Padres task force can learn a lot from trip to Baltimore

October 4, 1997

Go to the game, get a jolt from the hoopla.

But while you're in Baltimore, visit some scholars, too.

That's my advice to members of the Padres task force on ballpark planning. They are in Baltimore this weekend to see a playoff game at Oriole Park at Camden Yards. They presumably will tour the area, and be told what a wonderful economic boon the government-financed stadium is.

After all, the report by the San Diego mayor's first task force on Padres planning already has concluded that Camden Yards "was a home run for Baltimore" economically.

I suggest that our task force members stop around and talk to some economists who have studied the Baltimore situation. They say the baseball stadium is a slight net plus for the area, but hardly worth the investment economically.

The government-financed football stadium being built in Baltimore is expected to be a negative -- if not a disaster -- for the economy.

So I suggest our task force go over to Baltimore's Johns Hopkins University and visit economist Bruce Hamilton. He wrote a chapter on Oriole Park in an upcoming book from the Brookings Institution, "Sports, Jobs and Taxes," by Roger G. Noll and Andrew Zimbalist.

I could not reach Hamilton yesterday. But I was able to reach Zimbalist, an economist at Smith College in Massachusetts. I asked Zimbalist the gist of Hamilton's chapter: "He looks at the returns (on Oriole Park) in terms of employment, generation of output, and compares them to the size of the investment," says Zimbalist. "It is a minuscule return -- an investment that could not be justified on economic grounds."

Actually, Noll and Zimbalist believe that, as economically unjustifiable as it is, Oriole Park may provide the best payout of all the new stadiums being funded by government.

"About a third of the crowd at every game comes from outside the Baltimore area," say the authors in a Brookings report, largely because Washington, D.C., only 40 miles away, has no pro baseball team.

"Even so, the net gain to Baltimore's economy in terms of new jobs and incremental tax revenues is only $3 million a year -- not much of a return on a $200 million investment," say Noll and Zimbalist.

(Incidentally, one-third of Orioles attendees come from outside the Baltimore area. Only 16 percent of Padres patrons are from outside San Diego County.)

Our task force members also could visit Dennis Coates, economist at the University of Maryland, Baltimore County. In a new study, Coates and a colleague concluded that, "some professional sports franchises reduce the level of per capita personal income in metropolitan areas and have no effect on the growth in per capita income." All this "casts doubt on the ability of a new sports franchise or facility to spur economic growth."

It goes back to the substitution effect, Coates says. The money spent on a stadium could be spent "on a manufacturing plant, a school, or a myriad of things that would have a higher return on investment," he says.

He wasn't in Baltimore when the baseball stadium was built, and hasn't studied it specifically. But he has testified before a government panel on the new football stadium being built for the Ravens at an astronomical cost: "It is a complete disaster, a complete waste of taxpayers money," says Coates.

While at the game, our task force members might want to interview a person who will be there: Arthur Johnson, political scientist of the University of Maryland, Baltimore County.

He is more sympathetic to possible good that a stadium can do, but warns: "No city should expect dollar for dollar back in investment in these things."

Baltimore (and the state of Maryland) "of course did not get dollar for dollar back, and won't."

But, he says, "Camden Yards is important to the city because it anchors the Inner Harbor tourist area," and the Baltimore economy is in bad shape. "The new football stadium is a different story; it won't add much."

(Indeed, a study by the Congressional Research Service estimated that each job created by the Ravens and their stadium costs Maryland $127,000 to $331,000, vs. an average cost of $6,250 by the state's "sunny day fund.")

Our task force will be hosted by John Moores and Larry Lucchino of the Padres. Lucchino helped get taxpayer dollars to pay for Oriole Park. According to a story in the Union-Tribune, and other reports, Lucchino then sold his 10 percent share in the club for $17 million.

So I hope our task force pays a visit to Jon Morgan, sports business writer for the Baltimore Sun and author of the excellent book, "Glory for Sale: Fans, Dollars and the New NFL" (Bancroft Press). Says Morgan, "The best deal in finance these days is to find a team in an old stadium, and get taxpayers to build a new stadium. You're in clover. You have a gold mine."

So, finally, when the task force returns from Baltimore, I would like them to come to me. I have two words for them: Get smart.

Forbes 400

Forbes tweaks the billionaires and mega-millionaires getting the public to finance their sports ventures.

"Washington State taxpayers open their wallets to the third richest man in America," Paul Allen (worth $17 billion), Forbes says. "He made the state pay for 75 percent of a new $425 million (Seattle Seahawks) stadium."

Adds Forbes, "Pohlad (worth $1.3 billion) has been trying to cajole Minneapolis taxpayers into paying for a new, retractable roof stadium for his Minnesota Twins. So far no luck, but Pohlad has a new club: rumored to be negotiating a move to North Carolina or Virginia."

Finally, Forbes says of Chargers owner Alex Spanos, worth $600 million: "Spanos threatened to move his Chargers football team to L.A. if San Diego didn't enlarge Qualcomm Stadium; taxpayers howled, but Spanos got his way." Spanos describes his acumen: "I have the greatest instincts in the world."