A very interesting article that had never been brought to my attention before. This superb article is a publication of the Federal Reserve Bank of St. Louis (one of the "regional Feds" which, taken together, serve the same function as the Bank of Canada) and is written by an economist in the bank's Research Division.
Very well-written piece that employs basic economic concepts to persuasively make its case that public financing of stadiums is not a good choice for legislators. Not a surprising conclusion to me, but presented extremely well just the same.
As I was raised (and still live) in Los Angeles, I actually grew up with the misplaced belief that most teams own their own stadiums/arenas. The Dodgers, of course, own their land and stadium, and the Lakers and Kings were both owned by Jack Kent Cooke (later Jerry Buss) and the owner also owned the Forum. The Lakers and Kings have since moved to a private facility (Staples Center) but I believe that the land was granted by the City of Los Angeles.
Anyway, I am personally glad to see that the majority of the City of Los Angeles is not willing to use taxpayer dollars to finance a new NFL stadium for whichever football team may end up here. I really hope the Dodgers don't get a publicly financed stadium either next to Staples Center. Frankly, there's nothing wrong with the location they're at now (save for traffic).
As for Toronto, and I'm not in town obviously, but I haven't heard much clamoring for a park to replace SkyDome. Sure, it's not the prettiest edifice in the world and no one likes the fake grass but the facilities are good and the downtown location can't really be beat.
Anyway, I am personally glad to see that the majority of the City of Los Angeles is not willing to use taxpayer dollars to finance a new NFL stadium for whichever football team may end up here. I really hope the Dodgers don't get a publicly financed stadium either next to Staples Center. Frankly, there's nothing wrong with the location they're at now (save for traffic).
As for Toronto, and I'm not in town obviously, but I haven't heard much clamoring for a park to replace SkyDome. Sure, it's not the prettiest edifice in the world and no one likes the fake grass but the facilities are good and the downtown location can't really be beat.
I would love a beautiful, retractable roof, baseball-only park in downtown Toronto (who wouldn't?) but I don't at all mind the Skydome; in fact, I quite like it, certainly I like the Skydome more than I like the prospect of a new publicly-funded stadium. The location is absolutely ideal, too (by which I mean I can leave my house twenty minutes before gametime, grab the Spadina street car, and make the first pitch).
I'm fairly new to Toronto, but as I understand the matter, a lot of public money went into the construction of Skydome. I gather it's been something of a financial wreck, another example of the perils of public financing of professional sports facilities.
I'm fairly new to Toronto, but as I understand the matter, a lot of public money went into the construction of Skydome. I gather it's been something of a financial wreck, another example of the perils of public financing of professional sports facilities.
This article is well written but the conclusion is not new. What is interesting is that despite numerous independent studies that show public funding of stadiums is a bad investment, cities and states continue to do it. They do it by coming up with their own studies that show it is a good idea and people buy it. There is a politics lesson in here somewhere. Also the media are often onside because more sports means more newspapers sold and more TV/Radio viewers/listeners.
I am always amazed at the chambers of commerce or the state economists who produce the studies showing the huge economic impact of the stadium. It reminds of the old line - you can put all the economists in the world together and they still won't reach a conclusion - over to you Mike.
I am always amazed at the chambers of commerce or the state economists who produce the studies showing the huge economic impact of the stadium. It reminds of the old line - you can put all the economists in the world together and they still won't reach a conclusion - over to you Mike.
http://economics.about.com
I am always amazed at the chambers of commerce or the state economists who produce the studies showing the huge economic impact of the stadium. It reminds of the old line - you can put all the economists in the world together and they still won't reach a conclusion - over to you Mike.
No sane economist in the world would say these are a good investment.
All this shows is if you pay a mediocre economist enough, he'll say whatever you want him to say even if he knows it's a load of crap. Or as the old definition goes: "Policy Analyst is someone unethical enough to be a lawyer, impractical enough to be a theologian, and pedantic enough to be an economist."
