On May 15, those of us who bleed blue were worried about the fate of our hockey team.
That night. our Blues lost 5-4 in overtime to the San Jose Sharks to fall behind 2-1 in the Western Conference Finals. The big story was that officials had blatantly failed to stop play for an illegal hand pass that led to the Sharks' winning goal, one of the most famously terrible non-calls in NHL history. It felt like our 51-year curse was living on.
"It was so unfair that the game ended that way. The wrong way," NHL Executive Vice President Colin Campbell said, with stunning candor. The league took the extraordinary step of removing all four on-ice officials for the rest of the playoffs.
As perhaps you've heard, we eventually won the Stanley Cup. It's all good now. But something else unfair happened May 15 with regard to the St. Louis Blues. That was the night Missouri's inept General Assembly made a horrific hand pass of its own: It dished out $70 million in taxpayer dollars over a twenty-year period to the Blues — along with $60 million in handouts to the Kansas City Chiefs and Royals sports franchises.
"It was so unfair that the legislative session ended that way. The wrong way," said no one.
Actually, within the minuscule next-day coverage, Representative Bruce DeGroot (R-Chesterfield) did have the courage to denounce it as a "welfare-for-the-rich bill." But DeGroot was outvoted, with quite a handful of Democrats voting for the rich as well. And his voice was drowned out by civic types in St. Louis and Kansas City blathering about the exciting economic benefits that would trickle down to the masses.
Mostly, the story was eclipsed by larger dramas, and most people — myself included — missed the news entirely. (I'm not proud of that, in my case, since being in the media, it's my job to have noticed it, but ironically an obsession with the Blues' playoff run was preoccupying my waking hours.)
Last week, Governor Mike Parson signed the bad bill into law, and cash-strapped Missouri continued to participate in the disgraceful national tradition of transferring public wealth to the private hands of multi-millionaire — and sometimes, billionaire — owners of local sports monopolies. Yes, most other major cities are doing this, but that doesn't make it right. Not even remotely.
For the next ten years, the Enterprise Center will receive a no-strings-attached gift of $2.5 million annually, and that number will grow to $4.5 million annually for the decade after that. As bill opponent Representative Tracy McCreery (D-Olivette) points out, the politicians who scored local points making the handout will be long gone — if for no other reason than term limits — while their gift keeps on giving.
This is wrong.
Missouri has one of the most underfunded state governments in America. State employees not long ago ranked dead last in the nation in average salaries (one study did put us all the way up to 46th recently). State per capita health spending ranks 48th, according to the Kaiser Family Foundation.
Missouri needs more money. The St. Louis Blues do not need more money, nor do the St. Louis Cardinals nor the Kansas City Chiefs nor the Royals. These are extraordinarily successful businesses owned by extraordinarily wealthy and powerful people. They neither require nor deserve a dime of public assistance.
The St. Louis Blues are not villains here: They're simply fortunate recipients of a corrupted system, just like the Cardinals and the others. The Blues have already extracted more than $100 million from a city that cannot afford to keep its streets safe, among other minor problems. The Cardinals have surely received more. I say "surely" because there's so little critical coverage, the adoring public has only gotten an overview as to what the city and other public and quasi-public entities are giving these teams.
I'm a lifelong Cardinal fan and have gone nuts (usually in the stands) over eleven World Series. As a teenager in 1968, I was in the nosebleed seats singing "When the Saints Go Marching In" the very first season the Blues embarked on what even then felt like a magical playoff run. Seeing us win the Stanley Cup this year was an emotional high for me, to put it mildly.
So I apologize to no one for pointing out a couple of business details here. The current ownership group of the Cardinals, headed by Bill DeWitt Jr., paid roughly $55 million for the team in 1995 (after the sale of parking garages). Today, less than a quarter of a century later, the team is valued by Forbes at $2.1 billion. Yes, that's with a "B." A stake worth $27,000 in 1995 would be worth roughly $1,000,000 today. Think of that in the context of, say, your car.
