This article claims sports stadiums have about the same economic impact on a community as a Stein Mart store....
QuoteThere are a lot of things economists disagree about, but the economic impact of sports stadiums isn't one of them.
"If you ever had a consensus in economics, this would be it," says Michael Leeds, a sports economist at Temple University. "There is no impact."
Leeds studied Chicago – as big a sports town as there is, with five major teams.
"If every sports team in Chicago were to suddenly disappear, the impact on the Chicago economy would be a fraction of 1 percent," Leeds says. "A baseball team has about the same impact on a community as a midsize department store."
That's for a sport with 80 home games a year. NFL teams only play eight regular season games. Still, politicians love building sports stadiums.
"Yes, we will have the NFL back in Los Angeles!" shouted Carson City Councilwoman Lula Davis-Holmes at a rally last month, celebrating plans for a new stadium housing the Chargers and Raiders that would be built in this small city 15 miles south of downtown.
"Stand to your feet and say we want the teams here, for jobs, for revenue, and for our young people," Holmes said.
Down the freeway, next to Los Angeles International Airport, Inglewood is trying to stay one step ahead of Carson. So last month, its City Council approved plans to build the most expensive stadium in U.S. sports history.
Inglewood – one of poorest neighborhoods in LA — projects a football stadium would generate more than $800 million dollars worth of economic activity a year.
But Victor Matheson, a sports economist at College of the Holy Cross, is dubious.
"A good rule of thumb that economists use is to take what stadium boosters are telling you and move that one decimal place to the left, and that's usually a good estimate of what you're going to get," Matheson says.
Economists say the biggest reason sports teams don't have much impact is that they don't tend to spur new spending. Most people have a limited entertainment budget, so the dollars they are spending when they go to a game is money they would have spent elsewhere, maybe even at a restaurant or small businesses where more money would have stayed in the community. Plus, Matheson says, rather than draw people to a neighborhood, games can actually repel them.
"Sporting events can cause significant crowds and congestion that can cause people to stop going to other events in the area," he says.
That's part of the reason why a 2003 analysis on Staples Center commissioned by the Los Angeles City Controller included a surprising finding.
"Economic activity in Inglewood actually increased when the Lakers left town," says Matheson.
That is, sales tax revenue went up when the Lakers and Kings moved to Staples Center in 1999.
Full article: http://www.marketplace.org/topics/business/are-pro-sports-teams-economic-winners-cities#.VQuKaw8_5c0.linkedin
How to Stop the Stadium Wars (http://www.slate.com/articles/business/moneybox/2015/03/obama_s_stadium_plan_would_limit_public_financing_of_sports_complexes_could.html)
Both President Obama and the Koch brothers agree that tax-free government bonds for stadiums are wasteful government spending. I heartily agree.
Quote from: thelakelander on March 25, 2015, 06:42:37 AM
...sports stadiums have about the same economic impact on a community as a Stein Mart store....
Sounds about right.
I love the Jags and Suns but sports is entertainment and should stand on its own, competing with other forms of entertainment for consumer dollars. The sports venue business is just one of the many activities that government should not be engaged in. It's crony capitalism, meaning government is subsidizing or using regulation to protect a business or industry from the challenges of the free market.
QuoteIf you ever had a consensus in economics, this would be it," says Michael Leeds, a sports economist at Temple University. "There is no impact."
Leeds studied Chicago – as big a sports town as there is, with five major teams.
"If every sports team in Chicago were to suddenly disappear, the impact on the Chicago economy would be a fraction of 1 percent," Leeds says. "A baseball team has about the same impact on a community as a midsize department store.
This is either an atrocious level of analysis by the economist or poorly written article. Of course losing a sports team in a highly diversified and large economy like Chicago would not have a major impact on the city's overall economy. Just like a stock portfolio with 100 stocks doesn't dip when one performs poorly. I also think that anyone who has spent a game day in Wrigleyville would strongly disagree that the economic impact of the Cubs is the equivalent of a department store. I love that they also gloss over the impact moving the Staples Center and the subsequent LA Live development has had in revitalizing downtown LA.
