Why Have Stadiums Benefit The Economy?

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

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

Public financing for stadiums is an ongoing debate. Some studies show public funding does not generate economic impact. Other studies show public funding generates economic opportunities. Recently, November 16, 2017, the voting citizens of San Diego, California, reject a measure to finance a new stadium for the San Diego Chargers. In comparison, voting citizens of Arlington, Texas agree to sales, hotel and rental car tax increases to help fund the Texas Rangers new ballpark. What is available in Florida may vary from what is available in Texas. Depending on the instance, it comes down to politics. Politics is based on locality. Politically acceptable and politically realistic measures could depend on locality. The facilities built serve

     Possibly those who are most effected by the sport’s industry’s willingness to abandon a community are the dedicated fans. When Al Davis moved the Oakland Raiders to Los Angeles, he pulled away from some of sport’s most loyal fans and also hurt his football team. The NFL’s Colts and Cardinals have also had failures on the field since their moves. These three teams are proof that all the greed that was put into the moving of their franchises hasn’t brought them more success or in some cases less success.

I am going to discuss the topic of National Football League stadiums and their public funding. The purpose of the study is to find out if funding of NFL stadiums is “bad business,” The research I will look at the impacts that a stadium has on the economy in the city. Cities’ like to have attractions that they can draw from and be proud of. Most cities have some form of sport arena, and more are being built or are planned to be built. As with any business there are positives and negatives when hosting a sports team. Cities pay multimillions to help fund and build sport stadiums for teams. I hadn’t researched or looked into this topic before, so I was very intrigued by this. At the end of this paper I will give my own personal opinion.

Yankee Stadium was said to have profited hundreds of thousands of dollars a year just by renting out the stadium to the Negro Leagues. Shadow-Ball further illustrates the substantial differences in funding between the MLB, and the Negro Leagues. Because they Negro Leagues didn't have the money to buy supplies such as baseballs in some instances, they created Shadow-Ball. In this process, the "players would actually practice hitting the ball and catching a ball that wasn't actually there. In fact, they would go full practices without even having a ball, which further enhanced their discipline and focus." (Conrads, pg. 6) but in some instances, when they couldn't play in Major League ballparks, they were simply left to play on the dilapidated fields various areas - wherever they could find a field. Other than this, the players in the Negro Leagues did not make as much money as their counterparts who played in the MLB. For example, in Jackie Robinson's case, he "signed his contract with the Dodgers…for the Major League minimum salary: $5,000…for the year." (Rampersad, pg. 167) Furthermore, in general, "Negro leaguers made about a quarter of what their counterparts in the major leagues were making," but they kept their spirits alive, obliterated the negative energy, and kept playing the sport they loved…baseball. (Conrads, pg. 2)

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.

The fans that come to watch the athletes and who pay nearly $20 to get in the ballpark are padding the pockets of these owners. Statistics taken from online site http://cnnfn.cnn.com/2001 /03/30/news/baseball/ show that baseball ticket prices have gone up from $16.67 to $18.99 in just one year. A quote from the same online site http://cnnfn.cnn.com/2001/03/30/news /baseball/ wrote by Chris Isidore says, "Baseball fans going through the turnstiles on opening day across the nation Monday will be paying about 13 percent more than they did last year, according to a survey of prices…The increase makes baseball the sport with the fastest growing prices." Baseball in the United States is no longer America's Pastime. Baseball has changed to a high priced business, where average players make millions and above average players make tens of millions. To make the situation even worse, the dumbfounded owners and greedy sports agents who contaminate the game and the talented young athletes playing in it, control this business.

Stadium subsidies are used to fiancé new stadiums. The government provides financial support to franchises that allows them to build their new stadiums. These subsidies are costing tax payers millions and do not seem to be in the best interest of the city the stadium is in. Those in favor of using tax payer dollars to build stadiums argue that the economic impact a professional franchise has on a city is great and a new stadium will help generate revenue. Research has shown this is not the case. Most stadiums cost the city and never produce enough revenue to make up for those costs (Bast, 1990).

The reason for not maximizing the revenue from ticket sales is if there will be increase in ticket price there will be lower attendance which will decrease the sales of complementary associated with sporting attendance such as merchandise, concessions and parking.

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

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.

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.