There is no such thing as a good owner

Last June, the Oakland Athletics were in the midst of yet another terrible season. With an Opening Day payroll of under $57 million, they were dead last in spending—the third time in the past six years that they were last or second to last in total payroll. Their record stood at 19-50, a sad number made sadder by the fact that they had just gone on a six-game winning streak to get there.

Even worse, the door on the team’s home in Oakland had just shut. After years of “will they or won’t they,” it was announced two months earlier that the city and the team had broken off stadium negotiations and that the Oakland Athletics would be moving to a shiny new stadium in the Nevada desert.

Of course, “Las Vegas Athletics” didn’t have quite the same ring to it, and the lame duck franchise naturally struggled to draw fans and interest. By the end of 2023, the team only drew 832,352 fans in attendance; the next lowest team, the Miami Marlins, drew a whopping 40% more fans to their games. Skip ahead to this year for a second, and the team drew an announced attendance of 3,837 on the second game of the season. The visual is striking.

Last year, Oakland fans were desperate; they knew that they were mostly powerless. No matter how passionate they were, they knew their entire fandom mostly hinged on one person: owner John Fisher, who had controlled the club since 2005. With their backs against the wall, on June 13, 2023, disgruntled Oakland fans arranged one of the oddest yet most viscerally effective baseball protests in recent memory: a reverse boycott. A total of 27,759 fans showed up to the game, which outside of an early August weekend series against the cross-town San Francisco Giants, was the most attended game of the year. They wanted Fisher to sell the team to someone who was committed to Oakland.

Most of the baseball world supported the reverse boycott, but it didn’t matter. The two most important people involved—Fisher and MLB commissioner Rob Manfred—were unfazed. Manfred proceed to mock the fans who showed up, quipping that “It is great to see what is this year almost an average Major League Baseball crowd in the facility for one night.” And Fisher? Fisher, whose fortune came from his parents and who has seen the Athletics grow in value from $180 million in 2005 to over a billion dollars today? Well, Fisher stated that he wasn’t going to sell. Later in the year, Fisher told fans that, in fact, it was Fisher who had the worst of it, saying “All that time it’s been a lot worse for me than it’s been for you.”

The city of Oakland wanted the A’s to remain. At the time of the reverse boycott, the city had a concrete proposal in hand and was far down the road of securing funding and planning the logistics of the project. Yet, Fisher bailed. St. Louis residents might remember a similar situation where the city was assembling funding to construct a new waterfront NFL stadium. Owner Stan Kroenke took the team with him anyway.

Fortunately, the Kansas City Royals are blessed to have significantly better ownership than Fisher or Kroenke. John Sherman, majority owner of the Royals, has been particularly lauded for his responsible and aggressive ownership of the team. Sherman pushed for the massive extension of Bobby Witt Jr. and signed the check to make it happen. Furthermore, Sherman is a Kansas City local who treats Royals founder Ewing Kauffman with immense respect and who embodies many of Mr. Kauffman’s best civic and philanthropic traits.

And yet, the Royals (and Kansas City Chiefs, for that matter) are still looking to get public money for a new stadium.

So, what’s the deal, here? Why is this controversial? Certainly, it’s not an Oakland-level farce. Sherman wants to win. It’s immediately evident that he’s a sharp guy who has a vision for the baseball operations side as well as the business side of the club. He’s been willing to open his pocketbooks. By all accounts, he’s been a model owner for the team, and the financial disparity between the rich and less-rich baseball teams continues to grow. Why not give him some taxpayer money to build a stadium and an entertainment district that would put the Royals in a position to succeed for decades?

At the root of this entire issue is something that I don’t often see stated, which is that, at the end of the day, there is no such thing as a truly “good” owner, and this whole process has stemmed from this fact.

Like every other owner, Sherman’s primary goal is to consistently run a profitable business and to protect the overall value and financial health of Major League Baseball. Winning baseball games, being a good civic citizen—those things are secondarily important inasmuch as they feed into the primary goal, which is why baseball teams do those things. But the big picture dollars drive the bus.

Sherman’s peers are the other owners, whose collective goal is to increase their profits and share of the revenue pie. That’s no knock on Sherman. That’s just how it is. And Sherman has acted accordingly.

