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Ralph Nader's op-ed column on Major League Baseball's plan to shake down D.C. taxpayers for a new stadium

Baseball's Stadium Shakedown

Though it has hit a few bumps in the road recently, Major League Baseball still expects to shake down the District of Columbia. Many in the city want a team -- but we don't have to give in to baseball's demands to get it.

Major League Baseball, made up of 29 individual owners or ownership groups, owns the Montreal Expos collectively. The league plans to move the Expos to a more lucrative market, sell the team to new owners for a considerable profit and stick taxpayers with the tab for a new stadium.

The Washington metro area, by far the largest in the nation without a team, is preferred by baseball as a place to relocate the Expos. But Major League Baseball is demanding tribute before it will do what is in its own interest. No locale can become the Expos' new home, baseball's titans have decreed, unless the public pays for most of the cost of a new stadium.

The result: Washington, its Northern Virginia suburbs and Portland, Ore., are engaged in a race to the bottom that would limit resources for other pressing public services to subsidize a stadium for wealthy owners.

Look no farther for the success of baseball's squeeze than the District: Mayor Anthony Williams offering $200 million, then $275 million, then $300 million, then $339 million in corporate welfare to big-league baseball.

Fortunately, Jack Evans, chairman of the D.C. Council's finance committee, where the stadium bill now sits, has jumped in front of the mayor's runaway gravy train. Evans has gained widespread support throughout the city by calling baseball's bluff and promising that no stadium bill will go through his committee until baseball commits to the District. "Anything short of that, we've got nothing here," Evans said.

Evans's action is certainly a step in the right direction, but he isn't challenging the core concept of a stadium subsidy. Even if baseball commits to come to the city, the stadium bill will still be grossly inappropriate.

Williams claims that because a stadium would be financed by bonds and repaid through taxes outside the general fund, it wouldn't take money from schools, libraries, parks, police, health care, housing, drinking water, public transit, children's programs and other city-funded services.

But there is no free money; Williams should leave the Enron accounting to Arthur Andersen. Floating bonds might defer the day of reckoning, but if the city chooses to spend hundreds of millions of dollars on a stadium, that money will eventually come at the expense of the city's taxpayers, allocated either to reduced city services or increased taxes. The only other alternative is that the investment will generate growth that raises overall tax revenue. But a wealth of experience makes clear that won't occur.

As Smith College economist Andrew Zimbalist wrote this year, "There are very few fields of economic research that produce unanimous agreement. Yet every independent economic analysis of the impact of stadiums has found no predictable positive effect on output or employment. Some studies have even concluded that there is a possible negative impact."

One such study, by Robert Baade of Lake Forest College, examined 30 cities over 30 years and found that 27 experienced no significant impact from new stadiums, while three experienced a negative economic impact.

One segment of society does benefit from stadium subsidies. Team owners enjoy windfall profits when they turn around and sell. The favored ownership group for the District is the Washington Baseball Club, a team of investors reportedly worth $3 billion and headed by Fred Malek. A veteran of these conversions, Malek formerly owned the Texas Rangers, with George W. Bush among others. In 1991 Malek's group demanded that Arlington, Tex., taxpayers provide $135 million for a new stadium. The group threatened to move the team if the ransom wasn't paid. After the stadium was built and the Rangers' value had tripled as a result of the taxpayer subsidies, Malek's group sold the team.

There is an alternative to the baseball shakedown. The District, Northern Virginia and Portland should all tell baseball that they are ready to bid based on fan enthusiasm, transportation lines and other such factors, but not on the size of the public subsidy for a stadium. They should tell baseball that there will be no subsidy, especially in this time of extreme financial hardship for city and state governments.

Meanwhile, Major League Baseball should sell the Expos to new local owners for the amount it paid for the team -- $120 million, not the $250 million or more it will demand. The savings could be used by the private owners to build a new stadium or renovate an existing one, such as RFK, covering part of what baseball is now trying to squeeze from taxpayers.

Entertainment should be given the first privilege of surviving the tests of a free market.


The writer is a consumer advocate and author. He is the founder of League of Fans, a sports industry watchdog project.


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