March 30, 2001

Washington, D.C.-The Small Business Survival Committee (SBSC) published a report today-"You're Out: Corporate Welfare for Major League Baseball"-by chief economist Raymond J. Keating.  The study highlights the enormous ballpark subsidies received by big league baseball teams over the years, explains the related economic ills, and argues that business should not be supportive of such taxpayer handouts.

Keating observed: "As a huge baseball fan, I always look forward to Opening Day.  As an economist, though, I am distressed by the fact that big league baseball is on the dole."  The study pegs the costs of building big league ballparks over the years at at least $11.5 billion (in real 2000 dollars), with taxpayers picking up about 81% of the tab, or $9.3 billion.  The study includes funding information for every major league ballpark for which data was available-present and past.  

Keating noted: "Ballparks were once privately financed.  Like other businesses, team owners bought the land and erected their own facilities.  Before 1953, only one Major League Baseball club played in a government-funded stadium, and 75% of funding for ballparks came from private sources. In fact, during that period, every ballpark built exclusively for Major League Baseball-i.e., excluding government-funded stadiums built to attract the Olympics--was completely funded with private dollars.  But with the rise of the welfare state, the entitlement mentality eventually spread to baseball as well."  The report notes that only one big league ballpark since the early 1950s was built without taxpayer money, while 19 baseball stadiums were 100% taxpayer funded.

Keating warned: "Given current efforts, another $5 billion to $6 billion could be spent in the next few years on big league ballparks, with taxpayers easily on the hook for at least $3.5 billion to $4 billion."

Keating also observed: "Unfortunately, some businesses and their representatives-in particular, many state and local business groups-have supported subsidized stadiums. Such support is grossly misguided, as only select businesses benefit from such subsidies, namely, the baseball team that plays in the facility, and the architectural and construction firms designing and building the ballpark.  In contrast, practically all other businesses in the region or state receive absolutely no benefits, but instead face increased costs and lost business due to higher taxes paid by consumers and businesses, and/or due to consumer spending being redirected."  

Keating concludes: "Corporate welfare is always unsavory business, and baseball subsidies are bad economics and bad politics. As was the case in the early half of the twentieth century, beautiful ballparks can be built without taxpayer aid.  When you consider the countless sources of revenue at ballparks today-naming rights, signage, luxury suites, club seats, parking fees, concessions, etc.-team owners certainly could build their own fields of dreams.  However, when politicians stand willing to fork over millions of dollars in subsidies, team owners have no incentives to pay for their own ballparks."

To read "You're Out: Corporate Welfare for Major League Baseball," go to SBSC's website at www.sbsc.org.  For more information or an interview, call SBSC at 202-785-0238.  SBSC is a nonpartisan, nonprofit small business advocacy group with more than 70,000 members across the nation.