Sports News Without Access, Favor, Or Discretion
The site of the new ballpark in Worcester, Mass.
Photo: Jonathan Wiggs (Boston Globe via Getty Images)

When the state of Rhode Island offered up $38 million in June to the owners of the Triple-A Pawtucket Red Sox toward a new stadium, it seemed likely to be the first step on the road to a replacement for the beloved-but-modern-kitchenless 76-year-old McCoy Stadium. Sure, the PawSox owners had balked at some elements of the plan—for one, the state had declined to guarantee it would dig up additional cash if the provided tax subsidies fell short—but they had few other options: They needed to stay close to the parent club in Boston, and the only other likely candidate city, Worcester, Mass., had hired as a consultant renowned Smith College economist Andrew Zimbalist. And surely the man who literally wrote the book on the stadium scam wouldn’t tell Worcester to bust open its piggy bank to steal away the PawSox, right?

It didn’t quite work out that way.

On August 17, as the PawSox announced they will be leaving Pawtucket after 50 years, Worcester city manager Edward Augustus announced a plan to build a new $90 million (plus land costs) ballpark, to be accompanied by 18 acres of retail, housing, and hotels. The stadium would be funded with $106 million in city bonds: The team would pay off $36 million of that via upfront payments and future rent, but the other $70 million would come entirely from city tax money.


According to sports economist Victor Matheson, who himself teaches in Worcester at the College of the Holy Cross, the new home of the WooSox would be “in nominal terms the most expensive minor league baseball park ever built.” Adjusted for inflation, he calculates, it would be the third-priciest ever; and the $70 million public subsidy (not counting $35 million in state cash for parking garages, road work, and other “infrastructure”) would be the fourth-largest in history, behind only the more populous cities Buffalo, Memphis, and Nashville.

The Worcester gratuity was a stunning turnabout in a world where sports subsidies had seemed like they might finally be on the wane, and it was nearly universally panned by experts in the sports economics field. After Worcester issued its stadium plan, the Worcester Business Journal polled nine economists—plus, for some reason, me—to ask what they thought of the proposal. Among the collected comments: “It virtually never works.” “This is not a good thing for local governments to be doing.” “You better have a Plan B in place.” Only one expressed confidence that it would turn out well for the city, and that one was Zimbalist.

Zimbalist has since defended himself, penning a “guest column” for the Worcester Telegram in which he asserted that this project is different because it will be “both a ballpark and an economic development initiative.” While economists, when pressed, say that while they don’t necessarily agree with their colleague—some disagreeing more strenuously than others—this isn’t quite as simple as a disinterested economic researcher selling his soul so he can buy a new deck for his house.

“To the extent that he is being hired as a consultant, I think he did a much more conservative and realistic job than most hired guns are going to do,” says Matheson. Zimbalist didn’t, for example, spin out visions of people eating out at restaurants more just because they’re going to see more sporting events, or issue a report on a soccer stadium where two-thirds of its projected benefits turned out to be a bookkeeping error.


That said, Matheson remains fairly steamed at his colleague for lending his spreadsheet chops to the cause of justifying public spending on a private stadium. “If you’re going to say something bad, it’s that he did serve a bit as an enabler,” he says. “Andy is using his credentials and his prominence to basically give cover to the Worcester city council and Ed Augustus to go forward with this project.”

Andrew Zimbalist was not the first economist to tackle the dubious rewards of sinking public money into sports stadiums—that was arguably Robert Baade, who all the way back in 1990 surveyed 30 cities and found that in 27 of them there was no measurable effect on economic activity, while in the other three cities the new venues appeared to have hurt the local economy. But Zimbalist was absolutely the most famous, at least so far as any academic economists ever find fame. He’d co-edited one of the premier books on sports economics, Sports, Jobs & Taxes; he’d joined a group that during the 1994 baseball strike tried to launch a rival major league featuring collective player ownership; and he had an affection for the microphone and the camera, with a knack for explaining complex economic principles in lay terms.


But academic economists, it may shock you to learn, do not live on tenure alone. They also take on consulting jobs, issuing reports and testifying before city councils on the merits or lack thereof of proposed development projects.

Zimbalist’s first prominent client was Bruce Ratner, the nebbish-out-of-water real estate developer who bought the New Jersey Nets in 2004 with plans to move them to a new arena in Brooklyn. For his fee, Zimbalist wrote a report determining that while the arena would be a money-loser for New York taxpayers, the surrounding housing development would more than make up for it, supplying over $1 billion in new tax revenues.


