The price tag for professional sports

The price tag for professional sports

Meet the owners of the Green Bay Packers.
Meet the owners of the Green Bay Packers.

In late December, a caller on Howard Eskin’s 610 WIP sports radio show argued with the host on the issue of Donovan McNabb’s future as the quarterback of the Philadelphia Eagles. Eskin, known for his rough and tumble approach to sports commentary, issued a challenge to the caller: “If you know so much about McNabb, why don’t you predict who is going to win the next presidential election?” The caller responded, “The election? Who cares about that, it doesn’t matter! I’m talking about the future of the Eagles!”

Some people are emotionally tied to their city through their professional sports teams. The citizens of Green Bay, Wisconsin, have more than a Super Bowl riding on the Packers; they’re part owners of the team. Families in Green Bay with season ticket holdings can claim them as investment assets. Boston became America’s underdog hero city in 2004, when the Red Sox reversed “The Curse of the Bambino,” a superstition that was blamed for a championship drought dating back to 1918. Throughout the next year, it seemed millions of Americans became satelite citizens of Boston. That same city now enjoys the luxury of watching their Patriots make NFL history.

Even though sports teams can foster a sense of fulfilling pride (or in the case of Philadelphia, painful frustration), economists like Brad Humphreys claim that sports teams do nothing to bring people to major cities or spark the local economy. In this article, which includes research from University of Maryland economics professor, Dennis Coates, Humphreys says that the bill for a professional sports team is costly.

“The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area,” said Humphreys in the report. The statistics provided in Humphrey’s research are grim; including the average net loss of 1,924 jobs, loss of retail and loss of wages at nearby restaurants and bars all attributed to the impact of a professional sports team.

The construction of a stadium to house the team also comes at a price to local taxpayers:

Arena-funding measures vary from initiative to initiative, with taxpayers typically covering most of the tab – even though critics of such plans maintain that team owners could easily foot the bill themselves. In the (Montreal) Expos case, Humphreys said, the mayor of Washington, D.C., has promoted his plan by stating that the ballpark would be funded entirely by team owners, ballpark users and the district’s largest businesses, and not by residents’ tax dollars. Humphreys called the proposal a “novel approach,” but discounted it as disingenuous. “To say taxpayers won’t pay for the construction is really a sin of omission,” he said. -from The University of Illinois at Urbana-Champaign News article.

Philadelphia built two new stadiums for their football and baseball teams in 2003 after each team threatened to leave the city. These stadiums cost taxpayers 400 million to build. Even though both teams were still in contract to play in the multi-use Veterans Stadium and the city had ultimate legal leverage, they decided to build the facilities with the promise of bringing championships to the city of Philadelphia. We’re still waiting on that.

Do you think a professional sports team is worth the cost to a growing city? What can sports teams do differently to turn into profitable businesses for cities? Do you think the owners of these teams can build the facilities themselves?

Tags: taxessportsstadiums

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