Tuesday, January 10, 2006

Potter rains on the Marlins Parade....Hawkey Talk and more....

In a suprise to everyone, Suke and I are out of the studio again today. But..... it is by our choice. We will be at the Memorial Coliseum prior to the Portland WinterHawks game vs. Vancouver tonight. I am filling in on the PA again for the great Dan Fowlick who is unavailable, so since we are both hockey fans, why not hang out at the rink for the afternoon.

It is a strange setting for what we will be talking about though. We will be at the old sports venue in Portland, talking about building a new one to bring baseball here. Yes, we will be hitting the Major League Baseball to Portland topic hard again today, with Steve Kanter from the Portland Baseball Group.(http://www.portlandbaseballgroup.org/faq_01.cfm#4

If you saw the comments yesterday from Portland Mayor Tom Potter, it has to be maddening. When a mayor of a city effectively says I'm pro-education and so I don't want baseball here that is idiotic. Does that mean that cities with Major League Baseball teams are not PRO-EDUCATION? I would venture to say many of those cities have better education situations than we do here with the Portland School District. What did he accomplish by his comments yesterday? How about this gem from the Oregonian: Asked whether most Portlanders couldn't care less about a baseball team, Potter said: "That's my very strong sense."
Someone needs to give him the following information: Portland consistently ranks in the Top 10 in the country each season in television ratings for the World Series, including this season when only three markets outside of Chicago or Texas had better Nielsen numbers than Portland. On local cable, the Mariners, SEATTLE'S team, consistently beat about 2/3 of the other major league cities in terms of cable ratings for a team three hours North. In other words, the team up there gets better cable ratings than teams in their own market like the Royals, the A's, etc. So nobody cares?

Economic Development
This from the Portland Baseball Group web site: A new stadium would raise surrounding property values and spark economic development. The precedent has been set elsewhere. Property in the surrounding area of Coors Field in Denver has jumped from $10/foot to $80/foot since the opening of the stadium. In the first year of its operation, Baltimore's Camden Yards pumped more than $52.8 million into that city's economy. Jacob's Field in Cleveland created more than 6,500 new jobs to the surrounding neighborhood.

So what is the real concern?
I spoke to a couple of people who work for other sports franchises in the market (keep in mind we have an NBA team, a PCL baseball team, a WHL hockey team and now a lacrosse team) who both say the exact same thing: There is not enough corporate support for major league baseball.
WHAT???
Here is what they said:

"There is not enough corporations based here. By corporate standards, at the 23rd media market, we are considered to be a small market."

As such he continued.....
"The dollars invested here from corporate hospitality are not enough to support another team, at least a major league baseball team" although he also says, given the right situation, "I think hockey could survive here."
"There aren't enough companies in the market who have headquarters in this area or are specifically focused on this market (as opposed to other West Coast cities) to make the corporate support of another major league franchise viable."

I though of other cities who seem in a similar situation, i.e. being in the shadow of a larger market, and asked, for example, why are we different than San Diego?
"San Diego has a lot of corporations who are based there. We don't. Companies relocate to San Diego." In other words, what he is saying is places like San Diego, Phoenix, Denver and others have had corporate or regional headquarters go there and set up shop as opposed to Portland.

Next question: What about those who are based here, like Intel?

"Intel doesn't do sports marketing. It has 15,000 employees but they don't make a significant sports marketing investment, even in their own community."

So what do you think? Who is right? Under Mayor Tom Potter, we may never know. But to make the comment that you can't have MLB AND top flight education is irresponsible.

12 Comments:

At 4:10 PM, Blogger BuddyJay said...

I have been somewhat of a baseball to Portland detractor for some time. I have always said I would rather wait until the situation is a sure success versus getting a team that loses money and languishes each year waiting for the cap proceeds.

However, everyone should be upset at this point with the mayor. Even the skeptic should invite the Marlins into town and put their best foot forward. You want to get further in the process to see what the potential package would be. It's true Oregon has to figure out the education issue, it has been horrible ever since I was growing up in SW Washington watching ballot measure after ballot measure in Oregon fail, but that issue is a separate issue from baseball to Portland.

If you tell a girl you don't deserve her or introduce yourself with your #1 insecurity, you will never get the girl. Come on Potter, at least try for a second date!

 
At 4:52 PM, Anonymous Zach said...

What Potter fails to realize is that by bringing an MLB team to Portland, it would create more jobs in the Portland area. If there are more people working in the Portland area, there is a bigger tax base to take money from to repair the educational system in Portland. In no way would bringing an MLB hurt education in the least. To assume that it would is idiotic.

