Hiltzik: The folly of public financing of stadiums

The longest-running melodrama in sports is less about events on the playing field than about machinations in the ownership structure of baseball's Oakland A's, who are about to complete a move to Las Vegas in three or four years.

At least that's the hope of Major League Baseball and the team's billionaire owner John Fisher. That the deal will ultimately close as expected is the way to bet, to speak the language of Las Vegas.

But there are more and more reasons to lose out. As my colleague Bill Shaikin reports, two challenges to public financing of the team's proposed new Vegas field have been raised by a Nevada teachers union.

Strong Public Schools Nevada, a political action committee of the Nevada State Education Assn., has filed a lawsuit questioning public funding as unconstitutional. A separate committee of the union is pushing to qualify for the state ballot in November, a voter referendum on funding.

At issue is a measure signed last year by Nevada's Republican governor, Joe Lombardo, that authorized $380 million in public financing for a project estimated to cost $1.5 billion. The rest would likely come from Fisher and whatever other private investors he convinces to come on board.

The absurdity of awarding public money to a billionaire and his wealthy cronies for a sports venue when other public needs are more pressing is not lost on the teachers, nor should it be lost on anyone else.

“Nevada ranks 48th in per-pupil funding, with the largest class sizes and highest teacher vacancies in the country,” the teachers union said when it filed a lawsuit in February. But “during the last legislative session, when important education issues were still under discussion…Nevada politicians focused particularly on financing a 'world-class' stadium for a California billionaire.”

They are right. Fisher, whose net worth is estimated at $3 billion by Forbes, is the ultimate member of the Lucky Sperm Club, and not indelicate. He is an heir of Donald and Doris Fisher, founders of Gap Inc. Forbes ranks his “self-made score” at 2 on a scale of 10, meaning almost all of his wealth has been inherited.

As I wrote last year, since Fisher became sole owner of the A's in 2016, he has systematically dismantled the team and allowed its home stadium, the Oakland Coliseum, to crumble.

The nearly 60-year-old multi-use park used to be a terrible place to watch a baseball game, with seats ridiculously far away from the action, but in recent years the experience has only gotten worse. During one match the stadium was flooded. On another occasion the lights went out. Wild animals roamed the increasingly empty hallways. Fisher then doubled season ticket prices for the 2022 season.

Meanwhile, he and MLB commissioner Rob Manfred shed crocodile tears over the lack of fan support in Oakland. But what kind of product did Fisher and MLB ask fans to pay for? In short: the A's stink. Last year they had the worst record in baseball by losing 112 of their 162 games. They scored 339 fewer points than they conceded to their opponent.

This record was not the product of chance, but of design. The team's $43 million salary last season ranked last in the league, 12% of the league-leading New York Mets (who, to be fair, barely maxed out their $334 million salary and nearly 54% of their games lost). The A's highest-paid player, shortstop Aledmys Diaz, hit .229 last year and has started this season on the injured list.

Fisher began an apparently serious search for an alternative location in the Bay Area. Oakland city officials who tried to work with him on a plan to stop the team accused him of sabotaging those efforts, in part by pushing for massive subsidies for expanded joint stadium, commercial and residential developments.

The A's have announced that after completing their stay in Oakland at the end of the season, they will play at the minor league Sacramento River Cats ballpark for the next three years, maybe four, while their new stadium is on the Vegas Comic rises. site of the Tropicana Hotel, which will be demolished this year.

The Sacramento ballpark seats about 14,000, but it may still seem nearly empty when the A's play there, as the average attendance at the team's 13 home games in Oakland so far this year is 6,243, worst in the league by an unhealthy margin. The last year the average home attendance for A's games exceeded 14,000 was 2019. A game last May between the A's and the Arizona Diamondbacks had only 2,064 seats filled, the lowest attendance for an A's game in 44 years.

So what would Las Vegas gain from importing the A's? Probably almost nothing. In very rare cases, a new sports venue can increase economic activity in a town or city, usually one where little else in the way of sports or entertainment is offered.

Las Vegas isn't exactly the kind of community that's in dire need of another tourist attraction. An A-margin — or, for that matter, the NFL Raiders' Allegiant Stadium, which hosted this year's Super Bowl — can't do much for a city where hotel occupancy is generally near the highest in the country.

