I just counted 205 staffers who are likely to be both full-time and based in D.C., and I'm guessing that list isn't comprehensive.

LOL, so now partners, scouts and "Florida Operations" employees are based in DC?

And "you guess" the list isn't comprehensive? So now you want to collect Peanut vendors who work less than 81 days a year, while ignoring that from my list there is a thousand+ full time lower level workers reporting to the hundreds of managers at a mall?

Add in 25 players who make an average of $3.4 million and spend 6-7 months or more in D.C., and I'm guessing the Nationals' payroll dwarfs that of the best shopping mall in the D.C. area.

None of whom have to live in or spend a dime in DC, so it's probably lucky to see 10% of their salaries.

You can stop guessing. It's been researched, and unbiased economists (ie. the ones not paid by teams) have found that a single Nordstrom generates more economic value than an MLB franchise.

https://play.google.com/store/books/details?id=K-OuDxhiXkoC&rdid=book-K-OuDxhiXkoC&rdot=1&source=gbs_vpt_read

Well, no, you couldn't. TARP has been fully repaid. That you don't know that tells us you're not looking at the evidence, then coming to judgment, but rather coming to judgment then throwing stuff out there that you want to believe supports it, but in fact doesn't.

The WSJ article was, of course, only the tip of the iceberg. The idea that people routinely invest their own money wisely is frankly absurd (no offense, truly. I've seen far, far too many preposterous choices to believe you're correct here). Most people are clueless when it comes to economic choices. Private enterprise is also extraordinarily wasteful. Think of all the failed companies that go into making one successful one. Think of the dozen failed restaurants standing behind every restaurant that lasts a decade. Voters rarely tolerate that level of inefficiency in government; at least, not for long. There's oversight in government spending that doesn't exist for private investment, and so on.

It's clear enough that government tends to tread a middle road, which makes it look wasteful if you only look at the extremely efficient businesses that survive. If you look at everything, though, the picture is very different. The US government didn't try dozens of schemes before arriving at social security, for example, but rather plodded down the middle lane in establishing the program. Compare that with the incredible amount of money people have lost saving for retirement since the beginning of social security. That figure alone puts paid to your thesis.

LOL, so now partners, scouts and "Florida Operations" employees are based in DC?

I didn't count any of those, as I explicitly said.

And "you guess" the list isn't comprehensive? So now you want to collect Peanut vendors who work less than 81 days a year, while ignoring that from my list there is a thousand+ full time lower level workers reporting to the hundreds of managers at a mall?

When did I say anything about part-time peanut vendors?

You can stop guessing. It's been researched, and unbiased economists (ie. the ones not paid by teams) have found that a single Nordstrom generates more economic value than an MLB franchise.

Ludicrous. MLB's 30 teams generated over $7.5 billion in revenue last year; Nordstrom's 230 stores generated $8.5 billion.

TARP is on track to lose $24B, so not totally repaid. TARP was a massive bailout of poor investment decisions, i.e. a subsidy of reckless investors so they could keep their companies and equity instead of being forced to refinance or reorganize in bankruptcy. Then execs at the bailed out banks paid themselves billions in bonuses made possible only by the TARP handouts.

No idea how you're missing that this entirely proves my point--PRIVATE investment all but destroyed the world's economy. Government stepped in and for a very small fraction of the total, saved the day. How is that not an incredibly strong argument for the efficiency of government over private enterprise?

LOL. One minute the anti-stadium people are arguing that a sports team is in competition with all other forms of entertainment in an area, and that such sports teams simply cannibalize other entertainment spending. The next minute, that same sports team is a monopoly with an iron grip on its fans' dollars.

Really, the concept is THAT difficult for you?

Let's assume you lived in a remote town with a single commercial airline serving it's small airport. Is that airline a monopoly or not? Obviously it's a monopoly on air travel for anyone in that town, just like the Nats are a monopoly on live MLB baseball in the DC area.

But it's not a monopoly on "travel" any more than the Nats are a monopoly on "DC area entertainment". In your small town citizens have choices. They can drive, they can probably take a bus, they might even be able to take a train to some locations. But if they want someone to fly them out of town, they have no choice, just as if someone wants to see MLB baseball in DC has no choice.

So if the town suddenly decides to eliminate it's 10% tax on airfares, is the airline going to cut fares? Only if it is very sure higher volumes will lead to higher profits, so probably not, after all why take the risk when there is no competitor who can force it to alter pricing or pass the windfall to customers. Of course it may still try lower fares if it's already losing money or not making much and needs the higher volumes to try to make the business work.