“I would never have undertaken this exercise,” Washington State University sports economist Rod Fort told me at the time. “In essence, Andy is trying to forecast 33 years hence, and he’s forecasting housing markets, which there are other people spending all their waking moments on. What you see is assumption after assumption after assumption after assumption.” Two economists working with a community group that opposed the Nets arena issued their own analysis critiquing Zimbalist’s figures as hogwash; the city Independent Budget Office issued a study reiterating that the arena wouldn’t pay off its city subsidies, and the economics of the housing component were too hard to determine thanks to the “considerable uncertainty” of when construction would be completed. (Fourteen years later, barely 20 percent of the promised apartments have been built.)

Two years later, Zimbalist spoke in favor of a new Yankees stadium in the Bronx, writing a New York Times op-ed that dismissed “those who want no disruption and the maintenance of the status quo” and insisted that the city’s $210 million in costs would result in such public amenities as expanded recreation space and new parking revenues that would pay off state-funded parking garages. (The actual city cost would end up as nearly $700 million, the new parks were smaller than the old ones, and the parking garages were an unmitigated disaster that provided no new revenues to the state.)


The gigs, and the controversies, kept coming. When testifying for the city of Seattle, which was trying to extract restitution from the Sonics for skipping town for Oklahoma City, Zimbalist was revealed to have cribbed word-for-word from an earlier report he’d compiled for the city of Anaheim—only since that city had hired him to argue that sports teams (in its case the Angels) didn’t provide significant economic benefits, for his Seattle report Zimbalist had simply reprinted the same analysis but reversed his conclusions. In 2013, Zimbalist told the Tampa Bay Times that local taxpayers should be willing to chip in for a new Rays stadium, only to have it revealed that he was moonlighting as an MLB consultant at the time.

None of this seemed to hurt Zimbalist’s $225-an-hour side business. Before Worcester, he had most recently consulted for none other than the state of Rhode Island, advising officials on their own stadium bid for the PawSox.


Unlike some economists-for-hire—Mark Rosentraub of the University of Michigan, an early adopter of stadium gigging, ultimately repented his stadiums-are-boondoggles tome, Major League Losers, with a more rose-colored followup dubbed Major League Winners—Zimbalist hasn’t exactly changed his tune on the terrible return cities get from stadiums. But he is more willing to grant exceptions, whether on the grounds that additional non-sports development makes for sunnier outcomes, or because minor-league cities are a different beast altogether. In his op-ed, he cites University of San Francisco economist Nola Agha’s findings that minor-league stadiums may not be quite as zero-sum a game as major-league ones, thanks to smaller cities having fewer other attractions to lure folks downtown, as well as such factors as minor-league players spending a greater share of their meager paychecks at local stores. (The propensity for the Derek Jeters of the world to use their earnings to buy Florida mansions and entire sports teams is what economists call “leakage,” and is thought to be a major contributor to cities’ dismal economic returns on stadium spending.)

But Agha, it turns out, has concerns about the Worcester deal as well. She was quoted in the Worcester Business Journal saying “it virtually never works,” and while she credits that to on-deadline journalistic oversimplification—in reality, she says, “it’s extremely nuanced”—that’s still the standard against which all stadium plans need to prove themselves the exception to the rule.


“It really does depend,” says Agha. “There’s a list a mile long of cities where it hasn’t worked. And there’s a really short list where it has.” Her question for Worcester echoes that raised over a decade ago in Brooklyn: “Is this development guaranteed? Is it going to happen regardless of if there’s a stock market crash or interest rates go up?”

Matheson is less concerned about whether the tax revenues will roll in, saying Worcester is, like many urban areas since the recolonization of cities by young professionals, booming: “I don’t think this is going to be an El Paso, where they promised all this development and it still hasn’t come.”


But that, he notes, isn’t necessarily a good selling point for a stadium: “The fact that it was going to happen anyway means that instead of taking a huge increase in our economy and directing it towards general quality of life in Worcester, we’re having to direct all that to a stadium, and to the pockets of a billionaire ownership group.”

Zimbalist, for his part, acknowledges all the uncertainties. But he says he is a firm believer in the numbers he was hired to produce.


“Augustus and the chief of economic development, a guy by the name of Mike Traynor, contacted me, and they said they wanted my help in developing a financial model,” Zimbalist explains. “And they wanted only to do this if the city was not going to have to increase taxes on anybody in order to finance the team moving.”

Zimbalist ended up playing a far more central role—“I was at the bargaining table whenever we met, which was a lot”—and testified at public hearings in favor of the plan. He was able to reach this conclusion, he says, without any bookkeeping trickery: “I tried to at every turn be as straightforward and conservative as I could.” Even if the stadium itself is a money-loser like virtually all others in the past have been, he says his figures showed the city paying off its debts and even turning a small surplus, thanks to all the tax revenues that would pour in from the development alongside the stadium.


