Hundreds of Millions Invested in Minor League Baseball Has Not Helped Attendance

Friday, May 01, 2015

GoLocalWorcester News Team

One of the proposed sites for the PawSox in Providence

The new owners of the Pawtucket Red Sox, the AAA affiliate of the Boston Red Sox, have received a cold shoulder for their demand for $120 million in public subsidies from Governor Gina Raimondo and the public. The new owners, that include Boston Red Sox President Larry Lucchino, have said they will not move from Pawtucket to Providence without a public subsidy.

A failure to strike a deal could create an opportunity for Worcester and other cities around New England.

Over the past 20 years, billions in private and public money have been invested in minor league baseball stadiums across the United States. The promise has been that the stadiums will spark attendance and help ignite economic growth for those communities.

A GoLocal review of the teams in the league that the Pawtucket Red Sox compete in - the 14-team International League — shows that despite nearly hundreds of millions spent on new stadiums and improvements, league attendance over the past ten years has remained virtually flat.

During the past decade, total league attendance has increased per game by just over 4.5%. There seems to be no correlation between upgrades and new stadiums and increased attendance.

New PawSox Owners and Consultants at a recent hearing

The backlash against the proposed Providence stadium being advocated for by the new ownership group -- spearheaded by corporate lawyer Jim Skeffington – is primarily in response to their demand for $120 million in taxpayer subsidies.

“We have our fiscal train wreck coming in three years, when the casinos are up and running in Massachusetts. We'll have a large per drop in tax revenue in the state -- we have to be extra careful with what we do,” said Len Lardaro, Professor of Economics at the University of Rhode Island.

Pawtucket has realized nearly $30 million in costs for upgrades (costs plus debt service) and all funded by Rhode Island taxpayers, yet despite the improvements, Pawtucket’s per game attendance has dropped over the past decade.

In 2005, the PawSox averaged 9,561 attendees per game. Last year, that number had dropped by nearly 30% to 7,367.

Correspondingly, the Louisville franchise - the Louisville Bats — is another example of a team that saw an initial boost and then a decline.

Louisville Slugger Field, home of the Bats, moved into a new stadium in 2000 and in 2005, the team averaged 9,182 attendees a game - second highest average attendance in the International League.

In 2014, the Louisville team’s average attendance had dropped to 7,990 - a 15% decrease. The Louisville Slugger Field stadium cost $40 million.

“It is very unlikely that subsidies for AAA baseball stadiums can be justified based on any tangible economic outcomes related to games. Most of the economic activity generated by professional sports is simply consumer spending that would have occurred somewhere else in the community at some other time,” said Brad Humphreys, Professor of Economics at West Virginia University.

Durham Field after $20 Million in improvements

Cities Around the Country

For Durham, North Carolina, a new stadium bolstered the Durham Bulls attendance, but just slightly. In 2014, nearly $20 million was spent upgrading the Durham Bulls Athletic Facility. Despite the significant investment in improving the park, attendance increased only marginally. In 2005, the Durham Bulls average per game attendance was 7,227 and in 2014 - the first season after the renovations - per game attendance only increased to 7,615 — a 5.3% increased.

The Toledo Mud Hens opened a new stadium in 2002 at a cost of just under $40 million. Attendance at the Mud Hen games has also decreased. In 2005, the Mud Hens hosted on average 7,845 per game and in 2014 it dropped to 7,680.

“An AAA team simply concentrates consumer spending in a very visible place. If you removed the team from the area, those entertainment dollars would have been spent elsewhere in the area. So the subsidies just move consumer spending around,” said Humphreys.

Holy Cross Professor Victor Matheson raised serious questions about the demands of these minor league teams asking for government investment. “Given the landscape, how can new owners justify asking for public dollars to support a minor league stadium?”

“They can't,” Matheson continued. “Or maybe, they can ask all they want, but government officials looking to make the wisest use of taxpayer dollars should resist the call.”

Overall, despite the investment of hundred of millions in new stadiums and renovations, International League parks have only seen incremental attendance improvement - the increase per game is less than 400 fans per game.

“And it's not just about the net levels -- it's opportunity costs. What's the value in its next best use of that 195 land? It's more that a $1 a year -- you have to validly count what it could have been, and that would be in the tens of millions,” said Lardaro.

Related Slideshow: 10 Things That Need to Happen to Get PawSox to Worcester

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Arrange Meeting with PawSox Owners

City officials need to sit down with the new PawSox ownership group. CEO Michael Tamburro grew up in Worcester and is a graduate of North High.

