Top Menu

In Pittsburgh, the high costs of losing

Pittsburgh PiratesEveryone know that most MLB teams win at the box office when the team wins on the field. But losing teams can have an impact past the ballpark and throughout the local community, as a deep dive into the Pittsburgh economy revealed.

The cardinal rule in long-term planning for any sporting venue of any kind is not to assume the best-case scenario: fans will generate more revenue at the ballpark (tickets, per caps) when a team is winning, but no team can consistently guarantee a winning record. The goal, really, is to be consistently competitive, unless you’re the Dodgers or the Yankees.

In a smaller market like Pittsburgh, however, there seems to be more at stake when it comes to winning and revenues generated both at the ballpark and within the greater community. The Pirates are in a down cycle, on pace for a 100-loss season. The team knows how to budget during a down period–the team’s 2021 payroll of $54.5 million is considerably below the MLB $130 million average–and revenue reductions do reverberate through the local economy during the down cycle, ranging from area vendors to local government units. Again, the key is bring competitive: St. Louis and Colorado are among baseball’s top 10 draws in 2021, and both teams have been competitive enough to keep fans interested, even though neither team is above .500 as of today. (Similarly, two of MLB’s best teams, the Oakland A’s and the Tampa Bay Rays, are among the sport’s worst draws.) From the Pittsburgh Post-Gazette:

Perhaps there’s no better bellwether for how the Pirates’ performance affects the economics off the field than the city’s amusement tax. The 5% tax is levied on every ticket sold for a game at PNC Park.

In 2015, when the Pirates enjoyed their best regular season record (98-64) since 1991, they generated $3.94 million in amusement tax revenue.

By the time they staggered to a 69-93 record in 2019 — the year before the pandemic — tax revenue had plunged to $2.2 million. That’s nearly $900,000 less than it was in 2018 when the Pirates finished with an 82-79 record.

The issue isn’t quite as clear-cut as the Post-Gazette would have us believe, of course: even when losing the Pirates have a definite economic impact on the Pittsburgh community. And using 2021 as a proxy for anything is misleading–we are in the midst of a COVID-19 pandemic, and that is having a definite effect on how much folks spend and whether they are heading out to the ballpark. (We can see that across pro baseball; no MLB team is averaging 30,000 or more per game.) Still, the story is a good read and valuable when planning ahead.

, ,