QuoteBy Matt Galnor
As speculation over a possible Jacksonville Jaguars exit builds, the city has identified about $5 million a year that can be used to pay for needed maintenance at the Sports Complex â€" primarily Jacksonville Municipal Stadium.
City Council President Richard Clark said Tuesday evening he’s planning on introducing a bill that will redirect bed tax money now going to the Prime Osborn Convention Center to the city’s three major sports and entertainment venues.
With the convention center debt scheduled to be paid off in October, Clark will propose that the money going to the Prime Osborn instead go to the Baseball Grounds of Jacksonville, Veterans Memorial Arena and the stadium, home of the Jacksonville Jaguars.
“The Jaguars are an enormous economic driver in this city, and we owe it to them as much as we owe it to the taxpayers who own the stadium,†Clark said.
Every Jacksonville hotel bill generates six cents on the dollar for three funds: two cents go to the Sports Complex; two cents go to the Tourist Development Council; and the rest goes to the convention center.
The proposal comes at a time when the Jaguars are making national news for facing the prospect of having every home game blacked out due to poor attendance. The team’s viability in one of the NFL’s smallest markets is also being questioned.
“This shows their commitment to having this team here for the long term,†said Bill Prescott, chief financial officer and vice president of stadium operations for the Jaguars.
In 2007, the Jaguars identified $148 million in work that would be needed over the next 30 years â€" including replacing all of the stadium’s seats and upgrading sound equipment from analog to digital.
In the short term, smaller work is being done at the stadium. Last week, crews were replacing part of an air-conditioning system that had been leaking in the room where Jaguars coach Jack Del Rio addresses the media.
Other workers were waterproofing concrete stairs leading to seats on the west side of the 15-year-old stadium.
Mayor John Peyton said Tuesday night that Clark’s proposal would allow the city to keep its commitment to “maintain a world-class facility.â€
Clark said he has scheduled a public meeting for Thursday morning to discuss the issue with Council Vice President Jack Webb.
The proposal would be introduced to the full council next month.
The ballpark and arena, both opened in 2003, are much newer and smaller facilities, so the football stadium will likely need most of the maintenance attention in the short-term, city leaders said.
The city collected about $6.7 million in the 2007-08 budget year from events at the stadium. That includes money from rent, ticket surcharges and a cut of parking proceeds.
The two-cent bed tax already going to the stadium, combined with revenue from stadium events, totaled about $12 million that year, with the city getting another $2 million in sales tax from the state.
Even with those revenues, the city subsidized $11.2 million at the stadium.
The culprit? Debt service.
The city paid about $11.6 million in 2007-08 on past debt, including improvements made for the Super Bowl, hosted by Jacksonville in 2005.
That leaves little room for routine maintenance needed to keep a 1.5 million square-foot facility in working order, officials said.
Peyton has been more vocal recently about finding a way to take care of the ongoing needs at the stadium, and the budget approved by the City Council on Tuesday includes $1.5 million for maintenance.
http://jacksonville.com/news/metro/2009-09-29/story/convention_center_funds_may_be_diverted_to_football_stadium_sports_compl
I don't see anything wrong with that. The bed tax wasn't going to be repealed anyway, and now it can be moved from a satisfied debt to an ongoing expense.
"Peyton has been more vocal recently about finding a way to take care of the ongoing needs at the stadium, and the budget approved by the City Council on Tuesday includes $1.5 million for maintenance."
Gee, I have an idea... get someone to buy naming rights for the stadium!
Having blown off that steam, even though I'm a huge proponent for a new convention center, this is a very good use of those funds. The Jaguars are the #1 asset this city has and we need to do everything we can to solidify their future here. Well done reallocating those funds!
If this is really coming out of our DO NOTHING government, I will now officially agree, we are in REAL DANGER of losing our team. Cut a new keeper deal with Wayne, and run the damn SKYWAY right into the second floor of the stadium. THATS something he isn't going to get in Los Angeles!