Those cases really aren't that analogous to Jax though. The economic impact of the Jaguars, Bills, Packers, Thunder, Panthers, etc are likely much more significant to their local economies than teams in NYC, Chicago, LA, etc. Improving our local economy is largely predicated upon bringing in outside businesses and wealth. Without the Jags and The Players, I don't think Jax would be nearly as visible on the radar of outsiders. Would we have gotten Deutsche Bank or other corporate relocations? Would all the wealthy people that retire to PVB, Amelia, and the Beaches move here? Perhaps, but maybe not to the extent we have. We simply can't quantify the overall impact it has on our developing economy.
I don't believe we should bend over backwards for sports and personally would like to see Jacksonville become a more cultured city, but I think its asinine to believe the Jags have the same impact on our economy as a department store.
Quote"If every sports team in Chicago were to suddenly disappear, the impact on the Chicago economy would be a fraction of 1 percent," Leeds says. "A baseball team has about the same impact on a community as a midsize department store."
Weird article.
Can't seem to make up his mind whether he's talking about stadiums, or sports teams overall.
I think we can all agree that public subsidies for sports stadiums have gotten out of control, but economists have a tendency to have a hard time seeing the forest from the trees. There is no universe in which the Cubs, Bulls, Bears, White Sox, and Blackhawks have not had an aggregate positive economic impact on the city of Chicago over the last 100 years. Sure, wipe them all off the planet and the immediate economic impact might only be a fraction of 1%, but you can't look at these cultural institutions in a vacuum. Chicago's vibrant sports scene is priceless in terms of the quality of life appeal of the city. Take away the sports, and jobs start going elsewhere. Tourism plummets. Neighborhoods like Wrigleyville decay. Salaries go down.
Personally, I find Inglewood to be a pretty bad example too. Correlation does not equal causation. The gentrification of Inglewood follows a much larger trend in Los Angeles that began in the Latino neighborhoods before spreading into African American communities. With its location – less than ten minutes from LAX and the beach, and a modest trip into downtown – the upswing was inevitable. It doesn't hurt that the Metro built a commuter rail line directly through the heart of Inglewood either.
Cities like Jacksonville and Miami are doing the right thing updating their existing outdoor NFL stadiums. Refurbishing perfectly fine outdoor stadiums, in contrast to the overblown talk of 'building a new stadium every 20 years'. EverBank Field will be the home of the Jags indefinitely, don't believe the hype of 'the next 10-20 years another Jags stadium will be built'. Many cities unfortunately have these indoor dim austere environments (ie the Edward Jones Dome) and they need new stadiums, like ATL and MIN are doing.
maybe, but there isn't a mayor in this country that wants to lose a team on his watch.
Quote from: fsquid on March 25, 2015, 10:42:57 AM
maybe, but there isn't a mayor in this country that wants to lose a team on his watch.
That's the same race to the bottom rationale that leads to Bass Pro/Cabela giveaways and corporate HQ relocation blackmail. What will it take us to get out of this mindset?
Quote from: JFman00 on March 25, 2015, 11:05:45 AM
Quote from: fsquid on March 25, 2015, 10:42:57 AM
maybe, but there isn't a mayor in this country that wants to lose a team on his watch.
That's the same race to the bottom rationale that leads to Bass Pro/Cabela giveaways and corporate HQ relocation blackmail. What will it take us to get out of this mindset?
It is what it is. You might as well add, all the fancy stores at Town Center, Maxwell Coffee plant, that battery plant at cecil, the aircraft manufacturer from S. America that courts Cecil from time to time, Coach, American Express, Mayo Clinic, etc. It is the business of JEDC, Chamber of Commerce, and every other business development organization. And while we are at it don't forget all those amusement parks that folks are often whining/wishing about coming to JAX. You get rewarded for bringing things to town.
One reward is that corporations look for sports teams, universities, housing, shopping besides the logistics for the business. If people (employees) don't want to go there the company will be less motivated to relocate there.