If Bloomberg reported this earlier this year According to Allegiant, “If the $1.9 billion stadium had not been built at all, Las Vegas businesses would not have noticed the difference.” And any time tourists spend at a ball game is time they aren't spending in the city's real cash cows: the casinos.

Even if a new location brings in new dollars, the gain for the home community usually comes at the expense of the larger region. Think of it as the Inglewood effect: This outpost of 110,000 residents may see more business from SoFi Stadium, where the NFL Rams and Chargers play, but the opportunities it has had a measurable impact on Los Angeles County (9.7 million inhabitants) are so minuscule that they no longer exist.

In fact, some Inglewood business owners and residents complain that the project has brought them more traffic and noise; higher rents for homes and commercial properties drove a number of residents and businesses out of the city.

Which brings us back to the Vegas stadium financing challenges posed by Nevada teachers. Both the union's lawsuit and the proposed ballot measures are ticking over. Since February, virtually nothing has happened at the Carson City courthouse where the lawsuit was filed.

That makes the A's nervous because legal authorization for public financing expires 18 months after MLB's approval of the team's move, which was delivered Nov. 16 by a unanimous vote of MLB team owners — making it team was given a deadline of mid-May. 2025 to finalize all necessary agreements with local authorities. That means the deadline is just over a year from now, assuming the court upholds the legislation.

If the legislation is reversed, the team and its government promoters would be back to square one. Therefore, a few days ago the team petitioned the court to intervene in the lawsuit, which allowed them to assert their own interests in court. “Athletics … will be affected if SB 1 is found unconstitutional,” A's President Dave Kaval said in a court filing. “Every year of postponement will cost the athletics world millions of dollars.”

The union's efforts to undo public funding through the ballot box are also slowly moving through Nevada courts. Her petition to hold a referendum on the November ballot was invalidated by a state judge in November. The union appealed to the Nevada Supreme Court, which heard oral arguments on the case on April 9 but made no decision.

The union has until June 26, or just over two months, to collect more than 102,000 valid signatures from registered voters to place the referendum on the November ballot. But it cannot start the process until the court has determined the validity of the request.

That is important, because there are indications that Nevada voters are reluctant to spend public money on the A stadium. A poll released April 4 by the nonpartisan polling firm at Boston-based Emerson College found that 52% of voters are against public financingwhile only 32% were in favor and 17% were unsure.

Public financing of stadiums for team owners who could pay for construction out of their own pockets peaked in the 1990s, when voters finally got fed up with the giveaways that left their cities and states in dire straits for venues that were perpetually in the red .

The trend faded, but never disappeared completely. Recently it has experienced a revival. Last year, the New York Legislature and Erie County approved grants totaling at least $850 million for a new stadium for the NFL's Buffalo Bills. The team's owner, oil and gas magnate Terry Pegula, is even richer than Fisher, with a net worth of $6.8 billion. according to Forbes; he is also almost entirely a self-made man.

Pegula angered the politicians by threatening to move the team to Austin. The result was the largest taxpayer spend in American sports history, narrowly exceeding the $750 million subsidy Nevada posted to bring the NFL's Oakland Raiders to Las Vegas in 2022.

The rent-seeking game Fisher has played with Oakland and Las Vegas is as humiliating to taxpayers as the Bills and Raiders deals. It will make the A's the most traveled professional sports team in American history, originating as the Philadelphia Athletics under the legendary Connie Mack in 1901 before moving to Kansas City in 1955 and Oakland in 1968, with Sacramento and Las Vegas now in the future. .

So a sports franchise with 15 American League pennants and nine World Series titles to its name and more than 100 years of loyal fandom in three cities will endure in a sign of Major League Baseball's unsavory battle with the gambling industry.

Nevada's lying political leaders should be ashamed of themselves if they impose a billionaire bill on their voters. The gentlemen of MLB should be ashamed of themselves for treating the fans who supported the Oakland A's through four World Series titles so shabbily and sticking with them until Fisher simply cluttered the spectacle on the field.

Here's a simple prediction: This won't be the last time professional sports owners demonstrate their willingness to treat their fans like crap, as long as there's someone in the distance waving millions of dollars around.