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Shocker: public dollars given to a baseball team are being used in a questionable manner

Aug 1, 2012, 8:22 AM EDT

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Via Deadspin, here’s an investigative report from 810 WHB radio in Kansas City, detailing how millions of public dollars given to the Kansas City Royals for repairs and maintenance to Kaufman Stadium have not been used for repair and maintenance. Indeed, 91% of it has been used for things besides maintenance:

The Royals have received at least $12.7 million from taxpayers that was approved by the Jackson County Sports Complex Authority as part of the RMMO provision of the team’s lease with the county and spent it on full and part time employee salaries, security, cable tv, first aid, utilities, telephones and even payroll taxes.  By using the money for payroll taxes, the team literally collected taxpayer money to pay their own taxes. The Sports Authority approved the expenses and operates separately from Jackson County government.

This is frightening. Not just because it’s kinda fishy, but because it means that tax payers may be indirectly paying Jeff Francoeur nearly $7 million to hit .238/.275/.366 this year!

Is it illegal? No: there is a provision in the Royals lease which allows them to use the fund to pay “Event Day Operations.” 810 WHB has a detailed breakdown of what the Royals are spending this money on. I suppose a bit of it actually goes for day-of-event expenses in the common use of the term. The rest of it: not really, but I’m assuming the lease’s definition of such operations is pretty expansive.

But the notable part for me: those “Event Day Operations,” however defined, were not approved by taxpayers. The fund, when put before voters, literally was just for stadium upkeep. The Royals negotiated the expanded uses for that fund later, with the Sports Authority, and without voter approval.

A baseball team making any effort it can to have its operations underwritten by taxpayers with minimal voter say-so?  I am SHOCKED.

(via Deadspin)

  1. deathmonkey41 - Aug 1, 2012 at 8:26 AM

    What the hell? Do they think they’re the government or something? How dare they waste taxpayer money without being elected officials!!!

  2. Rich Stowe - Aug 1, 2012 at 8:28 AM

    sounds like Jeffrey Loria also owns the Royals

  3. tfbuckfutter - Aug 1, 2012 at 8:40 AM

    While that is galling on the surface, is there evidence that they AREN’T spending at least that much in repairs and maintenance and/or are neglecting repairs and maintenance?

    Because if they are still maintaining the stadium, just from a different pool of money, it’s not really an issue. Kind of like if you pay for your coffee with the money in your left pocket instead of the money in your right pocket.

    • Craig Calcaterra - Aug 1, 2012 at 8:50 AM

      It appears as though the repairs that need to get done are getting done from these funds. It’s just that there is more money than they need in that fund to do repairs and are using it for other things.

      Which, technically, is fine, because they got the Sports Authority to allow them to do it. But it’s a bait and switch by the Sports Authority and the Royals, because I’m guessing they never would dare to put a vote out to citizens asking them to underwrite team operations.

      • deathmonkey41 - Aug 1, 2012 at 9:09 AM

        This all could be worse- the government could have floated them a $527 million dollar loan and then they could have gone bankrupt and laid off all their employees shortly after.

      • bigleagues - Aug 1, 2012 at 11:24 AM

        This takes the slight of hand attempted by the Fenway Sports Group in attempting to secure public dollars for infrastructure improvements around Fenway to a whole new level.

        The Red Sox were caught before funding was ever approved, and then needed to negotiate a much less favorable deal in obtaining less public funding.

      • bigleagues - Aug 1, 2012 at 11:28 AM

        I’d like to see a wily politician hellbent on making a point about public/private partnerships step up and demand that the taxpayers should have an ownership stake in the Royals in return for this rather this rather liberal (small l not big L) use of government to generate revenue for a private enterprise.

        Of course that would likely mean the Royals would have to release their financials publicly and, well, Bud wouldn’t let that happen would he?

      • deathmonkey41 - Aug 1, 2012 at 12:34 PM

        bigleagues – Aug 1, 2012 at 11:28 AM
        I’d like to see a wily politician hellbent on making a point about public/private partnerships step up and demand that the taxpayers should have an ownership stake in the Royals in return for this rather this rather liberal (small l not big L) use of government to generate revenue for a private enterprise.

        Trust me- tucked away in all this, some politician’s brother/sister/cousin/mistress is getting some sort of kickback- either in way of a no-show job or was awarded some contract with the Royals.

