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When it Hits the Fan
by John Brattain
Previous Columns

Dumbfounded - 11/27/2001

I've spent the better part of the last couple of weeks sitting dumbfounded at my computer (all right, all right, *more* dumbfounded than usual). Although the contraction situation as respects Montreal is the one that makes my heart ache, it's what's unfolding in Minnesota that makes my head ache.

I have two children and even a half-witted parent as I am knows not to do certain things. For instance--one of my kids goes ballistic for whatever reason and to quiet her down I give her a big chocolate bar (as Bill Cosby once opined: parents aren't interested in justice--they just want it quiet). She goes off half-cocked again and to get her to calm down, I give her another chocolate bar. Suffice it to say, she's gonna learn pretty quick that sowing a temper tantrum will reap her a chocolate bar.

Now hold that thought for a moment as we'll be coming back to it.

Once thing has become crystal clear since the early 1990's, and that is: new, publicly financed stadiums have not helped major league baseball--but hurt it. Although SkyDome and New Comiskey Park are relatively new facilities, what triggered the current problem was the opening of Oriole Park at Camden Yards. When OPACY opened, it was new, it was exciting, it gave folks goosebumps--so much so that it suddenly converted the small market (or more accurately--small revenue) Baltimore Orioles into a big market (revenue) juggernaut. The new revenues lead automatically into bigger profits, larger contracts for players, and higher payrolls. Naturally when money talks, baseball owners listen. Now everybody wanted their own [publicly financed] version of "Camden Yards." Cleveland got one, as did Texas, Atlanta, Colorado, Houston, Seattle, Detroit, Arizona, Milwaukee, Pittsburgh; with Philadelphia and Cincinnati on deck and St. Louis and San Diego beginning to appear on the horizon.

Although it gets a lot of press, ticket prices and concession costs are not determined by player payroll but the other way around. A team owner will set prices at the level that will maximize his revenues. If a team will draw 2.5 million fans by charging $20 for a ticket but just 2 million fans if tix go for $22 a pop then he has to choose which he wants more: $50M in ticket sales or $44M.

An easy choice.

Further if payroll costs determined ticket prices, then it should cost next to nothing for tickets to March Madness, or the New Years Day bowl games--after all, the players aren't paid (cough cough) for playing in those games. Ticket prices are set by good old fashioned supply and demand.

So despite the rhetoric bandied about by team owners, new stadiums aren't the result of rising payrolls--they're the cause of it. Before the strike of 1994-95 (with just three retro parks -- bearing in mind that Texas and Cleveland were in just their first year of use, hence not long enough to have a noticeable effect on the baseball economy -- in operation and only one that had been around for longer than a full season) the top salary in baseball was about $7-8M/year. Now that a number of new facilities have popped up, now we have two players over the $20M/year mark and a third hoping to join the club (Barry Bonds) just six years after [the strike].

Would player compensation have skyrocketed in such a fashion had these new (publicly financed) ballparks *not* been built?

Would player compensation have skyrocketed in such a fashion had team owners financed these facilities themselves?

No, and of course, no.

So all of these stadium boondoggles gave owners revenues to give players these monster contracts. What has happened since?

(1) The honeymoon period for these parks have all but passed.

(2) Because there are so many of these kinds of parks the novelty has worn off more quickly--hence the length of the revenue boost is much smaller. Who wants to see the OPACY.12 edition?

(3) The reason for all these facilities coming on line is simple: luxury suites. The cost of such amenities is predicated by simple supply and demand. The supply of luxury/club seating is starting to outstrip demand with corresponding loss in revenues.

(4) Hence the revenues that were available to give massive contracts are no longer there, but the contracts and the salary structure remain in place.

(5) Now teams with new ballparks are cutting payroll including those in parks less than three years old (Pittsburgh and Detroit). Why? The salary structure that was set when the retro-park boom was in full bloom is no longer tenable in these markets.

(6) Now the economy is in recession.

When teams were stumping for new facilities they were claiming that they were necessary to be "competitive" in MLB. Let's look at the record of teams ' success while playing in new facilities.

World Series banners hoisted in *new* publicly financed (read: post-Camden Yards era) parks:

Baltimore--0 Cleveland--0 Texas--0 Colorado--0 Seattle--0 Detroit--0 Atlanta--0 (they were in Fulton County Stadium in 1995) Milwaukee--0 Houston--0 Pittsburgh--0 Arizona--1

Not real impressive--is it? Again we have to note that a lot of these teams are cutting payroll. Why? They say they cannot compete. So MLB told us, sold us a bill of goods that stated that a new, publicly financed stadium was the secret to fixing baseball's ills. They said that without this kind of public investment, these cities could lose (or wouldn't get) a team.


Hence, in the midst of all this, MLB is getting ready to battle the MLBPA claiming that the system is broken, so broken in fact that they're thinking of cutting teams. So many new stadiums, so many problems.

Remember that thought I told you to hold on to earlier? The one about kids and chocolate bars? Well, let's get back to it now:

Earlier the ruse was: "show us the money or we'll move your team." Well a whole bunch of suckers lined up like sheep begging to be sheared. Some regions though decided to think for themselves instead of listening to the proven incompetents better known as Major League Baseball. These incompetents are now saying: "show us the money or we'll *fold* your team."

Now some in Minnesota are wavering in their "no money until you clean up your own mess" stance.

The evidence is overwhelming: new, publicly financed stadiums are a bad deal for their host communities; publicly financed stadiums are bad for baseball; publicly financed stadiums will not make you competitive; publicly financed stadiums will not turn your idiotic front office/general manager into the second coming of Branch Rickey and George Weiss.

Since the old threats don't work, MLB is test driving a new one--contraction. Since the petulant child's temper tantrum isn't getting him anywhere, he's now kicking in the drywall and trashing the house.

Suppose Minnesota buckles, and gives the screaming brat a chocolate bar--then what? Minnesota will not be better off financially, MLB will not be better off except that they won't need as much in revenue sharing monies (that's right Minnesota, give tax dollars for a new ballpark and George Steinbrenner will be wealthier for it), and unless the front office makes all the right moves (and you don't need a new ballpark to do that)--you won' t be competitive on a regular basis, but this much will happen....'ll make Carl Pohlad a lot wealthier.

Cool eh?

Not only that. If Minnesota caves in, do you know what's gonna happen? Bud Selig and Co. will have affirmation. Affirmation that the contraction threat is a good way to sucker your community into coughing up hundreds of millions in corporate welfare. Not only that, they'll know that it works even in a period of war and recession! So guess what's gonna happen in Florida? Toronto? (yes--Toronto) Chicago? (yes--Chicago) Kansas City? Oakland? You give the owners a whoooooooole new threat. Now they don't need anymore markets to hold over cities' heads. MLB won't need to use Portland, Sacramento, Washington D.C., Northern Virginia, Las Vegas, etc. as threats anymore. They can save those gems for future expansion fees. Once you prove to MLB that a given tactic will make a host city unclasp it's maternity brassiere and offer unlimited nursing at the public teat, they'll never unlatch.

Now close your eyes. Picture Bud Selig and Carl Pohlad. Now brace your stomach and picture them in bonnets and diapers. Now visualize them thrashing on the floor kicking and screaming.

Are you gonna let them have their way?

by John Brattain

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