OCKLAWAHA
Disturbing to say the least. The cost of keeping the stadium in "NFL" condition just went up dramatically. Don't expect this to be the end of that for now either. That 2 cents could have gone a long way to fund a new convention center.
Given the major upgrade the stadium received just 4 years ago, what is the additional $148 needed for?
If a stayrafoam container lasts 1 million years in a landfill, why do those plastic seats need to be replaced after 20-30?
Plastic seats exposed 30 years in the Florida sun? I'm surprised that they lasted 15, really. There is a silver lining, however. The seats that have been tarped over should have a bit more longevity. ;) I agree on the skyway, too, but so many of us have said that forever, now...........
vic-
The $148 milion number is misleading. That is the total estimated cost across the remaining lifespan of the facility, IIRC from the previous article about the renovations.
It seems like an appropriate funding source.
QuoteThat 2 cents could have gone a long way to fund a new convention center.
I agree. Without looking at the books I don't know if its best long term, unless they already have an idea of what they're going to do on the convention center end in the future. However, I can see the benefit in splitting the money to help progress both issues.
It's not like they can't move the money around again.
Or--here's an idea--we can pay taxes comparable to the cities we wish to emulate. If we want modern city amenities, we should be willing to pay modern city prices. That isn't to say the city shouldn't be better stewards of our money, but we citizens need to step up, too.
AC... Amazingly I agree with you. I say amazingly because I am about as fiscally conservative as they come. However, if I make the choice to pay more in taxes for specific projects I want, then I do not believe that compromises my principles.
That being said... your viewpoint has NO CHANCE.
I frequently read the T-U comments after stories because I want to see who the most recent lobotomy recipients in Northeast Florida are. The comments after the article today on the property tax increase are representative of the city as a whole. The taxes for homeowners are going up $75 a year for the average citizen. That is $0.20 a day. Big deal.
You would think from the comments that we are just one step away from Stalin riding down the street in a T-40.
The problem is, "we should be willing to pay" must mean the majority of citizens. The majority of citizens could give a flip about modern city amenities. As long as they have a People magazine on the endtable, "Rock of Love 2" on the TV and some Cheetos in the cabinet, they are stoked and have no interest paying even another $0.20 a day to keep the city from being in dire shape.
We're a city that believes it can operate as a small town, and that kind of thinking has to die out or be overcome for us to grow- or even subsist at this point.
The thing I find most ironic is that many of those people who rail at the property tax increase and stormwater/JEA fuel and franchise fees/etc. are many times the same who complain, "there's nothing to do here" and ask, "Why don't we have X business/service/amenity here?" or, "Why doesn't the city pay for X?"
So our property taxes are officially going to help pay for the Jaguars improvements......and people call our town backward. Who gets credit for the idea? Clark or Peyton?
This marks the sad decline to the Prime Osborn. In 10 years, I'd be suprised if it doesn't have MAJOR issues with itself due to the shifting of revenue. This won't be the last shift in revenue from the City to the Jags, I promise you that! Pretty soon the Jags will be a line-item on the City Budget.
Right. But it is not ironic so much as it is emblematic. Everyone wants something for nothing.
I am all for using whatever means we need to in order to keep the stadium up to par. I am troubled, however, by anything that suggests the government is content to leave the convention center situation as-is. I believe moving the convention center from the old terminal to the old courthouse site is THE big move downtown needs. Streetcar down Bay, past the Landing and through the infant nightlife district complete with new convention center and anchor hotel, all begins with action on the convention center.
Local tax revenue has always been used to maintain and upgrade the Stadium as far as I know. I do not think this is a new development, nor is it much if any increase or expansion of the previous norm.
QuoteI believe moving the convention center from the old terminal to the old courthouse site is THE big move downtown needs.
One thing at a time. You have to build the courthouse, and see what revenue is available in the next few budgets for ANY additional work. Next year will be worse for COJ than this year. I don't see plans for a new CC for at least 5 or more years. We can talk about till then, much like we do about light rail.
