Playing Hardball

This year, the hot stove has been properly stoked by millions of crisp new Benjamins pledged in long-term player contracts. After three years of determined downsizing, the billionaires who own the game have reverted to type, engaging in a display of collective profligacy rivaled only by the outgoing Congress.

It's not just the traditional New York/Boston nuclear arms race. Perfectly hopeless teams in places like Phoenix, Seattle and Toronto are spending megabucks on mediocre players. This month alone, the top 10 real and reputed stars changing teams have attracted close to $400 million in guaranteed multiyear commitments. Team values and TV ratings have soared. In the year that has seen a commodity trader hoist the World Series trophy, baseball is again a hot commodity, just like gold, oil and steel.

Professional sports are subject to the rigors of the business cycle, and to its benefits when the trend turns up. But there's something else contributing to the latest hardball revival: The lords of baseball have become real pros at the sport of separating non-fans from their money.

They're doing it by forcing basic cable subscribers to buy their telecasts whether or not they care to watch them. They've also perfected the art of wheedling public subsidies for new ballparks.

Take the District of Columbia, which has bad schools, crime-plagued neighborhoods and, apparently, a desperate need to pay the lion's share of stadium construction costs for the carpetbagging Washington Nationals, who were known as the Montreal Expos until they fled that long-abused city last month.

Potential cost of the new ballpark in the District: $440 million to $584 million, depending on who's doing the counting. Popular support: low enough that this deal had to be pushed through a lame-duck City Council before opponents seize the majority next month. Adding another entertainment option for K Street lobbyists and rich Virginians: priceless.

Major League Baseball, which was threatening to take its show to greener pastures as recently as last week, will now be able to sell the badly mismanaged team for more money. But the District is hardly alone. Visit FieldofSchemes.com to understand that there's never a shortage of major-league suckers.

The economic development benefits claimed by pro teams seeking public handouts are often illusory, since in many cases publicly financed stadiums merely crowd out less privileged private development. For instance, Washington's ballpark will be partially financed by higher taxes on businesses, which will presumably then reduce their own investments.

What does this have to do with you and me? Only this: The year ahead could prove taxing enough on the public purse without the added burden of expensive new playgrounds for the affluent.

For starters, an installment payment of at least $80 billion on Iraq will be due in January. And you don't want to know about the cost of making the Bush tax cuts permanent, much less fixing Social Security so that no one is promised less, or asked to contribute more. Fortunately, the president is not counting that particular trillion when he speaks of the need to cut the record federal budget deficit in half over the next five years.

Still, even the president doesn't dispute that money is about to get tight. And one reason it's about to get tight is that the national savings rate has slipped to a spendthrift 0.2%. The coming tax reform is supposed to put this right. Here's hoping that it starts by abolishing the wasteful, hidden subsidy known as the business entertainment deduction.

In the age of the Internet and eBay (EBAY), can anyone really argue that taking a client to a ballgame is an essential cost of doing business akin to buying raw materials or paying wages? Let's stop pretending that a skybox is a business expense. Often, it's nothing more than a lavish perk financed by the taxpayers. If the goal is really to encourage saving over consumption, wouldn't it make sense to abolish a tax shelter for entertainment that distorts consumer preferences before imposing a national sales tax on life's necessities?

Perhaps not to the former baseball owner living in the White House. George W. Bush parlayed a gig as the front man for the Texas Rangers into a $15 million profit, the governorship and his current appointment with history. In the meantime, the taxpayers who financed the Rangers' ugly slab of concrete at his urging have been fleeced. I'll believe the president wants to encourage thrift when the tax code stops subsidizing Omar Minaya.