on corporate welfare for sports teams.

This one’s about the Boston Red Sox getting a new spring-training stadium in Fort Myers, Florida, whose fortunes have been brutalized by the housing bust (housing prices have fallen 50 percent in a year and it’s the “foreclosure capital of America”). The cost to the county starts at $100 million.

For a spring-training stadium.

This story is nicely conceived. It’s great to juxtapose the woes of a city with the frivolity (and hey, I like sports as much as the next guy) of subsidizing a bunch of loaded ballplayers and owners with taxpayer money at a time when the local budgets are getting slammed by plunging tax revenues.

But the dramatically diverging fortunes of the Red Sox and Lee County’s 600,000 inhabitants are striking local nerves. The ballclub, which has played its spring tune-up games in Lee County since 1993, has enjoyed regular sellouts at the current stadium and won baseball’s World Series twice in the last five years. Meanwhile, the number of food-stamp recipients in the county has nearly tripled over the past two years, while the foreclosure rate is one the nation’s highest.

Check out the slideshow, which puts it into visuals.

And the story gets the space it needs, enough for a classic Journal nutgraf telling us why we should care about this story (something we’ve noticed is too often missing lately):

The recession is drastically shifting the decades-long debate over the value of subsidizing sports stadiums. Local governments, which once had cash to burn, are suddenly heavily squeezed. Consumers, once willing to fork over more money for seats in showcases, are seeing their disposable incomes vanish.

As a result, big facilities like the one planned here, once viewed as huge revenue generators and symbols of local pride, increasingly look to many people like monuments of a bygone era of excess. In New York, the new home of the New York Mets, Citi Field, has been dubbed “Bailout Park” and “TARP Field” by locals in the wake of the federal government’s Troubled Asset Relief Program. Citigroup Inc., recipient of billions in TARP funds, helped foot the bill for the Mets’ new digs by paying $400 million for naming rights.

I thought I liked this story on first read more than I ended up liking it after analyzing it. There are some holes in it, though I still applaud what’s mostly a good look at this subject. Its heart is in the right place, as they say.

First, the piece doesn’t tell us what’s so wrong with the current stadium that it needs to be replaced. So let me consult Google. Ah yes. City of Palms Park. Built just sixteen years ago. Looks like a delightful place for a game.

Why wouldn’t the Sox be happy there? Here’s your answer, courtesy of a poor story in The Providence Journal, which is in a Red Sox market:

The Sox now play at picturesque City of Palms Park, built in 1993 and owned by the county. But their minor-league complex, player-development facility, practice fields and offices are two full miles down the road, through a residential neighborhood. With nearly every other team boasting consolidated training/stadium complexes, it’s a fragmented life that the Red Sox have grown tired of.

Two full miles down the road! Through a residential neighborhood? Let’s spend $100 million so these guys aren’t inconvenienced is a great idea. This is the sound of grown men whining: “Mommm, nearly every other kid has consolidated training/stadium complexes, why can’t we?”

But seriously, the reason behind the whole new-stadium push is a basic element missing from the WSJ’s story.

Second, the WSJ doesn’t spell out for those who aren’t baseball fans that spring training only lasts a month and a half each year. Then they head north to their real stadiums where they play for six months. The Red Sox only played eighteen games at home in Fort Myers this year. They’ll play at least eighty-one in Boston. That context should have made it in there.

A corollary to both—the WSJ also doesn’t say if Fort Myers has a minor-league team that would use it the rest of the year. That basic question led me on a quick search that found out something that should have been in the story. There is a minor-league baseball team in Fort Myers, but it plays at a different stadium—one the Minnesota Twins call home for a month before each season. The Journal does note that the Twins play in Fort Myers, but on first read I, and I assume many other readers, thought they played in the same stadium as the BoSox. They don’t.

So building this stadium will give Fort Myers three baseball stadiums, two of which will sit fallow about ten months of the year (And there are actually four baseball stadiums if you count Terry Park Ballfield, a national landmark that used to host major-league teams).

And although the story clearly is trying to show that this is a boondoggle, it succumbs to some false balance:

But the economics of such projects remain murky.

No they don’t. These projects don’t make economic sense. Almost all the research has found that.