Downtown has a better chance of an aquarium in 5 years than it does a Convention Center. You think people bitch and moan about taxes now, try pushing the elephant of a CC for downtown on taxpayers backs. At least with the aquarium, kids and parents could be mesmorized by Nemo.
5 million MORE in funds EVERY year to the Sports Area (Jax Muni Stadium mostly) whether listed or not on the books is a slippery slope. It will be 10 million, 15, 20, etc., sooner rather than later.
The same folks who support the Jags will soon be priced out of the market to attend the games. We think $75 for a Walt Disney ticket is bad, just wait for the Jags to break the 100 dollar mark for the lowest price seats.
This is something the NFL, even in a recession, does not understand. Their market is shrinking as fewer people can watch games and participate. Some of the most rabid Jag fans will never see the inside of the stadium due to the high cost of a family of 4 to attend.
Technically, these are Hotel Room taxes not property taxes. Although, I wouldn't be surprised that PROPERTY taxes are used to fund things at the convention center (like maintenance) that would or could have been paid for by the ROOM taxes.
If the new 'standard' for NFL stadiums, is the new Dallas stadium, then the city is definitely going to have to raise some kind of taxes.
While the sun will FADE the seats, it won't desintegrate them in 30 years would it, in all seriousness. The $148 mm over 30 years is nearly as much as it too to build it in the first place. That's a lot off 'maintenance' on a concrete and steel structure. The truth is that a lot of it is 'upgrades'.
The Coliseum in Rome is what 1,000 years old and is still standing. The deterioration that HAS occurred has mostly been deliberate deconstruction, BTW.
Quote from: Tripoli1711 on September 30, 2009, 09:10:00 AM
You would think from the comments that we are just one step away from Stalin riding down the street in a T-40.
I just couldn't resist this one! Stalin wouldn't have been caught dead in a T-40 tank, the T-40, T60, and T-70's were all LIGHT TANKS. Stalin was more a T-34 Main Battle Tank boy. OCKLAWAHA
QuoteIf the new 'standard' for NFL stadiums, is the new Dallas stadium, then the city is definitely going to have to raise some kind of taxes.
That stadium was built by its owner, Jerry Jones. In their home opener, the Cowboys still have a few thousand seats to sell, each was over $230 a piece. You bring in a stadium at 1 BILLION dollars, your seats are going to reflect that cost. Can you imagine a Jags fan paying 230 for the crummiest seat in the house?
The problematic scoreboard in the middle cost 40 million alone.
Personally, I'd rather this be paid on a facility in use at least 12 times a year (13 if you count the Monster Jam) vs. one in use only 2 times a year.
We should be able to maintain the stadium/sports complex and have a new convention center, museum, aquarium, etc. Like I said in another thread, 30 other NFL cities do it. We want to run with the big boys, we have to start acting like one.
With Amtrak ready to start rolling through downtown by Nov. 2011, I would think we need to get after the Prime Osbourne, post haste. We need to beg, borrow or steal at least Amtrak will allow us to reopen the old Southside (at Atlantic), and Yukon (at NAS) stations. Downtown at JACKSONVILLE TERMINAL (screw the PO name), FDOT, Amtrak, JTA and a host of others better get their collective asses in gear, or every advantage we could obtain through Amtrak money will be lost. If Amtrak blows through southside, or southwest, Jacksonville, just to arrive at our "Amshack", then we have officially screwed this up.
Finish the Courthouse, in the interim, start shifting all shows to the Hyatt, Arena, or other hotels. Have wrecking crews moving on taking down 75% of the Convention Hall, behind the station. As this demolition kicks in, develop a new private-public partnership with the Hyatt and Omni, a new riverfront Convention Center should break ground 20 minutes after the new Courthouse opens. If we'd just DO SOMETHING, we could be ready for the winter season of 2011.
Hang a $10 dollar a night charge to every hotel room in Duval, and allow the tourists and out of town business men pay for the improvements. Anyone think it would impact travel here, has probably NEVER been on a real vacation.