Quote from: JFman00 on March 25, 2015, 11:05:45 AM
Quote from: fsquid on March 25, 2015, 10:42:57 AM
maybe, but there isn't a mayor in this country that wants to lose a team on his watch.
That's the same race to the bottom rationale that leads to Bass Pro/Cabela giveaways and corporate HQ relocation blackmail. What will it take us to get out of this mindset?
Unsure, what was it like before cities did this?
I'd imagine they competed on competitive advantage rather than tax breaks, and didn't throw away taxpayer money while doing so.
The Folly of Corporate Relocation Incentives (http://www.citylab.com/work/2011/12/folly-corporate-relocation-incentives/737/)
Why Have So Many Cities and Towns Given Away So Much Money to Bass Pro Shops and Cabela's? (http://www.citylab.com/cityfixer/2012/08/why-have-so-many-cities-and-towns-given-away-so-much-money-bass-pro-shops-and-cabelas/2906/)
QuoteThe Uselessness of Economic Development Incentives (http://www.citylab.com/work/2012/12/uselessness-economic-development-incentives/4081/)
The bigger issue is that incentives do little to alter the locational calculus of most companies. The broad body of evidence on incentives, including the Times series, finds that incentives do not actually cause companies to choose certain locations over others. Rather, companies typically select locations based on factors such as workforce, proximity to markets, and access to qualified suppliers, and then pit jurisdictions against one another to extract tax benefits and other incentives.
Quote from: fsquid on March 25, 2015, 03:47:50 PM
Quote from: JFman00 on March 25, 2015, 11:05:45 AM
Quote from: fsquid on March 25, 2015, 10:42:57 AM
maybe, but there isn't a mayor in this country that wants to lose a team on his watch.
That's the same race to the bottom rationale that leads to Bass Pro/Cabela giveaways and corporate HQ relocation blackmail. What will it take us to get out of this mindset?
Unsure, what was it like before cities did this?
Almost exactly the same, only without the massive taxpayer leakage. There have been numerous studies showing that well over 90% of companies make their relocation and investment decisions completely irregardless of incentive considerations.
Quote from: JFman00 on March 25, 2015, 08:44:25 AM
How to Stop the Stadium Wars (http://www.slate.com/articles/business/moneybox/2015/03/obama_s_stadium_plan_would_limit_public_financing_of_sports_complexes_could.html)
Both President Obama and the Koch brothers agree that tax-free government bonds for stadiums are wasteful government spending. I heartily agree.
There is an entity called the Reedy Creek Improvement District (Disneyworld) that uses tax free munis to fund their improvements. Why stop at stadiums?
http://en.wikipedia.org/wiki/Reedy_Creek_Improvement_District (http://en.wikipedia.org/wiki/Reedy_Creek_Improvement_District)
All Aboard Florida will use tax free PAB's to finance their rail improvements.
Even hospitals use tax free munis for improvements deemed worthy to the public.
So where does one draw the line?
Illinois created ISFA to keep the White Sox from moving to Addison, IL (or as rumored at the time, Florida) and used tax free munis to build what is now US Cellular Field to replace the former owner held Comiskey Park. The Sox owners were going to take advantage of easier access to private tax free bonds in Florida. This state is designed for development and the regulatory environment around tax-free bonds are pretty liberal to support that. The Sox had to sign a long term lease of course.
Also there is a misconception that all tax free muni's are supported by a taxing body in the event of a financial failure. This is not true. Usually some kind of collateral or surety is required to get the needed financing.
Unlike your examples of infrastructure or public services, we stop when the demonstrated gains no longer accrue to the public as a whole and instead concentrate in the hands of the few. 50 million dollars for improving the quantity and quality of free urban parks? Or 50 million dollars for a private entity to get more people to pay $150 a visit?
Quote from: JFman00 on March 25, 2015, 09:10:45 PM
Unlike your examples of infrastructure or public services, we stop when the demonstrated gains no longer accrue to the public as a whole and instead concentrate in the hands of the few. 50 million dollars for improving the quantity and quality of free urban parks? Or 50 million dollars for a private entity to get more people to pay $150 a visit?