    • Jeremy Fox - Aug 1, 2012 at 8:54 AM

      If you tell me that you really, really need 12.7 million dollars for coffee because otherwise you’re tired all day, and for some foolish reason I believe you, you have 12.7 million more in your pockets than you had before. And if you then go and spend the money on something else–especially something I wouldn’t have given you money for in the first place–you are not just spending your own money from your left pocket rather than your own money from your right pocket.

      • tfbuckfutter - Aug 1, 2012 at 9:15 AM

        My point is, if you have $5 in one pocket and $5 in the other pocket, regardless of the source (one is public coffee fund, one is ticket sales) and you spend $5 on a coffee, regardless of which pocket you take it out of, you are taking $5 of the $10 you have.

        Craig, Thank you for the response.

      • Jeremy Fox - Aug 1, 2012 at 9:26 AM

        And my point is that the voters wouldn’t have given them that money in the first place if they said they just wanted to spend the money on whatever.

        Yes, money is fungible, but that’s not the argument-ender you seem to think it is. Take your argument to its logical conclusion. If you were right, then there’d be no point in ever giving anyone money for a specific purpose, or in complaining when they use it for a different purpose.

      • tfbuckfutter - Aug 1, 2012 at 9:29 AM

        It’s not spending the money on “whatever”.

        I was just saying they may be PAYING for those things JUST FROM ANOTHER POOL OF MONEY. It’s just an ACCOUNTING thing.

        Jesus.

      • Jeremy Fox - Aug 1, 2012 at 9:34 AM

        So if you give your kid some money and tell him to get a haircut, and he spends it on drugs, you’re totally cool with that so long as he paid for the haircut from another pool of money?

        Jesus.

      • tfbuckfutter - Aug 1, 2012 at 9:43 AM

        Are you really that dense?

        If I give my kid money for a haircut, and he ALREADY has money to buy drugs with and he DOES BOTH does it matter if the $10 I gave him went toward the $10 haircut or the $50 drugs?

        If the Royals collected $12 million in tax payer money and $100 million in ticket sales, and their accounting shows that they only spent $5 million of the tax payers money in maintenance and repairs, but $7 million in maintenance and repairs also came out of the $100 million pool….IT WORKS OUT THE SAME AND NO ONE HAS BEEN DEFRAUDED.

      • cleverbob - Aug 1, 2012 at 9:49 AM

        Only if he shares.

      • Jeremy Fox - Aug 1, 2012 at 9:51 AM

        From the investigative report:

        “Records show the Royals needed only $1,540,390 for actual maintenance and repairs since 2008 with the biggest expenses being supplies, Hall of Fame reconfiguration and waterproofing. The remaining RMMO Fund balance as of July 1, 2012 was around $5.6 million”

        So you’re wrong even by your own silly “money is fungible so it can never be misspent” standard.

      • tfbuckfutter - Aug 1, 2012 at 9:59 AM

        Reread my initial post, Jeremy (and try harder to comprehend it)….

        I didn’t say they DIDN’T misspend money. I ASKED if there was evidence that they didn’t spend AT LEAST that much on the repairs and maintenance possible FROM A DIFFERENT REVENUE STREAM.

      • Jeremy Fox - Aug 1, 2012 at 10:04 AM

        Thanks for admitting that you’re wrong either way.

        And next time click the link yourself if you have a question you want answered.

      • tfbuckfutter - Aug 1, 2012 at 10:17 AM

        You’re a very odd individual.

        And, why would I care about reading a financial report on the Royals when I can point something out, ask a question, and have someone useful like Craig provide an answer before some troll goes off on a tangent because he doesn’t understand the concept of one $5 bill being the same as another $5 bill if they both belong to the same person.

      • Jeremy Fox - Aug 1, 2012 at 10:39 AM

        I didn’t read any financial report. I clicked the link Craig provided in the post. As you say, Craig is useful. Here, he provided a link which, if you’d clicked it, would’ve saved you from having to ask your question in the first place.

        And Craig’s answer to your question is the same as mine: it’s a bait and switch by the Royals and the Sports Authority, the effect of which is to obtain for the Royals public money the voters *otherwise would not have given them*. So the Royals end up with *more* money than they’d have had otherwise. They end up with *more* “$5 bills” then they’d have had otherwise, because as Craig said, they’d have never dared to have a vote asking people for money to underwrite team operations. It’s not an issue of what the Royals spend which $5 bill on, it’s an issue of how many $5 bills they got and how they obtained them. Why you think Craig and I are saying different things is beyond me.