I've never yet seen any traveler to refuse a hotel room because a city had a room tax. God knows that I've paid for a bunch of these taxes all over the America's, and really didn't notice the difference.
OCKLAWAHA
Quote from: mtraininjax on September 30, 2009, 10:03:55 AM
QuoteIf the new 'standard' for NFL stadiums, is the new Dallas stadium, then the city is definitely going to have to raise some kind of taxes.
That stadium was built by its owner, Jerry Jones. In their home opener, the Cowboys still have a few thousand seats to sell, each was over $230 a piece. You bring in a stadium at 1 BILLION dollars, your seats are going to reflect that cost. Can you imagine a Jags fan paying 230 for the crummiest seat in the house?
The problematic scoreboard in the middle cost 40 million alone.
I dont think 230 is the "crummiest seat".
Quote from: Ocklawaha on September 30, 2009, 09:54:40 AM
Quote from: Tripoli1711 on September 30, 2009, 09:10:00 AM
You would think from the comments that we are just one step away from Stalin riding down the street in a T-40.
I just couldn't resist this one! Stalin wouldn't have been caught dead in a T-40 tank, the T-40, T60, and T-70's were all LIGHT TANKS. Stalin was more a T-34 Main Battle Tank boy.
OCKLAWAHA
I knew you were going to be the one to point this out, Ock. There was never a doubt in my mind. I chose the T-40 because I couldn't remember for certain whether it was T-34 or T-37 for the main battle tank. Also... I figured Stalin would need the maneuverability of a light recon tank to tool around the streets of Jacksonville. Didn't have confidence in the T-34's turning radius making that left onto Duval Street.
In Dallas, they pay $50.00 for standing room only. Yes, the COJ needs to keep up the stadium, arena and baseball stadium. We are so fortunate to be one of 31 cities to have a NFL team (NYC has 2). We need to realize the marketing value the Jaguars bring to the city.
With that said, Tony Boselli for Mayor in 2011.
I don't think I agree with this. We really need a new Covention Center. This probably means that if those funds are diverted the possibility of a new Convention Center is indefinitely on hold.
Come to think of it, I'd better not bitch and moan too much, cause if those funds don't get diverted to the sports complex/football stadium, we might lose the football team, and then we really will bitch, moan and groan!
Heights Unknown
QuoteWhile the game hasn't sold out the Cowboys are expecting more than 100,000 fans. That's thanks to standing room only Party Passes which sell for $29. A Cowboys spokesman said there are 82,000 tickets that guarantee you a seat, so that would leave roughly 18,000 Party Passes for this Sunday's game. Those fans will be fighting for spots to see the game on six large decks that span over 180,000 square feet.
The Cowboys wouldn't say how many tickets they have left to sell before the NFL's 72 hour pre-game deadline.
Tickets are available on the Ticketmaster website. As of 4 p.m. Wednesday the cheapest seats available cost $239. With taxes and fees, the total price for two tickets comes to $495. That does not include parking nor any food and drink.
The cheapest seats that the Cowboys HAD to sell were $239. So standing room only for 18,000 people is $29 per game. That is 40% of the cost of the Jags crummiest seat prices, and they can get 18,000 people to stand? Seems the BUD ZONE should become the $29 standing only area as well, since you only STAND there as well.
Their Private Seat License seats run $5,000 per year. The JAG Clubs are nowhere near that bad with the Terrace level only running 3,000 per seat. So our tickets are a deal compared to the cowboys.
I say this bodes well for a new CC. These are maintenance and debt funds. Now the CC will need to be re addressed. Just a guess.
Quote from: mtraininjax on September 30, 2009, 01:00:23 PM
Quote
The cheapest seats that the Cowboys HAD to sell were $239. So standing room only for 18,000 people is $29 per game. That is 40% of the cost of the Jags crummiest seat prices, and they can get 18,000 people to stand? Seems the BUD ZONE should become the $29 standing only area as well, since you only STAND there as well.
Their Private Seat License seats run $5,000 per year. The JAG Clubs are nowhere near that bad with the Terrace level only running 3,000 per seat. So our tickets are a deal compared to the cowboys.
