On Jun 20, 2005, at 12:37 PM, Jeremy Wieland wrote:
Don't know if anyone was following the news this week. Just got
back from
New York and the headlines there? Steinbrenner to lay out $800
million out
of pocket for a new baseball stadium. I would love to know how
that works
for George, but not for Carl.
It works on a couple of levels.
The biggest one is that any George kicks in lots of money (about $100
mill, I think) to the rest of Major League baseball through revenue
sharing. That's because of his massive Cable TV contract in the
nation's largest market, and higher ticket prices 'cause everything
costs more in NYC, and about a million and a half more fans than the
Twins because of the Yankees' perennial success.
HOWEVER - and this is key to understanding the unique economics of
the Yankee stadium deal — MLB rules let you deduct stadium debt
service from profits used to calculate revenue sharing. Therefore, in
effect, George gets to keep money he otherwise gives away to other
owners to spend on his new playpen, replete with more suites and a
new club level.
This sort of cash flow stream is simply not available to other
owners. (SF did its private deal by charging about 50 percent more
per ticket than other places with new stadia - function of high Bay
area prices and also the park's stunning beauty. The Cardinals mostly
private deal was amply explained by the Strib this weekend.)
Also, it should be noted that in any apples-to-apples comparison,
local NYC government is spending about $300 million to build new
parking ramps, a new subway stop and swap parkland in the Bronx. So
if you're tacking on the $84 million in county infrastructure costs
onto the Twins' ledger, the Yankee thing is a $1.1 billion project of
which the Yanks have offered $800 million.
David Brauer
Ballpark geek
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