If you build it, they will win New stadiums mean success on the field

October 09, 1997|By Jon Morgan | Jon Morgan,SUN STAFF

It used to work something like this: Baseball teams in cities with the most people generally sold the most tickets, made the most money, hired the most expensive players and won the most championships.

When television came along, it rewrote the formula. But big cities still came out ahead, because they had the most viewers.

Now, a winning club can be built, literally brick by brick, in a city of almost any size.

New stadiums, not sprawling urban settings, are the competitive edge in the 1990s. It's no accident that this year's American League pennant will be contested in two of the newest and most lucrative stadiums in sports: Camden Yards and Jacobs Field.

The tens of millions of dollars a season these parks generate from luxury seats, boutique beer and other trendy accouterments have been used to hire the sport's priciest players and launch both clubs into a new golden age.

Critics say it amounts to an expensive new form of corporate welfare: Taxpayers spend hundreds of millions of dollars on stadiums so rich team owners can pay more to rich players.

But it has turned upside down the old assumptions about population and winning, and made contenders of franchises formerly written off as small-market wannabes.

Cleveland and Baltimore are the Concord and Lexington of this revolution -- which affects football, too.

"You used to hear about small market vs. large market. Now, new ballparks are integral to success and winning," said Steve Greenberg, the vice president in charge of trying to get a new ballpark for the Pittsburgh Pirates.

Three of baseball's "final four" teams -- the Orioles, Cleveland Indians and Atlanta Braves -- play their home games in new parks. And the fourth, the Florida Marlins, plays in a stadium that is only 10 years old and was the first sports palace built with a section of high-priced, highly profitable "club" seats.

None of these clubs is bearing a standard for a megalopolis. Only one of the metropolitan areas, Baltimore, ranks among the nation's 10 most populous. And that's because Washington is included in the metro area. But all of the teams are top 10 -- actually, top seven -- when it comes to paying their players.

"The key to fielding a competitive team is having the economic resources, and that comes from having stadium revenues and a favorable share of those revenues," said Paul Much, a financial consultant to sports teams and senior managing director of the Chicago-based investment banking firm Houlihan Lokey Howard & Zukin.

"Market size is still an important part of getting revenues, but stadiums are more and more a factor," Much said. "There will always be Cinderellas emerging from time to time. But to put a competitive team on the field year after year will require stadium revenues."

Football, too, is experiencing the realignment. The NFL has a revenue-sharing tradition among franchises that diminishes the advantage of market size. But it is racing to catch up with baseball in the nation's stadium-building boom.

Last year's results should be a glimpse of the future: Although the Green Bay Packers and New England Patriots made it to the Super Bowl, they had to get by two newcomers playing in new stadiums, the Jacksonville Jaguars and Carolina Panthers. And most observers credit Texas Stadium, with its league-leading $40 million a year in concession, advertising and luxury-box revenue, for the Dallas Cowboys' recent success.

Football has a salary cap, which tempers the competition for players somewhat. But stadium money provides an edge in the way players are paid, allowing some teams to pack more into signing bonuses and other incentives. And the money fuels competition in other areas, such as training facilities and coaches' pay, which are not capped.

But it is in baseball that the impact of stadium dollars is most dramatic. The Pirates play in a 27-year-old stadium and have to share the revenues with the NFL Steelers. Consequently, the Pirates' total player payroll was $9 million this year, in a sport dotted with superstars making $6 million each.

Contrast that with the Orioles' $58 million payroll this season.

"We can't compete, from a revenue standpoint, with the Orioles and Clevelands and Atlantas," said Pittsburgh's Greenberg.

Pennants can still be won with clever management and inspired strategy. Baseball players aren't eligible for free agency until their seventh season in the majors; many young stars play for a fraction of what's earned by lesser veterans. But the correlation between payrolls and win-loss records is indisputable.

New stadiums generate cash like a slugger knocks in runs. The parks become magnets for fans and tourists. Each new stadium brought on line over the past five years -- including Camden Yards and Jacobs Field -- has catapulted its team to the top tier of attendance.

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