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

[redir]

In a flat tax sense dollars / population that's about $475 dollars per person in the city of Sacramento. That doesn't sound like a lot but consider that 99.9% of the citizens of the city will NEVER go to a game or benefit what so ever from it. In a progressive tax system probably some 60% don't need $475 dollars a year but for those who do that money could have been put to much better use.

[bigbill]

Folks have mentioned stadium locations in cities to promote other downtown businesses before and after games. In the late 80s, I attended Seahawk and Mariner games in the Kingdome. I'd ride the Winslow ferry from Bainbridge Island and walk to the stadium. The area around the dome was sketchy, but you could eat and drink your way to the game. In 99, the Mariners moved to what is now T-Mobile Park, a beautiful stadium with a retractable roof. The Kingdome was imploded, and the Seahawks played at the UW stadium until their new place was built. The stadiums revitalized the area and brought new businesses. The last game I attended with my son was in 2012, and although the area has degraded a bit with all the homeless villages, if you know where to go, it is safe.

Vegas would have to build a domed stadium next to the strip. Baseball is a summer sport, and Vegas is hot AF in the summer. Hotels and parking garages could connect via air-conditioned walkways underground to the stadium. I think it could be a great experience, but building a fanbase in a city that relies on tourism is hard. Phoenix (Diamondbacks) is hot too, but it is a domed stadium in a metropolitan area.

[prototoast]

Originally Posted by bigbill

Folks have mentioned stadium locations in cities to promote other downtown businesses before and after games. In the late 80s, I attended Seahawk and Mariner games in the Kingdome. I'd ride the Winslow ferry from Bainbridge Island and walk to the stadium. The area around the dome was sketchy, but you could eat and drink your way to the game. In 99, the Mariners moved to what is now T-Mobile Park, a beautiful stadium with a retractable roof. The Kingdome was imploded, and the Seahawks played at the UW stadium until their new place was built. The stadiums revitalized the area and brought new businesses. The last game I attended with my son was in 2012, and although the area has degraded a bit with all the homeless villages, if you know where to go, it is safe.

Vegas would have to build a domed stadium next to the strip. Baseball is a summer sport, and Vegas is hot AF in the summer. Hotels and parking garages could connect via air-conditioned walkways underground to the stadium. I think it could be a great experience, but building a fanbase in a city that relies on tourism is hard. Phoenix (Diamondbacks) is hot too, but it is a domed stadium in a metropolitan area.

The study linked earlier in this thread (https://papers.ssrn.com/sol3/papers....act_id=4340483 a very good summary by some of the best respected sports economists out there) has a good discussion on the evidence about localized development. There is limited evidence that in some cases stadiums may boost business to bars and restaurants near the stadium, the magnitude of these benefits is small, concentrated, and often at least partially at the expense of other businesses elsewhere in the city.

These limited benefits are rarely in proportion to the dollar value of the stadium subsidy, and often compare poorly to other uses of public funds.

[Mr. Pink]

Look, I'm not really a big sports fan, especially football. Baseball is in my blood as a Yankee fan since, like age 6, and, no matter how much the MLB tries to get me mad, I get sucked right back in. (I think I'm liking this fast pitch rule) I truely believe that football contributes mightily to the obesity epidemic, with millions sitting around all weekend watching and eating and drinking. We're out there riding in the cool fall. But, bottom line, that's a lot of food sold and consumed nationwide. Super Bowl Sunday sees more food consumption than Thanksgiving day, which is kind of amazing and horrifying at the same time, considering most people are working on a decent bloat from the holidays just a month before. So, anyway, I try to imagine a town like Baltimore without the Ravens party every weekend, and it would be a huge hole in the economy in the whole region, that stretches for miles. It isnt just businesses next to the stadium. Its thousands of bars and restaraunts, and lord knows how much is spent at supermarkets and delis and liquor stores for home parties. Is this included in the "studies"?

[KonaSS]

Originally Posted by Mr. Pink

So, anyway, I try to imagine a town like Baltimore without the Ravens party every weekend, and it would be a huge hole in the economy in the whole region, that stretches for miles. It isnt just businesses next to the stadium. Its thousands of bars and restaraunts, and lord knows how much is spent at supermarkets and delis and liquor stores for home parties. Is this included in the "studies"?

I get a little annoyed when people want to interject their thoughts on an issue, but aren't interested enough to go read a few sentences - mini-rant over.

But yes, in essence, this is considered. The short answer is that people always want to go out and have a good time, buy a few drinks. If it isn't for a game, they will find some other reason. From the paper...