And we still can't sell tickets though they are a "deal" compared to the Cowboys.
Heights Unknown
Does anyone really know how much net (after taxes generated by the Jags activities) tax dollars, from ALL sources, supports the stadium and Jags games? I doubt the bed tax dollars are anywhere close to the whole story. We have debt service, maintenance, capital expenditures, security and police, administration, etc.
I am not taking a position here, but it should be made clear to all, before any discussion takes place, exactly what we citizens pay to keep the Jags in town. If dollars are as stretched as the City says they are, we should know what all things costs so we can fairly determine our collective priorities.
Like mass transit, it has been proven time and time again, pro sports teams are not creations of economic development in excess of their costs. Rather, they are intangible contributors to the community's psyche and morale and assist in general PR. Again, everything for a price - what is ours?
^^ Excellent post sjtr.
Maybe that could be a story for MetroJax?
Then we may as well do a cost/benefit analysis on every event that takes place in a city-owned building, from the Suns to Arena/Florida Theater/TU Center concerts and performances, Monster Jam and Supercross, the Symphony, and even high school graduations. If we don't profit from any of those other things, let's get rid of them, too.
This city can't afford to waste another dollar on things so frivolous as recreation and quality of life.
Let's all just stay at home and watch TV. ::)
Ok do not have a heart attack but Government is not a for profit business.
Which was my point :)
Yeah just getting your back.
No one ever said government was a for profit business. But having a football team is NOT a necessity, and it is ridiculous NOT to understand in dollars and cents exactly how much it does cost, across the board, in terms of taxpayer investment.
Resources are not unlimited and priorities have to be made. The 'investment' in the stadium and the Jags may be well worth it, but how can that be determined without at least knowing the true cost? Obviously, some benefits cannot be quantified, but that is not a reason to quantify nothing either.
The same is true for all those other events as well. There costs should be accounted for as well.
The Jags are not in the same league as other events. No one has a made-to-order, customized stadium and no one has the concessions from the City the Jags do. Also, no one gets the JSO and maintenance support to order that the Jags get. As Vicupstate says, how can an evaluation be done when the costs are not known. Everything for a price, folks, but what is that price?
I find it interesting that taxpayers are happy to pay taxes to support the Jags but balk at other vital services and cultural investments. I wish people cared as much about education, etc. as sports.
Jags fans should also follow the Weavers example. They obviously are the ultimate Jag fans but they invest and support heavily our "quality of life" opportunities and went on record as supporting Mayor Peyton's tax increase. Even they recognize Jax needs more than the Jags to be a great City. Kudos to the Weavers. I wish their fans would follow more in their footsteps.
Where did you get the idea I wasn't in favor of funding and supporting education or the arts? Apparently my sarcasm was lost on you.
I guess you missed the part where I said I was willing to pay my fair share for us to have everything a city this size should have. We can fund culture and education in this city, and support quality of life without losing assets we already have. Again, if our NFL peers in Nashville, KC, Charlotte, etc. can do it, why can't we? Having this team is a building block, not the reason we can't advance as a city. That rests solely on our fellow citizens. Those attitudes you assign to Jaguar fans were here long before the Jaguars.
I'd be more willing to believe that the folks who sit at home and blame the Jaguars for all our woes are the self-same who opposed raising our taxes to even a subsistence level.
Ac, my post wasn't directed at specifically to you, but there are many in our fair City that see no issue saving the Jags at any costs while deriding the payment of taxes for almost any other cause.
I find it humorous (alright, at times, sickening) that the most ardent anti-tax payers manage to favor their own sacred cows at the taxpayers expense: roads over mass transit, stadiums and arenas over libraries, infrastructure for urban sprawl over parks, economic development subsidies over programs for the needy, professional sports incentives over grants to cultural institutions, property tax cuts for wealthy land owners over public safety and education, etc.