The new ownership group is led by Boston Red Sox President Larry Lucchino, who will serve as Chairman, and James J. Skeffington, who will be President

"We are very excited about our purchase of the Pawtucket Red Sox and the opportunity to partner with the Boston Red Sox to provide first class baseball and family entertainment to our loyal fan base in New England," said Skeffington, who will oversee the operation on a daily basis.

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Providence Deal Needs to Fall Through

There's always the chance that Providence could balk at the amount of public funding that the new ownership group is looking for. Early indications show that the number could be upwards of $70 million.

"The doors are always open," said Tim Murray, President and CEO of the Worcester Regional Chamber of Commerce. "If the deal were to fall apart, I think people here would be willing to listen, but everyone recognizes this requires signifcant municipal assistance. Massachusetts, traditionally, has been reluctant to use tax dollars to those kind of things, and I think in most cases, appropriately so."

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Sell Public on WHY It Will Work

With the loss of the AHL Worcester Sharks looming after this season, Worcester will be without a professional sports team. Worcester residents will look to its city officials to do something to get a pro team back to the city.

"As usual, the city leaders have done nothing to attract the PawSox. It's been known for several months that the PawSox were going to be sold. Much like with the Sharks, the city has been reactive instead of proactive. The city leaders - (i.e. government and businesses), and some state leaders as well - need to step it up. Unfortunately, they seem to think Spag's is still around and want something for nothing (or almost nothing). Looking for bargains where very little effort has to be put into it. The city manager, mayor, and city council have been virtually silent on the Sharks move, and probably weren't even aware about the PawSox until it was too late," said Rich Lubin, President of the Worcester Sharks Booster Club.

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Strengthen Public Support

Worcester is home to the Worcester Bravehearts, the defending Futures Collegiate Baseball League (FCBL) Champions. After the fiasco that the Worcester Tornadoes turned out to be, residents of Worcester would be proud to see both the Bravehearts and the PawSox succeeding in the city.

“Worcester is a city that has always loved baseball. You can track the history all the way back to the early 1900’s when we had a team in the National League. With the (Boston) Red Sox so close, and all of these minor league teams, the city still took to the Worcester Bravehearts. We were tops in attendance and won the Championship game in front of more than 2,000 people. Baseball will certainly thrive in this city,” said Casey Cummins, Bravehearts pitching coach.

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Find Land in Worcester for Stadium

“The 'WorSox' could purchase, clean up and build a fine stadium on the spacious Wyman Gordon property near Kelly Square. That location also has excellent highway access. What a welcome neighbor the team would be to the up-and-coming Canal District. Worcester, New England's 2nd largest city, would be a much better home for the "WorSox." People from cities and towns throughout the Commonwealth of Massachusetts and beyond would flock to our city on a frequent basis to see such high level and quality baseball," said City Councilor Gary Rosen.

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Utilize Central MA Connections in MA Gov

Lt. Governor Karyn Polito, of Shrewsbury, now holds the highest seat of anyone from Central Massachusetts in state government. Her position was formerly occupied by Tim Murray, now the President of Worcester Regional Chamber of Commerce.

Worcester could use this connection to help gain support from Governor Charlie Baker and may even be able to garner state funding to help lure the PawSox to the city.

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Find Local Business Partners

The cost of a new stadium could run the city and state upwards of $70 million.

Worcester will need to turn to local businesses to invest in the cleaning up of any area they decide to build a stadium and the actual construction of the stadium.

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Push Forward Canal District Plans

The Canal District is located on the "Green Island" area of Worcester that includes Water Street, Green Street, Millbury Street, and Kelley Square.

Over the past ten years, the city and the Canal District Business Association has put a lot of money into the area to revive it and bring business in.

A push to gain funding to continue to improve the Canal District could be a great sign to the PawSox owners that Worester means business.

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Pay to Clean Up Proposed Land

Tim Murray, President and CEO of the Worcester Regional Chamber of Commerce said the city has looked previously at the Wyman Gordon site, discussed expanding the field at Lake Park, or partnering with one of the colleges or universities on a site to build a baseball stadium. Murray noted that things get tricky when you start looking at these sites when you begin dealing with property and land acquisition costs and clean-up costs.

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Keep the Bravehearts in the Discussion

The Worcester Bravehearts, the 2014 Futures Collegiate Baseball League (FCBL) Champions in their inaugural season, will be entering their second season as the only local major sport team left in the city. Last season, they drew over 50,000 people to Fitton Field.

Murray said "We have a great product with the Bravehearts and they had a great inaugural season. The Bravehearts are locally owned and controlled, and they had a great product and strong attendance in their first year. It plays on one of the advantages that Worcester does have that a lot of places don't, is the amount of colleges and universities around and the large number of student atheletes we have here."