pageok
pageok
pageok
The New York Times on Public Funding for the New Yankee Stadium:

I have written several posts criticizing the massive public financing of the new Yankee Stadium, which has received more government subsidies than any other stadium project in American history (see here for the most recent, with links to earlier ones). Yesterday, the New York Times had an interesting article on the evolution of sports stadium financing in New York:

In dimensions and decor, the new [Yankee] stadium, handsome and comfortable, is meant to evoke the old one. But the resemblance is only concrete deep. This is not history, but a costume party, a rigging of familiar geometry. It disguises a radical departure from New York's baseball history: the embrace of public subsidy — around a billion dollars when all the costs are added — for private wealth.

The first incarnation of Yankee Stadium opened in 1923. The owner, Jacob Ruppert, bought private land, raised private funds for the construction, and maintained the place with money he made in ticket sales. Ruppert and his successors paid taxes on the property: the land alone was assessed at $1.75 million in 1923. By 1970, the stadium and land were valued at $5 million.

If you were to page through the annual city tax rolls, you would find the valuation of Yankee Stadium — as well as the Polo Grounds in Manhattan and Ebbets Field in Brooklyn, the homes of the Giants and Dodgers — listed right alongside the other big properties in the city, like Rockefeller Center, the Metropolitan Life building and Loews Paradise theater.

What do those old tax rolls tell us?

They say that for much of the 20th century, baseball in New York was recognized by the government as another commercial venture, with all the opportunities and responsibilities of owning property.

Not at the new "cathedral of baseball." In fact, the stadium is being treated by the government as if it were a house of worship, not a place to sell $10 cups of beer. The partnership that owns the team has a 40-year lease on what had been city parkland. The partners will pay neither property tax nor the "payments in lieu of taxes" that are made when a private business venture occupies public space.

The fact that sports stadiums were routinely built and financed with private funds up until the 1960s and 70s - at a time when the business of pro sports was far less lucrative than today - undercuts owners' claims that they need government subsidies to survive. Indeed, in that earlier era, sports team owners not only paid for their stadiums themselves but also paid property taxes on them at the same rates as other landowners.

Ironically, as the NYT article points out, the Yankees opposed public financing and tax exemptions for the construction of the rival New York Mets' Shea Stadium in the early 1960s. Then-Yankees General Manager George Weiss warned that publicly funded sports stadiums would become "white elephants" for city governments. Weiss' prediction has turned out to be accurate. Today, public funding for sports stadiums routinely fails to provide economic benefits that even begin to approach their costs. Perhaps it is time for New York and other cities to take Weiss' warning to heart.

UPDATE: The original version of this post wrongly referred to to George Weiss as "Al Weiss." The mistake has now been corrected.

Related Posts (on one page):

  1. Exorbitant Ticket Prices at the New Yankee Stadium:
  2. The New York Times on Public Funding for the New Yankee Stadium:
Jim Rhoads (mail):
You don't understand, Ilya. The Mets simply aren't the Yankees.

It is undisputed the Mets have:

Had 2 world championships to the Yankees' 24;

Had 4 league pennants to the Yankees' 39

Had no House that Ruth Built, which has been a mecca to baseball fans since the mid-1920s;

Had only 10 Hall of Famers, most of whom played elsewhere while earning their honors.

Had no Ruth, Gehrig, DiMaggio, Mantle, Berra (although Yogi managed the Mets to one of their three pennants) -- and that is just the beginning of the 39 Hall of Famers most of which played for the Yankees for most of their careers.

Let's face it. The Yankees are the most successful sports franchise in professional sports. Why isn't it a legitimate matter of public pride to create a monument for them?

BTW, I am a Braves and Indians fan, but in a spirit of full disclosure, my partner's dad played for the Yankees.
4.4.2009 10:23pm
Ilya Somin:
Let's face it. The Yankees are the most successful sports franchise in professional sports. Why isn't it a legitimate matter of public pride to create a monument for them?

The fact that someone is successful at what they do doesn't justify public subsidies for them. Indeed, the more successful they are, the more they should be able to finance themselves. Moreover, we are talking about far more than a "monument" here. We are talking about hundreds of millions of dollars in government funds.

