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The Price of Four Aces

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4_aces.jpgPhiladelphians love their Phillies and its time to praise the guy most responsible for making this franchise so successful. John Street.

That is not a misprint.

It was Street as a new mayor who made the deal to build new stadiums for the Eagles and Phillies, a decision that was roundly criticized at the time as a boondoggle. People didn't like the cost ($394 million from the city) nor the location (the Phillies wanted their park in Center City) nor the whole darn idea (Why should government help subsidize privately-owned sports teams?)

Street -- whose roots were in the neighborhoods -- could have easily decided that the aging Veterans Stadium was good enough.  Had he done that, there was not much the teams could do: each had leases to play at the Vet through this year.

The Eagles were making noises of moving the franchise unless a deal was done, but the Phillies were pretty much stuck.

Now, imagine what would have happened had Street decided to hell with new stadiums and made them stay at the Vet?

Would we have the Four Aces on the squad? Would we have won the World Series in 2008?  What difference did the building of a new stadium make in the life of this team?

The short answer is: a lot.

In the final four years at the Vet, the Phillies averaged 22,865 fans per game or about 1.8 million paying customers each season.

In the last five years at Citizens Bank Park (which opened in 2004), the Phillies have averaged 40,862 fans per game, with season attendance averaging 3.3 million customers.

At an average price of about $36 per ticket it means the Phillies gate alone totals close to $140 million a year.

479px-John_F_Street.jpgAt the Vet, due to lower ticket costs and much lower attendance, the gate was closer to $40-to-$60 million a year.

In 2003 season, the Phillies last year at the Vet, the team grossed $97 million through all sources of revenue -- tickets, TV rights, concessions, etc.. This year, they are expected to gross close to $240 million.

Which is a good thing because according to Forbes magazine their payroll -- for players only -- is $173 million this year, the second highest in the majors (behind, of course, the Yankees, who have a $203 million payroll.)

They don't call it money ball for nothing.

You could make an argument that if  the Phillies had invested big money in players and started to win, more people would have shown up at the Vet. With rising attendance would come rising income. (Forget the fact that you came to see the Phillies at the Vet despite the Vet, while people will go to Citizens Bank Park for the experience of being there.)

But let's get real. You have to make money to spend it. You can't use your Master Card to pay Ryan Howard his $19 million a year or Roy Halladay his $15.7 million a year.

(Despite these big numbers, the Phillies owners don't exactly rake in the cash. According to Forbes, the team has had an average net profit of $13 million a year over the last five years -- just a tad more than Raul Ibanez is making for playing this year ($12.1 million).

The Phillies' management and owners deserve credit for working to improve their team.  For years, it was a major-market team with a middle-market payroll.

But, they knew that (excuse the expression) to play in the majors they had to get talent, and that comes at a price. Getting a new stadium was essential to the team. And it is is clear that money the new stadium yielded was spent not on themselves but on buying that talent.  Take that modern Maverick, Ruben Amaro Jr., and give him a  pile of money and watch him work magic at the table.

But, that money would not have been there were it not for John Street.

As the new mayor, Street took the risk of supporting the use of public monies for the new stadiums -- though he lost his campaign to build it downtown. He's the one who had to face the questions about why spend any money on sports teams when the city has so many other needs (Why not sell bonds to repair police and fire stations?) He fought the law suits to stop the projects. He stuck with his original decision that financing stadiums was a good deal with the city. (He was stubborn that way.)

The Phillies' transformation into a winning team gives credence to the argument of the civic value of such intangibles as quality sports teams, world-class orchestras, good museums, decent park systems.  They are civic amenities that add to the collective value of a region and define its image (and its self-image among its residents).

Economists hate such intangibles because they cannot be measured in dollars and cents; therefore their value tends to be marginalized. 

It's much easier to measure the size of Cliff Lee's contract (five years, $120 million), than the feeling Philadelphians had the day they learned Lee had spurned the Yankees to return to Philadelphia.

Because that is priceless.

 

--Tom Ferrick

 

 

 

 

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