A private entity that antitrust law doesn't apply to and that does not pay corporate taxes.
How the NFL Fleeces Taxpayers http://www.theatlantic.com/magazine/archive/2013/10/how-the-nfl-fleeces-taxpayers/309448/
Quote from: JFman00 on March 25, 2015, 09:10:45 PM
Unlike your examples of infrastructure or public services, we stop when the demonstrated gains no longer accrue to the public as a whole and instead concentrate in the hands of the few. 50 million dollars for improving the quantity and quality of free urban parks? Or 50 million dollars for a private entity to get more people to pay $150 a visit?
Reportedly, this is the basis of the "Florida Resident Discount" at many of these entertainment centers that rely on tax free financing tools to develop their attraction. It not only acknowledges their status, but also reflects public good will.
In the area of sports, we usually don't see discounts like these. However, this is also why the NFL is so sensitive to public perceptions. They acknowledge they have a good racket going and have to be subject to the public will lest they lose it. Hence the crackdown on player behaviors.
Will AAF offer a "Florida Resident Discount"? Probably at the beginning, if anything to attract ridership and establish some usage patterns. But if it is deemed a success early, I could see that discount diminish over time.
Quote from: spuwho on March 25, 2015, 11:30:47 PM
Hence the crackdown on player behaviors.
The public would be better served by a crackdown on corporate extortion.
Why are politicians so eager to jump into bed with the NFL? Because the voters reward them for doing so. It stinks worse than a paper mill but most of us just ignore the smell.
Quote from: urbanlibertarian on March 26, 2015, 09:02:15 AM
Why are politicians so eager to jump into bed with the NFL? Because the voters reward them for doing so. It stinks worse than a paper mill but most of us just ignore the smell.
what would I do with my Sundays?
Quote from: fsquid on March 26, 2015, 09:48:55 AM
Quote from: urbanlibertarian on March 26, 2015, 09:02:15 AM
Why are politicians so eager to jump into bed with the NFL? Because the voters reward them for doing so. It stinks worse than a paper mill but most of us just ignore the smell.
what would I do with my Sundays?
I don't want the NFL to go away, I just want the government subsidies and anti-trust exemption to go away.
Usually the question that comes up is how it got to be that way in the first place?
In baseball many early owners owned their parks. Or sold them to someone who had the resources to build them.
Football started as clubs usually stemming from a company sponsoring their employees. When they seperated themselves from their employers, finding enough money to even field a team was struggle. Finding the dough to pay for players and pay rent for a place to play bankrupt many early teams.
2 things changed.
Red Grange and Free Agency.
People were clamoring to see Red Grange. His exploits in college were heard nationwide on radio and now they wanted to see him play pro. Major cities were throwing around venues to get the Bears to play so the locals could see him in action. Exhibitions were common and the Bears made alot of money during this time. And they put up no money for the venues, just part of the gate.
It was here that the predecessors of the NFL got used to not having to pay for their own place to play. The seasons were short. The players had full time jobs, why waste money on a place to play?
Then came free agency. Player salaries were moving up fast. Just a take on the gate proceeds wasnt enough. TV revenue was growing but not as fast as the salaries. Teams needed new sources of revenue in the venue but didnt have the capital to warrant it. So local municipalities built a series of multi purpose stadiums to accomodate all the growing levels of pro sports. It made sense to have 100 events a year in the place due to the tax revenue off the ticket and beer sales. Teams got their money off parking revenue.
But this has changed. The multi purpose stadiums arent enough anymore. Now the only way to increase revenue is to make purpose built venues. But the issue is that the volume of events per venue has been going down. This makes less of a value to the local taxpayer becuase the local revenue from the venue drops relative to the funding required to create it.
In this day and age, you can eliminate the cost of the stadium completely and have the game played in a green screen high roof warehouse.
The crowds and noise can be simulated and cities would be off the hook of funding the venue. The team can keep every penny to themselves.