Royals promise $425 million of fun

The Kansas City Royals announced yesterday what taxpayers will get for their money if they approve $425 million in sales-tax subsidies to the Royals and Chiefs on April 4: a “360-degree entertainment atmosphere” with “an abundance of amenities geared toward families, groups and individuals.” (Cults and angry mobs will presumably have to make their own fun.) Included are a new food court, a new restaurant, expanded concessions concourses featuring new food stands, and, for the not especially hungry, living quarters for the team’s blue-nosed, disturbingly crown-headed mascot.

The Royals also plan on adding 2,500 “fountain seats” in the outfield (around Kauffman Stadium’s iconic fountains), which is slightly odd in that most baseball teams these days are looking to reduce capacity to create ticket scarcity, not increase it. Either Royals management is more optimistic about a return to pennant contention than the experts are, or it doesn’t understand that increasing supply without increasing demand leads to reduced prices – either way, it’s potentially good for Royals fans, I guess.

As for the effect on Kansas City beyond the fountains, the K.C. Star has a good roundup of the likely economic impacts, which sums up to “not as much as people claim.” In additional to the usual reasons for pessimism – the substitution effect and the like – is one that’s seldom mentioned: Raising sales taxes by 0.375% to pay for the renovations, according to federal data, would take $25 a year out of the pocket of the average Jackson County resident, dampening the local economy. That’s something you almost never see addressed by those eager-to-please economic impact consultants.


7 comments on “Royals promise $425 million of fun

  1. This was the first well balanced article on the issue from the Chiefs/Royals propaganda machine also known as the Kansas City Star. The teams own this town and I fear for the career and well being of the article’s author. In addition to the “$25 a year” reference, I think the best line of the whole article was, “The econmoic benefit of bringing a Super Bowl to the city is not anywhere near the cost of building the roof.”

    On a side note, you would not believe the multi-million dollar ad campaign selling fear and threats to the tax payers. I knew David Glass (Royals) was not above this but I have been saddened by Lamar Hunt’s (Chiefs) Art Modell impersonation.

    Thanks for your website.

  2. I don’t think Lamar and David are running the show, KC Fan. It sounds more like Dan and Clark are the ones trying to prove they’re grown up. (I personally think Dan is the problem with the Royals, along with Baird). They’re careful, though, to specifically say only that they’ll need new stadiums if this doesn’t pass on April 4. They leave it to our imaginations to think that could be way out of town and not just across the state line in Kansas.

    I’ve gone back and forth on this. I’d really like to see a good stadium get better (The K) rather than a new stadium, but I can’t get past the idea that I’d be helping billionaires pay millionaires even more millions by charging me more to go the game.

    Having read Neil’s book on the subject, it’s hard to imagine supporting a stadium through a tax increase, but I’m still somewhat undecided. I’ll reserve my judgment for April 4th.

  3. As KC fan noted, this was a better piece published in a typical homer newspaper. The article at least questions the over-the-top economic projections of hosting a Super Bowl made by the NFL and host cities. Contrast this to the piece recently published in the Star-Telegram about the potential for the new Cowboys stadium hosting the big game (http://www.dfw.com/mld/dfw/news/14126600.htm): “The economic effect of the game is sizable. According to a report commissioned by local officials in 2004, a Super Bowl in Arlington could generate $425.8 million as thousands of visitors descend upon the area.” The article’s author (who most likely has little basic understanding of economics) takes the numbers provided as fact, making no effort to question them, as opposed to the KC Star article. The Star-Telegram has been behind the new stadium in Arlington from the get-go. Even 18 months after the election, they still have no interest in presenting their readers a balanced analysis. Is it really that difficult to contact a sports economist or economics researcher who has studied the issue to solicit a comment? It will be interesting to see how the KC Star covers the vote over the next couple of weeks. Will this article be the only balanced piece published?

  4. The Star-Telegram reporter didn’t even need to contact an economist – for starters, they could have just looked up the difference between “economic activity” (all the dollars spent around a Super Bowl) and “fiscal impact” (actual net tax revenue that results). But why spend five minutes on Wikipedia when there are weasel words like “generate” available?

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