The common justification that stadium-related spending results in increased economic activity is not well founded, because most fan spending derives from existing area residents who
reallocate their spending from other local leisure consumption options. Thus, spending at sports
events crowds out other local spending and does not represent net new spending to the area.

[tomato coupe]

Originally Posted by Mr. Pink

Super Bowl Sunday sees more food consumption than Thanksgiving day …

Both incorrect an irrelevant.

[Mike V]

No thinking unless you have read the article!

[Mr. Pink]

I get annoyed when obviously biased "studies" are used to prove what seem to be a pre conceived beliefs. Social science, especially economics, is an oxymoron. Its bending stats and so called facts to support an argument.

Football is really big business. Really big.

I'm not arguing for a lot of public support for stadiums. Like I said, the Olympics are a glaring example of how that all goes awfully wrong. But, you just can't blow off the significance of some public spending to support it. And theres a lot of intangibles that some academic that doesn't like jocks can't measure.

[redir]

There is inherent bias in anything we ever do so by that fact you can simply just dismiss them because there is bias leaving you to your own thoughts which I'm sure are much better

If I were to follow my own thoughts, living in a big time football college town, I would think that small businesses make no money at all on game day because on game day I do my very best to avoid going any where near down town.

[prototoast]

Originally Posted by Mr. Pink

I get annoyed when obviously biased "studies" are used to prove what seem to be a pre conceived beliefs. Social science, especially economics, is an oxymoron. Its bending stats and so called facts to support an argument.

I am confused why you think this? The particular paper linked in this thread is a literature review. Do you think that is biased? Are they ignoring studies that show the benefits of public investment in stadiums? Do you think each of the studies they cite has its own biases and all those biases collectively push in the same direction.

If anything, I would think there would be incentives for an academic to find economic benefits to stadium construction, because that would set the person up for lucrative consulting opportunities.

To the best of my knowledge, most of the economists who do sports economics are pretty big sports fans themselves. It would be an unusual field for someone to pick out of spite.

If you have specific critiques of any of the studies, I would be happy to hear them. Has someone in the business of reading, writing, and critiquing economic papers, I am absolutely not naive enough to think that everything that's written in an economic paper must be true. There are a lot of bad papers out there. But also, in my professional judgment, the collective body of work on stadium subsidies is strong, and if you disagree, I would be very interested to hear more specifically where you think the authors of those studies have erred.

[tomato coupe]

Originally Posted by Mr. Pink

And theres a lot of intangibles that some academic that doesn't like jocks can't measure.

Wow, talk about bias and preconceived beliefs.

[vav]

Originally Posted by Mr. Pink

You can't convince me that some sports teams don't have enormous impacts on local economies.

[wernerherzogsid]

I am reminded of the reconstruction of my homeland and wider Europe in the wake of the unspeakable horrors of WWII.

The key pillar of the Marshall Plan was rebuilding through the use of soccer stadiums. A new, freer, more economically just Germany would rise from the ashes of the Third Reich by ensuring several bars and restaurants near Bundesliga stadiums would see success several dozen nights in a long year.

[KonaSS]

Originally Posted by Mr. Pink

I get annoyed when obviously biased "studies" are used to prove what seem to be a pre conceived beliefs. Social science, especially economics, is an oxymoron. Its bending stats and so called facts to support an argument.

Football is really big business. Really big.

I'm not arguing for a lot of public support for stadiums. Like I said, the Olympics are a glaring example of how that all goes awfully wrong. But, you just can't blow off the significance of some public spending to support it. And theres a lot of intangibles that some academic that doesn't like jocks can't measure.

There are only 32 NFL teams. That leaves a lot of towns across this country with full bars and restaurants and people spending their money on other leisure activities. It is not hard to wrap your head around the fact that football is a substitute good as far as leisure activities and not a net gain. Unless you are biased.

[echappist]

Originally Posted by wernerherzogsid

I am reminded of the reconstruction of my homeland and wider Europe in the wake of the unspeakable horrors of WWII.

The key pillar of the Marshall Plan was rebuilding through the use of soccer stadiums. A new, freer, more economically just Germany would rise from the ashes of the Third Reich by ensuring several bars and restaurants near Bundesliga stadiums would see success several dozen nights in a long year.

I know your post is completely tongue-in-cheek, but the concept of the Bundesliga at the time of the implementation of the Marshall Plan is anachronistic by more than 15 years. And I'm almost certain that most were not funded by taxpayers.