OT: The Economics of Sports Stadiums and bye-bye to the Oakland A’s

[XXtwindad]

My hometown Oakland A’s are moving to Sin City just like their gridiron brethren. No surprise, really. The Fisher family has long been considered the worst owners in baseball and the City of Oakland refused to foot a large part of the bill for a proposed move to Jack London Square.

It’s a sad day for Oakland, which has also lost the Raiders (as above) and the Warriors to San Francisco. The A’s leave a rich legacy in Oakland: the heyday of Charlie Finley’s renegades (Reggie, Rudy, Rollie, etc..) the BillyBall era (Rickey), the Bash Brothers era, and the MoneyBall era. Great memories.

Which brings me to my central question? How much should a city pony up for a sports team? I know that several teams/cities (San Francisco, Baltimore, and Pittsburgh come immediately to mind) have revitalized downtown areas and made beautiful ballparks. But should a city allow an owner to hold them hostage? Are the economic and civic benefits worth it?

[Elefantino]

The city came up with a package of incentives worth $375 million and that still wasn't enough for Fisher, a silver-spoon punk.

Across the bay, the Giants built Pac Bell Park (then AT&T, now Oracle) with no public funds, just a $10 million tax abatement and promises (since fulfilled) from the city to extend the Muni Metro line to the park.

Not to be political, but I agree with Chris Christie, who as NJ governor had this to say when the New Jersey Nets tried to extort taxpayers for a new arena: "My message to the Nets is goodbye. You don't want to stay? We don't want you. I mean seriously, I'm not going to be in the business of begging people to stay here ... They want to leave here and go to Brooklyn? Good riddance. See you later ... There will be no tears shed on my part tonight. They go? They go."

[prototoast]

There's a lot of economic research on the question, and aside from the consultants who are hired to try to persuade municipalities to pay for the stadium, the evidence overwhelmingly supports the conclusion that the costs exceed the benefits for publicly subsidized stadiums. To the extent there are benefits, they tend to be highly concentrated, particularly to team owners, and to a lesser extent, a narrow group of sports fans. Some other businesses may benefit, but the spillover benefits tend to be quite small compared to the total dollar subsidy, and in particular other non-sports uses of public money.

[tomato coupe]

Originally Posted by prototoast

There's a lot of economic research on the question, and aside from the consultants who are hired to try to persuade municipalities to pay for the stadium, the evidence overwhelmingly supports the conclusion that the costs exceed the benefits for publicly subsidized stadiums. To the extent there are benefits, they tend to be highly concentrated, particularly to team owners, and to a lesser extent, a narrow group of sports fans. Some other businesses may benefit, but the spillover benefits tend to be quite small compared to the total dollar subsidy, and in particular other non-sports uses of public money.

If it doesn’t fall under the category of corporate welfare, nothing does.

[Elefantino]

From seven years ago, still relevant. (Although he does put most of the blame on greedy sports-team owners, mostly ignoring the politicians who kowtow with taxpayer money.)

https://www.youtube.com/watch?v=xcwJt4bcnXs

[Mr. Pink]

Moneyball.

[deluz]

It is a private for profit business with billionaire owners.
City should pay zero.
Chargers left San Diego after the city paid the Spanos family millions in subsidies while the the city infrastructure suffered. Good riddins, I could care less about a professional sports team here. Let some other sucker city pay for it.

[Matt92037]

Worst owner in the NFL IMHO. Spanos could have done something great in San Diego if he was willing to partner with San Diego State.

No Spanos is a renter…..

Originally Posted by deluz

Spanos family

[JedB]

Originally Posted by deluz

It is a private for profit business with billionaire owners.
City should pay zero.
Chargers left San Diego after the city paid the Spanos family millions in subsidies while the the city infrastructure suffered. Good riddins, I could care less about a professional sports team here. Let some other sucker city pay for it.

And **** the Spanos' sideways. Good riddance to bad rubbish.

[prototoast]

Originally Posted by tomato coupe

If it doesn’t fall under the category of corporate welfare, nothing does.

Technically I believe many teams are owned by partnerships, not corporations.

[eddief]

would he keep selling off his best players?

[nickl]

Originally Posted by prototoast

Technically I believe many teams are owned by partnerships, not corporations.

Those partnerships are owned and controlled by the top 1% in almost all cases. These individuals should not be benefiting from huge taxpayer funded subsidies in most cases. Then again, this type of arrangement is not unique to sports organizations.

[Mikej]

Just look up the financial history of The Meadowlands- built in 1974 it still held $264 million in debt when it was torn down to spend 1.6 billion on a new stadium in 2010. 34 years later. Because of the tax payer is the only way this can happen. If billionaire owners could make money off of a private stadium they would. But they can’t so we have to subsidize there fun. It’s a game.

[Elefantino]

Sports team ownership groups expect government handouts because most of them have been given government handouts. Private financing is almost non-existent. So who is to blame, the owners or the politicians who feed their habit?

[Mr. Pink]

I still think it's a decent investment to encourage a sports team to stay in your town, especially if they invest in a winning team. Baltimore would be in even worse shape without the Ravens. You should see it there every weekend, starting Friday, in the fall and early winter. The purple wearing party people start early. There's an enormous amount of business that churns because of that team. You can't ignore that.

One thing a lot have ignored, though, is how the average citizen is taxed on their cable bill for sports they could care less about. The YES network in NY, home of the Yankees, receives a surcharge from every customer in the NY area and a little beyond for that broadcasting. Last I heard, ESPN gets five bucks a household for every customer nationwide, too. So, your grandmother may love her cable TV for FOX and Lawrence Welk reruns, but she's also paying for the Yankees (in NY) and college football and poker tournaments.