Being a civil society requires a certain level of individual submission to and sacrifice for the greater good. The only issue is to what degree. All of us should understand that what is most important to us is not necessarily important to others, but nonetheless, that both our own priorities and those of others may be equally important to all.
Quote from: vicupstate on September 30, 2009, 06:45:14 PM
No one ever said government was a for profit business. But having a football team is NOT a necessity, and it is ridiculous NOT to understand in dollars and cents exactly how much it does cost, across the board, in terms of taxpayer investment.
Fine...then do a full, comprehensive cost-benefit analysis....I think you might be surprised at the "positive" outcome....the tough part will be putting a value on all the intangible benefits.
Good story out today in the Nashville paper about their convention center challenges. Nashville wants to build a 600 million dollar CC, but some feel if they do, the city will not have the resources to build anything else for a while....
http://www.tennessean.com/article/20091026/NEWS0202/910250376/Will+new+convention+center+max+out+Nashville+s+credit?+Critics+fear+it+will
^^ Nashville plans a $600mm (1.2mm sq. ft) convention center and a $300mm hotel. Almost a billion dollars for a convention center complex. Huge by any standard.
Just as Charlotte has left Jacksonville in the dust, it appears Nashville is on the verge of doing so as well.
We need some of the leaders from Charlotte down here in Jax. Forget the Chamber trip to KC, send them to Charlotte, where they are taking Fortune 1000 companies and landing them there, also they have so many positives identified by all of the posters here.
Charlotte is a very progressive thinking town and we would do well to emulate as much from them, that we can afford, as possible.
Leaders from Charlotte were here earlier this year for JaxPride's annual luncheon...Mayor Peyton was also in attendance so hopefully he learned something.
Quote from: vicupstate on October 26, 2009, 08:59:35 AM
^^ Nashville plans a $600mm (1.2mm sq. ft) convention center and a $300mm hotel. Almost a billion dollars for a convention center complex. Huge by any standard.
Just as Charlotte has left Jacksonville in the dust, it appears Nashville is on the verge of doing so as well.
Smart what we need to do is Move the School Board from the St Johns River to an empty building Downtown there is several to pick from. Then implode the School Board building and with the JEA land next door put a New Hotel and a convention center. Because we all know that the old train station convention center here in Jacksonville is a (DOG)!
Quote from: tufsu1 on October 01, 2009, 08:08:52 AM
Fine...then do a full, comprehensive cost-benefit analysis....I think you might be surprised at the "positive" outcome....the tough part will be putting a value on all the intangible benefits.
Well, some people have already made such studies, Tufsu, and it appears the answer may not be what you want to hear. There does appear to be agreement on the difficulty of valuing intangibles, but as to the hard economic impacts on a community, stadiums for teams do not rank well as good community investments.
Here are a couple of quick excerpts on the subject expressing a counterpoint to your opinions:QuoteFear on the part of public officials that they will be held responsible for losing a team is not the only motivation for stadium deals. Subsidies to sports franchises are also justified in terms of economic development. As with other forms of government-assisted investment, proponents of publicly funded stadiums have tried to make the case that these sports palaces are job generators.
This is a difficult case to make. A professional sports team does not operate on a continuous, year-round basis. Each sport is limited to its season, and half the games are played out of town. The most egregious example is football, with games played only once a week for five months. A stadium devoted exclusively to professional football will be in use only about ten days a year.
Then there's the question of the quality of the jobs created. Aside from the small number of athletes with astronomical salaries, the jobs directly associated with stadiums tend to be part-time, intermittent positions with low wages and few benefits. Hawking hot dogs and beer or cleaning up after the fans go home is not a sure-fire route to prosperity. The construction of stadiums does generate better-paid work for masons, carpenters, electricians and the like, but this is of limited duration. The construction jobs evaporate once the stadium is built.
For these reasons, subsidy supporters tend to focus on the indirect job-creation impact of stadiums. Team owners pay consulting companies to write reports--or get government agencies to do it for free--estimating how much new economic activity will be generated at bars, restaurants and other establishments catering to the stadium crowds as well as the impact of their expanded payroll and purchasing on other businesses.