Remember the Oakland Athletics relocation debacle we discussed above? Well, Sherman and the other 29 owners unanimously voted to approve the A’s relocation to Las Vegas back in November. And remember back in the 2021/2022 offseason when the MLB Player’s Association and the league were trying to negotiate a new Collective Bargaining Agreement? Sherman and the other 29 owners unanimously voted to lock out the MLBPA that December as a stall tactic to put pressure on the union.

With this pattern in mind, you can begin to see why the Royals downtown stadium push has played out how it is. Sherman isn’t just trying to get money for his own shiny new stadium—just as star players push to get bigger contracts to benefit other members of their union, the taxpayer-funded stadium gravy train continues only if the owners follow the playbook to get as much money from whoever will pay them.

Part of this pattern is purposefully misrepresenting the economic benefit of stadiums. Like, we know that they’re bogus at this point. We know that they’re bogus because of a huge amount of academic studies that say taxpayers don’t get a return on stadium subsidies. Deep down, the Royals themselves also know that the math doesn’t add up because they haven’t made their economic study public or available to the media.

At one point in this lengthy stadium process I had reached out to J.C. Bradbury, a well-known stadium economics expert, and asked him what, exactly, was the biggest issue with these “studies” carried out by the teams. Bradbury pointed out that teams looking to create economic impact studies are not actually honestly seeking economic impact—if they did, these impact studies would be carried out by independent economists, after all, and not by consulting firms—and that they would be, you know, public.

As to how these studies are so bad, Bradbury said they consistently fall prey to what’s known in economics as the broken window fallacy, and he did not mince words. “It’s an Econ 101 mistake not to understand it,” Bradbury said. “No one who’s in elected office should be fooled by that. They should be embarrassed by not knowing it.”

Jackson County Executive and Royals Hall of Famer, Frank White, intends to vote no on the April 2 ballot initiative. While White has perhaps been a wee bit obstructionary in this process, his values have been consistent. In his announcement on why he’s voting no, White criticized the Royals and Chiefs for a lack of transparency, as well stating that “our community deserved a thoughtful, equitable, and transparent approach to these public investments” that “prioritized the overall well-being and fiscal health of the county and our residents.”

White is correct, because this whole process has been, frankly (and no pun intended), a disaster. There’s the community benefits agreement kerfluffle. There’s the Chiefs’ unashamed strategy of using money to create better VIP experiences for the already wealthy. There’s the whole stadium location controversy. There’s the displaced and disgruntled Crossroads businesses who are unhappy with the teams’ communication. There’s the fact that, after early voting had started, the Royals were announcing tweaks to the location of the ballpark. There’s the incorrect campaign assertion that this vote isn’t a new tax, which it is.

And wouldn’t you know it—the Royals are making passive aggressive threats that they could move if they don’t get their way:

On Friday, Royals majority owner John Sherman was on Kansas City sports-talk radio station 610 to hammer home that same message, without coming right out and saying that would happen if the tax doesn’t pass. “This is about sustaining ourselves as a major league city,” he said. “There’s lots of cities that would love to have these franchises.” The host did not press him further, leaving listeners to wonder if Sherman would move his team, if things don’t work out the way he’d like on Election Day.

When the The Star asked the campaign committee that question directly, this was the response: “Both teams have been consistent and clear: We are focused on a successful campaign and want to stay in Jackson County. If the vote doesn’t pass, both teams will consider all options.”

The Royals aren’t likely to leave the Kansas City metro. There are three other counties that would probably pony up the money to keep them here.

But here lies the ultimate problem with giving the Royals (and Chiefs) $2 billion of taxpayer money over 40 years: the city doesn’t ultimately get a say in where the team ends up. The Royals will remain the Kansas City Royals for now, but Sherman won’t be the owner forever. And even if he is the owner for the next 20 years, the Royals are a private organization. The ownership group holds the keys.

At the end of White’s statement on voting no, he says that he hopes voters can get a second chance so that “we can do this the right way.” It’s important to remember that there’s still a level of public money that might be agreeable to send to two important Kansas City institutions. But it would have to be on the city’s terms. And no owner is going to allow that without a fight.