Why Chicago shouldn't finance a new stadium for Reinsdorf or Ishbia
In 1981 Bill Veeck and his syndicate put the White Sox up for sale. Veeck’s group no longer had the financial wherewithal to compete with a new era of escalating salaries. The first serious bidder was Edward DeBartolo, a shopping mall developer from Youngstown, Ohio. Major League Baseball was worried about his possible ties to organized crime. He already purchased the San Francisco 49ers in 1977. I guess the standards are different between the NFL and MLB. Eddie Jr. took over and the team has won several Super Bowls.
Next in line was the Farley-Reinsdorf Group. William Farley, a Rhode Island native who founded a private equity firm in Chicago and Jerry Reinsdorf, a Brooklyn native and a rabid fan of the pre-L.A. Dodgers. Reinsdorf founded the tax shelter firm, Balcor. Farley bowed out when the White Sox under Bill Veeck signed free agents, Ron Leflore and Jim Essian for a grand total of $3 million. If that was his pain threshold then it’s a good thing Farley bowed out. Eddie Einhorn, sports TV mogul whose firm, TVS, was bought out by NBC, became the new partner. The sale price was $20 million. That would be $75 million in inflation adjusted terms today.
It wasn’t long before Reinsdorf, who eventually became the chairman of the White Sox, was clamoring for a new stadium at the taxpayer’s expense. In 1986 St. Petersburg approved the building of the Florida Suncoast Dome, a stadium without a team. Reinsdorf used the new Florida stadium as a cudgel against the Illinois legislature, to have the taxpayers finance a new stadium for the White Sox. Otherwise, the Sox would leave for the huge population center of Tampa-St. Pete. With the leadership (?) of Republicrat Governor Jim Thompson the legislature approved it by one vote in 1988.
Like any piece of legislation, the sausage making was ugly. Many different locales were discussed. One of them was along the riverfront in the South Loop very near today’s The 78. An asymmetrical stadium along the riverfront would have been a much better location. The other leader on the Democrat side was the notorious Michael Madigan. He needed to corral the votes of the aldermen near Comiskey Park. That meant that any location other than 35th & Shields was a no go. Of all the new ballparks that went up at the time (Camden Yards, etc.) the new Comiskey Park was the ugliest. The two popular taverns, McCuddy’s and O’Brien’s, were razed and not replaced with anything.
The usual shell game for a new Sox ballpark is to run the financing through the Illinois Sports Facilities Authority (ISFA). That may sound like an arm’s length arrangement, but it is no free lunch. The ISFA issues bonds backed primarily by a hotel tax, and the State of Illinois advances money from the statewide hotel tax each year so ISFA can make its payment. If ISFA’s own collections come up short, the State of Illinois automatically claws back the difference from Chicago’s share of state income-tax revenue. That is the Local Government Distributive Fund (LGDF). In other words, when tourism dips, or projections simply miss, city taxpayers backstop the deal, not the White Sox. COVID wiped out tax revenues for a couple of years. As a result, in Fiscal Year 2022, $27.4 million was withheld from the City’s LGDF because hotel-tax revenues were insufficient. That’s real cash that Chicago couldn’t use for core services.
The trend line makes this risk more than theoretical. Analyses of ISFA’s schedule show annual debt service rising as the decade progresses. That’s tens of millions of dollars each year that must be covered before a single police shift or CTA repair is funded. In 2023, Crain’s reported Chicago had to plug a hotel-tax gap to cover existing stadium debt; in 2024, it detailed how ISFA payments step up toward the end of this decade. Piling a new Sox ballpark onto this structure would either extend those obligations for decades or increase the annual bite and both are bad outcomes for Chicago, a city that needs fiscal flexibility.
Proponents often argue that, because the money would come from dedicated sources hotel taxes, a new special sales-tax district around The 78, or tax-increment capture (TIF), it’s not really a “subsidy.” That’s sleight of hand. Earmarked revenue is still tax revenue that could fund transit reliability, neighborhood safety or other miscellaneous uses. In 2024, editorial reporting in the Sun-Times made clear one version of the Sox proposal envisioned diverting $400 million in state sales-tax growth from The 78 into stadium debt paydown, while leaning on ISFA’s hotel-tax bonds for the rest. That means extending existing stadium debt decades further into the future. Whether those dollars come from a hotel room, a restaurant tab, or a retail purchase, they are public dollars redirected away from broader public needs. Stadium financing doesn’t create new revenue; it merely shifts away money that Chicago and Illinois would otherwise have.
Okay, those are the costs but what about the benefits? There are dozens of studies that have covered the cost-benefit analysis of the public financing of new sports arenas or stadiums. They all have one thing in common. The benefit almost never equals the cost. In a University of Chicago IGM poll a supermajority agreed that subsidies for pro-sports venues cost taxpayers more than any local benefits generated. A 2023 policy retrospective by economists J.C. Bradbury, Dennis Coates, and Brad Humphreys reaches the same conclusion after surveying modern studies: expected public benefits are meager and routinely oversold.
When claims are tested against real data, new stadiums mostly shift entertainment spending from elsewhere in the metro area rather than create brand-new activity. There are intangible benefits. A city the size of Chicago should have two MLB franchises. Of course, that is the opinion of a rabid sports fan. Reinsdorf’s threat to leave for greener pastures in Florida worked in 1988. This time around he has had a flirtation with Nashville.
Look at the value of MLB franchises.
MLB team valuations – 2025 (Forbes)
1. New York Yankees $7.10B
2. Los Angeles Dodgers $4.80B
3. Boston Red Sox $4.50B
4. Chicago Cubs $4.10B
5 .San Francisco Giants $3.70B
6. New York Mets $2.90B
7. Los Angeles Angels $2.70B
8. Atlanta Braves $2.60B
9. Philadelphia Phillies $2.575B
10. St. Louis Cardinals $2.55B
11. Houston Astros $2.25B
12. Texas Rangers $2.225B
13. Seattle Mariners $2.20B
14. Toronto Blue Jays $2.10B
15. Chicago White Sox $2.05B
16. Washington Nationals $2.00B
17. San Diego Padres $1.75B
18. Baltimore Orioles $1.713B
19. Milwaukee Brewers $1.605B
20. Colorado Rockies $1.475B
21. Detroit Tigers $1.45B
22. Minnesota Twins $1.39B
23. Arizona Diamondbacks $1.38B
24. Pittsburgh Pirates $1.32B
25. Cleveland Guardians $1.30B
26. Tampa Bay Rays $1.25B
27. Kansas City Royals $1.20B
28. Cincinnati Reds $1.19B
29. Oakland Athletics $1.18B
30. Miami Marlins $1.00B
Justin Ishbia will take control of the White Sox in 2029, assuming Reinsdorf’s health holds up until then. The White Sox are in a similarly ghoulish state Bears fans were in regarding Virginia Halas’ health updates. Ishbia walked away from taking controlling interest in the Minnesota Twins after looking at their books. The Twins have been a better run organization than the Sox but are worth over $600 million less. The disparity in franchise value between the two franchises will undoubtedly grow once Ishbia takes the reins.
In 1996, the Bulls and Blackhawks moved into a new arena financed by the respective teams’ owners. That would be Jerry Reinsdorf and Bill Wirtz. There is no reason to think that Jerry can’t afford it. That $20 million purchase is now worth $2 billion, a 100-fold increase. Chicago should provide reasonable infrastructure improvements. That is why cities were formed. The total financial commitment from Chicago and Illinois for the building of a new stadium for the Sox should be exactly $0.00.
