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S.E. Wood At whose expense? What would happen if you had a steel mill,
or a department store, or something, in Nashville, St. Louis
or elsewhere, and because a few of your highest-paid employees
complained about your 20-year-old building, you went to the city
council and demanded a new facility at taxpayer expense? Why, they'd throw you out quicker than you
could say "George Steinbrenner"! But that's exactly what sports promoters have
done in city after city. And they got what they wanted by promising
to bring hundreds of new jobs and tons of new money to the community.
The Federal Reserve Bank of St. Louis recently
published a study concluding that public financing of sports
facilities is a poor investment. The promised benefits just don't
happen. Economist Adam Zaretsky, writing in The Regional
Economist, says cities must compare the benefits to be obtained
for publicly funded sports facilities to those that would have
been received from schools, police, roads, etc., had the funds
been used for those purposes. "This calculation is almost always missing
from these studies," he wrote, "because the next-best
alternative is often the better choice." In other words, they don't publish these findings
because they would make the sports arena expenditure look bad
in comparison. Since World War II, out of the 140 remodeled
or rebuilt sports facilities, taxpayer dollars funded 126 of
them! That's $15 billion since 1987; $10 billion of that in the
past two years. Zaretsky says for a sports event to have a
positive impact on a community, it must attract attendance from
outside the local area. But studies indicate that the only major
facility in recent years to qualify for this requirement is Baltimore's
Oriole Park. And even then, the net gain to the Baltimore economy
is only about $3 million per year, on a taxpayer investment of
$200 million. Not too good. The Zaretsky study also rejects the argument
that new stadiums generate new jobs. He found that those who
work at such facilities generally come from other nearby jobs,
so there is no real change in the number of jobs available. Additionally,
many of the openings that are available are low-paying, minimum-wage
jobs, and available only on game days. Economics professors Roger Noll of Stanford
University and Andrew Zimbalist of Smith state in a Brookings
Review article, "A new sports facility has an extremely
small (perhaps even negative) effect on overall economic activity
and employment. No recent facility appears to have earned anything
approaching a reasonable return on investment. Regardless of
whether the unit of analysis is a local neighborhood, a city
or an entire metropolitan area, the economic benefits of sports
facilities are minimal." It is obvious why the team owners won't invest their own money in these facilities. So why do our elected representatives continue to do so with our money? Personal ego and bragging rights ... and of course, season tickets to the luxury boxes. Now you know. |