My bidding starts at 200K. :)
There's also Murphy's Law of Economic Policy: Economists have the least influence on policy where they know the most and are most agreed; they have the most influence on policy where they know the least and disagree most vehemently. I think that applies here as economists have pretty much *zero* impact on these silly stadium deals.
Cheers,
Mike
I am always amazed at the chambers of commerce or the state economists who produce the studies showing the huge economic impact of the stadium. It reminds of the old line - you can put all the economists in the world together and they still won't reach a conclusion - over to you Mike.
No sane economist in the world would say these are a good investment.
All this shows is if you pay a mediocre economist enough, he'll say whatever you want him to say even if he knows it's a load of crap. Or as the old definition goes: "Policy Analyst is someone unethical enough to be a lawyer, impractical enough to be a theologian, and pedantic enough to be an economist."
My bidding starts at 200K. :)
There's also Murphy's Law of Economic Policy: Economists have the least influence on policy where they know the most and are most agreed; they have the most influence on policy where they know the least and disagree most vehemently. I think that applies here as economists have pretty much *zero* impact on these silly stadium deals.
Cheers,
Mike
No sane economist in the world would say these are a good investment.
I play in a roto league (and Jacko used to) with an economist - Brad Humphries - who has done some work on the economics of building new sports stadiums.
Here is one of his papers and an interview he did for the Prospectus with some guy named Law.
I play in a roto league (and Jacko used to) with an economist - Brad Humphries - who has done some work on the economics of building new sports stadiums.
Here is one of his papers and an interview he did for the Prospectus with some guy named Law.
What about stadiums and buildings being constructed by public dollars for a special event like the Olympic Games? I believe every Summer Olympics city since Los Angeles (which used an old building) has constructed many new stadiums (notably for the Track and Field and Opening/Closing Ceremonies) for use during the Games.
Whereas franchise ownership is an ongoing enterprise, the Olympics are two weeks. Granted, the stadiums are often used as venues after the Games (such as Turner Field) but is it worth it for a city to spend taxpayer dollars for this?
I ask for a couple reasons. In 1984, LA had a massive surplus from the Olympics, presumably because I cannot remember them building any significant new venues for any of their events (the Velodrome may be the only one). I also ask because Toronto still trying to lure the Summer Olympics. Are most of the venues already in place?
And with New York City still in the running for 2012, I don't know whether a new stadium would be required to house Opening and Closing Ceremonies. It seemed like the rejected San Francisco Bay Area bid was the soundest fiscal model (all existing venues with some touchup) but I'm guessing the IOC, like baseball owners, want spankin' new facilities to show off to the world.
Whereas franchise ownership is an ongoing enterprise, the Olympics are two weeks. Granted, the stadiums are often used as venues after the Games (such as Turner Field) but is it worth it for a city to spend taxpayer dollars for this?
I ask for a couple reasons. In 1984, LA had a massive surplus from the Olympics, presumably because I cannot remember them building any significant new venues for any of their events (the Velodrome may be the only one). I also ask because Toronto still trying to lure the Summer Olympics. Are most of the venues already in place?
And with New York City still in the running for 2012, I don't know whether a new stadium would be required to house Opening and Closing Ceremonies. It seemed like the rejected San Francisco Bay Area bid was the soundest fiscal model (all existing venues with some touchup) but I'm guessing the IOC, like baseball owners, want spankin' new facilities to show off to the world.
I liked the Humphreys article and the Law interview of him. It seems to me that what is behind municipal funding of pro sports stadiums (or Olympic bids for that matter) is often an exaggerated view of civic pride. Huge amounts of money are poured into projects to create a grandiose display. These things appear to be driven by psychology and politics, not economics.
Not sure if anyone is interested, but here is a link to a Cost-Benefit Analysis performed here in Vancouver regarding the 2010 Games .
The companion to this argument is that ballparks don't have to cost anywhere near the amount of money that is spent on them.
Nothing new here, people. I deleted some spam from this thread, which "activates" it on the Hot Topics list.