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Can Washington Beat Out San Juan For the Expos? 'Jock Tax,' Puerto Rico May Factor In Relocation
Can Washington Beat Out San Juan For the Expos?
By Thomas Boswell
April 18, 2003
So, how do we like those San Juan Expos so far? Pretty hot stuff, huh? The National League East standings say that some team from Montreal is in first place. But the Expos have played all their home games in Puerto Rico. And why wouldn't they be hot? The temperature on the field for a day game was 136 degrees. And this is only April. What happens in summer? If Vladimir Guerrero and Jose Vidro give each other a high-five, will their hands stick together like glue?
The lengths to which baseball will go to keep the Expos out of the Washington area -- which, as we all know, was territory deeded to Peter Angelos's forebears by Sir Walter Raleigh -- have reached the preposterous.
So far, the tiny 18,264-seat Hiram Bithorn Stadium has been sold out once in seven Expos games. That's likely to be the only capacity crowd in all 22 games the Expos are scheduled to play in Puerto Rico. On Monday, attendance was 13,155. Wow, four games into the romance and already 28 percent of the stadium is empty!
Wait until the last-place Cincinnati Reds arrive, without injured Ken Griffey Jr. How many people are going to pay $89 for a box seat, and $25 for the most remote bleacher seat? That's an average price of $33.47 -- more than double the big league average.
Baseball has no shame. The monthly per capita income in Puerto Rico is $682. What does baseball care? Hey, they got theirs already. The majors got an up-front guarantee of $6.5 million from a promoter. It's not the sport's problem, it thinks, if a Puerto Rican baseball lover spends a week's salary to take a family to one game.
The median household income of Northern Virginians is $72,800. But why would you want to put a team near them? Instead, just fly the Expos from Canada to Puerto Rico. By 2010, maybe the itinerant Expos can be fleecing suckers in Antarctica.
Baseball is so delighted with its San Juan experiment that a decision on where to relocate the Expos in 2004 may not be made by the All-Star Game in July. Why not milk Puerto Rico for an extra year, then decide by the '05 season?
These days, the game will take a buck anywhere it can grab one. The sport has bigger money issues than the indigent Expos, problems that have a bearing on the future of baseball in the Washington area. This week, the world champion Angels, originally for sale for $300 million, were sold for $180 million. A team in the Los Angeles market, in a park recently refurbished for $100 million, couldn't fetch $200 million, even with a championship banner flying. A shiver went down the back of every big league owner. Ironically, the current Forbes listed its valuations for every team. It pegged the Angels at $225 million.
Did every franchise in the sport just get marked down by 20 percent?
If so, did the Expos just get 20 percent cheaper for any potential Washington or Northern Virginia buyers? That would certainly help make the numbers work here. As recently as last month, there were rumblings that this whole baseball project, with discussions of $400 million ballparks and $225 million Expos price tags, was getting out of hand. At such costs, was it even worth doing? Some central players were starting to have doubts.
If there was a $100 million gap between hope and reality back then, it may have been cut in half by the sale of the Angels.
However, the biggest issue isn't what the Expos would fetch. It's how much Angelos can get on the open market for his Orioles. The worst-kept secret in baseball is that he wants to sell. Highly placed sources in baseball say it's common knowledge.
Angelos prefers to cash out, but he wants a healthy price. If he can establish a precedent of Baltimore blocking this area from getting a team, then the Orioles, and especially their cable TV rights, are worth more. One stumbling block to an Orioles sale has been Angelos's asking price. In light of the Angels' sale, it will have to come down. Will a cheaper price attract new interest? Washington is allowed to hope so.
Gradually, and grudgingly, some in baseball are tending toward the same conclusions. A sick economy, shrinking crowds, uncompetitive teams in several shriveling markets and, now, the stunningly low Angels price have started to reshape the sport's assumptions. If the Dodgers and Braves, both "for sale" interminably, also sell this year for modest prices, a lot of owners in weaker markets are going to be demanding the right to relocate.
After all, if the world champs, playing in the L.A. market, are only worth $180 million in a spruced up, paid-off ballpark, what are the Royals, Devil Rays, Marlins and others worth? Are they even worth what they owe their banks? When an owner is "upside down" -- owing more than his team is worth -- he tends to be less concerned about the wishes of an owner in Baltimore. Washington is the only available demographic pot of gold left. Somebody is going to move here or sell to us and solve his problems.