      • tfbuckfutter - Aug 1, 2012 at 10:53 AM

        Actually, Craig’s response was NOT the same as your’s. His response was that the maintenance and repairs budget did NOT meet the taxpayer contribution (a point not addressed in his writeup, which is all I cared enough about to read).

        Your response (and followups) was akin to “It doesn’t matter if they spent $12 million on repairs and maintenance unless the money came directly from the account the taxpayer money went into.”

        That is not only markedly different, but a ridiculous point.

      • dadawg77 - Aug 1, 2012 at 11:43 AM

        tfbuckfutter I see your point on asking the question. But the fact the Royals were spending the money on items besides upkeep, tells me they didn’t spend 12.7 million on upkeep in total. They would have accounted all spending for upkeep as being funded by the tax payer pool of money since why risk having a feces storm kick up by spending tax payers money on other items while spending 12.7M on upkeep.

      • Jeremy Fox - Aug 1, 2012 at 12:09 PM

        tfbuckfutter: I will let our respective thumbs up and down counts do my talking now.

  4. Paul White - Aug 1, 2012 at 8:42 AM

    Just a quick note of interest…that particular radio station used to own the radio broadcast rights to Royals games but lost them to a competitor a couple of years ago. They also had one of their reporters banned from press access by the Royals at one point, essentially for being a jerk during a press conference. The primary talking head on that station is also part owner of it, and once held a walkout protest at a Royals game at a publicity stunt about the Glass family’s spendthrift nature.

    None of which is to say that what Royals have done with the money is proper or not. Just hoping to explain why a sports-only radio station is doing “investigative reporting”. It’s fair to say they have an axe to grind with the Royals.

    • Craig Calcaterra - Aug 1, 2012 at 8:45 AM

      Motivations are always interesting, but in this case I don’t see how they matter for what appears to be a fact-based report.

      • Paul White - Aug 1, 2012 at 8:55 AM

        Well it matters in the spin. As tfbuckfutter has noted, it’s entirely possible that the fund of money in question wasn’t needed for maintenance because it’s a newly renovated stadium, and when the team recognized that the funds were going to sit idle, asked the Sports Authority for permission to use them elsewhere. They got approval and did so, all within the rules of their agreement. Did the radio station pursue that question properly and present it fairly? It’s hard to say, the author didn’t mention that in the report on the station’s website. And by the way, the report’s author is the part-owner who held the publicity stunt and had his station lose the team’s broadcast rights. So draw your own conclusions.

      • dadawg77 - Aug 1, 2012 at 11:59 AM

        Paul, one thing is who are the people on the Sports Authority? Here in Chicago, the people are political hacks who enjoy access to the sports teams and give generous deals to the team. Looking at the commissioners, one see plenty of conflicts of interest. The general partner of the Bud distributor is on it, not sure but I can guess what beer is served at Kaufman? There are other but that one is the most glaring. Point is allowing an unelected board to over rule a public vote just makes that vote a mockery.

    • Jeremy Fox - Aug 1, 2012 at 8:56 AM

      And we care about the station’s motivations why? I don’t care if they investigated the Royals because the voices in their heads told them too. I care if the facts their investigation turned up are true. Which has nothing to do with the motivations of the investigators.

    • sportsdrenched.com - Aug 1, 2012 at 10:12 AM

      They also had one of their reporters banned from press access by the Royals at one point, essentially for being a jerk during a press conference.

      Let’s tell the whole story. KCSP (Rhonda Moss) also had a reporter banned during the same event. The reporter you mentioned from WHB, Bob Fescoe, now works for KCSP.

      Either way. It’s good to have competing radio stations isn’t it? KCSP is the Minister of Information for the Royals, and WHB is the Minister of Information for the Chiefs.

      Every media outlet in Kansas City should have an axe to grind with the Royals. They’ve been the worst MLB franchise during their owners tenure all the while taking public money for their stadium renovations. SOMEONE needs to hold the Glass Family accountable for their fleecing of tax dollars.

      • Paul White - Aug 1, 2012 at 11:43 AM

        Telling the whole story was my only reason to bring up the radio station owner’s motivation in the first place. Because while it would be nice to hear “investigative report” and be safe in assuming that it was a real investigation, fairly conducted and presented with no agendas, that’s probably not the case.

