Red Eye Chicago, the free daily started a few years back by the Chicago Tribune to appeal to young people who don't read newspapers, has an article out today griping that the Ricketts family is demanding public money for the Cubs' Wrigley Field when they charge a lot for tickets and the team sucks. Which is sort of a strange argument — would public stadiums subsidies be more acceptable if the Cubs were finishing in first place? (I almost wrote "winning the World Series," but let's try to keep some grip on reality here.)
Still, there's a kernel of logic to thoughts like this that's worth following:
The Rickettses can create those jobs by swallowing their pride and hitting up their parents for a loan, much like thousands of us have had to do to pay the bills. It's not like dear old dad can't afford it—he is the billionaire founder of Ameritrade, after all, and wanted to spend tens of millions on a superPAC to unseat President Obama.
Again, if Joe Ricketts were a mere millionaire, it'd wouldn't be any more or less worthwhile for Chicago taxpayers to hand his kids public money to upgrade their private ballpark. But what about the corollary question: Why don't the Ricketts younguns just ask their dad for a loan?
The answer, presumably, is that he wouldn't see it as a good investment: It's unlikely that a renovated Wrigley is going to produce enough new cash to pay off $150 million in subsidies (let alone the $300 million that the city could actually be asked to pony up). Which means the only way Chicago would earn its money back would be by increasing the amount of money spent in the city enough to generate $300 million worth of new tax revenues.
Wrigley wouldn't be getting more seats, and it already sells out all the damn time, so forget about more foot traffic. The only way to get more money spent, then, is to have each fan spending more on average — which means either raising those $95 bleacher ticket prices even higher, or getting fans to spend even more on souvenirs and food and such on each visit.
$300 million in present value over 30 years is going to be about $20 million a year. The sales tax in Chicago is 9.5%. This means that assuming three million fans per year, each Cubs fan would have to spend an extra $70 at every game in order for the city to earn back its investment.
There are some nuances I'm not covering here — in particular, increased ticket prices are subject to the 12% amusement tax, not the 9.5% sales tax, and a renovated Wrigley would likely pay a couple million more per year in property taxes as well — but even if you're expecting an extra $40 or $50 per fan, that's a hefty chunk of change. The alternative, of course, is that fans won't be spending that much, and Chicago taxpayers will simply take a bath. Assuming, that is, that Rahm Emanuel ever decides to take Tom Ricketts' calls again.
from Field of Schemes http://www.fieldofschemes.com/news/archives/2012/06/4992_chicagos_breake.html
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