No one shows up for Florida baseball and the myth of new stadiums

If you follow Major League Baseball, you know Florida’s two baseball teams are in trouble. The Miami Marlins are just bad, and the Tampa Bay Rays can’t draw fans.

The Marlins were just handed a brand new, tax payer funded, stadium that no one goes to. The Rays have been good, despite a low payroll, but they play in such a hideous ballpark that no one is willing to open their wallets for seats unless it is playoff time.

The Tampa Bay Tribune is reporting that Rays management knows the precarious position they’re in, explaining:

Cash in the form of Major League Baseball revenue-sharing is sustaining the Tampa Bay Rays, but the patience of other team owners is running low as they wait for the Rays to secure a new ballpark.

That’s a key point local business leaders took Wednesday from an hourlong discussion with Tampa Bay Rays principal owner Stuart Sternberg and president Matt Silverman at the offices of the Tampa Bay Partnership, a nonprofit economic development organization.

The Rays are pushing the city of St. Petersburg to build them a new stadium, just like working families just paid for in Miami. But will that really make a difference? Real baseball fans will show up if they want the product, as evidenced by Fenway Park and the soon to be demolished Candlestick Park (SF Giants always drew decently well there).

But what lesson can the leaders of St. Petersburg learn from Miami? According to Miami Herald, quite a bit:

What has moving to Miami brought the Marlins? About 100 extra fans per game.

That’s the current gap between this year’s attendance and the average gate count for the Marlins’ last season at Sun Life Stadium, the football field that owner Jeffrey Loria blamed for the team’s long-standing attendance and revenue woes.

Those problems ended up following Loria to the government-owned Marlins Park, which is on track to face the worst fan rejection of a new baseball stadium in at least a generation.

The sad but very real truth is these new stadiums don’t generate revenue, they cost far more than they bring into local government. But politicians keep running to keep rich sports owners happy. The Atlanta Journal Constitution dove into the subject last year as talks continued on the construction of a new, possibly $1 billion, retractable roof football stadium for the Atlanta Falcons:

Despite the economic realities, cities continue to pursue new stadiums because of an industry “arms race,” the experts said. Owners don’t want to be last on the Forbes list of “most valuable teams” and elected leaders don’t want to be the one who loses a team to another city while in office. They will work to convince the public that the benefits outweigh the risks and that they have the formula for success.

“In part, it reflects the import some people put on having a major league sports team,” said Heywood Sanders, a professor of public administration at the University of Texas at San Antonio. “Los Angeles has not died because it does not have the Rams.”

The AJC reported that even the beloved SuperBowl cost the city of Indianapolis $1.3 million. And this is on top of the $10 million a year their new Lucas Oil Stadium is falling short each year.

I love my San Francisco Giants, but in no way does the presence of the team in the city make me want to live there. Fortunately for the city by the bay, the Giants ending up paying almost all the freight for their stadium and will reap the benefits when the debt service is finally paid off.

It will be a great day when cities tell owners to pay for it themselves or bug off.


Opening a window on what the connected and rich can get away with

A collaboration of reporters from around the world has produced a new report entitled “Secrecy for Sale”. The report describes the way in which the connected and rich use offshore companies and tax havens created by the world’s biggest banks to hide their money and avoid contributing to the communities that have helped them become successful.

From the report summary:

The leaked files provide facts and figures — cash transfers, incorporation dates, links between companies and individuals — that illustrate how offshore financial secrecy has spread aggressively around the globe, allowing the wealthy and the well-connected to dodge taxes and fueling corruption and economic woes in rich and poor nations alike.

The records detail the offshore holdings of people and companies in more than 170 countries and territories.

. . .

The vast flow of offshore money — legal and illegal, personal and corporate — can roil economies and pit nations against each other. Europe’s continuing financial crisis has been fueled by a Greek fiscal disaster exacerbated by offshore tax cheating and by a banking meltdown in the tiny tax haven of Cyprus, where local banks’ assets have been inflated by waves of cash from Russia.

Anti-corruption campaigners argue that offshore secrecy undermines law and order and forces average citizens to pay higher taxes to make up for revenues that vanish offshore. Studies have estimated that cross-border flows of global proceeds of financial crimes total between $1 trillion and $1.6 trillion a year.

There has been an ample amount of evidence reported on in the United States to warrant vast prosecutions of those on Wall Street. But that hasn’t happened as the Bush and Obama Administrations let the revolving door between Wall Street and government agencies spin round and round. And besides the Occupy Wall Street, the American people have largely let them off the hook.