Maybe Potter should go back to class himself to realize that more jobs equals more money for the government itself. And the point that Portland has no corporate sponsorship is downright ignorant. No corporations exist here except what, Intel, Nike, even Adidas HQ is in Portland. Yeah, there certainly isn't any damn corporate sponsorship available in Portland.

 
At 7:58 PM, Anonymous Anonymous said...

More jobs, no way. A successful MLB team sells about $100 million/year in tickets. Where does that come from? Mostly from the entertainment budgets of local families. Money that would otherwise be spent at theaters, clubs, restaurants, etc. Figure a net loss to Portland of 200-300 jobs if baseball comes, that's 20-30 restaurants, theaters, and clubs.

Where does the money go? To players. The players mostly won't live here, and because they earn their money over a very few years, they save most of what they earn. So they won't spend much here, and it's a dry hole for the local economy.

What about the idea that this is free money, nothing coming out of the public trough? No way. The promoters want to fund the stadium with the regular state income tax on player salaries. But the player salaries are paid from money paid for tickets by local residents who would otherwise be spending it where it would produce taxable income for many other local wage earners. This is a big cut out of local tax revenues. For an MLB or NBA team, it would be as much as the $4.5 million that you claim the Blazers put into the local economy. And much of the $4.5 million that the Blazers put in is in kind (tickets and time), e.g. free to them.

BTW, notice that the greatest and best baseball stadia were built with private, not public money: Ebbetts Field, Yankee Stadium, Fenway Park, the Polo Grounds, Wrigley Field, etc. Figure it out.

Does it really help a city grow? No. Some of the most prosperous and fastest growing cities over recent years -- Columbus, Austin, Albuquerque -- have no big league teams. Some cities with big league teams are in terrible shape -- Oakland, New Orleans, Detroit, etc. And don't forget how the Portland Breakers went bankrupt and stiffed half the town.

When a half-baked town like Portland gets a team, it's really the other way around. The team gets the town -- by the short hairs. You get this perpetual suggestion from the beloved owner that "I love this town, and I'd never move the team out of it, but if you don't spend money on X for me, I'll have to sell the team to someone who will." That's happened all over, including here.

There is a possible source of free money to pay for a stadium. The basic economics of baseball franchises works out like this: (1) The owners buy a franchise for about half a billion dollars. (2) A city builds the owner a free stadium for about half a billion dollars. (3) The owner winds up with a franchise that's worth about half a billion dollars. That's right, between public and private money, it costs a billion to create a half-billion franchise. The simple way to get public money out of it is to recognize that sports franchises have no value. Have the league or the previous owner give the franchise to the new owner. Have the new owner build his own stadium with his half-billion dollars. Problem solved. No public money. That's the way that the free market system would solve the problem. It's an optimal allocation of resources.

That's the main reason not ot have subsidized baseball, it's socialized baseball, it's socialism, socialism, socialism, i.e. government funding of the capital required to produce private goods for private needs. America has become great by avoiding socialism. We are in a free market age with a free-market President and free-market courts, a free-market Congress. Why go back to the way the Bolsheviki want us to live. Cuba has socialist baseball and they have to juice up the balls and cork the bats to fill the stadium. That shouldn't happen to America.

 
At 9:07 PM, Blogger BuddyJay said...

Completely discounting the out-a-towner attraction of a baseball team. All those out-a-towners pouring money into the economy when they visit.

 
At 10:30 PM, Anonymous Anonymous said...

Right. How do you know lots of out-of-towners would come to Portland to watch baseball?

Portland is very poorly situated to draw out-of-town fans. Portland must have fewer potential fans in the 40-250 mile range than just about any city in MLB. Lots of people to the north, but they'll almost all go to Seattle.

Maybe out-of-towners who would come to Portland anyway would watch baseball while they are here instead of spending the money on restaurants, shopping, museums, theater, etc. If you are just pulling bucks away from other local businesses, no gain.

A loss actually, based on where the money goes. And if I run a local restaurant, steam bath, miniature golf course, or nightspot, and my local government that I support with my taxes is going to go into partnership with my competitor, and let my competitor's taxes get syphoned off to pay his costs of operation, I think that's not very fair.

If baseball in Portland is a paying proposition, it would be here without government help. If it's not, it shouldn't be here. Brookings (Roger Noll or some such) has done a study on the net economic effects of sports teams, and it's nil.

 
At 12:07 AM, Anonymous zach said...

Wow, someone here has absolutely no grasp of economics at all. The money that you are claiming is coming out of the economy from various entertainment budgets within a family is money that is there for just that, entertainment. That money is disposable income, by putting that money into a ticket, it would help create more jobs at local bars, restaurants, hotels, and at the stadium itself.

