Seems like every major city I’ve been to at some time or another has had a debate with one of it’s local sports teams as to who’s going to pay for a new stadium/arena.
I hear both sides of the arguments as
-Players and owners make so much money, why should joe taxpayer foot the bill for these millionares. I don’t care about football/baseball/basketball why should I pay.
and
-Sports teams are good for the community. The amount of taxes they will be paying to the city will cover the costs of the stadium. Local business around the arena will prosper. It attracts companies to locate their corporate offices in that city thus creating more jobs for the community. If you don’t build us one we will move to another city.
So which side of the debate do you fall on?
And in regards to “we’ll move if you don’t build for us”, what are the cities that are eager to build for an outside team to move in?
The NFL/NBA/NHL et al make a large amount of money off of televised events, ticket sales, advertising, endorsements, etc. and so can afford to build their own “houses of worship”
Ticket costs, season ticket costs, and box seats costs are climbing to the point that many long time fans can no longer afford them
The “outflow” to the League and players APPEARS to my untrained eye, to exceed what comes back to the community in the form of jobs or taxes.
I see no reason why Joe Taxpayer should have to foot the bill for building or renovating a stadium. This is reinforced by various teams that eventually leave their city of origin anyway - Brooklyn/LA Dodgers, LA/Oakland Raiders, etc. and those who threaten to leave town in order to wangle more money or tax breaks or whatever.
In general I think a successful sports team will bring enough revenue into an area of town that it makes any costs to the city worthwhile. Many times stadium buildings are part of general economic development programs.
Interestingly the Yankees are building their new stadium entirely on Steinbrenner’s money, to the tune of something crazy like almost $800m.
Hypothetical: For whatever quirky reasons of his own, Bill Gates wants to uproot all of Microsoft from Redmond, WA and move to Yourtown, USA.
Should Mr. Gates buy the property and build his new offices like anyone else, or should he go to Yourtown City Hall and demand that the taxpayers pay for his move, since the influx of relocated employees, gawking geek tourists, and additional tax revenue (hey, them employees have to buy groceries) will be a net boon to the city?
Funny you should mention that. The best case is if no municipality offered special deals to some companies but not to others – if the taxes are too high for Microsoft, they’re too high for Joe’s Deli.
Sadly, that is not the case in many instances. Municipalities frequently offer incentives to get large businesses or, more often, to retain them. “Build your auto plant here and we’ll waive the sales tax on the construction, give you a break on property and payroll taxes, build you a park-n-ride, etc.” “Keep 9,000 jobs here and we’ll rebate you this and that tax.”
Within that unfortunate reality, sports teams should not be treated differently from any other business with a large economic impact and each deal should be looked at on its merits. The new Yankee Stadium deal seems to fit the bill. The Yankees are building their own stadium, but the city is putting up subway stops, widening highways and building exit ramps, abating some taxes, etc. Similarly, Goldman Sachs is cutting a deal to stay downtown and it looks like they’ll get a subway stop, no sales tax on construction materials, etc.
Again, I think that the reality of the situation sucks. But I can’t see why it should suck more or less for a sports team than it should for a Saturn plant.
I’m in one of those cities right now: the Orlando Magic have been bitching about a new arena for years. Supposedly Kansas City and St. Louis want them.
Myth. Owner-supplied bullshit. Every independant study says the effects on local business are minimal; if that isn’t good enough, just think anecdotally … name one neighboorhood that’s been revitalized by a stadium. Baltimore’s Inner Harbor and Lodo in Denver were being rebuilt long before stadiums came along.
Well, that’s another issue.
To the extent that they are businesses, they are no more deserving of corporate welfare than any other. But a city may well put a price tag on the emotional & community-building value of a team. In Orlando’s case, the Magic are the city’s only claim to being a “major-league city.” To some people (not me) that’s important.
This weeks economist notes that major American sports associations act basically as cartels that deliberately undersupply the market. This gives sports teams extra bargaining power since demand outstrips supply. They point out that the british football model leads to a much more equitable and efficient arrangement.
