Build It, Or Else
In light of the recent threat made by the owner of the Seattle Supersonics to move to another city, James Thayer writes an article in the Weekly Standard concerning the impact that stadiums (and profesional sports teams) have on the local economy. The Supersonics are threatening to leave unless a stadium upgrade is paid for the by the taxpayers of Seattle.
To justify spending public tax dollars on a stadium, the claim would have to be that stadiums “pay for themselves” through enhanced economic devlopment, more jobs, and all the income generated in and around the stadium. An excerpt, edited every so slightly so as not to give away the answer:
…team owners promise urban renewal and a stronger local economy…Regarding the Sonics proposed stadium refurbishment, Washington State Senator Margarita Prentice gushed, “The ripple effect defies our imagination.”
So the question is – are the politicians right? What happens when you do the math.
Thayer tells you what happens when the leading economists studying the problem add it up. You might be surprised. Read the article!
Once you read the article, can you blame the Seattle Supersonics owner?
–CT
February 23rd, 2006 at 11:31 pm
No, you definitely cannot balme the owner of the Seattle Supersonics. This is a win/win situation for him. Either he gets a new stadium upgrade in Seattle or some other city builds him a better stadium. He really has no loss; however he does a great job of making the city of Seattle believe that the team is crucial to its economy. Of course, he is not going to put any effort into helping raise money so the easiest way to get money is from taxpayers. This is because the taxpayers have no say in the situation.
February 23rd, 2006 at 11:35 pm
The politican is right. All of the revenue that is “promised” never amounts up to what was supposed to be. However, most are none the wiser, the team owner is happy for now. But a few years down the road, the new stadium will not be as good as others that have been improved in the meantime and the owner will probably make the same demand. So this process will more than likely continue. So the ones who seem to lose the most here seem to be the taxpayers.
February 24th, 2006 at 11:23 am
No, the politicians are not right. What was the question again?
Seriously, the sports stadium phenomenon is a great illustration of why economists find politics frustrating. This is one of the few areas economists have reached a broad consensus on, yet state and local governments continue to use public money for stadiums (if you haven’t read the Weekly Standard Article, please do).
For New Orleans, with all its restaurants, we have a classic case of the seen vs. the unseen. Let’s say that only 50 percent of fans at the Zephyrs, Hornets, or Saints games buy food at the stadium. That money might have been spent, instead, at a restaurant….so it shouldn’t be too surprising that restaurant workers lose.
February 28th, 2006 at 9:12 pm
Can you blame the owner? I dont think so. He practically gets what he wants no matter what so it works out for him either way even though he doesnt plan to put forth any effort in raising the money.
March 4th, 2006 at 1:15 pm
No, in my opinion you can’t blame the owner because if the seattle sonics leave seattle the city will take a hit in the pocket. So many people will lose jobs if the team move to another city. The city is making a profit from the team anyways, so I don’t see the problem with giving the team a new stadium.Besides the recent superbowl appearance by the seattle seahawks the sonics we’re bring the most money into seattle. The hotels and restaurants made a profit from the tourist that visited seattle last year during the NBA regular season and NBA playoffs last year. So economically the owner is doing the right thing by threatening to leave the city.