But if your town suddenly decides to eliminate a 10% surtax on hotel rooms, and your town has a dozen hotels. If 11 hold firm and try to trap the windfall, their plan is foiled by a single hotel slashing it's rates and increasing it's profits by minimizing it's vacancies. Once one lowers prices the rest of the dominos fall. If all 12 meet in secret and agree to hold the line, they can't stop the canny local businessman from building a new hotel on that empty lot to take advantage of the now much higher profits the hotel business offers in your town, and he'll likely undercut their rates to build his business, forcing the dominos down anyways.

Market wide cost reductions in competitive markets are almost always passed on to consumers. Competitive markets have easy, or relatively easy entrants. Whatever the "right" level of profitability is in order to provide the service or product from a sustainable business is, once everyones costs drop the same amount, the losers aren't going to sit tight and accept lower profits than the winners, they'l fight for market share and higher profits by cutting prices. And outsiders who may not have entered the market at it's previous profitability levels are quickly drawn in by the newer, higher profits, unless the current market operators reduce prices accordingly.

Ludicrous. MLB's 30 teams generated over $7.5 billion in revenue last year; Nordstrom's 230 stores generated $8.5 billion

Almost all of Nordstom's stores revenues were local.

Little MLB revenue is. TV money is over half of their revenues. Owners, players, GMs, scouts, the highest paid employees rarely live in the town.

Read the report and try to rebut it. It's solid.

No idea how you're missing that this entirely proves my point--PRIVATE investment all but destroyed the world's economy. Government stepped in and for a very small fraction of the total, saved the day. How is that not an incredibly strong argument for the efficiency of government over private enterprise?

The Federal Government guaranteed trillions in mortgage debt and encouraged, (in some cases forced under equal lending law "interpretations"), the writing of loans that were patently bad. The Feds opened a casino where banks could gamble with taxpayer money and keep all the winnings, and stick the taxpayers with most of the losses.

Just like the Nats and the Marlines getting local governments to take all the risk and heavily subsidize the cost of their stadiums and businesses.

The Feds also forced US car makers to make more of the most unprofitable cars in their lineups or face massive fines (CAFE) for decades until they finally went under.

Then instead of taking AIG, GM and the other bad actors through bankruptcy or a similar process that would have forced the gamblers to give up all of their ill gotten gains, they kept them afloat by printing massive amounts of new money, and then let them pay themselves massive bonuses as rewards for their ineptitude.

So where is private investment decisions in all of this?

But if your town suddenly decides to eliminate a 10% surtax on hotel rooms, and your town has a dozen hotels. If 11 hold firm and try to trap the windfall, their plan is foiled by a single hotel slashing it's rates and increasing it's profits by minimizing it's vacancies. Once one lowers prices the rest of the dominos fall. If all 12 meet in secret and agree to hold the line, they can't stop the canny local businessman from building a new hotel on that empty lot to take advantage of the now much higher profits the hotel business offers in your town, and he'll likely undercut their rates to build his business, forcing the dominos down anyways.

If the hotel tax is 10 percent, the most the rates can be cut is 10 percent without cutting further into the previous profit margin. Ten percent hardly constitutes "slashing" prices, and it's not the type of margin that sends developers scurrying to build additional hotels.

Almost all of Nordstom's stores revenues were local.

Little MLB revenue is. TV money is over half of their revenues. Owners, players, GMs, scouts, the highest paid employees rarely live in the town.

Little MLB revenue is local? GMs don't live in the team's city?

As for Nordstrom, they sell products that are made elsewhere and then send most of the profits back to Seattle. The guy who manages the Nationals' clubhouse almost assuredly makes more money than any Nordstrom store manager in the country, and probably more than any Nordstrom regional manager. (And he probably ranks no better than 50th on the Nationals' hierarchy.)

Well, no, you couldn't. TARP has been fully repaid. That you don't know that tells us you're not looking at the evidence, then coming to judgment, but rather coming to judgment then throwing stuff out there that you want to believe supports it, but in fact doesn't.

Maybe you should update their wiki page.

http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program

By October 11, 2012, the Congressional Budget Office (CBO) stated that total disbursements would be $431 billion and estimated the total cost, including grants for mortgage programs that have not yet been made, would be $24 billion.

