Saturday, July 28, 2012

D'backs seek to get landlord to sell stadium to city of Phoenix-Field of Schemes

"So what's driving the D-Backs to cut payroll? Nothing."...

Just when I thought there was nothing new under the sun in the stadium game, there comes this: The Arizona Diamondbacks are trying to boost their profits by getting their landlord, Maricopa County, to sell their stadium to the city of Phoenix.

How would that help the D-Backs' bottom line? Well, the team would no longer have to pay $4 million a year in rent and maintenance expenses to the county; instead, they would "pay Phoenix rent, the amount of which has not been determined," in the words of the Arizona Republic. But the team owners also want more control over how to spend a capital improvement fund currently controlled by the county, and more control over non-baseball events at Chase Field — plus, possibly, to reduce seating in order to create more seat scarcity at the 48,000-seat stadiumand allow the team to charge higher ticket prices, something that's drawn the ire of former Phoenix mayor Skip Rimsza, who charges that this would violate promises that the D-Backs would keep some seats inexpensive when they got $238 million in tax money to help pay for construction.

The Republic also chimed in with its own thoughts on the seat-scarcity issue:

The Diamondbacks have boasted about keeping tickets affordable. The team's $15.74 average ticket price this season ranked second-lowest among major-league teams...
But those low ticket prices also hinder the team's ability to spend money on players. The Diamondbacks have one of the lowest payrolls in baseball....

First off, let's dispense with the notion that sports teams operate by throwing all the money they make into a huge bucket, and then spending it all until it's gone. Most team owners are fabulously wealthy, and have the cash reserves to spend an extra $10 million on an outfielder if they think it'll help the team — and more important, help sell tickets.

And that's the key point: When behaving economically rationally (the usual caveats about rational sports owners apply, obviously), owners will spend money on players when they think it'll help produce enough in profits to pay for the added cost. And while more expensive tickets certainly help (it's tough to pay for a big free-agent signing one $5 ticket at a time), fewer seats hurt, because it's tougher to recapture your investment by selling tons of tickets once you've built a pennant-winner. (You can raise prices even more once the team is good, obviously, but you can do that whether your stadium holds 40,000 or 48,000.)

So what's driving the D-Backs to cut payroll? Nothing — in fact, the team added nearly $20 million in payroll over the last winter. They're certainly not spending like the Yankees and Red Sox, but they're not going to unless they can convince Maricopa County to sell their stadium to the city of New York, not Phoenix.

In any event, this looks like the very early stages of negotiations — in fact, if I'm reading between the lines correctly, it was Rimsza who broke the news after learning of the talks. Why the Diamondbacks would need to orchestrate a transfer of ownership just to get some lease concessions — or, for that matter, why the city would be more willing to give up some rent payments and control over the stadium than the county would — isn't exactly clear at the moment. But if nothing else, this is probably the first sign that with a now 14-year-old stadium, the D-Backs are preparing to get back on line for more public aid, now that the initial excitement of getting the last round has worn out."

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