Lastly, the Boston Celtics and Montreal Canadiens have won championships at a higher per season rate than the Yankees (both with far less in the way of government subsidies). So the Yankees are not in fact "the most successful franchise in professional sports."
4.4.2009 10:33pm
Alexia:

You don't understand, Ilya. The Mets simply aren't the Yankees.....The Yankees are the most successful sports franchise in professional sports. Why isn't it a legitimate matter of public pride to create a monument for them?


Uh, I am a Reds fan, and I don't understand either. They shouldn't pay taxes because they're sucessful?
4.4.2009 11:15pm
R. M. Swan:

Had 2 world championships to the Yankees' 24


The Yankees have actually won 26 World Series, which still doesn't justify spending public money on a private venture, which the public won't even be able to enjoy due to exorbitant ticket prices.

BTW- I'm a Yankees fan.
4.4.2009 11:23pm
Jim Rhoads (mail):
You'll concede my proposition is at least debatable, won't you Ilya? It is beyond dispute that the Yankees and Yankee Stadium have for generations been iconic sports symbols in the biggest sports market in the country.

But the Celtics compete with the Sox and the Patriots for iconic status in Metro Boston.

I also suspect Le Habs have been the beneficiary of substantial subsidies from the City of Montreal, the Province of Quebec and the national government of Canada over their storied history. However, that will take some more research.
4.4.2009 11:24pm
BGates:
It is beyond dispute that the Yankees and Yankee Stadium have for generations been iconic

So have the Empire State Building, Radio City Music Hall, and Macy's. Do their owners get to freeload too?
4.4.2009 11:35pm
Jim Rhoads (mail):
BTW, to be clear, I would not vote for any public subsidies of Yankee Stadium as a citizen of NYC or as a member of the municipal or state government. I agree with Ilya's premise and Alexa's suggestion that subsidizing the Yankees is not an appropriate expenditure of public funds.

But I believe there are many people that are so invested in the Yankee Mystique that in New York City, it may be a close question there.

There is in NYC a strong emotional attachment to the Yankees and their 80+ years of success.

Sometimes emotion overrides logic and good sense.
4.4.2009 11:36pm
R. M. Swan:
Lastly, the Boston Celtics and Montreal Canadiens have won championships at a higher per season rate than the Yankees


That may be incorrect. If you look at the Yankees since they became the Yankees (1913), they've won 26 championships in 96 seasons (no 1994 world series), for a rate of 27%, the Celtics have won 17 titles in 64 seasons for a rate of 26.5%, and the Canadians have won 24 in 100 seasons, for a rate of 24%. Only if you go back to the founding of the Baltimore Orioles, who later became the Yankees, (1901), is that an accurate statement. And even then, the Yankees have won at a rate of 24.3%. Either way, it's extremely picayune. I think generally, people would regard the Yankees, by virtue of not only their championships, but their pennants as well, as the most successful franchise in professional sports. (At least in North American. If this comparison included Europe, it wouldn't be a contest.)
4.4.2009 11:37pm
Jim Rhoads (mail):
IMO, the same logic would apply to the Empire State Building. And Central Park, St. Patrick's Cathedral, and Grand Central Station as well.

But not Macy's, the Waldorf, Rockefeller Center (including RCMH) or LaGuardia.
4.4.2009 11:43pm
Bretzky (mail):
The reason that stadiums keep getting subsidised with public funds despite the evidence showing that they almost never produce the economic benefits that their advocates claim they will is that politicians aren't stupid. If you vote against funding the stadium and the team finances its own or just keeps playing in the current one, the voters who support that position generally aren't going to make a big deal out of it. If you vote against funding the stadium and the team moves, then a good number of the team's die hard fans will notice and will vote against you.

Of course, the question with the Yankees is, would they really leave New York if the government didn't fund the construction? The Yankees had been threatening to move to New Jersey for decades, but whenever New Jersey officials called them up to discuss a deal, the Yankees always said they weren't ready to do anything just yet. It's clear from the Yankees' history that they had no intention of leaving New York City; although I'm sure they would have preferred getting a stadium in Manhattan.

