Grapefruit or Cactus: The juice on the value of teams in communities

Spring training always a money-losing business
Brian Milner
Globe and Mail

Just about everyone in and around baseball looks forward to spring training, with its timeless traditions and its new-season promise of success — everyone, that is, except perhaps those responsible for the clubs' finances. For them, spring training is all about juggling costs and reducing expenses. While the business of baseball is booming, the business of spring training is a perennial money-loser for major-league clubs, at least on paper.
"There's a huge cost to operating the organization," Toronto Blue Jays president Paul Godfrey said from his office overlooking the Jays' Knology Park in Dunedin, Fla.
The Jays pocket all the revenue from their 14 home games, including ticket, concession and merchandise sales. But it's not enough to offset the costs of housing dozens of major-league and minor-league players, coaches, trainers, administrators, team doctors and every other staffer associated with the baseball operation — more than 200 people in all.
Godfrey estimates that the net shortfall is about $1.5-million (Canadian), which is in the same ballpark as that of other clubs, depending on how they do their accounting for player development and other expenses. The Jays, for example, do not include the accommodation costs of general manager J.P. Ricciardi and other club officials in their spring training tab. These are paid out of their department budgets.
Not even the Yankees, who sell out every game in a stadium that seats 10,200 (almost double the Jays' capacity) and have a valuable television deal, turn a profit in Tampa. "My guess is that it would be a loss for everybody," Godfrey said.
That includes the communities that play host to the teams in Florida and Arizona. When it comes to operating and maintaining facilities, "most municipalities would say they lose money, particularly if they have debt to service," said David Cardwell, the executive director of the Florida Grapefruit League Association. "You have to look at a broader picture to determine whether or not it's viable for the community."
Baseball's economic impact in major cities is typically overblown by proponents of new stadiums. But it's hard to argue that the sport isn't important to the health of smaller communities that depend heavily on tourism. Cardwell cites Florida studies showing that spring training adds $18-million (U.S.) to $24-million, for each club, to community coffers. If you took all the spring training activity in Florida and treated it as a single attraction, he said, "it's roughly equivalent to having a Super Bowl in Florida every March."
So it should come as no surprise that Arizona, Florida's rival for the spring rites, has been waging a full-court press to draw more teams. The latest catches are the Los Angeles Dodgers, who intend to vacate their legendary 60-year home in Vero Beach after next spring, and the Cleveland Indians, a Cactus League pioneer in 1946, who will be heading back in 2009 after 16 years in Florida.
The pending departure of the Dodgers has struck a nerve with people nostalgic for the old days when trainloads of fans from the chilly north would crowd into small, rickety grandstands to see their heroes up close. But baseball is all about business and the Dodgers can scarcely pass up a deal that will produce higher revenue, help them attract a better TV package and bring them close to their West Coast fan base.
Arizona's big advantage over Florida, apart from better golfing weather and the close proximity to West Coast teams, is that it has had more money to spend, thanks to a surcharge on rental cars and hotel rooms that is earmarked for the construction and upgrading of facilities. Local communities, in turn, have set up non-profit clubs to operate spring training. That gets them an exemption from sales taxes, which amounts to savings of $100,000 or more a team each spring training.
The addition of the Dodgers and Indians would give Arizona a record 14 teams. But Florida doesn't have to worry about more poaching. None of the 16 remaining clubs have leases coming up for renewal before 2016. And there isn't much room left in the sprawling Arizona suburbs, where the teams are located within short distances of each other.
"We do not have any interest in taking teams from Florida," said Jon Richardson, a Cactus League committee member and onetime GM of the Calgary Cannons. "We realize that there's a point of diminishing returns." Shoehorn in more teams, and "we would be cannibalizing each other's gates."