We Don't Get Fooled Again? Don't Be So Sure

The St. Louis Cardinals have just been named the area's 101st Neediest Case by the St. Louis Post-Dispatch, and it can only mean one thing:

The public is getting set up to be fleeced for another new stadium.
In the past two weeks, the Cardinals have gingerly notched up their efforts to take part in the new national pastime for blue-blood sports owners: Stadiumball. Team officials went before a group called the Greater St. Louis Sports Authority to make the beginnings of the case for the public to help them build a replacement for the ancient, crumbling, 33-year-old Busch Stadium.

This wasn't exactly a daredevil act, seeing as how the Greater St. Louis Sports Authority was established by the state two years ago -- at the suggestion (and through the lobbying) of none other than these same Cardinals -- for the noble purpose of figuring out how the public might best be bilked, stadiumwise, on the team's behalf. But everyone kept a straight face.

There's no reason for alarm, says Cardinals President Mark Lamping, quite mindful of St. Louis' skittishness from having allowed itself to be rendered a national laughingstock by another sports franchise down the street. He said there were no imminent plans to leave Busch Stadium.

"It's going to take a long time to determine what's the right path to take," Lamping said.

Well, it's not going to take a long time for the Cardinals to start dialing for dollars. That's what team officials were doing, ever so subtly, at the meeting with the "Authority."

I'd like to tell you what they said, passing along Post-Dispatch news reports, but first let's set the stage for just how creditable those reports -- contained in the newspaper that proclaims itself "proud to be part of the home team" -- just might be.

Here's the Post news headline, on Feb. 6, covering the Cardinals' meeting with the Authority:

"CARDINAL OWNERS OPEN BOOKS TO STATE PANEL, MAKE CASE FOR STADIUM IN 21ST CENTURY."

Now, there's openness for you. Right out of the blocks, the Cardinals are laying out their books for all to see, and you can just imagine the Authority members and their team of accountants poring over the numbers so as to gain a sophisticated understanding of the financial challenges facing the team.

Well, don't let your imagination go too far.
The Cardinals presented a one-page handout to the panel, nothing more. A one-page summary of financial information chosen by the team -- not from an outside source, not independently verifiable and certainly not a complete financial package -- was characterized by the Post with the words "Cardinal owners open books to state panel."

Just a headline, you say? Last Thursday, Bernie Miklasz -- the Post's respected lead sports columnist -- amplified the point:

" ... the franchise did the right thing by opening its financial books to a state panel -- The Greater St. Louis Sports Authority -- that's studying the future of pro sports in St. Louis. Disclosure is the only way to build trust and foster a spirit of cooperation."

Indeed it is. But as anyone who has been within a Mark McGwire home-run shot of a business transaction can tell you, a one-page sheet of self-generated, generalized claims, plus $4, will just get you a beer at the ancient ruins known as Busch Stadium.

Pardon my suspicion, but at least I'm not alone. In its Dec. 14 issue, Forbes magazine -- rather highly regarded in financial circles -- did an exhaustive piece on sports franchises and their bottom lines. Here's one headline:

"MOST TEAM OWNERS CLAIM TO BE LOSING MONEY. DEPENDS ON HOW YOU COUNT."
The editors at Forbes offered this qualifier before presenting the information they compiled about the teams:

"Mind you, it's hard to find much sympathy either for billionaire club owners or for multimillionaire sports stars, but fairness requires us to point out that the owners, in their haste to cry poverty, are taking some liberties with the statistics. An exhaustive analysis performed by FORBES shows that team owners have exaggerated their penury. When it comes to how bloody their balance sheets are, owners talk a big game. But only a few teams were willing to provide us with figures."

The magazine cited several examples of how teams can massage the numbers to understate franchise performance by excluding lucrative income from advertising, sponsorships and luxury suites from their team's books. Those revenues simply get credited to a different corporation, allowing teams to poor-mouth freely in labor and, yes, stadium negotiations.

So what numbers do you trust? Your guess is as good as mine.
Based on Forbes' estimates, the Cardinals ranked in the middle of the pack among Major League Baseball teams in 1997, with profits of $2.4 million on $82.9 million in revenues. The team's estimated value: $174 million.

(Note that on March 31, 1997, the St. Louis Business Journal reported that the new Cardinals owners paid just $70.4 million for the baseball team and that they already had realized a cool $25 million profit on the sale of four parking garages they acquired with the team.)

Now, if the Cardinals' numbers are to be believed, the team did just $71.4 million in 1997, which is $11.5 million less than Forbes estimated. The team claimed to the Authority that despite a whopping, McGwire-inspired $22.6 million increase in revenues (that's 31.7 percent), it barely scraped by with just $1.4 million in profits. And it's only going to get worse.

1
 
2
 
All
 
Next Page »
 
My Voice Nation Help
0 comments
 
Loading...