Pirates, Phillies economic impact reports inform future public stadium financing

(The Center Square) – With leases for the Pittsburgh Pirates and Philadelphia Phillies coming to an end in the next seven years, political positioning has already begun on how the state will handle costs associated with a new stadium.

Reps. Tim Bonner, R-Grove City, and Jim Gregory, R-Hollidaysburg, requested economic impact reports on each team from Pennsylvania’s Independent Fiscal Office, which said that the Pirates drove $254 million in net direct spending in 2023 while the Phillies led to $525 million in spending that doesn’t go back to the team or Major League Baseball.

Teams and politicians often use economic impact reports to justify spending large amounts of taxpayer funds on new stadiums and renovations but Bonner and Gregory said that the reports show the Pirates need to spend more in order to justify a public investment in a new or renovated stadium when the current lease runs out in 2030.

Stadium projects often need to begin four or more years before they are completed.

“If the taxpayers are going to put money into the stadium, the Pirates need to also invest in PNC Park, as well as put a worthy product on the field,” Bonner said in a statement. “Taxpayers deserve more than the bare minimum, and the report demonstrates how sustained on-field success can increase fan attendance, which is how a stadium drives the local economy.”

Economists say that economic impact reports are not valid. They don’t follow economic principles such as displaced spending, spending that would have occurred elsewhere in a city or state without the team and stadium, or expenses related to a project.

“Not much interesting to see here,” said economist J.C. Bradbury of Georgia’s Kennesaw State University. “If you looked at how much spending was associated with any business you'd see a positive number.”

Bradbury said the state office followed directions and likely did the report it was asked to complete.

PNC Park was approved in 1999 with a $75 million state grant and $147 million in Allegheny County taxes toward a $260 million project, meaning the Pirates contributed just $40 million.

“I've waited to see this data for as long as anybody to show what we thought was true is real and now quantified for taxpayers, hospitality businesses, critics of the 1999 stadium funding deal and supporters,” Gregory said. “Philly will be pleased, and Yinzers will point out the Bucs need to do better.”

The reports included a graphic on team payroll compared to number of wins, with the Pirates spending $76 million for 76 wins with an average attendance of 20,100 in 2023 while the Phillies spent $245 million on player salary and won 90 games with an average attendance of 37,700 fans.

The Pirates responded to the report, saying the graphic on wins compared to Major League payroll does not include all of the necessary context.

"The report acknowledges that there is a myriad of other factors that impact winning percentage, yet those factors were neither analyzed nor incorporated into the report," the Pirates wrote. "Focusing solely on Major League payroll is limiting because there are countless other investments that clubs make to develp a winning team."

The Phillies responded to the report , claiming the teams believes the report undervalues the impact of the team “due to conservative assumptions.”

The team said that it has spent $178 million over the past 10 years on Citizens Bank Ballpark, including a new video scoreboard in 2023.

The state put $170 million in grants and Philadelphia contributed $304 million in taxes toward the construction of both Citizens Bank Ballpark and the Eagles’ Lincoln Financial Field, which opened in 2003 and 2004.

The Phillies’ lease runs through 2031 with a series of five-year renewal options.