Hiltzik: The folly of public financing for stadiums

By Michael HiltzikBusiness Columnist

April 24, 2024 3 AM PT

The longest-running melodrama in sports is less about events on the field of play than on machinations in the ownership suite of baseball’s Oakland A’s, who are close to finalizing a move to Las Vegas three or four years from now.

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 increasingly there are grounds to take the under. As my colleague Bill Shaikin reports, two challenges to the public funding for the team’s proposed new Vegas ballpark have emerged from a Nevada teachers union.

During the last Legislative Session, with important education issues outstanding,...Nevada politicians singularly focused on financing a ‘world-class’ stadium for a California billionaire.

— Nevada State Teachers Assn.

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

At issue is a measure signed last year by Nevada’s Republican governor, Joe Lombardo, authorizing $380 million in public funding for a ballpark estimated to cost $1.5 billion. The rest supposedly would come from Fisher and any other private investors he persuades to come on board.

The absurdity of making a grant of public money to a billionaire and his rich cronies for a sports venue while other public needs are more pressing isn’t lost on the teachers, and it shouldn’t be lost on anyone else.

“Nevada ranks 48th in per pupil funding with the largest class sizes and highest educator vacancies in the nation,” the teachers union stated when it filed its lawsuit in February. Yet “during the last Legislative Session, with important education issues outstanding ... Nevada politicians singularly focused on financing a ‘world-class’ stadium for a California billionaire.”

They’re right. Fisher, whose net worth is estimated by Forbes to be $3 billion, is the quintessential member of the Lucky Sperm Club, not to be indelicate. He’s 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 that almost all his wealth was inherited.

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

The nearly 60-year-old multipurpose park was always a terrible place to watch a baseball game, with seats ridiculously distant from the action, but in recent years the experience has only gotten worse. During one game, the stadium flooded with sewage. On another occasion, the lights went out. Feral animals roamed the increasingly vacant corridors. Then, for the 2022 season, Fisher doubled season ticket prices.

Meanwhile, he and MLB commissioner Rob Manfred shed crocodile tears over the lack of fan support in Oakland. But what kind of product have Fisher and MLB been asking fans to pay for? In a nutshell: The A’s stink. Last year they turned in the worst record in baseball by losing 112 of their 162 games. They scored 339 fewer runs than they gave up to opponents.

This record was the product not of chance, but design. The team payroll last season of $43 million ranked dead last in the league, 12% of the league-leading New York Mets (who, to be fair, hardly made the most of their $334-million payroll, losing nearly 54% of their games). The best-paid player on the A’s, shortstop Aledmys Diaz, batted .229 last year and has started this season on the injured list.

Fisher embarked on an ostensibly serious search for an alternative venue in the Bay Area. Oakland municipal officials trying to work with him on a plan to keep the team accused him of sabotaging those efforts, in part by insisting on massive subsidies for expansive joint stadium/commercial/residential developments.

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

The Sacramento ballpark has about 14,000 seats, but it may still seem almost vacant 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 that average home attendance at A’s games exceeded 14,000 was 2019. At a game last May between the A’s and the Arizona Diamondbacks, only 2,064 seats were occupied, 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 augment economic activity in a town or city, usually one with little else in sports or entertainment on offer.

Las Vegas is not exactly the kind of community in desperate need of another tourist draw. An A’s ballpark — or for that matter, the NFL Raiders’ Allegiant Stadium, where this year’s Super Bowl was held — can’t do much for a city where hotel occupancy is generally close to the highest in the nation.

As Bloomberg reported earlier this year apropos of Allegiant, “had the $1.9 billion stadium not been built at all, Las Vegas businesses wouldn’t have noticed the difference.” And any time that tourists spend at a ballgame is time they’re not spending inside the city’s true cash cows, its casinos.

Even when a new venue brings in new dollars, the gains for the home community typically comes at the expense of its larger region. Think of it as the Inglewood effect: This outpost of 110,000 residents may be seeing more business from SoFi Stadium, where the NFL Rams and Chargers play, but the chances that it has had a measurable impact on Los Angeles County (population 9.7 million) are minuscule to the point of being nonexistent.

Some Inglewood business owners and residents, as it happens, are complaining that the project has brought them increased traffic and noise; higher residential and commercial rents have forced some residents and businesses out of the city.

That brings us back to the challenges to the Vegas stadium financing brought by the Nevada teachers. The clock is ticking on both the union’s lawsuit and its proposed ballot measures. Since February, almost nothing has happened in the Carson City courthouse where the lawsuit was filed.

That makes the A’s nervous, for the legislative authorization for public financing expires 18 months after MLB’s approval of the team’s relocation, which was delivered on Nov. 16 with a unanimous vote of the MLB team owners — giving the team a deadline of mid-May 2025 to complete all its necessary agreements with local authorities. That places the deadline a bit more than a year from now, assuming the court allows the legislation to stand.

If the legislation is overturned, the team and its government promoters would be back at square one. That’s why the team petitioned the court a few days ago to allow it to intervene in the lawsuit, which would allow them to speak up for their own interests in court. “The Athletics … will be affected if SB 1 is found unconstitutional,” A’s President Dave Kaval declared in a court filing. “Each year of delay will cost the Athletics millions of dollars.”

The union’s effort to overturn the public financing at the ballot box is also moving slowly through the Nevada courts. Its petition to place a referendum on the November ballot was invalidated in November by a state judge. The union appealed to the Nevada Supreme Court, which heard oral arguments on the case April 9 but hasn’t issued a decision.

The union has until June 26, or just over two months from now, to collect more than 102,000 valid signatures of registered voters to place the referendum on the November ballot. But it can’t start the process until the court resolves the validity of its petition.

That’s important, because there are indications that Nevada voters are less than eager to spend public money on the A’s stadium. A poll released April 4 by the nonpartisan polling center of Boston-based Emerson College found that 52% of voters are opposed to the public funding, against only 32% in favor and 17% unsure.

The 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 giveaways that left their cities and states holding the bag for venues that consistently ran in the red.

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

Pegula brought the politicians to heel by threatening to move the team to Austin. The result was the largest taxpayer handout in U.S. sports history, narrowly edging out the $750-million subsidy Nevada posted to bring the NFL Oakland Raiders to Las Vegas in 2022.

The game of rent-seeking that Fisher has played with Oakland and Las Vegas is every bit as humiliating for taxpayers as the Bills and Raiders deals. It will make the A’s the most-traveled pro sports team in American history, having originated 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 its 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 continue its existence as a token of Major League Baseball’s unsavory dalliance with the gambling industry.

The supine political leaders of Nevada should be ashamed at sticking their constituents with a billionaire’s invoice. The lords of the MLB should be ashamed of so shabbily treating the fans who supported the Oakland A’s through four World Series titles and stuck with them until Fisher made the spectacle on the field simply unwatchable.

Here’s an easy prediction: This won’t be the last time that pro sports owners show their willingness to treat their fans like crap, as long as someone is off in the distance waving millions of dollars around.