The WSJ’s own reporting comes close enough to concluding that (keep in mind here that these economic-benefit studies are notoriously worthless):

Local supporters point to a Florida-funded study in 2000 estimating a county derives $25 million in annual economic benefits by hosting spring training. A study commissioned by Sarasota County last year estimated the Sox could generate $45 million in annual benefits.

Several academics dispute those projections, pointing to data showing tax and sales revenue have remained stable in counties after they secured or lost major league baseball teams.

Go with it next time, WSJ! Slide headfirst into second!

I referenced that poor ProJo story above, and it’s emblematic enough of a certain boosterish sort of sports journalism that I thought I’d give it a closer look, too.

First the dramatic lede, setting the scene with the visionary sports executive surveying his future fiefdom:

Red Sox Chief Operating Officer Mike Dee looks into the Florida underbrush and sees something that isn’t there.

In place of the scrawny trees and used-up gravel pits, Dee sees a ballpark filled with 12,000 people, surrounded by fields where minor-leaguers train. There are offices, and a sprawling rehab and workout complex. On the vacant lots around it, developers have built hotels and retail plazas.

Followed by the everybody-wants-a-piece-of-them graph:

The Red Sox had been talking with Lee County for several years to let them know that they wanted a bigger, consolidated facility. Then Sarasota knocked on the team’s door, trying to lure the Red Sox north to their city. That jump-started negotiations between the team and Lee County, culminating in an agreement to keep the Sox in Lee County for 30 years, provided the county builds a new complex for the team.

The ProJo doesn’t report what the Journal does: That Sarasota citizens rose up to knock down any corporate welfare for the team.

And the paper might as well have just let the Red Sox flack write the story:

A new complex is seen as an economic driver for the area, but the Red Sox believe it could mean big things for the team’s baseball operations, as well.

“Is seen as an economic driver”? By whom? The team and three county commissioners. Again, as I wrote above, it’s been well-established that sports stadiums don’t drive economic growth. You’d think sports desks would know this by now.

And now its time for the requisite “to-be-sure” graph:

Many have raised concerns, however. At packed local board meetings, residents have asked whether it’s right for Lee County, which had the second-highest foreclosure rate in the nation in the month of February, to spend nearly $100 million bankrolling a baseball complex for a New England team.

That’s all we get for skepticism in this long piece. And that half-hearted paragraph is followed immediately by this:

(County Commission chairman Ray) Judah insisted this is precisely the time to undertake new economic development projects.

“While there are still those who have expressed doubt or concern about the timing, what I have been able to convey is that we don’t want to circle the wagons and hunker down. This is really a time when we need to stimulate their local economy,” Judah said.

It sure is. But there’s no question here on whether a baseball stadium that will sit empty the vast majority of the time (even in spring-training season) is the best way to stimulate said local economy.

If you bet that the story’s next source would also have a vested interest on the “for” side of this project, you got it right (emphasis mine):

John Yarbrough, the county’s former parks and recreation director who has been retained as a consultant on the project, said that the financial structure of the deal should mitigate residents’ concerns somewhat.

The stadium would likely be paid off through borrowing from the county’s own reserve fund, which would be paid back through tourist taxes.

Money is fungible. Tourist-tax dollars aren’t magic money that doesn’t have an effect on other local taxes and spending—even if the law says it can’t be used on things like homeless shelters. As the Journal was good to point out:

Philip Porter, an economist at the University of South Florida, said Lee County’s decision to bankroll a new spring-training site is “unconscionable” amid the current uncertainty.

Mr. Porter notes local taxpayers could be on the hook if Lee County’s tourist-tax revenue, which has remained stable in recent months, shrinks in the coming years. He also argues communities have wiggle room with tourist-tax proceeds and could be directing them toward a local park or school gymnasium, freeing up local taxes for other needs.

As far as I can tell, the ProJo reporter, Daniel Barbarisi, didn’t talk to a single independent, skeptical source—at least he didn’t quote or paraphrase them.

Look, I understand this is a sports-section story. But that’s no excuse. If you’re going to wade into the business and political end of things you’d better do it right.

There is one interesting bit of information here that caught my eye, however—of course framed in the best possible light for the pro-stadium folks:

The Baltimore Orioles, who are dissatisfied with their current Fort Lauderdale location, have been in talks to replace the Red Sox at City of Palms.

And ‘round and ‘round we go.

Has America ever needed a media watchdog more than now? Help us by joining CJR today.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.