A Modest Pirate Proposal

By now, everyone knows that the Pirates are tied for the worst losing season streak in Major League Baseball, ever. Beyond being an embarrassment for the team, it financially hurts the Pittsburgh Region.

Consider the following: the Pirates have a (nearly) brand spanking new stadium, built through tax payer money. Obviously, one of the arguments for the stadium was that it would first help to improve the marketability of the team and second draw revenue to the City in the form of amusement tax revenue and spillover tax revenue (I'm thinking of hotel taxes, car taxes, and sales taxes from people patronizing establishments as part of their baseball experience). Without a good team, however, these revenues just aren't there for the City.

Suppose (and I'm totally making this up) that PNC Park contains 30,000 seats and that the average ticket price is $10. Every night, the Pirates should take in $300,000 in revenue and the City of Pittsburgh should recoup $9,000 in amusement taxes. Over the course of a 90 (let's say) home game season, the City should see about $810,000 in taxes and the Pirates should net $27,000,000 in revenue.

When the team has a bad season, however, and the Park is, let's say, only 1/3 filled daily, the City only receives $270,000 in tax revenue and the Pirates only receive $900,000 in revenue.

Again, I'm making up these numbers.

But, let's suppose a few things (1) more money to the team means better players can be acquired, (2) people want to see a winning team, and (3) there's a way that we can peg the amusement tax rate of the Buccos to their win/loss percentage.

Suppose we reduced the amusement tax rate on the Pirates if they started winning. There would be a baseline rate, to be sure, but between the current rate and this base rate if the Pirates started to do well, taxes would be reduced. The team could start reinvesting in their player development, win more, and have their taxes reduced again.

From the City's perspective, a half full Stadium or even a completely full Stadium would bring a better return at a lower tax rate than a third filled Stadium at a higher rate.

Of course, this assumes that there's no substitution effect on the rest of the Regional economy, such a plan could work without complaints from other more winning teams, and that the Pirates management is actually running a friggin' major league baseball team and not some AA farm team for the National League.