Lawmakers seeking to audit, review economic impact of state’s 2 MLB stadiums
State lawmakers have introduced legislation aimed at reviewing the economic impact each of the state’s two Major League Baseball stadiums have had on their respective regions.
“The Pirates and the Phillies are cherished and historic assets in their communities ... this legislation is meant to document the contributions to their respective regions and to help ensure their historic presence within their communities for generations to come,” said Rep. Tim Bonner, R-Butler/Mercer.
Bonner was joined by his co-sponsor, fellow Republican Rep. Jim Gregory, R-Blair, for a news conference outside PNC Park on Friday, announcing the legislation.
The announcement comes as the Philadelphia Phillies play in the World Series. The Pittsburgh Pirates, meantime, finished the season with 100 losses.
“The Pittsburgh Pirates have been reluctant to open their books for the community to determine whether they are struggling financially or whether they have the resources to field a more competitive team,” Bonner said.
The legislation calls for two measures. If passed, the Independent Fiscal Office would conduct studies looking at the regional economic benefits resulting from the taxpayer-funded ballparks.
“This is all about legislation to quantify the impact these two ballclubs have had on their regions,” Gregory said. “But there are things that cannot be quantified and that is the amount of hope that is created when you go to your first game, when you go through a pennant run.”
The legislation further calls for the Pennsylvania auditor general to audit the teams’ financial calculations.
Under an agreement made more than two decades ago, called the Capital Facilities Debt Enabling Act of 1999, four of the state’s sports entities received state funding for new stadiums. The Phillies and Eagles each received $85 million, while the Steelers and Pirates received $75 million, as a one-time payment for a 30-year lease term.
According to Bonner and Gregory, that deal requires each team to report finances in 10-year intervals. Teams are expected to pay $25 million per decade unless demonstrating they generated additional tax revenues in excess of $25 million.
After the first 10-year period, all of the clubs exceeded that amount, meaning “they made no actual payment to the state for the use of the facility,” Bonner said, noting that that outcome had been expected. But none of the reports were audited.
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Reports for the second 10-year period are due this year.
“We are particularly interested in the Pirates’ claim for tax credits during this past 10-year period because we are seeing a decline in attendance as well as a salary structure well below MLB averages,” Bonner said.
Bonner emphasized that he has no reason to suspect misconduct on any team’s part.
Currently, the legislation focuses on the two MLB teams, but the two NFL teams could eventually be looked at as well.
“We’re not expecting improprieties whatsoever,” Bonner said. " These are four outstanding organizations ... this legislation is meant to address some concerns we have, but to seek remedies. We’re not looking to punish, we’re not looking to embarrass. We’re looking to make sure these organizations stay in these communities for decades to come, and we think this process will be helpful in achieving that goal.”
“We don’t know what’s going to come from it, but somebody is going to get a good deal. For me, I want to make sure the people of Pennsylvania get the best deal in the new negotiations,” Gregory said.
Channel 11 asked the lawmakers what the cost of the audits and studies would be. They stated that an exact cost is unknown but expected it would be “minimal” if anything.
Channel 11 contacted representatives for the Steelers and Pirates to see if the teams had a response, and to ask if they would cooperate with any potential audit. A Steelers spokesperson declined to comment. We have not yet received a response from the Pirates.
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