Some teams do of course wind up moving when they don't get the government to fund their playground (see the Raiders and their move back to Oakland). But looking at the situation in LA, is it really all that bad that they don't have an NFL franchise? The city hasn't fallen into the ocean because the Raiders left and they aren't exactly begging the NFL for an expansion or relocated franchise either. The NFL has tried to get the city to fund a new stadium because they do really want to have a franchise in the country's second largest market, but the city keeps turning down the NFL's requests.

More governments should follow LA's lead and just say no. Of course, LA has a lot more going on than many other cities around the country do. If the Steelers asked the city to demolish downtown so they could build a practice facility, I'm not sure that the city would say no or that the people here would object. But Pittsburgh is a pretty dull place.
4.5.2009 1:06am
Visitor Again:
I also suspect Le Habs have been the beneficiary of substantial subsidies from the City of Montreal, the Province of Quebec and the national government of Canada over their storied history. However, that will take some more research.

As a leftist, I have to put up with a lot in reading this blog, but this takes the cake (since I also have been an avid supporter of the Canadiens since 1953). The Canadiens are and consistently have been saddled with huge federal, provincial and metropolitan taxes. The tax rates its players have to pay are and have been the highest in the National Hockey League and are and have been a huge hindrance in attracting free agents. Do your research. You will find the Canadian citizenry does not put up with the kind of financial mullarkey that is pandemic in this country. The Canadiens, unlike the Yankees, have always paid their own way.
4.5.2009 1:15am
einhverfr (mail) (www):
In Washington State a decade or so ago, they put the question to the voters as to whether to finance new sports a stadium for the Mariners.

The people (wisely) voted it down.

Idiots in government called an emergency session to figure out how they could fund the stadium against the wishes of the public. I think personally think that this is one of the big reasons why folks in this state who campaign against taxes are unreasonably successful. Our public officials squandered all reasonable trust in that area and the public backlash has lasted for over a decade.
4.5.2009 1:27am
Harry Eagar (mail):
Why do almost all municipal parks departments build tennis courts, but none builds bowling alleys?
4.5.2009 7:56am
jgshapiro (mail):
The problem is that unless other cities refuse to fund a stadium, a city's refusal would in many cases lead to losing the team, which is detrimental not only to revenues that the city gets from related activities, but also to the city's image as a metropolis (most big cities have multiple sports teams) as well as to the recreational opportunities of its residents. I'm not sure that figures into Ilya's math in determining that the costs outweigh the benefits. And that math is in many cases subjective, since putting a value on what a museum, park, etc. adds to a city depends on your view of these things.

Of course you could address the issue with a federal law stating that any city that accepts federal taxpayer funds shall not expend more than $X or pay more than Y% of the cost of a stadium. Then a team would not be able to evade the rule by moving elsewhere and a city would not be subject to losing the team by acting more frugally. Not very libertarian, but it would probably work.

In the Yankees' case, you could add a provision stating that any stadium accepting more than $X in taxpayer funds or having more than Y% paid with such funds must have at east Z% of its seats available to the public at an "affordable" price ("affordable" to be defined based on average ticket prices across the sport, as adjusted for inflation). If the number of affordable seats falls below the threshold, the team would be subject to an additional income tax on a percentage of the gross ticket sales. A team could escape this rule by giving the city/state back all of the public money it received to build the stadium above the X/Y thresholds by whatever deadline.
4.5.2009 8:01am
Jay (mail):
The governments are able to fund ballparks, etc, because of the psychology underlying the first several posts here. Notice how the central point of the question is lost as people post how the team that they support is better than the team that someone else supports. The identification with a team fulfills a type of Hofferesque "True Believer", and a stadium/arena for this gratification to play out becomes as essential as an airport for airtravel. Thus, public support for government stadium funds. This suits the politicians, for whom, as the Caesars discovered with their games, sports gratification provides the distraction from closer political scrutiny and criticism. Bread and games.
4.5.2009 8:13am
common sense (www):
I hear that stadiums never make money, but I wonder about the Verizon Center. That area of town has really turned around, in no small part due to the Verizon Center. What tax breaks did the Verizon Center get, and has it proved profitable in turning around that area of DC?
4.5.2009 9:12am
Fedya (www):
Yankee Stadium is an icon. It's an icon to how New York sports fans are a bunch of arrogant SOBs.

