The Free Lunch – Literally

         We blogged about the finances of athletic teams in general and in New York in particular, on June 14, 2008, In Pursuit of the Free Lunch. Check it out.

         Now, we are informed by the New York Times (David W. Chen, Bloomberg Team Pressed Hard for Use of Luxury Suite at Yankee Stadium, N.Y. Times, Nov. 30, 2008, at p. 28) that there was presure put on the Yankees by the New York City officials to make sure and provide a luxury box for use by the city officials, and — are you ready? — to throw in free food for its users. So how did the city get the Yankees to agree to that? We’re glad you asked. According to the Times report of disclosures made by New York Assemblyman Richard L. Brodsky (who is evidently not what you might call the Yankees’ fan — or at least not a fan of their deal with the city) the way the city got the Yankees to cave in on its demands was to threaten to withold its request to the IRS to allow the Yankees to finance their new stadium with tax-exempt bonds. Says the Times:

“The project required permission from the Internal Revenue Service because of the team’s desire to use tax-exempt bonds to finance construction. In one heated exchange, city lawyers threatened they would not make the request to the I.R.S. for the use of the tax-exempt financing unless the Yankees would consider providing the luxury suite.”

One of the Yankees’ lawyers resisted the free food part, and is quoted by the Times as saying “The Yankees feel the city should pay for any food it wants to consume, and I think it’s a little unseemly to require ‘free’ food.”

       So the moral of it all appears to be that, outrageous as this caper may sound, it also contains a touch of poetic justice. If there is one thing that can be said about the practice of cities acquiring land by eminent domain while undercompensating the hapless condemnees who get in the way, it is that those cities and the mega-millionaire owners of professional athletic teams are pursuing the proverbial free lunch at the expense of the taxpayers. Now we learn that the “free lunch” metaphor can be literally true, and it is a case of just deserts that after pocketing those huge municipal subsidies, the team owners have to buy city officials some free lunch. The ultimate touch is provided by the fact that New York’s Mayor Bloomberg is a multi-millionaire, and if anybody should refrain from schnorring and pay for his own hot dogs, he and his staff would appear to be the prime candidates.

         On the other hand, don’t shed too many tears on behalf of the abused Yankees. According to the Times, the deal included the city’s relinquishment of 250 public parking spaces for the Yankees’ exclusive use, and “the rights to three new billboards along the Major Deegan erxpressway, and whatever revenues they generate.” Those revenues are estimated by the Times to be $750,000 annually. That’s some lunch. As they say in some parts of New York, k’n ein nehoreh.

        So all things considered, while we admire the Yankees’ gallant effort to strike a blow against municipal greed, we find it hard to shed a tear for them when they have to pony up for . . . . Wait a minute! That lunch does consist of ballpark hot dogs, doesn’t it? You don’t suppose those folks would trash a grand old American tradition and scarf up foie gras and champagne at a baseball game, do you?