"There's already a lot of pressure from other owners for relocation," said an industry source. It's only going to grow.
Sometimes, it seems that baseball can pile absurdity on top of absurdity. Denying reality is one of the game's specialties. Every time the Expos play a game on a 136-degree field in San Juan before smaller and smaller crowds of Puerto Ricans who are asked to pay insane prices, everyone in the sport should ask the same questions.
Why isn't there a team in the fifth-biggest market in the United States? Why is a disastrously run franchise in Baltimore being used as a justification to block what might be a wonderful franchise in the Nation's Capital?
Why on earth isn't baseball playing Washington off against Northern Virginia to get the highest price for the Expos? The Braves aren't selling. The Dodgers aren't selling. The Angels go for peanuts. But in Washington, and only in Washington, there are multiple buyers lined up to bid for what nobody else in America wants right now: a big league team.
Baseball owners can't be this rock-headed, can they? Beat the bushes and find Angelos a buyer. Figure out an indemnification price for the "loss" of the Washington area he never owned.
Then move the Expos to the only city that wants them and can afford them. Hint: It's not San Juan.
'Jock Tax,' Puerto Rico May Factor In Relocation
By Mark Asher
May 16, 2003
Robert A. DuPuy, Major League Baseball's president and chief operating officer, said the District's plan to use a tax on players to finance the construction of a baseball stadium is a "troublesome issue," the Associated Press reported.
DuPuy's reaction to the "jock tax" proposal, one of three prongs in its financing plan to service $291.9 million of construction bonds for renovations to RFK Stadium and a new ballpark, was the first public comment by a baseball official since union executive director Donald Fehr said last week his union would challenge the plan's constitutionality.
Also yesterday, baseball released correspondence in which Puerto Rico's non-voting representative in Congress, Del. Anibal Acevedo-Vila (D), asked Commissioner Bud Selig to "strongly consider" San Juan as a future home for a team. In his three-paragraph response, Selig said he would be "delighted" to consider a proposal from San Juan as a possible suitor for the Montreal Expos.
Baseball has appointed a relocation committee to examine where the Expos will play in the 2004 season. The committee is supposed to make a decision by the All-Star Game, but in recent weeks speculation has grown that the committee will delay a move until at least 2005.
The release of the correspondence comes the day before officials in the District, Northern Virginia and Portland, Ore., expect to be notified of follow-up negotiations to their initial bids for the Expos, which were presented eight weeks ago. A delay would allow Puerto Rico to join the bidding since it currently has no ownership group or stadium financing plan.
"It would be necessary for us to gain some sense of a person or group of persons who may wish to acquire this club," Selig said in a May 2 response to Acevedo-Vila's letter, which was dated April 23.
Puerto Rico is playing host to 22 of the Expos' home games this season and could get more next season if the Expos are not relocated.
David M. Carter, a sports consultant based in Southern California and co-author of the recently published book "On the Ball: What You Can Learn about Business from America's Sports Leaders," said the Expos' first 12 games in San Juan may have bolstered MLB's impression of the island's viability.
"But I think it also might speak to the fact that, just like the NFL, MLB is keen on generating leverage for where to place franchises, whether that's expansion or the relocation of teams," Carter said. "So, this might say as much about MLB trying to ensure it gets the best possible deal out of [the Washington area] than its absolute belief in Puerto Rico being a viable long-term market for the sport."
Financier Fred Malek, leader of one of three local investor groups seeking the Expos, was unfazed by the development. "I don't care who they add to the list," he said. "Washington, D.C., is still the best market in the country by far, and everybody knows it."
Jock taxes are common nationally, but states that impose them also routinely tax the income of non-residents. The D.C. home rule charter specifically forbids that, and Mayor Anthony A. Williams (D) is seeking an act of Congress to get approval to tax professional athletes whose teams move to the District after 2003.
District officials have said their financing plan provides enough cushion in case the tax on players is ruled illegal or eliminated.
Gene Orza, the MLB Players Association's No. 2 executive, said the union would not be opposed to permanently locating the Expos in Puerto Rico.
"It's a little bit of a surprise. The general thinking was that, while a contender, [Puerto Rico was] not a top contender," Orza said. "Since the Montreal games were played down there, maybe the reaction to what transpired down there has elevated [Puerto Rico] as a contender, so to speak. I don't have access to information on which [MLB] relied. From a staff level up here, people who have been down there said they put on a good show and the players are pleased with what's happening in Puerto Rico."