And what about Matheson’s argument that if Worcester is ripe for development, it will happen regardless of whether there’s a stadium next door?

“Victor makes the argument, which I think in theory is correct, that if the city just did nothing, Worcester is developing, and this area of the Canal District is right next to downtown, and this area would be developed,” Zimbalist says. “And I think that that’s correct. The question is how much investment would it get? Would it get $10 million, would it get $20 million, would it get $70 million? And when would it come?” He also notes that a stadium is an opportunity to get city planners on board to redevelop a whole area, whereas if left to the devices of the market a city can end up withhelter skelter” development that is less coherent.


Zimbalist also readily admits that he didn’t try to price out all the added public services that the new development would need: “Some of the services are included there, and some are not,” he says, but he estimates that the expense involved shouldn’t be too great. Adding 225 new units of housing, for example, given that 15 percent of current households in that area of Worcester have children, shouldn’t create a huge liability for a school district with 25,000 students in it, he says. (Matheson is far less sanguine, calculating that at an average cost to the school district per student of $14,000 a year, even a few dozen new kids could quickly eat up Zimbalist’s projected $14 million in total surplus, putting the city in the red.)

“I don’t want to sound idealistic about this—it’s not perfect,” Zimbalist says. “I was not arguing that this is necessarily the best financial outcome that might accrue to the city.”


But does that come across to the public, I ask? Or do people not attuned to the nuances of stadium economics just hear “no new taxes” and leave it at that, even if it’s siphoning off tax money that might otherwise be available for less sportsy purposes?

“I think the point has come across really well,” says Zimbalist. But, he adds, “you ask, do people understand this? I think in Worcester, they don’t even want to understand it. There’s a tremendous amount of excitement about bringing the team there.”


That is precisely the problem, says Matheson.

“One of the reasons I didn’t see [the Worcester bid] coming is Massachusetts has a very good history of being able to say no to public subsidies,” he says, noting that the WooSox stadium is set to receive more in public subsidies than the Patriots, Bruins, Celtics, and Red Sox combined. “I think Worcester just really, really, really, really, really wanted a baseball team. I think the city council and the mayor and the city manager had a gigantic inferiority complex, and they wanted to create an identity for the city, and didn’t care what it cost them.”


What Worcester officials needed, then, was a way to paint the stadium deal as one that pays for itself—or, at least, as something where the numbers are hazy enough that it could be interpreted that way. And that’s where the mixed-use development came in: Forecasting ancillary impact stuff is a mess, and you can predict anything (within reason) and squint hard enough and justify your conclusion. And if that makes the resulting economist battles he-said-she-said—or he-said-everybody-else-said—that’s sort of the point.

“This is a convenient dodge for any municipal government engaging in these sort of things,” says West Virginia University sports economist Brad Humphreys. “There’s not much evidence about the effectiveness of these targeted redevelopment projects that go along with mixed-use retail/residential projects.” That’s a good thing in one way, he says: At least it’s encouraging sports venues to be built with more than a sea of parking lots around them. But whether the ancillary stuff is going to pay for the subsidy, that’s a pie in the sky claim that has no evidence to back it up.”


And that’s a concern, not just because a city like Worcester could be wrong about a particular project, but because it suggests that cities could end up having an ulterior motive for tacking on ancillary development like apartments and hotels, beyond the one of providing tax revenues that can be siphoned off to pay a stadium tab. Already, we’re seeing “it’s not just a stadium” developments being proposed for the Oakland A’s, NYC F.C., and Nashville’s MLS expansion team, coming on the heels of the Atlanta Braves’ ballpark village. Team owners would say that they’re creating synergies that make both projects more financially workable; critics who’ve seen how easy it is for stadium-side retail to crash and burn would say that it’s a scam, tacking on unrelated development in the hopes that politicians, journalists, and fans alike will throw up their hands and say, “Well, at least we’ll get a team out of it.”

If so, Zimbalist’s freelance work is helping to muddy the waters further, by providing cool academic certainty to something that is far murkier: The guy who hates stadiums says it’s a good deal, so what more do you want, huh? What team owners want, even more than a shiny new building, is something to counter the narrative that, as Andy Zimbalist once put it, “In every case, the conclusions are the same. A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment.” Already, the Red Sox farm team in nearby Lowell is looking for its own bucket o’ cash, and minor-league teams across the nation are likely readying their “$100 million is the going rate for Triple-A stadiums” and “Don’t be the next Pawtucket!” pitches now. If it costs $225 an hour to get there, that’s money team owners will consider well spent.


Neil deMause has covered sports economics for more publications than even he can shake a stick at. He’s co-author of the book Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit, and runs the website of the same name.

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