A new downtown ballpark is at the heart of a project to bring a Major League Baseball team back to Montreal, Canada. Following a thorough analysis of the results of a feasibility study, this is the conclusion of a group comprised of the Board of Trade of Metropolitan Montreal, the Montreal Baseball Project, EY and BCF LLP.
Montreal wants to build park to attract MLB back
A new downtown ballpark is at the heart of a project to bring a Major League Baseball (MLB) team back to Montreal, Canada. Following a thorough analysis of the results of a feasibility study, this is the conclusion of a group comprised of the Board of Trade of Metropolitan Montreal, the Montreal Baseball Project, EY and BCF LLP. Warren Cromartie, President and Founder of the Montreal Baseball Project, said:
Based on several realistic assumptions, including broadcasting revenues and ticket sales similar to MLB averages, baseball’s return to Montreal is definitely feasible. Keep in mind that Montreal is currently the largest market in North America without a Major League Baseball team.
According to an analysis of MLB trends and the opinion of architectural firms Populous and Provencher Roy, building a new stadium near downtown would be the best option for Montreal. This would ensure the stadium is easily accessible by public transit and reach more business clientele. Sylvain Vincent, Managing Partner for Quebec at EY said:
Three of the sites that were studied meet our criteria: the land adjacent to the Bonaventure Expressway, the Wellington Basin, and the area around the Montreal Children’s Hospital. What’s more, building a stadium will have a positive impact on the urban development of each of these locations.
In addition to having the capacity for approximately 36,000 people, the feasibility study shows that the new stadium will benefit from being an open-air facility. Vincent continued:
Given that the cost of building a retractable roof varies between $150 million and $180 million, we have concluded that doing so would undermine the financial viability of the stadium. Note also that the Twins’ open-air stadium in downtown Minneapolis, which has a climate comparable to ours, shows that this type of stadium could be suitable for Montreal.
Michel Leblanc, President and CEO of the Board of Trade of Metropolitan Montreal, said:
The feasibility study shows that Major League Baseball can be profitable in Montreal. For the project to now become a reality, we need private and public champions to stand and commit to working on it. The road will be long, but we’ve successfully completed an important step.
The total cost of this project is estimated at $1.025 billion, which includes $500 million to build a new stadium and $525 million to acquire an existing team. It’s also important to note that the majority of MLB teams use a hybrid funding model that requires both private and public involvement. Leblanc suggested a possible public private funding split:
According to this model, the team owner typically funds 67% of the project, or $690 million, while government funds 33%, or $335 million. The amounts required are clearly significant. We estimate, however, that this project can offer private investors an interesting business opportunity and satisfying returns, especially if they can combine this asset with sports content broadcast activities. Furthermore, to the extent that the government gets involved, it would recover its investment in eight years through the QST on stadium and team sales activities, income taxes paid by companies and workers involved in the baseball team project, as well as taxes induced by them, on top of taxes on players’ salaries. Once its investment is recovered, the government’s cumulative earnings are estimated at $1.188 billion for the following 22 years.
The economic benefits of this project would be significant, as in addition to creating thousands of jobs to build and operate the stadium, it will have a positive impact on Quebec’s GDP. In fact, according to the Conference Board of Canada, the impact on the GDP would be $130 million annually during the construction of the stadium, and $96 million when it’s in operation.
According to a Léger Marketing survey of 1,589 Quebecers and 392 representatives of corporations of all sizes located in the Montreal area, 69% of the general public and 81% of businesses support the idea of bringing a Major League Baseball team back to Montreal. As well, Léger Marketing notes that 40% of the population would be very interested in purchasing tickets to see an MLB game in Montreal and season tickets would represent approximately 60% of all tickets sold per game. Finally, the average projected attendance would be between 27,600 to 31,600 people per game