Pro sports facilities economic influences

[the north omaha star]

Can any of my fellow friendly, neighborhood Cyburbanites point me in the right direction for books, case studies, articles on professional sports facilities economic influences on cities, metro. areas, CBD's, etc...? Thank you.

 

[Chet]

Heres one paper from UT Arlingtonwith a unique approach - property rights

First hand, everything I've seen on sports venue impacts has been nebulous, hard to measure, shotgun approaches. Years after the fact, many are debunked as sales pitched to woo the weary public. Case in point Tread lightly.

 

[Cardinal]

I remember coming across a handful of articles on this topic a few years ago. Unfortunately, I can't remember where. ULI and the Brookings Institute are always good starting points.

 

[Mud Princess]

It seems to me that the Economic Development Division of the APA covered this topic in one of their newsletters.

I'm no longer an APA member, however, and the APA is now limiting access to previous newsletters to current members...

 

[Duke Of Dystopia]

When considering this topic, one might also decide to study not just the impact of a professional sports team on the economic landscape, but also the impact of the "Market size".

The economic benifit of a sports franchise has been studied and the results tend to show a minimal impact. What is not addressed is the impact of a sports franchise and the size of the market.

Case in point, Green Bay, undoubtedly one of the smallest markets in professional sports. My thesis would be that such a team brings in a large amount of economic income because they have a captive audience. There is little to do in the way of "Major Events" in GB, so it is focused on the team.

Suporting reasons:
-You can't casually rent a hotel within a 20 mile radius 8 times a year.
-You MUST rent the room for the WHOLE WEEKEND
-Surge in restaurant sales
-Free advertising (nobody would know GB exists without that football franchise.

In Contrast:
-larger urban areas with teams have a larger diversity of residents, meaning many don't care
-larger urban areas have more choice in "major events"
-the larger the local economy, the less the team matters
-larger urban areas naturally get more advertising exposure, so the name recognition brought by the team means less

Just my comments, let us know what you find.

 

[lowlyplanner]

I enjoyed "Field of Schemes" by Neil DeMause.

As the title may indicate, he's fairly skeptical about the economic impact - he also goes over some of the economic impact studies and shows how they are flawed.

In particular, the substitution effect makes it difficult to estimate economic impact, i.e. would the money spent on tickets be spent on other entertainment options - bars, theaters, movies, etc. if the stadium wasn't there.

That said, there is some un-quantifiable benefit in terms of exposure and sense of being a "major-league" city. That definately happened here after we got our (currently 3-9) team... Who's to say whether it's worth the several hundred million dollar investment we made.

 

[Repo Man]

There is a book out called "Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums" by Roger G. Noll , Andrew Zimbalist. I read it in grad school as I was doing a statistics study on whether a stadium's location (Downtown vs Suburbs) had any impact on attendence.

[/shameless plug] If you buy it from Amazon, make sure you go through Cyburbia. [shameless plug/]

 

[Jeff]

Pennsylvania is a great example of how wonderful new stadiums are.

Pittsburgh will never be able to pay for their new stadiums, and Phillys are going to bankrupt the city within 10 years.

 

[oulevin]

Pro Sports' Impact

Mark Rosentraub's Major League Losers; on sports teams' effect as a whole on cities

 

[the north omaha star]

The St. Louis Cardinals are building a new baseball-only park near Busch. It's supposed to open for the 2006 season. One of the caveats that was placed on the Cardinals for getting funding from the state and the city was that a "ballpark village" will be constructed in addition to the stadium. The ballpark village is to be paid for by the Cardinals. I'm assuming that the 'ballpark village' is to ensure that the area around the stadium becomes a destination point during the off-season and not just April - October. Can any of the St. Louis area Cyburbians shed some light?

 

[mgk920]

Pennsylvania is a great example of how wonderful new stadiums are.

Pittsburgh will never be able to pay for their new stadiums, and Phillys are going to bankrupt the city within 10 years.

In contrast, the 'public' (read: 'taxpayer') costs of the recently completed Lambeau Field re-enovations are being covered by a 0.5% sales tax in Brown County, WI. Revenues from that tax are running well ahead of projections and that public debt and the tax will both likely be retired by about 2011, several years ahead of schedule. The stadium authority will then be debt-free and the Packers are already operating at a healthy profit. With the re-enovations, the stadium is now a year-round attraction (it really is NFL Nirvana), bringing in lots of tourists and money, working well beyond everyone's most optimistic dreams.

(Imagining if the rest of professional sports could possibly repeat that model....)

Mike

 

[Howard Roark]

The St. Louis Cardinals are building a new baseball-only park near Busch. It's supposed to open for the 2006 season. One of the caveats that was placed on the Cardinals for getting funding from the state and the city was that a "ballpark village" will be constructed in addition to the stadium. The ballpark village is to be paid for by the Cardinals. I'm assuming that the 'ballpark village' is to ensure that the area around the stadium becomes a destination point during the off-season and not just April - October. Can any of the St. Louis area Cyburbians shed some light?