The WSJ article was, of course, only the tip of the iceberg. The idea that people routinely invest their own money wisely is frankly absurd (no offense, truly. I've seen far, far too many preposterous choices to believe you're correct here). Most people are clueless when it comes to economic choices. Private enterprise is also extraordinarily wasteful. Think of all the failed companies that go into making one successful one. Think of the dozen failed restaurants standing behind every restaurant that lasts a decade. Voters rarely tolerate that level of inefficiency in government; at least, not for long. There's oversight in government spending that doesn't exist for private investment, and so on.

Your confusing individuals making personal investment decisions with their own money, with business investment decisions. In the latter case, there is much more money invested and much more due diligence done, even at the sole proprietor level.

"failure" is a word that's thrown around too liberally. If there was truly 12 failed restaurants for every 1, no one would ever start a restaurant. If you start a restaurant and it's not as profitable as you like, you may sell it to someone else or simply close it to focus on your other restaurants. That''s not a failure, but you didn't last 10 years.

And the fact that many businesses fail doesn't make the process wasteful, capitalism is a constant exploration to find better products and business models, what if Steve Jobs had stopped when the Lisa failed? Many VC firms have made huge returns for their investors, despite having most of their investments fail.

Thanks for point out how tough it is for a government agency to deal with the publicity of making investment mistakes, which is another reason they should get out of the business of picking winners like they did Solyndra (a clever example of a VC using government handouts to reduce his own risk, all for the low cost of some campaign contributions). But if a government agency can't handle making the number of mistakes a typical VC firm does, who is going to take those risks?

You seem to argue that the Intel execs who gave Steve Jobs a few hundred thousand to turn Apple into a real company should have instead bought a minor league baseball team and had Cupertino build them a subsidized stadium. I'm sure that would have worked out the same way for Silicon Valley.

If the hotel tax is 10 percent, the most the rates can be cut is 10 percent without cutting further into the previous profit margin. Ten percent hardly constitutes "slashing" prices, and it's not the type of margin that sends developers scurrying to build additional hotels.

Do you really think hotels make even a 10% profit margin? Last I looked Marriott was under 5%. Dropping another 10% to the bottom line at least doubles profits, if not triples them. So yes, it will send developers scurrying.

Little MLB revenue is local? GMs don't live in the team's city?

Mine is in Africa on a safari right now, and rumour is still lives in San Diego.

As for Nordstrom, they sell products that are made elsewhere and then send most of the profits back to Seattle. The guy who manages the Nationals' clubhouse almost assuredly makes more money than any Nordstrom store manager in the country, and probably more than any Nordstrom regional manager. (And he probably ranks no better than 50th on the Nationals' hierarchy.)

And all the people above him live elsewhere. Rebut the report. You can guess all you want, but real economists wrote it without being paid to reach a predetermined conclusion. Whether you agree or not, you should get value from reading it, cause you dont' know much about business now, that's for sure.

Do you really think hotels make even a 10% profit margin? Last I looked Marriott was under 5%. Dropping another 10% to the bottom line at least doubles profits, if not triples them. So yes, it will send developers scurrying.

So the hotels' profit margins are under 10 percent, but you believe that if a 10 percent hotel tax is eliminated — a tax that millions upon millions of travelers have been paying for years, often without even noticing — the hotels' first move will be to lower prices? Not buying it. (And I'm certainly not buying it under the current conditions, with hotel occupancy rates at or near all-time highs in many markets.)

Mine is in Africa on a safari right now, and rumour is still lives in San Diego.

Going on vacation now constitutes "not living in the team's city"? That's rich. And he might still own a home in San Diego, but I doubt he's an absentee GM. The only one of those I can think of in the last decade is J.P. Ricciardi, who lived in Massachusetts while GM of the Jays.

And all the people above him live elsewhere. Rebut the report. You can guess all you want, but real economists wrote it without being paid to reach a predetermined conclusion. Whether you agree or not, you should get value from reading it, cause you dont' know much about business now, that's for sure.

"All the people above him live elsewhere"? Are you kidding? Do you really believe MLB front offices are staffed by a bunch of minimum-wage secretaries and interns while the top 50 people in the hierarchy all live elsewhere?

What is this 1T you mention? TARP was around 450b and has been repaid...

The $1T we were discussing is the stimulus, which is 100% gone (and not coming back) and largely wasted.

The Federal Government guaranteed trillions in mortgage debt and encouraged, (in some cases forced under equal lending law "interpretations"), the writing of loans that were patently bad. The Feds opened a casino where banks could gamble with taxpayer money and keep all the winnings, and stick the taxpayers with most of the losses.

