Friday, October 24, 2008

Financial Crisis? What Financial Crisis?

The Mets and Yankees continue to get sweetheart deals from the government, as the IRS -- while imposing tough new regulations designed to discourage the use of tax-exempt financing for private businesses -- specifically exempted the Yankees', Mets', and Nets' new digs:

The Yankees have approval for $942 million in tax-free bonds but claim they need $366 million more to finish the stadium. If the IRS had rejected the exemption, that request would have been dead. The Mets received approval for $612 million in tax-exempt bonds, but have not asked for more. Their new stadium is nearing completion . . .

. . . Mayor Bloomberg says he sought the exemption for projects across the city, but his economic development team did so while consulting with the Yankees' tax lawyers, e-mails show. After consulting with the Yanks, the city had Rep. Charles Rangel (D-Harlem), head of the House Ways and Means Committee, submit a letter to the IRS advocating their position.

The exemption is lucrative and timely for the Yankees. If the city approves the new funding, the nation's richest team will realize a total of $247 million in lower borrowing costs, the Independent Budget Office said.
Nice to have friends in high places. Meanwhile, your boss can't get a line of credit to make payroll, your kid won't be able to see any games in person next year because the seats are too expensive, and the Mets and Yankees will probably spend a couple hundred million bucks on over-the-hill free agents.

(thanks to Pete Toms for the link)

7 comments:

Ted Spradlin said...

Seeing that picture of a near complete Yankee Stadium made me think this is US Cellular Field with a Yankee Stadium facade. If Hank & Hal are spending taxpayers money like drunken sailors, make it jump out to the guy watching a game and the guy watching on TV.

All the new parks have such a generic feel. When you see one, you've really seen them all (Camden, PacBell, & PNC aside). Just another missed opportunity to go "retro" with taxpayer money.

I guess, this is New York, where taking taxpayer money and having a lot of rich guy fun is the norm (AIG's $23,000 in facials and massages at the Ritz in Dana Point, CA a few weeks ago).

There's different rules for the wealthy and we're seeing this in the financial meltdown of today. It's the way the game is played and they pay to have the rules written this way.

But come on, don't build a cheap-ass looking, Jerry Reinsdorf inspired, new Commiskey-Old Yankee Stadium retro knockoff in NYC. Especially when it's on the backs of the working people of New York who aren't recipients of the mega-bailouts of today.

Sorry, my inner Howard Roarke had to come out.

Anonymous said...

APBA Guy-

The more frightening thing is what if the Yankees don't spend that extra loot on aging FA's? What if, and this is a big what if, they really, seriously invested in scouting and signing young draft-age players. Imagine a Tampa Bay approach with 7 times the capital to work with.

Mark said...

What does "APBA Guy" mean? i've been wondering for a while.

Craig Calcaterra said...

APBA is baseball sim table game with dice and stuff, and I presume that APBA Guy is quite the fan.

Pete Toms said...

I never understood the APBA acronym either.

Ted's comments remind me of a lot of similar sentiment that I've been reading in recent newspaper columns, websites, blogs etc. Rank & file fans are getting pissed about the corporatization of pro sports. Lots of anti PSL stories / commentaries, lots of sentiment that the diminishing appetites in corporate America for naming rights deals, luxury suites, ad time, signage etc is a good thing ( I'm not arguing it's not ), Congress & the IRS finally getting around to changing stadium funding rules ( PILOTS ), more difficulty in getting public dollars for private stadiums ( the reason you see more and more teams as pieces of mixed used developments ) because both fans and non fans have figured it out....is pro sports out of step right now?

Ken Dynamo said...

well agree here. tax payer money or pro stadiums is beyond retarded. but until people stop voting for politicians who think its cool, its pretty tough to stop.

Ted Spradlin said...

To Pete,

For the moment, and maybe the next few years, sports may be out of step. Baseball will continue to be significant in the long run, but right now, lots of people are dealing with job losses, foreclosures, and uprooting families that take a financial toll and may have a lingering psychological impact on many. The wrench that was thrown into the economic system has made an almost instant impact, from gas this summer to bank failures to job losses to whatever's next?

For many people, it's tough to hear George Steinbrenner and his boys getting an inflated land appraisal so they can qualify for $8,500,000 annual savings on the muni bond issue. Sure, it doesn't directly impact you and I, but it's the principle that more breaks are going to those who can already afford it.

Any student of the laws of money and wealth will understand that's the way it works every time. The more money you have the more people want to take you out to lunch, seek your advice, or just hang around you. The more wealth, the more leverage. If not, George would have taken up The Meadowlands offers/threats of the past.

Since the bailouts have not bailed out the rank and file directly, and layoff announcements are picking up, it's tough for many to see another story about a billionaire and his highly profitable Yankees/YES empire getting a $250,000,000 favor from the city. Financially distressed people are just wondering how they'll come up with rent money to avoid eviction. For these people, baseball can be put on the back-burner until life stabilizes again.