People would find a way to pay for both the restaurants and the tickets. Not to mention the out of town business that it would indeed bring into the Portland economy. One does not have to live 1000 miles away to be considered out of town. People from Gresham, Oregon City, Milwaukie, and Gladstone would all be spending money within Portland, and thus spurring the Portland economy (which is what Potter cares about, not the economy of the state on the whole). Having a major professional franchise always encourages growth within a city, not decay.

I suggest you pull your head out of your ass before spouting off on something that you clearly have no idea about.

 
At 6:15 AM, Anonymous Anonymous said...

Right. But people from Gladstone don't have to stay in a hotel or buy a couple of meals when they go to Portland to watch baseball. One of the biggest positive effects on the local economy would be that about 50,000 fewer Portland area residents would visit Seattle to watch baseball each year. But the benefits from such a small number are trivial compared to the immense, immense costs of a stadium with a retractable roof. The idea that we should build a stadium, and the highways to support it, and subject ourselves to 162 traffic jams per year just to reap the benefits of more suburbanites driving through our city is not attractive.

Columbus, OH, is a perfect example of a city that lucked out by not getting pro sports. Back in the 1970's, they were one of the two most populous metro area without the NFL, and they were hot to get a team. But the NFL didn't want to put a third team into OH. Columbus tried and tried, but finally gave up on football and decided to support the arts instead. That worked. That gave them many of the same economic benefits that are touted for sports teams at about 1/10 the cost. They have continued to grow and remained the largest and most prosperous city in OH.

So, what economists say that dumping a pile of money into a white elephant stadium is good for a city? What does Nobel winner Vernon Smith say about it? He used to be quite active writing about sports economics. He's one of those many midwestern economists who love baseball, as I do, and who has written extensively about the economics of sports, especially baseball, but who knows that public subsidies for baseball and other sports are just dumb wishful thinking, feeding a bunch of inedible hogs at the trough. The National Taxpayers Union recently got over 100 economists to sign a statement denouncing one of these deals.

 
At 10:56 AM, Anonymous zach said...

You have also skewed the facts on Columbus. First, it is also the capital of Ohio, so a lot of money flows through there anyway, whether on tax riders, tourism, etc. It is not just the arts that has brought money to the city. Portland also has a thriving art community, and we are also the largest and most prosperous city in Oregon, yet according to you we are bumpkins, even though we statistically match up very well with Columbus. Also, if Columbus had an NFL team, which are damn near financial cash cows, Columbus would be even wealthier.

I will secede the point on an MLB team not being able to make that much money, without the support of the community. We have all seen countless MLB teams fail in recent years, or at least not make as much money as they should, if not a downright loss. However, has this been a drain on the city's economy? NO! Look at Miami with the Marlins. Are they any worse off financially because the Marlins are not succeeding financially? Not at all.

I guess the key to an MLB franchise succeeding here in Portland would be the ownership group. If the ownership group could put together an ideal stadium finance package, without a large drain on the Portland tax base as Potter fears, I believe that an MLB team would succeed and the community would support the team.

 
At 11:40 AM, Blogger Michael Namba said...

I believe that on many occasions the M's have stated that at least 11% of their fanbase is from Portland, which is closer to 400,000 than 50,000 on an average attendance of 3 mill per year. Just clarifying

 
At 12:04 PM, Anonymous Chris Snethen said...

The out of town visitor argument is a joke. How many out-of-towners does Tampa attract with its baseball team? Cincinnati? Minneapolis? Denver? Pitsburgh? Heck, how many out-of-towners centered their trip to Washington DC last year around a Nationals homestand?

I would love to see baseball here too. But when people say a stadium can be had for free AND free of taxpayer risk AND under $600 million, they're selling you a load of bunk. And that's no way to go about this.

 
At 10:02 AM, Blogger Deen Macheen said...

Ian,
The problem with Portland baseball is three words- city of Portland. Every time these jokers get involved in something, it's an instant train wreck. Look at the fiasco that was the PGE Park deal. And the outlandish trouble at the Portland water bureau. Every time the city of Portland gets involved you can stamp that project FUBAR. Keep Portland out of it. Let Troutdale or Gresham have the project and make the money. There's more space out there and no city of Portland goofballs to ruin the prospects.

Deen

 
At 6:36 PM, Anonymous Jeff said...

Zach-

You are the last person that should accuse others of not understanding economics. Your logic and language is no better than a 5 year old.

As to the 11% fan base in portland...keep in mind that they don't all travel. In fact, very few do. I love the Seahawks but have NEVER travled to a game.

Someone ought to pull out an interview that Colin Cowherd did with Phil Knight back in 2001 or 2002. When asked why he didn't help Portland get a baseball team, Knight responded by saying that it is a terrible investment partly becuase the MLB has a broken business model. He said something along the lines of his investment in the Diamondbacks is one of the worst he'd ever made.

I think he know's what he's talking about....

 

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