I (and you, if you read this site regularly) didn’t have to go much beyond the headline on this Milwaukee Business Journal story — “Miller Park has delivered $2.5 billion impact to Wisconsin, study shows” — to figure that it’s probably nonsense, for all the usual reasons: economic “impact” doesn’t really mean anything, most sports spending is just cannibalized from other local entertainment spending, and most economic impact reports are garbage. But you will be glad if you do, as I was, because then you will discover who wrote the report that was responsible for the rose-colored headline:
An independent study released by the Metropolitan Milwaukee Association of Commerce Monday shows Miller Park has generated $2.5 billion in economic output since 1999. It officially opened in 2001.
Miller Park and the Brewers delivered valuable exposure to the city during the 20-year period, according to the study performed by Conventions, Sports & Leisure International, including $131.8 million in media value. It also brought in out-of-state dollars, which include visiting teams and fans, and fans from across Wisconsin who do not live in Milwaukee or Milwaukee County.
Oh hell yeah, it’s everybody’s favorite incompetent cartoon supervillains, CSL! In this case, they were hired by the local chamber of commerce — surely a disinterested body if ever anyone has seen one, even if the Brewers are a member — to show how the people of Wisconsin’s gift of $310 million to one Bud Selig for a new stadium was totally worth it.
The chamber allows for downloading the full study by clicking on the “Download the Full Sudy” (sic) button on its website, so let’s see what the report has to offer:
- “Cumulative net new impacts to the State … “totaled approximately $2.5 billion in total output, $1.6 billion in direct spending, $263 million in new taxes, 1,835 total annual jobs, and $1.2 billion in personal earnings.”
- 86% of Brewers game attendees were from the state of Wisconsin. Of the others, 95% said their main reason for going to Milwaukee was to see a Brewers game.
- That $2.5 billion in “total output” over the last 20 years comes from $448.2 million from construction, plus $152.5 million a year from new spending by fans who otherwise wouldn’t be spending in town.
- The $152.5 million a year, in turn, is an estimate based on a multiplier effect (in essence a calculation of how much spending generates more spending when the places you spend your money then turn around and pay workers who then spend that money, etc.) applied to $99.4 million a year in actual spending.
Let’s do a smell test on that $99.4 million a year. If 14% of Brewers game attendees are from out of town, and they sell maybe 2.7 million tickets a year, that’s 378,000 people. To generate $99.4 million, each and every one of those people has to spend $263 per game, meaning no doubling up on Airbnbs. And, of course, these need to be people who would not have gone to see the Brewers if they were still in their old stadium.
And, of course, that’s just total money changing hands in the state of Wisconsin, not actually money that Wisconsin taxpayers get back in their pockets. To see that, we have to take a look at CSL’s estimates for net new tax revenue:
- “Over the course of the previous 21 years, it is estimated that the operations of the Team and Ballpark have generated approximately $262.9 million in net new tax revenues to the State, $25.2 million to the County, and $24.3 million to the City.”
Another way of look at this then, is: In exchange for $310 million in cash in 1999 dollars, if you squint and make a lot of optimistic assumptions about out-of-towners and how much they’ll only spend if offered a new stadium to visit, the state of Wisconsin has gotten back $292.4 million in tax revenue, over the course of 21 years, meaning taxpayers have taken a loss on the deal, we’re just not sure how bad of one. That would arguably be more honest, but it also wouldn’t get CSL more chamber of commerce contracts if it made that the headline, so of course it didn’t play that up!
Or we could call up a legit economist, like the Wisconsin politics site The Center Square did, and see what they have to say about the CSL report:
“I refer to [CSL’s] approach as a ‘benefits-only analysis’ because it’s fundamentally one-sided; it never counts the negative economic impact of the taxes needed to fund the subsidy in the first place. And, unsurprisingly, it’s pretty easy to make arguments in favor of an idea if you ignore the cost,” said Dr. Michael Farren, a Research Fellow at the Mercatus Center at George Mason University. “At the end of the day, peer-reviewed academic research consistently finds that subsidies, especially stadium subsidies, don’t work very well to create economic development, and may even reduce it in the long-run.”
Really, Keith Law’s response is probably the best. But if you want the hard, cold numbers to back up your kneejerk derisive laughter, feel free to reference the above.