These reports usually involve some dubious assumptions. For example, in a 1999 report on the expected economic impact of a new stadium in Boston to replace Fenway Park, C.H. Johnson Consulting Inc. assumed that visitors coming to the new facility would spend 20 percent more outside the ballpark than those who visited Fenway. The report's rosy scenario, which included an increase of more than 3,000 jobs, may have had something to do with the fact that the analysis was commissioned by the Greater Boston Convention and Visitors Bureau and the Greater Boston Chamber of Commerce.
Economic projections also tend to overlook jobs that might be eliminated as the result of a new stadium. For example, construction of the much celebrated Camden Yards baseball stadium in Baltimore required the dislocation of a group of manufacturing businesses that together employed about 1,000 people. In sum, the projections made by team owners and their paid consultants in support of stadium subsidies are little more than vague or arbitrary promises about job creation and economic stimulus.
If we go beyond anecdotal information to more formal academic analyses, the results are no different. The conclusion of the overwhelming majority of studies is that stadium subsidies do not pay off in terms of economic growth or job creation. The limited number of jobs that might be created come at a high cost to taxpayers--often well above $100,000 each.
This theme of subsidies as a bad investment for cities permeated the most extensive scholarly volume on the subject: Sports, Jobs and Taxes, a 500-plus page anthology published by the Brookings Institution.In their opening chapter, Roger Noll and Andrew Zimbalist conclude that new sports facilities "rarely, if ever, are worthwhile. Sometimes they can be financially catastrophic."
In another chapter of the volume, Robert Baade and Allen Sanderson analyze economic trends in ten metropolitan areas where new stadiums had been built. Overall, they find that professional sports teams tended to "realign economic activity within a city's leisure industry rather than adding to it." In other words, all that public subsidies accomplished was to help shift spending from other forms of entertainment to the stadium, with little in the way of net employment gain. "Professional sports," they write, "are not a major catalyst for economic development."
Who Benefits?
If taxpayers are footing the bill and the local workforce is not enjoying a boon, who is benefiting from stadium subsidies? The obvious winners are the owners of the teams that inhabit the stadiums erected at public expense. These owners are hardly in need of public assistance. About two dozen of them appear on the Forbes list of the 400 wealthiest Americans, with a net worth of more than $750 million each. Paul Allen, owner of the Seattle Seahawks and the Portland Trail Blazers, is said by Forbes to be worth $20 billion, making him the third richest person in the country.
http://www.goodjobsfirst.org/corporate_subsidy/professional_sports.cfm
From the Brookings Institute on one of the studies cited above:QuoteThe economic rationale for cities' willingness to subsidize sports facilities is revealed in the campaign slogan for a new stadium for the San Francisco 49ers: "Build the Stadiumâ€"Create the Jobs!" Proponents claim that sports facilities improve the local economy in four ways. First, building the facility creates construction jobs. Second, people who attend games or work for the team generate new spending in the community, expanding local employment. Third, a team attracts tourists and companies to the host city, further increasing local spending and jobs. Finally, all this new spending has a "multiplier effect" as increased local income causes still more new spending and job creation. Advocates argue that new stadiums spur so much economic growth that they are self-financing: subsidies are offset by revenues from ticket taxes, sales taxes on concessions and other spending outside the stadium, and property tax increases arising from the stadium's economic impact.
Unfortunately, these arguments contain bad economic reasoning that leads to overstatement of the benefits of stadiums. Economic growth takes place when a community's resourcesâ€"people, capital investments, and natural resources like landâ€"become more productive. Increased productivity can arise in two ways: from economically beneficial specialization by the community for the purpose of trading with other regions or from local value added that is higher than other uses of local workers, land, and investments. Building a stadium is good for the local economy only if a stadium is the most productive way to make capital investments and use its workers.
In our forthcoming Brookings book, Sports, Jobs, and Taxes, we and 15 collaborators examine the local economic development argument from all angles: case studies of the effect of specific facilities, as well as comparisons among cities and even neighborhoods that have and have not sunk hundreds of millions of dollars into sports development. In every case, the conclusions are the same. A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.