Just like the Nats and the Marlines getting local governments to take all the risk and heavily subsidize the cost of their stadiums and businesses.

The Feds also forced US car makers to make more of the most unprofitable cars in their lineups or face massive fines (CAFE) for decades until they finally went under.

Then instead of taking AIG, GM and the other bad actors through bankruptcy or a similar process that would have forced the gamblers to give up all of their ill gotten gains, they kept them afloat by printing massive amounts of new money, and then let them pay themselves massive bonuses as rewards for their ineptitude.

Exactly. It is a sin that Hank Greenberg and James Gorman and Lloyd Blankfein still have tens of millions of dollars of stock in their companies after the taxpayers had to bail them out.

The whole bailout fiasco was the absolute worst kind of crony capitalism, rewarding rich political donors at taxpayer expense.

Right now in the city of DC we are going through a hotel building boom with thousands and thousands of additional rooms getting built within the next 5 years and virtually none of that has to do with the Nationals ballpark. In fact the proposed hotel next to the park hasn't been built yet and I'll believe they'll have one when I see it. The various F&B and tourist taxes definitely do hinder business. Hidden costs might not mean a lot to some average joe booking a room for a night but it most certainly factors into what businesses will and won't do. Corporations and businesses have budgets and they aren't fooled by hidden costs. If a corporation has a $100,000 to spend they'll spend $100,000 in total not spend on $100,000 before tax and then pay the tax.

SEcondly the hidden costs aren't really hidden anymore. When you book a room online you get the total cost of the room and your stay before you finalize your purchase so hotels don't get to avoid the sticker shock as much as they used too.

live elsewhere

The Rangers' website reports that Rick George (COO) lives in Colleyville; Jon Daniels (GM) lives in Southlake; John Blake (VP for communications) lives in Grapevine (all upscale suburbs near DFW airport, typical commutes to Arlington). Nolan Ryan has several Texas homes, one of them in Fort Worth. Other Rangers brass with noted addresses live in Southlake or Dallas. I don't know why they'd live anywhere else. There are tons of affluent suburbs around most major-league cities, and even if you're making low six figures, that's not really a private-jet-commute kind of income.

Add in 25 players who make an average of $3.4 million

That's the real benefit. Having a professional sports franchise allows a state or local government to tax income of highly paid athletes which is something they wouldn't get to do without the sports franchise. They're essentially turning national television advertising dollars into local taxes. Those ad dollars would otherwise go to reality television shows in Hollywood.

Yes, what a wonderful benefit that is when compared to the costs.

what a wonderful benefit that is when compared to the costs

It does depend on the costs. I was looking over the MN Vikings stadium debate and it's clear the state made money on Metrodome and will probably break even on the next NFL stadium despite $700M of subsidy. The $$ are that big.

The Metrodome was used for pro baseball, football, basketball, and soccer as well as college football and basketball plus a Super Bowl. It was also built on the cheap and at a time before the Feds restructured bonds to try and dissuade state and local government from building these things.

From what I can find the Metrodome was built for 55 million dollars with 33 million dollars coming from public money and the state spent another 70 million in infrastructure around the stadium. So the public spent 102 million dollars on the project and according to the Vikings the government has gotten back 320 million in taxes over that time. 102 million in 1979 is something like 325 to 350 million in today's dollars. I have no idea who has to pay for repairs or how much it cost or how much revenue was pulled from other areas of the county but it certainly looks like through it all the people either barely made any money or lost money on the deal. It's up to each individual to decide whether or not the cost was worth it for the entertainment provided.

Metrodome also brought in a Super Bowl, Final Fours, numerous other events and 20+ years of Twins baseball. The Vikings paid for it but the rest brought in the profit.

That's the real benefit. Having a professional sports franchise allows a state or local government to tax income of highly paid athletes which is something they wouldn't get to do without the sports franchise. They're essentially turning national television advertising dollars into local taxes. Those ad dollars would otherwise go to reality television shows in Hollywood.

Florida doesn't have income tax.

So the public spent 102 million dollars on the project and according to the Vikings the government has gotten back 320 million in taxes over that time. 102 million in 1979 is something like 325 to 350 million in today's dollars.

Not to wade into the debate, but did they only get the $320 million taxes in 2012? I assume those are nominal dollars over a 30+ year period that also are worth more in today's terms.

Florida doesn't have income tax.

Yeah, that makes it a bad idea.

They got something like 20 million in 2011 according to the Vikings and got 11 million in 2001. So something like half of all the tax revenue has come in the last decade.