I would love to see big banks torn apart brick by brick, a return of the firewall between commercial and investment banking, and government agencies with real teeth and power to go after financial fraud. I’m optimistic but no fool to believe this will actually happen. I suspect even the next financial crisis, which is bound to happen because of the currently overinflated stock market, won’t bring about real change. With unemployment expected to remain high, corporations hiding $1.7 trillion in liquid assets in their mattresses, wages dropping, and the price of energy continuing to climb (no, drilling won’t help) working people don’t have anymore to give.

They don’t have more to give in large part because they aren’t making any money, if they can even find a job.

This is how Bloomberg reported it back in September:

The U.S. Census Bureau figures released yesterday underscored the struggles of American families in a sputtering economic recovery. The report also showed the income gapbetween rich and poor people grew to the widest in more than 40 years in 2011 as the poverty rate remained at almost a two-decade high.

. . .

The census data show the wealthiest Americans secured most of the benefits from the economic recovery that began in June 2009.

“The gains from economic growth in 2011 were quite unevenly shared as household income fell in the middle and rose at the top,” Robert Greenstein, president of the Center on Budget and Policy Priorities in Washington, said on a conference call with reporters.

MotherJones puts the income gap problem in graph form:

So what you have is a toxic mix of income equality, hidden money and assets, falling wages for working people, and a political system unwilling to do anything about it. Henry Ford famously set out to make a car that people could afford. For the last 20 years people have been buying cars, boats, computers, and other goodies they really couldn’t afford, able to do so only because of multiple home mortgages and vast amounts of credit card debt. This is not the recipe for a successful society. What companies, their CEO’s and the rich must understand is that their success is tied directly to the fortunes of those don’t have what they do. Wages can only go so low, environmental conditions can only become so bad, and corruption and greed can only become so rampant before the society they depend upon for their riches collapses.

Is the United States no better than Greece?

As author Mark Lewis pointed out in 2010, Greece is in a huge hole in large part part because no one pays taxes.

The scale of Greek tax cheating was at least as incredible as its scope: an estimated two-thirds of Greek doctors reported incomes under 12,000 euros a year—which meant, because incomes below that amount weren’t taxable, that even plastic surgeons making millions a year paid no tax at all. The problem wasn’t the law—there was a law on the books that made it a jailable offense to cheat the government out of more than 150,000 euros—but its enforcement. “If the law was enforced,” the tax collector said, “every doctor in Greece would be in jail.” I laughed, and he gave me a stare. “I am completely serious.” One reason no one is ever prosecuted—apart from the fact that prosecution would seem arbitrary, as everyone is doing it—is that the Greek courts take up to 15 years to resolve tax cases. “The one who does not want to pay, and who gets caught, just goes to court,” he says. Somewhere between 30 and 40 percent of the activity in the Greek economy that might be subject to the income tax goes officially unrecorded, he says, compared with an average of about 18 percent in the rest of Europe.

. . .

In Athens, I several times had a feeling new to me as a journalist: a complete lack of interest in what was obviously shocking material. I’d sit down with someone who knew the inner workings of the Greek government: a big-time banker, a tax collector, a deputy finance minister, a former M.P. I’d take out my notepad and start writing down the stories that spilled out of them. Scandal after scandal poured forth. Twenty minutes into it I’d lose interest. There were simply too many: they could fill libraries, never mind a magazine article.

Today comes a story from Forbes about the extremes local and state governments are willing to go to crack down on tax cheats:

All of the taxes in the world don’t mean a thing if you can’t collect on them – or so many states and localities are figuring out these days. Taxing authorities fromTennessee to New Jersey are reporting shortfalls and lags in collections activities just as cuts from federal funding are being felt.

Some taxing authorities are saying enough. Alternative, aggressive and controversial new proposals are popping up all over in an effort to fill budget holes.

. . .

A county in North Carolina is going even further: in Jackson County, North Carolina, if you don’t pay your taxes, you could lose your house. County tax collectors are using the threat of foreclosure to collect outstanding taxes, a tactic the county hadn’t used since the early 1980s. While effective – the county has collected about $1.2 million in payments from 85 individual tax delinquents – that level of aggressive collections is considered so contrary to public policy that even the Internal Revenue Service has been discouraged from the behavior.

Oliver Wendell Holmes famously said that taxes are the price we pay for a civilized society. Greeks haven’t been paying their taxes for decades and their society has begun to break down. I hope Americans have better sense.