Neil deMause, co-author of Field of Schemes, testimony (as presented by Shawn McCarthy, League of Fans) against bill to publicly-subsidize a baseball stadium in Washington DC

Testimony of Neil deMause
Co-Author of Field of Schemes
Before the Committees on Finance and Revenue, and Economic Development
District of Columbia City Council
October 28, 2004

Chairpersons Evans and Brazil and Members of the Joint Committees my name is Shawn McCarthy. I am a District resident and director of a sports reform project called League of Fans. Thank you for the opportunity to speak today regarding the “Ballpark Omnibus Financing and Revenue Act of 2004.”

I have submitted testimony, but will instead present the testimony of Neil deMause, an expert on this subject who could not be here today. deMause is co-author of Field of Schemes: How the great stadium swindle turns public money into private profit. He has submitted copies of his book as full testimony for the record with an accompanying article specific to this bill.

deMause writes:

The decision that faces the D.C. council in the coming weeks is one that will have far-reaching implications, not just for the District and its citizens, but for America as a whole. The question that you are being asked is not whether Washington deserves baseball, or whether you support economic development. Rather it is: How much money should Major League Baseball be allowed to extort from the public purse in exchange for locating a baseball team in your city?

I've been researching and writing about stadium deals for nine years now, and have spoken with dozens of economists and public planners who have studied sports facility development. And I have yet to find a single independent economist who believes that building new sports facilities has *any* significant impact on a city's economy. In terms of measurable economic impact, they're nonexistent; in terms of job creation, they typically come in at more than $250,000 in public expense for every new job, one of the worst ratios imaginable. As University of Chicago economist Allen Sanderson has famously said, you'd create more economic impact by going up over your city in a helicopter and tossing the money out the window than by building a pro sports stadium.

Look no further than Baltimore, where Camden Yards, despite its popularity, is costing the state of Maryland $14 million a year to pay off and, according to Maryland economists Dennis Coates and Brad Humphreys, getting back just $3 million a year in new taxes, for a net loss of $11 million a year. Mayor Williams' proposed stadium would be much more expensive than Camden Yards - even after adjusting for inflation - and far more costly to D.C. taxpayers. According to my calculations in the accompanying article from Baseball Prospectus, even after accounting for spending by any new visitors to the city, the District would be losing 25 to 30 million dollars a year on a stadium, solely to enrich the baseball team's private owners.

The tragedy is that it doesn't have to be this way. When local officials said no to public subsidies, both the San Francisco Giants and the St. Louis Cardinals agreed to shoulder the bulk of stadium costs themselves. And Washington's leverage couldn't be better, as right now you have Bud Selig over a barrel: Baseball has burned its bridges in Montreal, and D.C. is its only viable option. If D.C. presents Selig with a stadium bill that forces the team's private owners to take on a larger share of the financing, Selig will likely kvetch and moan - but he will have little choice other than to accept.

Washington, D.C., faces a choice. You can become known as the city that reopened the floodgates of sports welfare. Or you can strike a tough deal, and tell Major League Baseball that if it wants to tap into the lucrative D.C. baseball market, it needs to cough up its own money for a stadium. Now that would be a baseball legacy to be proud of.

I'd like to thank the Joint Committees again for the opportunity to speak today.