The people had to pay interest on that 102 million and that isn't included either. Really no matter how you slice it the people aren't really coming out ahead in terms of dollars.

Metrodome also brought in a Super Bowl, Final Fours, numerous other events and 20+ years of Twins baseball. The Vikings paid for it but the rest brought in the profit.


Almost all of the revenue came from Minnesota so I'm not sure what the people really gained by spending all that money. Were people going to sit on that money forever or go to Wisconsin for fun?

The marginal revenue from taxing athlete income is really the only income generated by having professional sports and is the only income I'd consider in determining economic payback. You're right that the other entertainment dollars would be spent elsewhere. Beyond that I'd be in favor of publicly subsidizing facilities to the extent any athletic facilities are subsidized in a parks budget. Subsidize just enough to cover the public benefit (high school championships, etc).

Anecdotal, and I've noted this on BBTF before, but: the building of Cowboys Stadium was followed in short order by the opening of several new restaurants downtown in Arlington TX, and many new retail and residential initiatives downtown as well, plus expansion and renovation of old ones. Downtown is a couple of miles from the Stadium (the area right around the Stadium is still fairly sketchy), but the renewal cannot have been a coincidence: the city's downtown had languished forever till the Stadium opened. (By contrast the Ballpark never seemed to have any impact whatsoever on development.)

There's a large irrational factor at work. I don't really know why the restaurants opened. They serve a lot of alumni on college-football game days, but that's a couple of afternoons a year. It's probably more that the opening of the Stadium said to local business types that Arlington might be a place worth both visiting and investing in. After long cynicism about stadium financing, I'm less dogmatic about the issue now. I'd probably still vote against the next stadium tax that comes along, but the right one can make some difference in the livability of a city.

the right one can make some difference in the livability of a city

I would guess it would be much cheaper for the city to renovate the restaurants without building the stadium.

re 77: But that is simply shifting money around from one geographic spot (zip code?) to another. People in Arlington weren't not eating. They simply ate elsewhere and now maybe they eat in area Y instead of X. So X winds down or has to innovate while Y possibly grows.

Almost all of the "taxpayer money" being spent on this is coming from hotel taxes

I started wondering "hey, this is interesting", until I saw who wrote it: one of the rare people whose arguments are almost completely detached from reality.

much cheaper for the city to renovate the restaurants without building the stadium

Yes, but at some point one has to start attracting private development. A stadium may seem like overkill, but it can be a catalyst for that private development. Cities don't usually get into the business of running restaurants (maybe they should?) If you wait for smaller private enterprises like restaurants to move gradually into rezoned or rehabilitated areas, you may wait forever. A stadium, whatever its disadvantages, brings attention and a fair number of people into an area and kick-starts activity.

People in Arlington weren't not eating. They simply ate elsewhere and now maybe they eat in area Y instead of X

That's a good point, most relevant to large metro areas with lots of independent municipalities. Arlington got a stadium and Irving lost one. Though Irving, over the lifetime of Texas Stadium, gained substantial upscale corporate/retail/residential development which is now self-sustaining – again, probably not a coincidence.

If it's a matter of a single large city just shuffling entertainment around within its own limits, that's somewhat different.

Yes, but at some point one has to start attracting private development. A stadium may seem like overkill, but it can be a catalyst for that private development. Cities don't usually get into the business of running restaurants (maybe they should?) If you wait for smaller private enterprises like restaurants to move gradually into rezoned or rehabilitated areas, you may wait forever. A stadium, whatever its disadvantages, brings attention and a fair number of people into an area and kick-starts activity.

I'd rather a city built a museum, research lab, or college than some stadium that will sit empty the vast majority of the time.


That's a good point, most relevant to large metro areas with lots of independent municipalities. Arlington got a stadium and Irving lost one. Though Irving, over the lifetime of Texas Stadium, gained substantial upscale corporate/retail/residential development which is now self-sustaining – again, probably not a coincidence.



The only way anything is self sustaining is if they offer something other places cannot. For most places that means either cheap land or low taxes or both. If Irving gets too expensive people will leave, if place Y offers better incentives companies will leave place X. So for me at the end of the day if my government is going to throw hundreds of millions of dollars out the window I'd rather they built something we could all benefit from and or use. Thins like a road system, mass transit, school system, energy grid, so on and so on and not build some place that stays vacant 340 days of the year.

Though Irving, over the lifetime of Texas Stadium, gained substantial upscale corporate/retail/residential development which is now self-sustaining – again, probably not a coincidence.

Well, it probably was.