Monday, July 09, 2007
McClatchy: Rose Colored History
News outlets and sports commentators have been gushing with praise of Kevin McClatchy since the announcement he is leaving as CEO of the Pirates. Strange behavior indeed considering the years they have spent castigating the man for his leadership of the team. Now he is credited with saving the Pirates and getting them a wonderful new ballpark in which to display their talents.
Let’s be clear. Mr. McClatchy did not save the Pirates for Pittsburgh. He and his partners who bought the team in 1996 had one overriding objective—to make money for themselves. And they have done well. After paying $90 million for the franchise in 1996, the partners have seen their investment rise in value to $274 million in 2007, according to Forbes magazine. The increase in value reflects in large measure the revenues produced at the new park, revenue sharing through the “luxury tax” and the general increase in franchise value over time. Again, according to Forbes, the team will earn $25 million pre-tax this year. Moreover, Mr. McClatchy has been paid handsomely for being chief executive over the years his group has owned the team.
There are several inconvenient facts in the “McClatchy saved the Pirates for Pittsburgh” argument. First, there was no market of adequate size available except Washington, D.C. to move to and that market was being ruled out in deference to the Baltimore Orioles. Second, the Montreal Expos were in a much more perilous financial and attendance situation than the Pirates and would have been the major leagues’ priority as a team to move. Eventually, the Expos were taken over by the league and moved to Washington.
Third, if there had been no new stadium, McClatchy was prepared to put the team on the market. In December 1998, after the so-called “stealth” legislation was vetoed by Governor Ridge, McClatchy was quoted as saying, “We can’t be here long term if we can’t put a competitive team on the field. We need a new stadium to be competitive.” In the same interview he held out the threat of triggering the clause that would allow him to sell or move the team if the City could not find a local buyer. In short, he was prepared to take the team out of the City unless he got a new stadium.
So, if the team was saved for Pittsburgh, it was state politicians who defied the overwhelming will of the people not to publicly fund the new stadiums who saved them. This list includes the then Republican Governor, a number of Republican Senators from western Pennsylvania and a Republican County Commissioner in Allegheny County who abandoned a pledge not to use public funding for stadiums. That commissioner joined with the minority Democrat commissioner to move the Plan B funding scheme ahead, including the use of Regional Asset Tax revenues to build the new stadiums. This despite the claims by officials before the tax referendum was soundly defeated that RAD dollars could not be used for new construction.
Here’s the reality. If the team was actually going to move out of Pittsburgh during this period, which in all probability it was not, and was saved by getting a new stadium, then the sports columnists and others who are now lauding Mr. McClatchy ought to have the honesty to give credit where it is due.
By the way, it does not appear that a new stadium was able to cure the small market problem faced by Pittsburgh. Just as we warned at the time.
Let’s be clear. Mr. McClatchy did not save the Pirates for Pittsburgh. He and his partners who bought the team in 1996 had one overriding objective—to make money for themselves. And they have done well. After paying $90 million for the franchise in 1996, the partners have seen their investment rise in value to $274 million in 2007, according to Forbes magazine. The increase in value reflects in large measure the revenues produced at the new park, revenue sharing through the “luxury tax” and the general increase in franchise value over time. Again, according to Forbes, the team will earn $25 million pre-tax this year. Moreover, Mr. McClatchy has been paid handsomely for being chief executive over the years his group has owned the team.
There are several inconvenient facts in the “McClatchy saved the Pirates for Pittsburgh” argument. First, there was no market of adequate size available except Washington, D.C. to move to and that market was being ruled out in deference to the Baltimore Orioles. Second, the Montreal Expos were in a much more perilous financial and attendance situation than the Pirates and would have been the major leagues’ priority as a team to move. Eventually, the Expos were taken over by the league and moved to Washington.
Third, if there had been no new stadium, McClatchy was prepared to put the team on the market. In December 1998, after the so-called “stealth” legislation was vetoed by Governor Ridge, McClatchy was quoted as saying, “We can’t be here long term if we can’t put a competitive team on the field. We need a new stadium to be competitive.” In the same interview he held out the threat of triggering the clause that would allow him to sell or move the team if the City could not find a local buyer. In short, he was prepared to take the team out of the City unless he got a new stadium.
So, if the team was saved for Pittsburgh, it was state politicians who defied the overwhelming will of the people not to publicly fund the new stadiums who saved them. This list includes the then Republican Governor, a number of Republican Senators from western Pennsylvania and a Republican County Commissioner in Allegheny County who abandoned a pledge not to use public funding for stadiums. That commissioner joined with the minority Democrat commissioner to move the Plan B funding scheme ahead, including the use of Regional Asset Tax revenues to build the new stadiums. This despite the claims by officials before the tax referendum was soundly defeated that RAD dollars could not be used for new construction.
Here’s the reality. If the team was actually going to move out of Pittsburgh during this period, which in all probability it was not, and was saved by getting a new stadium, then the sports columnists and others who are now lauding Mr. McClatchy ought to have the honesty to give credit where it is due.
By the way, it does not appear that a new stadium was able to cure the small market problem faced by Pittsburgh. Just as we warned at the time.