(And Madison Square Garden's slogan really ought to be "The Most Overrated Arena on Earth".)
4.5.2009 9:34am
geokstr:

Jim Rhoads:

Sometimes emotion overrides logic and good sense.

In many of life's other arenas, too, like, for instance, presidential elections.
4.5.2009 9:55am
Soronel Haetir (mail):
On the question of rec departments and tennis courts vs bowling alleys, I would figure it would come down to upkeep. A tennis court can be little more than a fenced in area with the proper paint job and a ratty net. Unless you are going to downgrade the bowling experience greatly, you need a fair amount of machinery, as well as staff to keep people from stealing what is there. (People could steal the tennis net, but that's why it's allowed to be ratty in unsupervised locations)

I have seen one park with open air public bowling, the lane was concrete, the ball was a hollow rubber sphere and you had to set up the hollow plastic pins yourself, most of which were highly dented. That's the sort of thing I mean by downgraded experience.
4.5.2009 10:55am
seadrive:

You don't understand, Ilya. The Mets simply aren't the Yankees.


By this logic, the Gov't should build buildings for IBM, but not for Dell.
4.5.2009 1:23pm
Jim Rhoads (mail):
The sarcasm signal wasn't working on my keyboard, seadrive. Sorry.
4.5.2009 4:37pm
Randy R. (mail):
"Let's face it. The Yankees are the most successful sports franchise in professional sports. Why isn't it a legitimate matter of public pride to create a monument for them?"

Because if you are making millions of dollars, you shouldn't also get public subsidies.

Shapiro "The problem is that unless other cities refuse to fund a stadium, a city's refusal would in many cases lead to losing the team, which is detrimental not only to revenues that the city gets from related activities, but also to the city's image as a metropolis (most big cities have multiple sports teams) as well as to the recreational opportunities of its residents."

Really? Well art museums and symphony orchestras are also vital to the city's image as a metropolis, and they provide a great deal of recreational opportunities for the residents. But they receive a lot less money than sports franchises from the city. in fact, many cities let them shut down if they go bankrupt.

So I guess that means you favor a dramatic increase in cultural funding from the public coffers, right?
4.5.2009 7:02pm
pintler:
Every time I hear about public funding of stadiums, I thing 'panem et circenses.
4.5.2009 7:23pm
dejapooh (mail):
One of the things that make me proud to be from Los Angeles is that we refuse to play that game (any more). If they want an NFL stadium, a new Arena for Hockey and/or Basketball, they can just go ahead and build it. I am looking forward to the 2020 Olympic Bid for Los Angeles (assuming Chicago doesn't win 2016). A stadium paid by Olympic Television funds is just what we need.

BTW, The Chicago Olympic plan calls for an $850,000,000 stadium that will be torn down once the games are over... That makes a lot of sense.
4.5.2009 7:45pm
Craig Oren (mail):
The Yankee general manager was George Weiss, not Al. He left after the 1960 season, and eventually became general manager of the Mets. I can't remember the name of his successor, but it wasn't an Al, I don't believe.

The irony is that Walter O'Malley had been stymied by New York government in his attempt to build a privately-funded stadium above the Atlantic Yard railroad tracks in Brooklyn. Robert Moses pressed O'Malley to go where the Mets ended up and O'Malley said no.
4.5.2009 9:51pm
Joshua (mail):
Randy R: <i>Really? Well art museums and symphony orchestras are also vital to the city's image as a metropolis, and they provide a great deal of recreational opportunities for the residents.</i>