As noted, a stadium can spur economic growth if sports is a significant export industryâ€"that is, if it attracts outsiders to buy the local product and if it results in the sale of certain rights (broadcasting, product licensing) to national firms. But, in reality, sports has little effect on regional net exports.
Sports facilities attract neither tourists nor new industry. Probably the most successful export facility is Oriole Park, where about a third of the crowd at every game comes from outside the Baltimore area. (Baltimore's baseball exports are enhanced because it is 40 miles from the nation's capital, which has no major league baseball team.) Even so, the net gain to Baltimore's economy in terms of new jobs and incremental tax revenues is only about $3 million a yearâ€"not much of a return on a $200 million investment.
Sports teams do collect substantial revenues from national licensing and broadcasting, but these must be balanced against funds leaving the area. Most professional athletes do not live where they play, so their income is not spent locally. Moreover, players make inflated salaries for only a few years, so they have high savings, which they invest in national firms. Finally, though a new stadium increases attendance, ticket revenues are shared in both baseball and football, so that part of the revenue gain goes to other cities. On balance, these factors are largely offsetting, leaving little or no net local export gain to a community.
One promotional study estimated that the local annual economic impact of the Denver Broncos was nearly $120 million; another estimated that the combined annual economic benefit of Cincinnati's Bengals and Reds was $245 million. Such promotional studies overstate the economic impact of a facility because they confuse gross and net economic effects. Most spending inside a stadium is a substitute for other local recreational spending, such as movies and restaurants.Similarly, most tax collections inside a stadium are substitutes: as other entertainment businesses decline, tax collections from them fall.
Promotional studies also fail to take into account differences between sports and other industries in income distribution. Most sports revenue goes to a relatively few players, managers, coaches, and executives who earn extremely high salariesâ€"all well above the earnings of people who work in the industries that are substitutes for sports. Most stadium employees work part time at very low wages and earn a small fraction of team revenues. Thus, substituting spending on sports for other recreational spending concentrates income, reduces the total number of jobs, and replaces full-time jobs with low-wage, part-time jobs.
A second rationale for subsidized stadiums is that stadiums generate more local consumer satisfaction than alternative investments. There is some truth to this argument. Professional sports teams are very small businesses, comparable to large department or grocery stores. They capture public attention far out of proportion to their economic significance. Broadcast and print media give so much attention to sports because so many people are fans, even if they do not actually attend games or buy sports-related products.
A professional sports team, therefore, creates a "public good" or "externality"â€"a benefit enjoyed by consumers who follow sports regardless of whether they help pay for it. The magnitude of this benefit is unknown, and is not shared by everyone; nevertheless, it exists. As a result, sports fans are likely to accept higher taxes or reduced public services to attract or keep a team, even if they do not attend games themselves. These fans, supplemented and mobilized by teams, local media, and local interests that benefit directly from a stadium, constitute the base of political support for subsidized sports facilities.
From: http://www.brookings.edu/articles/1997/summer_taxes_noll.aspx
Go ahead with the attempt to "save" the Jaquars............additional provocative chapters.
Everything is different now.
stjr....I am well aware that the direct economic benefits of stadiums and pro teams do not outweigh the costs....in fact, I did a study on the effects of the Camden Yards baseball stadium in Baltimore about 15 years ago.
But a FULL, comprehensive analysis that would include all the indirect costs and benefits (including those intagibles you mentioned) would likely reveal a much different result.
Every professional sports team is a business, first and foremost. How an NFL teams stays in business is beyond my comprehension. I just saw where the Dallas Cowboys gave a guy 40 MILLION guaranteed money with an 84 million dollar contract. Their new stadium cost 1 BILLION to build.
The numbers in professional sports are staggering these days. There was a good article on NCAA sports in the paper today, discussing ways to return the football events back to their ametuer status, of course, the NCAA did not say how much football was worth to them over a season.