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Holy Cross Economics Professor Robert Baumann on Worcester's controversial PawSox deal (All-New Episode)

Photo of Robert Baumann
Program: 
Date: 
Sunday, October 7, 2018 - 10:00pm

In an all-new ‘The Business Beat,’ Steve Jones-D’Agostino interviews Economics Professor Robert Baumann of the College of the Holy Cross, shown at the site of the proposed PawSox park along Madison Street in Worcester. They talk about whether Worcester is getting scammed in the controversial PawSox deal.

As Dead Spin writer Neil deMause wrote on September 10, 2018, in an article titled, The Stadium Scam Goes Minor-League, And It Has An Unlikely Ally: “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," deMause reported. "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."

deMause continued: “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, 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'."

Three weeks before that Dead Spin article was posted, on August 19, the Telegram & Gazette published an op-ed titled A Worcester stadium plan hoping for the best, but up against complex trends by my guest, Robert Baumann, who chairs the Economics and Accounting Department at Holy Cross. In it, he stated: “Compared to the city, I am far less optimistic about this public investment. For the last 10 years I have published research that examines the economic benefit of sports franchises, stadium construction, and large sporting events like the Olympics and Super Bowls. The summary of this research is simple: public money towards stadium construction is rarely, if ever, worth the investment. In fact, it can turn out poorly if demand for the sport wanes.”

Professor Baumann has recently published research articles in Contemporary Economic Policy, Journal of Sports Economics, and Journal of Forensic Economics. He is also the co-creator of econphiles, a YouTube series that examines economic events.

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