With many sports if you allow tons of teams you have a vast dilution of talent. Baseball for example wouldn’t be served well by more teams, more tems means a higher percentage of the population is making it into the majors and thus the talent pool is lower on average
That’s true only if your proposed level of expansion would change the talent level noticeably. The levels of expansion that North American pro leagues have experimented with have not done so, that I can see. To continue using baseball as our example (convenient for me, it being my area of expertise) there’s no evidence that expansion has resulted in a reduction in the quality of play. It’s invisible to the eye if it’s there, and the statistical indicators of play quality - differential between the worst and best players, the standard deviation of winning percentages, minor league experience, etc. - simply do not support such a hypothesis.
I have watched and played and studied baseball for years, and I don’t see very much difference between a Triple A game and a major league game. I can see some subtle differences but not very many. If I can just barely see the difference, 97% of the fans can’t see any difference. Truth is, you could expand the major leagues from 30 teams to 40 in a few years, and the visible difference in talent level would be almost nothing.
I don’t see any reason to believe it’s any difference in the NFL or NBA. Some would argue the NHL overexpanded, but I even doubt that, and the evidence generally tends to support me.
I don’t see why baseball would be ill served by having more teams. Portland could certainly support a team; Montreal could support a major league team too (the last time they had a major league team they certainly did. The Expos in their dying years were not a major league franchise in any sense that matters.) The New York City metropolitan area could quite easily support another team and possibly two more. Vancouver could probably support a team, and possibly even Mexico City.
Evidence strongly suggests that it does not take a huge market to support a franchise if the franchise is intelligently run. St. Louis is not a big market but the Cardinals do well. Oakland has put many good teams on the field. Minnesota has had great success. Why would a well run team in Portland or Raleigh be bad for the sport? You don’t really think you can’t find another 25 guys who can play ball?
Check my location. The amount of money Pittsburgh spends to placate the Stillers is absolutely revolting. While on the brink of bankruptcy, the stupid mayor spent taxpayer money to destroy an old stadium and build two new ones, one for baseball and one for football. There was even a time (a referendum vote in 1998, I believe) when Pittsburgh tried to force all surrounding counties to pay an extra tax so that they could build stadiums. Why should the outlying counties pay this tax? Because through the magic of trickle-down theory, the increased money that Pittsburghers (and tourists! Because Pgh is such a touristy city) would spend on going to see games in their new shiny stadiums would come back to us. Because when people come to Pgh on their vacations to see the Stillers, they’re going to travel two hours south to Fayette County and see all the wonderful sights of southwestern PA (we have nature, historical sites from the French and Indian War… and that’s it). Luckily, that tax didn’t pass, but Pgh still found a way to bilk its own residents through a less direct tax.
I hate corporate welfare. Sports teams (and Walmarts, and Microsoft, and Saturn plants) shouldn’t get any privileges that aren’t available to the average people who want to start businesses. It makes me sick to think that cities are fawning over these megacorps. “Oh, please Mr. Conglomerate, relocate to my town so you can drive out all the extant businesses! We’ll build a brand new road, just for you! Don’t like that housing development across the street? They’ll be gone by morning.” How is such blatant selling out supposed to strengthen the community? It just makes me hate the people in charge even more. (And I don’t think sports teams are any different from other businesses–they market something, they make a profit, they’re a business just like Walmart.)
I am in one of those areas that is going through this sort of debate, though I am not in the actual city that is gonna be taxed in the end. I have to add more evidence to the argument that building a new stadium does not benefit the economy.
If they actually helped business in the area, why are there no developments of business in the area in question after the stadium is built?
Examples from my area:
Texas Stadium: Opened in 1971. The only businesses that I can remember from many trips by there (almost daily until recently) is a no-tell motel. The rest of the area is industrial parks.
Arlington Stadium/Ballpark in Arlington/Whover owns the rights now field: There is a Hotel on the access road to the freeway near there. There are several restaurants further down the freeway. They would probably all be there anyway, since Six Flags is on the same freeway. Nothing but the Hotel and the Arlington convention center is really within walking distance. (Arlington has no public transportation.)
Reunion Arena/AA Center:Next to Reunion, there is the Hyatt Regency. The nearest commercial development is West End, about four blocks away. It is the closest to being something that might be affected commercially by the stadium. But, as far as I can tell, it was pretty much developed independently. Its central placement downtown seems to be more of a concern. They placed the AA Center across Woodall-Rodgers freeway from West End when they built it. Go Figure.
