Why Should We Subsidize Baseball?
Subsidizing baseball isn't about having fun. It's serious business that leads to the hijacking of public funds for private purposes, and it has no end.
by Jerome F. Winzig
Sometime tomorrow, after last night's thrilling one-run victory in the ninth inning of the seventh game of the World Series by an expansion team, the 30 major league baseball owners will vote on whether to reduce the number of major league baseball teams by two. According to news reports, the two teams that may be eliminated are the Montreal Expos and our own Minnesota Twins.
The whole affair has a surreal quality to it. For many years, major league sports teams have pleaded with cities and states across the country to give them public subsidies. They've threatened to move if they didn't get what they wanted. They've asked for public bonds to build new stadiums. They've asked for larger shares of stadium revenues, even though that meant the difference would come out of taxpayers' pockets.
Yet now the owners have sufficient income to seriously consider paying $200 to $250 million per team to shut down two small-market teams rather than having large-market teams share their revenues with small market teams. This makes no sense when the owners have demonstrated they have no need for public subsidies and the industry needs competitive teams in order to succeed.
However, major league baseball doesn't talk about itself as entertainment too often. Most of the time, it tries to surround itself with a mystical aura. This causes hundreds of business leaders getting together to determine how they can spend more of their stockholders' money to subsidize major league baseball by buying expensive box seats. It causes political leaders to discuss new ways they can raid the public treasury to help a privately-owned entertainment franchise. It also causes union leaders to come out in favor of public financing for new sports stadiums.
It also leads to an incredible amount of waste. The old Met Stadium, first large sports facility in Minnesota, was built in 1956 when I was in grade school. Nineteen years ago the Hubert H. Humphrey Metrodome was built over the objections of many.
In the past, this kind of furor about subsidizing private industry was limited mostly to sports teams. But now other kinds of companies are trying the same approach. The city of Bloomington and the state of Minnesota were persuaded to contribute millions of dollars in public infrastructure to support the huge Mall of America project. (In the process, the old Met Stadium, less than 30 years old, was torn down.) In recent years, Target convinced the city of Minneapolis to subsidize construction of a new store downtown, even though that meant many smaller businesses were forced to relocate. In the last session of the Minnesota legislature, the Guthrie Theater persuaded lawmakers to subsidize construction of an entirely new theater complex to replace the one that was built when I was in high school. At the same time, many in the community are objecting to plans to tear down the old theater complex.
I like baseball. I like the Guthrie Theater. I shop at Target. I've been to the megamall (although I don't enjoy it because it's too big). However, subsidizing such private enterprises comes at a cost. First, it takes money away from other people. This implies that baseball, the Guthrie Theater, Target, the Mall of America, and others who receive public subsidies are more important than those that do not, even though that's a highly questionable judgment. Second, it wastes resources. Institutions that are not subject to the discipline of the marketplace can afford to discard stadiums and theaters even when they're not worn out.
Third, and perhaps most importantly, it leads to the hijacking of public money for private gain. This distortion of the public treasury tends to have no end. It encourages those who are left out of the subsidy game to seek their share at the public trough, until every public decision becomes influenced by private special interest groups.