I would humbly submit... OK, maybe not so humbly... that you're dead wrong about this, at least when it comes to a city's public perception among outsiders - the sports scene pretty much dominates everything else. What do you suppose Dallas-Fort Worth is better known for by most non-DFW-area-residents - its symphony orchestra, its museums, or the Cowboys? (Substitute the Texas Rangers, Mavericks or even the Stars for the Cowboys in the above and I suspect the answer you get would be the same.) Come to think of it, an even better example might be New Orleans. After Katrina hit, what was the one local cultural institution that got the lion's share of national media attention, and of focus as a local rallying point, to the point where hundreds of millions of dollars in public money were spent to restore its home building in time for it to return to the city the following year? Hint: It wasn't the French Quarter.
4.5.2009 10:05pm
Randy R. (mail):
Joshua: "I would humbly submit... OK, maybe not so humbly... that you're dead wrong about this, at least when it comes to a city's public perception among outsiders - the sports scene pretty much dominates everything else. "

I think it's all in the eye of the beholder. To some people, the arts are what makes a city, to others, it's the sports. I have seen studies that show that higher level executives prefer cities that have a strong cultural component.

Among the top places to live in north america are consistently larger cities with diverse culture -- top restaurants, impressive symphonies and art museums, live music such as jazz venues, good stock of housing, sports franchises, etc. In other words, it's a big picture. A city that lacks cultural institutions and has only sports is no city at all. to have a city that is all culture and no sports wouldn't be a city either.

Futhermore, studies have shown that the arts contribute far more to the mulitplier effect on the region than sports do. Therefore, from a purely economic standpoint, the arts should be well funded, and better so than sport teams.
4.5.2009 11:12pm
Joe Gator (mail):
Lastly, the Boston Celtics and Montreal Canadiens have won championships at a higher per season rate than the Yankees (both with far less in the way of government subsidies).

I agree with the general tenor of the post, but I think it should be added that the NHL and NBA were much smaller leagues than MLB. The NHL primarily had 6 teams until 1967 and the NBA wavered between 8 and 11 teams from its inception until the early 70s.

Whereas MLB consistently had 16 teams throughout the first half of the 20th century, and then expanded to 20 in 1961. Taking this into account, I find it hard to argue against the proposition that the Yankees are the most successful professional franchise in major North American sport.
4.6.2009 9:54am
New Pseudonym:

What do you suppose Dallas-Fort Worth is better known for by most non-DFW-area-residents - its symphony orchestra, its museums, or the Cowboys?


I think here is a point other than the apparent one. As a Dallas resident, I give thanks for the generosity of the taxpayers of Arlington, TX. Two taxpayer funded stadiums that I don't have to pay for. Dallas gets the glory even though the Cowboys will be playing in Arlington, and since very early on, have been playing in Irving, TX. At least the Rangers don't use "Dallas." OTOH, I do have to pay for an arena for the Mavericks and Stars.

As a long time Yankee fan (first major league game I saw was against the Red Sox with Joe and Dom playing center field for the rivals), let me point out that the championship figures for the Celtics and the Canadiens are both for league championships (unless les Habs have a Stanley Cup or two from pre-NHL days). The Yankees have won 39 league championships.
4.6.2009 4:15pm

Post as: [Register] [Log In]

Account:
Password:
Remember info?

If you have a comment about spelling, typos, or format errors, please e-mail the poster directly rather than posting a comment.

Comment Policy: We reserve the right to edit or delete comments, and in extreme cases to ban commenters, at our discretion. Comments must be relevant and civil (and, especially, free of name-calling). We think of comment threads like dinner parties at our homes. If you make the party unpleasant for us or for others, we'd rather you went elsewhere. We're happy to see a wide range of viewpoints, but we want all of them to be expressed as politely as possible.

We realize that such a comment policy can never be evenly enforced, because we can't possibly monitor every comment equally well. Hundreds of comments are posted every day here, and we don't read them all. Those we read, we read with different degrees of attention, and in different moods. We try to be fair, but we make no promises.

And remember, it's a big Internet. If you think we were mistaken in removing your post (or, in extreme cases, in removing you) -- or if you prefer a more free-for-all approach -- there are surely plenty of ways you can still get your views out.