        None of which is to condone the Royals…if it was an honest mistake where they asked for more maintenance funds than were needed, it would have been nice if they’d returned the difference rather than seek to spend it elsewhere. But for all we know, that actually was part of the conversation they had with the Sports Authority, and just wasn’t reported in the article. Because, again, the guy who wrote it does have his own agenda, which includes being the owner of a business that was jilted by the Royals rather than being just some altruistic ethics-laden fresh j-school grad.

  5. randall351 - Aug 1, 2012 at 9:11 AM

    I agree with the fact that the motivations shouldn’t really matter as long as they aren’t falsifying any information. It doesn’t matter what it took for them to start the investigation.

    On the other hand it is nice to see one of the local radio stations doing something besides bending over backwards to make the Royals organization look infallible like the one who has the radio rights does now, which I enjoy listening to more than WHB. I understand that you don’t want to bite the hand that feeds you, but to take away your objectivity for the rights to the games I think is a bit much.

  6. sfm073 - Aug 1, 2012 at 9:20 AM

    There really needs to be a federal ban on giving money to sports teams.

    • purnellmeagrejr - Aug 1, 2012 at 9:30 AM

      Are you trying to imply that sports teams aren’t people?

  7. rathipon - Aug 1, 2012 at 10:21 AM

    Money is fungible. Unless they spent less than 12.7 million on stadium repair and maintenance during the applicable time period, I don’t see how you conclude that the taxpayer money went towards other inappropriate expenditures. It really doesn’t matter which bank account the money came out of….

  8. rathipon - Aug 1, 2012 at 10:24 AM

    Missed the above comment that they only had 1.5 million in maintenance and repair expenses since 2008. I find that pretty amazing for a stadium. But if true, then the fungibillity of money argument is irrelevant.

  9. paperlions - Aug 1, 2012 at 10:44 AM

    Welfare for billionaires, nothing new.

  10. yarguy - Aug 1, 2012 at 11:06 AM

    Obviously, tfbuckfutter and rathipon have never dealt with public money. Public money isn’t as “fungible” as they think. Real governments with real auditors (and that does not describe the Sports Authority) look askance when you claim to have spent money from “other accounts” that should have come from the money they gave you. That’s because they suspect that you didn’t really spend anything from those other accounts – and they are usually right. And, of course, in this case the whole thing is moot – as tfbuckfutter and rathipon could have easily figured out by doing a little work clicking – because the Royals asked permission to spend it elsewhere and the spineless Sports Authority caved.

    • tfbuckfutter - Aug 1, 2012 at 11:33 AM

      That’s all well and good, and you make a good point about accounting for public money….I was only saying it MAY not be nefarious IF they were actually spending the correct amount of money in the way it was intended, regardless of the source of the money because it all balances.

      Is that what happened? No, apparently (and unsurprisingly) not….I was just saying IF.

  11. sictransitchris - Aug 1, 2012 at 11:08 AM

    A former CEO of Wal-Mart and owner of a club valued at 354 million dollars can barely afford to put a product on the field let alone pay for the general repair and upkeep of his stadium. Poor poor soul. I’ll be passing around the collection plate.

  12. rcali - Aug 1, 2012 at 11:09 AM

    So the voters allowed it to pay for ONLY stadium repairs and when the measure was approved, it was changed. Kind of sets a dangerous precedent doesn’t it? I’m sure this is only the tip of the iceberg.

  13. gloccamorra - Aug 1, 2012 at 11:28 AM

    Well, the money was voted for maintenance and repair and not as much as estimated was needed, and the Authority authorized use of the remainder for operational expenses. It’s not what the voters voted for, but a valid use of taxpayer money, if the money was spent on other stadium operations normally taxpayer funded.

    I’ve worked for the government and done estimating, and a lot of estimates can’t be quantified exactly – foundation work is guesswork until you literally start digging, for instance. The listing of expenditures don’t always tell you what they were for. Full and part-time workers – could that be stadium cleanup? Security, first aid (supplies? equipment?), and utilities/telephone are all part of operations that may have been the responsibility of the Authority and were handled by the club instead. Even “payroll taxes”, if they covered people normally employed by the Authority (likely security) would be acceptable.

    You really can’t tell from this report if the club was assuming costs that weren’t its responsibility and were being compensated for them. As far as public subsidies go, it’s small spuds compared to the largesse demanded elsewhere.

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