Not quite as dramatically — but still amazing — is the success of the Blues' ownership group headed by Tom Stillman, a bonafide local hero. Stillman is an admirable man, not nearly as billionaire-wealthy as many sports-owner counterparts (and unlike many of them, he didn't hog the stage after the Blues' victory). I've shaken hands with him a dozen times, not as a media guy but as one of the thousands of fans he personally greets at games (including when times were bad). He, like so many of his players and others in the organization, is wonderfully charitable in the community.
But there's this: Stillman and a group of wealthy investors reportedly paid $130 million for the Blues just seven years ago, at a time when Forbes put the franchise's value at $150 million. Today, thanks mostly to better TV deals, that value skyrocketed to $465 million almost overnight. And that was before the Blues won the Stanley Cup. The windfall from that will certainly mean Stillman and company will have increased their net worth by more than half a billion dollars in about seven years. Not bad.
Teams make much ado about the loyalty of their fan base, which is real and important. But understand that in 2019, fan support is necessary but not sufficient. Teams don't rise or fall on ticket sales, as they did in the 1960s when the Solomon family took a chance on the Blues.
Today, revenues and attendant values are generated by enormous broadcast and digital revenues. Sports teams are in the advertising and merchandising businesses. Busch Stadium and the Enterprise Center are gigantic advertising delivery systems, wherein fans are passive recipients of literally thousands of commercial messages in a three- to four-hour period. The revenues that flow from that — and, of course, from television — are what make these businesses so amazingly lucrative.
In this context, teams like the Blues hardly need a dime of public subsidy. But not only do they get it, they benefit from obscene public assistance deals that include not only direct handouts like the one in the state bill, but also sweetheart leases, most of which are shielded from public view.
Consider the Blues' good fortune with the Enterprise Center. They don't own the deed to the building, which means no annoying property taxes. I'm told the team eventually will be making some Payments In Lieu Of Taxes (known as PILOTS) to help local schools, but that's one of many details fuzzy to the public.
And the team does enjoy various incredible revenue streams as if it were the owner, including the lucrative naming rights from Enterprise. (It was announced as a fifteen-year deal in 2018 for an "undisclosed" amount, even though in many other cities the numbers — ranging from $3 million to $10 million annually for NHL arenas, are publicly known.) Yes, the city technically "owns" the building. But the Blues own almost all of the money it generates.
The Blues get the gargantuan advertising revenues in and on the building — including incredible revenue streams from a scoreboard built for it by the public — along with concessions and merchandising. They also get rental fees when there's a concert or sporting event in the building, even though they're unrelated to the hockey team.
All the near-bankrupt city gets is its share of the ticket and sales taxes, and parking revenues, which pale in comparison. And now two levels of government are going to help the poor guys maintain the building for several decades going forward.
It's awful, but it's real. But in the euphoria of having won that Stanley Cup, I'm guessing this might rank as one of the least popular columns I've written in the past four decades.
Speaking of that, I'd like to address one point that really drives me nuts: All the civic propaganda about what these teams and stadia mean to St. Louis is in terms of jobs and revenue. By the dubious measures always cited in civic propaganda, the RFT has directly and indirectly created thousands of jobs and raised millions for good causes since I started it in 1977. Do you know what the public owes us? Nothing.
Just like it owed nothing to a fine company like Creve Coeur Camera, which just announced, sadly, that it's closing its doors after four decades of good service to our community. Just like the former Streetside Records and Mississippi Nights and thousands of good restaurants that have come and gone over the years.
It's called risk-and-reward capitalism, and it's a system I still believe in, through good times and bad. To succeed, you need a good product and the loyalty of your customers and followers, and given the changing world we live in, you also need some good luck. But you neither need nor deserve government handouts.
Unless, of course, you are a wealthy sports monopolist.
Ray Hartmann founded the Riverfront Times in 1977. Contact him at [email protected] or catch him on St. Louis In the Know With Ray Hartmann and Jay Kanzler from 9 to 11 p.m. Monday thru Friday on KTRS (550 AM).