From Lever News, September 12, 2024:
Monopoly League Baseball
It’s a late August afternoon in Portland, Maine, and the crispness in the air makes it clear that, up here, summer is fading fast. But the sobriety of autumn hasn’t hit yet: It’s Elvis Night tonight and out front of Hadlock Field — the home stadium of the Sea Dogs, the city’s treasured Minor League Baseball team — the people, simply, are going nuts.
An Elvis impersonator backed by a ramshackle live band smashes through “Hound Dog” while the Sea Dogs’ mascot Slugger, in a bedazzled white pantsuit and big black sunglasses, busts out karate kicks. The band’s guitarist — a sixtysomething man bald except for the very back of his head, where the hair flows bountifully — flings his instrument over his back to shred a solo.
The banners behind the band advertise Horch Roofing’s “seamless gutter leak repair” services. Mustached security guards mimic the Elvis impersonator’s moves. Grinning, Elvis swings into a lovely rendering of the trademark hip shake, then shouts, “Man, they still work!” Squealing in delight, the fans mob Slugger and Elvis for selfies.
Major League Baseball is the highest level of the sport, where players get paid millions to join the Yankees and the Red Sox. Minor League Baseball is an interconnected series of lower leagues where guys who hope to one day make it to the majors scrape together a living playing in towns like Wichita and Amarillo for teams with names like the Wind Surge and the Sod Poodles. Tickets are cheap; babies and grandparents are everywhere.
The Portland Sea Dogs are quintessential Minor League Baseball. They’re also part of a newer American tradition: a private equity roll-up. In 2022, the team was acquired by Diamond Baseball Holdings (DBH), a subsidiary of Silver Lake, a Silicon Valley-based investment firm with over $100 billion in worldwide assets whose portfolio companies generate over $248 billion in annual revenue. There are 120 Minor League Baseball teams operating directly below Major League Baseball — DBH now owns more than 30 of them.
As DBH has grown it’s been boosted, in part, by public taxpayers. In the three years DBH has been in operation, DBH-owned teams have extracted nearly $300 million in public money from local governments throughout the country, according to the Maine Center For Economic Policy.
Columbus, Georgia, is coughing up $50 million in stadium renovation costs. Spartanburg, South Carolina, will spend more than $100 million in part to build a whole new stadium for a DBH-owned team. Those funds don’t go directly into DBH’s bank account — but when local municipalities foot massive bills for stadium repairs and construction, DBH avoids having to spend the money themselves.A few months before Elvis Night, the Maine State Legislature approved a $2 million tax break for the Sea Dogs. While Maine’s contribution is small compared to other municipalities, the $2 million brings up the same essential question: Why are local taxpayers giving private equity-owned teams any money at all?
There is little proof that subsidies to sports teams benefit the public. There is a lot of proof that private equity ownership negatively impacts the industries it enters and the public at large. But if Portland refused to play ball, it might have encountered the same existential threat facing DBH-owned teams all over the country: the Sea Dogs, Elvis nights and all, could leave town for good.
Pat Garofalo is the director of state and local policy at the American Economic Liberties Project, a think tank that promotes antimonopoly policies. “I’ve spent a lot of time working on ways to stop sports stadium subsidies,” he said. “There’s almost complete consensus among economists: None of this money does anything; the economic benefits are virtually nonexistent.”....
....MUCH MORE
Who knew?
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