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A generous baseball ‘deal’
Question of the Day
The District’s Sept. 14 Democratic primary served as a de facto referendum on the use of taxpayer funds to funnel hundreds of millions of public dollars to the owners of Major League Baseball, an industry in which players’ salaries averaged $2.4 million last year. Three D.C. Council incumbents (who supported the taxpayer subsidies) were defeated by three challengers (who opposed the subsidies). The public spoke, and MLB got the message. The day after the primary, D.C. and MLB representatives engaged in a 12-hour negotiating marathon to close the “deal” before the balance on the council shifts from pro-subsidy to anti-subsidy at the beginning of next year.
The “deal” involves the proposed relocation of the Montreal Expos to the District in exchange for a much-too-generous taxpayer subsidy to build the ballpark for the team. Apparently no price is too high for Mayor Anthony Williams, who desperately wants his legacy to be the return of baseball to the national capital. The latest figure for the stadium cost is $440 million, which, as Eric Fisher of The Washington Times reported yesterday, is “much higher than what was projected in the spring, and it likely would rise further before the ballpark would be completed.”
The District, whose income and population demographics make it a far superior market for baseball than any of the other competing communities, appeared to be bidding against itself. Moreover, during “collaborative discussions,” according to a report in The Washington Post, MLB officials effectively exercised veto power over an alternative site where RFK Memorial Stadium is currently located. Building a new ballpark at that site would have been far less expensive, but its selection was rejected because it was too far from the heart of downtown. Instead, a much more costly waterfront stadium would be built less than a mile from the U.S. Capitol on the Anacostia River.
To finance the $440 million project, the District would issue 30-year bonds. Annual debt-service costs would total more than $40 million. Those annual costs would be financed by $21 million to $24 million from a gross-receipts tax imposed on businesses with more than $3 million in annual revenues; $11 million to $14 million from taxes on tickets and stadium concessions; and $5.5 million in rent payments from the ballclub.
The team’s owners will receive all the income from ballpark naming rights, which can be quite substantial. The Redskins, whose stadium was privately financed, will receive more than $200 million over 27 years from Federal Express. It is outrageous for taxpayers to be on the hook for hundreds of millions of dollars over the next 30 years while the taxpayer-subsidized owners pocket perhaps hundreds of millions more for the naming rights of a ballpark they received as a gift. Should such a travesty come to pass, it would be the real legacy of Mayor Williams.
The subsidies are a hit with patients who don't exist
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