By Andy Mannix
By Caleb Hannan
By Olivia LaVecchia
By CP Staff
By Aaron Rupar
By Jacob Wheeler
By Olivia LaVecchia
By Aaron Rupar
Perhaps most significant, despite having to pay $18 million annually on its stadium loan, the team turned a profit for the first time since new ownership took over in 1993. Staci Slaughter, the team's vice president for public affairs, declines to get into specific dollar amounts, saying only, "It wasn't a huge profit, but we're in the black."
Part of the reason for the Giants' early financial success has been continuing creativity by the team's management. In addition to hosting ballgames, the Giants have rented out Pac Bell Park for more than 100 non-baseball events, ranging from arena football games to rock concerts to wedding receptions. In fact, Pac Bell Park has been so successful that the Giants' ownership is now contemplating whether to privately finance another 20,000-seat arena nearby.
While Pac Bell Park has so far been deemed a boon, sports economists caution that the true financial picture will not be clear for years. The 20-year loan is a significant liability, and if attendance drops (which is likely as the novelty of the new stadium wears off) or non-baseball revenues decline, the team could find itself back in the red.
"It's certainly a model to show that it can be done," says Neil deMause, co-author of the 1998 book Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit. "But I think basically you're gonna have to look back at Pac Bell over 10 years or 20 years and say, 'Did it pay for itself?'"
New Ballpark Inc. has drawn inspiration from the San Francisco model. Mark Oyaas and Chuck Neerland helped craft a plan to raise $50 million from private businesses. It calls for raising $130 million through a new for-profit company. Approximately $80 million of the money would be invested in corporate bonds, while the remainder would go toward construction costs. Together the investments would earn an annual return of about 5.5 percent.
Oyaas claims that they have received $30 million in commitments from businesses such as Wells Fargo and U.S. Bank, but he allows that they've got "a hell of a long ways to go." He hopes that a meeting held with local business leaders at the end of July will jump-start the effort and that they will have a "sales force out on the street" by fall. Oyaas stresses that New Ballpark Inc. is no longer demanding that the stadium be built exclusively with private funds.
The plan receives a cautious endorsement from Bill Lester, executive director of the Minnesota Sports Facilities Commission, the agency that oversees the Metrodome. "The $50 million seems achievable," he says. "It's a viable option; I think it has good potential."
Still, New Ballpark Inc.'s efforts have been stymied by a lack of enthusiasm from the Twins. Team president Jerry Bell says that he's not familiar with the details of the effort to raise private dollars. "I assume if they have a plan that they want to go forward with they would talk to us about it, but they haven't lately," he maintains.
A frustrated Oyaas counters that the group has been attempting to explain the plan to the team for months: "It's clear we have to do a better job of communicating with the Twins, because if they are indifferent or not interested, why in the hell would we waste anybody's time?"
In October 1997, with a special legislative session dedicated to the Twins stadium looming, Carl Pohlad signed a letter of intent to sell the team to a group of businessmen who were interested in moving the franchise to North Carolina. The bluff almost worked.
As Star Tribune reporter Jay Weiner detailed in his book Stadium Games: Fifty Years of Big League Greed and Bush League Boondoggles, the letter of intent was a red herring cooked up by the Twins and their chief political ally, then-Gov. Arne Carlson, in order to blackmail the Legislature into approving money for a new stadium. There was never any real chance that the team would fly south.
Four years later the threat du jour is "contraction." Twins officials themselves never utter the word, but on a weekly basis the sports gossip columns and call-in shows are filled with alarming tidbits about how Major League Baseball is going to get rid of up to four existing teams. The theory is that by eliminating struggling franchises, which are currently subsidized by their wealthy counterparts, the remaining teams will get a bigger piece of the league's financial pie. With their outdated, Teflon-roofed stadium, lackluster attendance, and revenue that lags some $85 million behind the league average, the Twins have been marked as a prime target.
Last month, when the Twins traveled to Milwaukee's new, state-of-the-stadium Miller Park, Brewers' owner and baseball commissioner Bud Selig renewed the contraction threat. In an interview aired on Fox Sports Net before the Twins' Friday-night game, and then again in snippets throughout the contest, Selig stressed that Major League Baseball in Minnesota was an endangered species. "If anybody thinks contraction is just a bargaining chip, they're crazy," Selig blustered.
But others intimate with the economics of baseball believe contraction is exactly that: a "bargaining chip," Carl Pohlad's letter-of-intent taken to the extreme. "The chances are nearly zero and the obstacles many," argues Rodney Fort, an economist at Washington State University and co-author of Pay Dirt: The Business of Professional Team Sports.
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