My answer to why the stadiums are not a boon to commerce in the area: Have you ever tried to drive anywhere near these buildings when they have an event? It looks like rush hour’s big brother with a steroid problem. Arlington closes the streets next to their current stadium, adding insult to injury. Sure, you can go to the expense of building near one of them, but your business is going to hurt every time there is an event. In the case of baseball, this is 81 days every year. Why would anyone want to do that?
Bleah, have them, but do not make me pay for it, and don’t expect me to belive that they help business. Can anyone name a place where the stadium actually attracted other businesses to its location? Places where they developed the whole complex at once does not count. Building a mall by itself often works, and can be done whithout attaching a stadium to it.
Because they benefit from having the team there. Many, many people throughout western PA live and die with the Steelers and would be crushed to see them leave. You may not feel that way, but they do, and for them, the economics are irrelevant: it’s a matter of regional tradition and pride.
Studies also show that much of the money spent on sporting events and businesses around the venue is merely taken out of people’s entertainment budgets and would otherwise have been spent locally on other forms of entertainment.
Desparate local governments that give big tax breaks to attract businesses seldom are able to negotiate a deal requiring the business to maintain a specified level of local jobs or total payroll over a period of time. Frequently, companies leave before the tax break that attracted them expires.
Fortunately, the boneheaded plan to bring the (then) Expos to Northern Virginia fell through; the main site the boosters had in mind was three blocks from the condo I lived in at the time. I hate to think how much my selling price would have been depressed by the specter of 81 traffic jams (and illegal parking in the condo lot) every year.
It could be like Pittsburgh, where there was a referendum on the ballot over whether or not taxes should be used to fund the building of new stadiums. The referendum lost, as the citizens of Allegheny County voted that they did not want to use tax dollars to fund the new stadiums.
So the county raised the sales tax to 7% in Allegheny County in order to pay for the new stadiums.
The China Basin & Mission Bay areas of San Francisco… the whole thing was abandoned warehouses until Pacific Bell Park was built. People were scared to be there. Now the ballpark is surrounded by new condo towers, upscale & middle class commerce, and a new campus for UCSF Medical school, which may end up being the center of stem cell research in California. It’s quite a sight to see.
Not if you plan right. The Giants provide about 10,000 parking spaces for a 42,000 seat stadium. They strongly encourage the use of MUNI Metro, BART, CalTrain, MUNI, biking, and walking to the stadium, and it works. The businesses around the ballpark, stretching fifteen piers north to Market & the Ferry Building are packed before & after most games.
Put me down as a naysayer for publically financed sports stadiums. We’ve built four of them in the last 15 years here in Cleveland (Jacobs Field, Browns Stadium, Gund Arena and CSU Arena) and I can’t say there’s been a great benefit to the region’s economy because of it.
Quoting from Pay Dirt: The Business of Professional Team Sports by James Quirk and Rodney D. Fort (Princeton University Press 1992), at page 175 “One of the fascinating things about the rosy projections that are made of the impact of a new stadium or arena on a city is that most existing publically owned stadiums and arenas do not cover their (own) fixed and variable costs. If these facilities are going to generate so much income for city businesses, it seems strange that they generate so little income themselves that they must be subsidized by city taxpayers. And it is also strange, in the face of optimistic estimates of expenditure benefits, that more stadiums and arenas aren’t built by teams and other private entrepreneurs. … There isn’t much evidence of the “put your money where your mouth is” variety that teams give any more credence to the high-side projections of expenditure benefits than skeptical economists do.”
In other words, if these buildings generate so much income, why don’t the capitalists build them themselves and reap the great benefits themselves, rather than foisting their construction off on the taxpayers?
As for George Steinbrenner’s “magnanimous” offer to finance new Yankee Stadium himself, my understanding is that that’s a gimmick too. Under baseball’s revenue sharing plan, the Yankees would have to pay into the team owners’ fund that subsidizes the low player salary teams but for the moneys the Yankees pledge to spend on a new stadium. Given the choice between having to kick back revenue to the other poorer teams and spending it on his own team, Steinbrenner chooses to spend it on his own team’s new palace. That’s called taking advantage of a loophole.