Ravens spent nearly $70 million in 1996 Greater local impact expected in full 1997

critic notes subsidy

February 06, 1997|By Jon Morgan | Jon Morgan,SUN STAFF

The Baltimore Ravens spent nearly $70 million in their first partial year of residency in Maryland, much of it on businesses and residents located in the state, and should spend about $20 million more than that this year, the team said this week.

The Maryland Stadium Authority said the numbers exceeded its projections and proved the value of the controversial acquisition. But a critic of the deal says the figures, while impressive sounding, rank the team among the state's small companies.

In a brief accounting of the Ravens' financial impact prepared for the Stadium Authority, the team said its employees -- including players -- received $34 million in wages in the eight months after the franchise moved to Maryland. The 135 full- and part-time employees collectively spent $12 million on new homes.

This year, the team's first full year in the state, will see it spend $58 million on wages, $3.3 million in payroll taxes, $25 million in rent, services and supplies from local vendors, and pass on $2.35 million in ticket taxes collected from fans.

It will turn over to the state $3.3 million in state payroll tax withholdings and $20.3 million in federal income tax withholdings.

Service America, the team's stadium concessionaire, bought $543,000 in food locally and paid out nearly $1 million in payroll last year at Memorial Stadium. The company paid $220,000 in sales taxes.

"I'm astounded that these numbers are as good as they are," said Maryland Stadium Authority Chairman John A. Moag Jr., who said the team's spending has exceeded the state's prior estimates.

State estimates had pegged employment of the team at the equivalent of 71, close to the NFL's average but small for the Ravens. The team plans to operate its own stadium, requiring additional staff, and owner Art Modell's franchise has historically had one of the larger front-office staffs in the league.

Moag said the figures prove the team was a good investment for the city and state.

But Arthur T. Johnson, a political science professor at the University of Maryland at Baltimore who has studied the economic effects of sports franchises, said the team's impact is not as great as it appears.

"If you are talking about economic impact, you have to ask how much of this is new spending," Johnson said.

Studies suggest that most of the money fans spend at sporting events -- and that teams recycle into the economy -- would have been spent anyway on other entertainment outlets. That, in turn, would be pumped into the economy through people employed at those companies.

And more than half of the spending represents the team's player payroll. Much of that money, and the income taxes withheld, will flow out of state if the players maintain residency elsewhere, as many do, Johnson said.

Ranked alongside other employers, the Ravens represent a small company, he said.

And the money the state spent to acquire the team -- chiefly the $200 million pledged to build a new stadium -- could have been used to attract or retain other businesses that would have employed more people, Johnson said.

"It's a public subsidy," he said. "That's $200 million that other businesses aren't getting."

Pub Date: 2/06/97

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