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June 17, 2005

Issue 4

Issue 4: Why can't the Twins pay for the stadium themselves ala the Yankees or the San Francisco Giants?

This will be "off the cuff." The Strib had an interesting editorial that mentioned this topic a while back that I will quote from now:

As we've said numerous times, it would have been wonderful for teams to have built new ballparks on their own. The Giants were actually able to do that by riding the Bay Area's dot-com bubble of the late 1990s, but they couldn't do it today. The Yankees can do it because of their huge local TV contract. The Cardinals can finance most of their new digs because they own development rights on the adjacent real estate. Other teams lack those advantages.

SBG also points out that the Yankees can deduct the cost of the stadium against their total revenues, thereby reducing their payment to the other teams. It actually makes financial sense for them to do this.

What it all comes down to though is money. The Twins don't have a lot compared to these other teams and Pohlad has already made it plainly clear that he won't use his personal fortune. The Cardinals and the Yankees have huge cable TV packages that roll in the cash, and they have huge, rabid fan bases that also increase their revenue. The Twins, quite frankly, have neither. According to the Twins, if they built their own stadium they would not increase their revenue enough to stay competitive over the long term. We can argue that point until we're blue in the face, but that is what they are telling us.

And if I could, I'd like to stick with this stream of consciousness for a little bit and discuss maybe one more thing that the Twins actually have that the other teams don't that might also make all this blackmail from the team possible. The Twins have leverage. The Twins have the leverage to threaten contraction, or to threaten that they'll move away from the state if they don't get what they want. The Yankees, the Cardinals, and the Giants do not have this same leverage. At all. Can you imagine Steinbrenner threatening to move the Yankees out of New York? He would be laughed at by the state, the city, the fans, heck even MLB would snicker at something that outrageous. The Cardinals, the Giants, and the Yankees will never leave their respective areas. Everyone knows it, and therefore they have no leverage.

The Twins have this leverage, and they are using it to its maximum potential. I don't like it, you don't like it, no one likes it ... but that is the way it is. I would be interested in any comments on this point as I am sure it is full of holes. Am I on to something or am I off my rocker?

Posted by snackeru at June 17, 2005 1:53 PM | Stadiums

Comments

The Yankees threatened to move to New Jersey. They may not have the same leverage as the Twins but they had some. The Cardinal fans are no more rabid than anyone, and they could still move. However, the owners would probably not be able to withstand the shame of moving. It would be bad PR on their part. The Giants moved FROM another location. They certainly could move TO another location. Thus, they still had that although possibly to a lesser extent than the Twins.

Contraction is off the table. There is no way they can sell that. It was a threat, and it didn't work. They'll lose their exclusion clause for sure if they did it. So, that is a non-issue.

The Twins can certainly move. That is the leverage that they still have, but unfortunately it is a weak issue. The issue is finance. Plain and simple. The budget problems reflect an unwillingness to raise money to pay for things. Among these things are stadiums. The best chance has not been the current plan, but when they had budget surpluses a few years back. They should have taken that surplus and invested it in a ballpark. They didn't. Now, that the legislature cannot agree on how to raise the money to spend, they aren't going to tackle a stadium which has limited public support.

Unfortunately, the stadium is dead. Stick a fork in it. Further, it is probably dead until we get a different governor. Pawlenty has a "no tax raises" pledge that is making a budget very difficult. These difficulties would be compounded if they went off and OK'ed a stadium bill without a referendum. The referendum would fail. So, until Minnesota has a more friendly revenue raising environment any publicly financed stadium plan is dead. So, yes, let us hope that Pohlad's threat to move is just a bluff...

Posted by: Doug at June 17, 2005 2:21 PM

Doug, yes, I am in agreement with you concerning the stadium bill's chances this session. Slim to none. However, the Yankees threatening to move to New Jersey is hardly the same as the Twins threatening to move to Las Vegas. But I should have written above that the Yankees would never move out of the "area." The Cardinals will never move both because of shame and because they know MLB would never let them. And speaking of which, the only reason the Giants paid for their own stadium is because Selig stepped in and told them they couldn't move to St. Petersburg Florida. So, I still am a firm believer in all this leverage stuff. None of these three teams can seriously make their fans believe they could move. Everyone knows it will never happen. Therefore they have to pay for their stadiums themselves.

Ah happier times, the budget surpluses of the 90s were definitely the time to get this done. If you'll recall, the best chance this stadium ever had of getting built was the no-interest loan the Twins asked the state for. Do you remember? The Twins agreed to pay for everything and all they asked for was a no-interest loan from the state. Even in a time of budget surplus it still didn't see the light of day.

Posted by: Shane at June 17, 2005 3:04 PM

Contraction is only off the table until after the 2006 season, so it is still very much out there. Selig could certainly bring that back on the table at that time.

I don't think that contraction will happen at that time, and that Pohlad's main leverage is moving the team.

Posted by: Cheesehead Craig at June 17, 2005 3:36 PM

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