How baseball is reflecting the U.S. economy

Marketplace Staff Apr 21, 2011

How baseball is reflecting the U.S. economy

Marketplace Staff Apr 21, 2011

Kai Ryssdal: The box score from the Los Angeles Dodgers game last night was a nifty win. They beat the Braves 6-1 on 11 hits, no errors. But really, nobody was talking about the game. The buzz at the stadium and all over sports last night was about Major League Baseball taking control of team from owner Frank McCourt.

Renee Cantu: It was just a matter of time before it happened.

Dave Serpa: I think it’s a good thing; I don’t think Frank McCourt was doing a good job with the Dodgers, and we need to find somebody who’s going to take care of the Dodgers and their history.

Zak Forbes: Hopefully it will lower ticket prices and raise payroll.

Anthony Gonzales: Have to have death of an old for birth of a new, so we’re going to rise up, we’re going to get better.

That was Renee Cantu, Dave Serpa, Zak Forbes and Anthony Gonzales at the game last night.

For some thoughts today, we’ve called Dave Zirin. He’s the author of “Bad Sports: How Owners are Ruining the Games We Love.” Dave, great to talk to you.

Dave Zirin: Hey, great to be here. Thank you.

Ryssdal: The word that comes to mind when you think about the Dodgers and Frank McCourt is sort of Wall Street-y, actually — it’s “leverage.” The guy borrowed $145 million to buy the team, he owes $430 million now. What was, though, the straw that broke the camel’s back for Bud Selig, the commissioner of baseball?

Zirin: Oh, I think the straw that broke the camel’s back for Bud Selig was when Frank McCourt asked Fox Broadcasting, his broadcast partner, for a individual, personal loan so he could make payroll. And this was after Frank McCourt asked Major League Baseball if he could take a business loan to make the payroll, and Major League Baseball said no. So then he did an end-around and said, I want money for a personal loan, and then used it for payroll anyway. I think that was just a bridge too far for Bud Selig.

Ryssdal: He’s going to appoint a representative in the next couple of days, the commissioner is. What will that person have the power to do?

Zirin: It’s a very good question. Because on the one hand, all the other owners are subsidizing this team. But on the other hand, what do you do if this team is then competitive, if they go on a run and they need to add some parts here and there? Will they have the freedom to do that, even though they would effectively be spending the other owners’ money for the purposes of bettering their competitive advantage against other owners? So it’s a very tricky situation in terms of what that person is going to be allowed to do, and the only thing we can know by looking at history and by looking at other sports, is that it will in fact be rife with conflict.

Ryssdal: This whole episode has echoes of the financial crisis, a little bit, with the Obama administration stepping in with General Motors and with TARP, and with this top-down type of dictate-from-above, whether it’s the government or the league saying, listen, we know what’s best, here’s what we’re going to do. What happens now with the Dodgers?

Zirin: I think it is true to say that the Dodgers are too big to fail, that they would fall under their rubric certainly. But I think the other echo of the financial crisis here is not just seen with the Dodgers, but with all of Major League Baseball. The Texas Rangers, who made the World Series last year, had to be sold in the middle of last season in a bankruptcy auction. Let’s remember that the New York Mets, whose fans are already wearing paper bags over their heads just 15 games into the season, are literally bankrupt because their owners leveraged their team towards Bernie Madoff. I mean, the problem really is, really mirrors the economic problems in the United States because so much of baseball has been about real estate over the last 30 years. I mean, you’re talking about over $30 billion that have been spent on either refurbishing or building brand new stadiums and parks, which owners then borrowed money on. Now, that was all fine and good when the economic climate was better and the real estate market was good, but now that the real estate market has cratered, you’re seeing a lot of teams crater along with that market, as the values of the land and values of the stadiums have actually plummeted.

Ryssdal: What about the fans, though? They’re kind of staying away this year, I mean, Dodgers’ season ticket sales are down, baseball attendance is down.

Zirin: Yeah. It’s a tragic thing, actually, because the Dodgers had the number one attendance mark for 12 straight years, and that’s really changed. But that’s a story across Major League Baseball. And I would argue that it’s happened because Major League Baseball has ignored working-class and middle-class fans for a generation, because they haven’t had to cater to those fans, for the simple reason that they were making so money from public subsidies, from sweetheart cable deals and from luxury boxes. But now that those revenue streams are running dry, you really are seeing the chickens come home to roost.

Ryssdal: Dave Zirin, he’s a sports editor at The Nation magazine. His most recent book is called “Bad Sports: How Owners are Ruining the Games We Love.” Dave, thanks a lot.

Zirin: My privilege, thank you.

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