Stadium And Arena Funding Case Study

They saw advertisement as an income. And the franchises have increased revenues by using new stadiums and increasing prices for premium seating since 2002. New stadiums have new clubs, restaurants, stores and museums that can be served as new sources of revenues. They made profits by selling merchandise. Also, new stadiums improved the attendance of fans.

In 2010 there was a study conducted by Greater Memphis Chamber of Commerce to determine what the economic impact of the Memphis Grizzlies and the FedEx Forum was on the economy of the greater Memphis area. A professional sports team such as the Memphis Grizzlies is going to aid the community in increasing the revenue of the local economy. Games or concerts at the arena will draw in individuals from outside of the area who will buy such things as food, luxuries, or hotel rooms, which directly impact the local economy. This is why it can be beneficial for a large community such as Memphis to be able to host a professional sports team. In order to determine the benefits and economic impact, the community and organization need to be able to determine

Professional sports has become one of the most popular industries in the world today. The media spends billions of dollars on advertisements and teams spend millions of dollars on professional athletes all for one reason, the fans. The fans ticket sales and merchandise purchases are what keeps all the sport teams around and prevents professional athletes from losing their jobs. There are three types of fans in the sports world, average fans, fanatics, and fair-weather fans.

Thus we can see why public money is eagerly donated. The full costs of a stadium and the damage it does to communities are often years in the future, long after the politician is known for being the hero that save our local team and has moved on to bigger and better things, now with the campaign funding of the very teams that they built homes for and the fans who continue to pay. Team owners can choose new cities but cities can’t choose new teams thanks to the leagues government-sanctioned monopolies over franchise placement, mayors for example, feel they must offer owners anything they want. “Politicians continue

Sports Stadiums are an iconic staple of American tradition. However not everything about these venues is positive. Team owners take advantage of laws and fans to meet their own goals. Citizens and city officials from various locations have taken up their grievances with the NFL in the past. And it has gotten to the point where even political parties join together to bring to light issues with the organization. NFL stadiums are not good for cities because they take advantage of tax payers, hurt citizens on an economic level and cost them billions in subsidies.

Ticket sales, advertising, and merchandise help colleges produce hundreds of millions of dollars through college sports (Nocera and Williams). College-athletes, especially from D1 universities, are there to help the school produce money. A major part of a school’s profit is coming from the athletic department and they are even saving money too. Athletic departments are considered part of the educational system and do not need to pay taxes on sponsors, tv broadcasting, and season tickets (Eitzen). For example, March Madness is a popular event that is televised every year; some teams have even created their own broadcasting systems. Universities and coaches are supplying enough money that the athletes could receive some pay as well.

The issue at hand, however, is that power has shifted from the cities to the teams themselves. Professional athletic organizations have started taking advantage of cities by threatening to relocate unless they get public subsidies for expensive stadium renovations and construction. With this in mind it is imperative to ask today’s question: Do public subsidies for professional athletic organizations benefit their local community?

For example, the Oregon University Athletics program alone makes $196 million a year just off of sports sales. And twenty other colleges are making over $100 million a year with the athletes still not being paid. Almost every college makes their money off sporting resources like admission, or jersey sales. But almost all of their main money source comes from ticket sales. Depending on the seat view or spot will range from about $14 to $4,250 per ticket. And if the event is a special game the cost rises, along with the team or area. And the thing is that the majority of the money coming from sports the colleges use on things not even needed. Auburn University used money from its sales on a 11,000 foot HD screen for the stadium worth 13.9 million. And many other schools used the money from sporting events for different additions to the school worth well over $50

Proponents of subsidizing sports stadiums is a great decision because the economic impact it will have on the community is great for two main reasons. First, sports stadiums are massive construction projects. In fact, one could compare them to a medieval cathedral in their attempts to dominate a skyline and inspire pride in one’s city And, just like these cathedrals, they are very expensive, and massive building projects that would require many years of hard painstaking labor. For example, the proposed stadium for the Los Angeles Rams in Inglewood, California, was predicted to cost $3 billion and add 22,000 construction jobs to the economy of Los Angeles, California. Although construction jobs do eventually disappear once a stadium is constructed once the games begin, so does the massive consumer spending. For example, more than 3.5 million people saw the St. Louis Cardinals play at Busch Stadium in 2015.

In the United States, new sports stadiums are commonly seen as a vital part of the redevelopment of a city having a great economic growth with the production of jobs and a positive income builder. After this, the owners of the pro sports teams with millions and millions of dollars of subsidies for the construction of new stadiums and arenas and expect these facilities to generate economic benefits exceeding these subsidies by large margins. However, a growing body of fact indicates that professional sports facilities, and the franchises they are home to, may not be engines of economic benefit anywhere claims Sachse, “. In reality, sports franchises typically account for a very small proportion of the total economic output of the cities in which they reside.” Some economical studies on the amount of income and employment in US cities find no evidence of positive economic benefits associated with past sports facility construction and some studies find that professional sports facilities and teams have a net negative economic impact on income and employment. It just shows that these results suggest that at best, professional sports teams and facilities provide non-pecuniary benefits like civic pride, and a greater sense of community, along with consumption benefits to those attending games and following the local team in the media; at worst, residents

The city of Springfield, Massachusetts were blessed with the basing of a baseball minor league franchise in their city. But the class A team is faced with great revenue generation challenges that will make or mar the organization. The new team might likely take advantage of the fact that closest sports franchised teams are all located 90 miles away from Springfield. This might create a ticket and concession boom for the team and other benefits like employment and taxes for the city. The city has a considerable moderate family income and a recent growth index in the healthcare, financial, and other small and medium enterprise sectors is an advantage

Each of the  stadiums are funded in unique ways, communities do not benefit from new stadiums, and stadiums do not save a struggling downtown. Foremost, stadiums hurt public schools, and this money should be used for more important public services.  There are many  reasons we subsidize sports, but stadiums do not help the economy, and there are no net benefits from stadiums.  Teams strive for new stadiums to create an image,  but there are  options so that a community will not loose a team to another city without building a new stadium.

This directly impacts the projected NPV of the project as almost 95% of the cash flows are derived from this boost in sales. In addition to the financial support, remodeling the Stadium location also fits well with their business strategy. Some of the key supporting evidence includes a high percentage of the target market in the trade area at 42% of college educated adults, and a population with the highest median income of the group at $65,931. Most important to Target however, would be the maintenance of their brand. As a company that places a high value on the image of their brand, revitalizing a lagging store would both keep their presence in the local area and potentially draw more customers to an upgraded location. The final decision would be to accept the project under no budget constraints, but not issue new debt or equity to achieve it.

The Wembley stadium was built using a Design and build Procurement strategy. A Design and build strategy is where a single contractor is responsible for both the design and construction of the stadium. The client must specify the type of building they require and the contractor proposes the best design to meet this, this information was found at the web address Building.co.uk.

Unfortunately, these arguments contain bad economic reasoning that leads to overstatement of the benefits of stadiums. Economic growth takes place when a community's resources--people, capital investments, and natural resources like land--become more productive. Increased productivity can arise in two ways: from economically beneficial specialization by the community for the purpose of trading with other regions or from local value added that is higher than other uses of local workers, land, and investments. Building a stadium is good for the local economy only if a stadium is the most productive way to make capital investments and use its workers.