The "Ballpark Village" (I am still hoping for a better name) was a trade-off with the city. The Cardinals are paying for about 50% of the ballpark, and promised the city and county that they would build the adjacent mixed use area in return for loans, street work, and tax abietment on the ball park. I think the number they pleged to it was 120 million (check the numbers I am doing all this from memory) If the Cardinals do not build the village in 5 or so years after the ballpark is completed, then they are on the hook for taxes on the whole thing. I would check with the Post-Dispatch, they followed the deal pretty close.

It really is a pretty good deal for the city, certainly better than getting stuck with the bill, yet we have an active part of the populace that is pursuing legal measures to stop the Cardinals from recieving anything, yet these same folks were silent when the state and St. Charles county gave millions to Mastercard to keep them in the metro... It is just something about sports teams that gets peoples blood boiling.

 

[Peteinwales]

For a report on the economic impact of the Millenium Stadium in Cardiff, UK visit www.cardiff.gov.uk, click on quick links and select the link.

The report is in .PDF format

 

[jordanb]

FWIU, the "ballpark village" is an attempt to create a "Wriglyville" type area around the ballpark where people would go after the games and drink and whatnot. Wriglyville is a cash cow for Chicago, but it's not really duplicated anywhere else (not even around Sox Field on the south side which is surrounded by parking).

I think baseball is unique in its ability to foster such an area because there are 82 home games a year---more than any other sport. If the venues surrounding the ballpark can count on 82 nights with big gameday profits, then they can potentially lose money the rest of the year and still be profitable. I don't think you could get the same effect with Basketball or Football.

 

[nuovorecord]

In contrast, the 'public' (read: 'taxpayer') costs of the recently completed Lambeau Field re-enovations are being covered by a 0.5% sales tax in Brown County, WI. Revenues from that tax are running well ahead of projections and that public debt and the tax will both likely be retired by about 2011, several years ahead of schedule. The stadium authority will then be debt-free and the Packers are already operating at a healthy profit. With the re-enovations, the stadium is now a year-round attraction (it really is NFL Nirvana), bringing in lots of tourists and money, working well beyond everyone's most optimistic dreams.

(Imagining if the rest of professional sports could possibly repeat that model....)

Mike

Well, yes, the "taxpayers" paid for the stadium renovations in GB. But, keep in mind that the "taxpayers" also own the team. So there's a much greater investment and ownership mentality among the residents of GB than you will find in any other major city.

The GB anomoly aside, sports are a business, pure and simple. IMHO, public subsidies have no place in stadium construction. If a team can't afford to build a stadium on their own, too bad. There are far more important uses for public dollars; schools for example.

 

[Breed]

The GB anomoly aside, sports are a business, pure and simple. IMHO, public subsidies have no place in stadium construction. If a team can't afford to build a stadium on their own, too bad. There are far more important uses for public dollars; schools for example.

Even with myself as an avid sports' fan... I couldn't agree more. It is inexcusable for cities to be throwing themselves at teams without conducting a legitimate, independent analysis of the benefits of doing so.

 

[the north omaha star]

To play devil's advocate, big-time corporations do the same thing. They hold municipalities hostage until they get what they want. I can't remember how man times ConAgra threatened to leave Omaha. Now, they have a sprawling corporate campus on the banks of the Missouri.

 

[Breed]

To play devil's advocate, big-time corporations do the same thing. They hold municipalities hostage until they get what they want. I can't remember how man times ConAgra threatened to leave Omaha. Now, they have a sprawling corporate campus on the banks of the Missouri.

The principle doesn't change though. Any time a city offers any kind of assistance, they need to look long and hard at the economic ramifications. Unfortunately, they only look at reports specifically designed to argue their points, rather than relying on some type of independent study.

 

[Cardinal]

The principle doesn't change though. Any time a city offers any kind of assistance, they need to look long and hard at the economic ramifications. Unfortunately, they only look at reports specifically designed to argue their points, rather than relying on some type of independent study.

As professionals, we should be delivering that un-biases, thouroughly researched analysis. Having seen the work of many of my economic development counterparts, though, I realize that this is seldom the case. Whether it is due to incompetence, political pressure, or a desire to see thier project carried through, a majority of economic developers do not perform that analysis. Let's not just limit it to the economic developers, though. Too many planners let their biases influence their results, and the same is true of citizen groups.

As much as I beleive that economic development incentives are improperly used more often than they are warranted and well-executed, I can also recognize that the widely cited Minnesota report prepared by the Sierra Club (and mimicked by other states) or the series of articles that appeared in the Milwaukee Journal-Sentinal a couple years ago failed to thoroughly research the topic and showed a remarkable lack of knowledge of the practice of economic development.

All of this leads to one conclusion. Neither the pro nor the con case on incentives is ever adequately investigated and these decisions are more political than they are logical.

 

[nuovorecord]

All of this leads to one conclusion. Neither the pro nor the con case on incentives is ever adequately investigated and these decisions are more political than they are logical.

That's a good summation. Politicians are sports fans, too, which often colors their judgement. I recall back in the early 90's, a state legislator attempted to get a procedural rule passed that would mandate that a daily session of the State Legislature would end in time to watch Trail Blazer games on TV. He wasn't alone in supporting this idea, but his more reasonable colleagues shot the idea down.