Baltimore soccer stadium study: Do the numbers add up?

A city-commissioned study on the economic impact of building a soccer stadium in Baltimore — presumably for D.C. Unitedwas released yesterday (download it here), and included the following estimated benefits: 780 to 940 jobs created per year, state tax revenues of $3 million to $3.5 million a year, and city tax revenues of $2.3 million to $2.8 million a year. Added Patrick Turner, the developer who wanted to build the thing as part of his Westport megaproject: “It would be great for us and great for the city of Baltimore.”

So, would it? Are those numbers realistic, and if so are they a good return on public investment? Let’s crunch:

  • Following a mind-numbing recitation of the history of MLS attendance and various Baltimore demographics (including, for some reason, a chart of student enrollment at every one of Baltimore’s colleges), the study finally gets down to how many events it expects would be attracted to a new stadium: 17 MLS home games, 9 women’s pro soccer games, 7 “national/international soccer” games, 4 college soccer games, 6 other sporting events (such as lacrosse), one concert, and 5 “other community events” each year. This seems a bit ambitious — are that many international soccer teams really going to want to play in Baltimore? — but not outrageously so.
  • Total attendance at these events is projected at 584,750-695,100, with total direct spending of $40,379,000-$48,155,000. That’s almost $70 a person, which is a lot to drop on a soccer game, even counting food, parking, and hotels (assuming anyone is traveling from out of town and staying overnight to see D.C. United). Factor in that this average needs to factor in lacrosse games as well, and you’re starting to enter wishful-thinking territory.
  • The report says it accounts for both displacement of existing spending and leakage of spending out of the local economy, but doesn’t say squat about how these adjustments were calculated, beyond that it’s part of the IMPLAN computer model used. That’s not exactly reassuring, given that displacement and leakage are extremely locale- and project-specific (you need to know what out-of-town options there are for people to be otherwise spending their money at), and not easily captured in a generic computer model.
  • Nobody’s saying how much Turner wants in public cash for his plan — he says his goal is to privately finance the stadium, but given that this is a $1.4 billion project overall, there’s plenty of other stuff he could be asking for money for. If you buy the estimated increased tax revenues of around $6 million a year, that would probably justify $80-90 million in taxpayer spending — but, of course, if any of the economic impact numbers are off, that would drop proportionately.
  • Those 780 to 940 new jobs would justify a much lower public expenditure — more like $40-50 million if you want to stay below the $50,000/job figure above which projects are just embarrassingly wasteful. Though given that, according to the report, that job figure was just cranked out by IMPLAN by applying a multiplier to the economic benefits produced, it’s probably not worth taking seriously anyway.

So, the overall takeaway: There’s a price point at which helping to subsidizing a new soccer stadium in Baltimore makes sense, and it could be as much as $80 million, but probably a good bit less than that. Also, the clear plastic binder trick for getting your report taken seriously still works.

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6 comments on “Baltimore soccer stadium study: Do the numbers add up?

  1. I totally forgot that the report contained within the aforementioned clear plastic binder was about bats!

    Sometimes when reading these economic impact statements, it appears that the research used to compile them was similar to the kind Calvin did for his report on bats.

  2. Didn’t you used to write them, D Train? I thought that’s where you first came up with the “clear plastic binder” rule.

  3. Man, I go away for a week and the entire sporting landscape changes… ok, maybe not.

    Not only is $70/attendee a bit rich, if you do the math on the “events”, the study seems to suggest that the 30 “major” events they plan each season will result in a sell out every time (sorry, I should clarify that, a sell out of tickets, not the taxpayers who funded the stadium – which is more believable).

    Well, most MLS clubs do not sell out their home games. DCU might, of course. They do have a history of better than average fan support. And if they could get 4 or 5 significant int’l games, I can believe they would sell those out too (although they might also sell out a much larger stadium, meaning that playing at the proposed soccer facility would reduce net revenues, not increase them).

    But WPS? honestly?
    I’m pleased that there is a pro league for the ladies, but there is no chance they sell out even at 8k capacity… ditto lacrosse. HS Football might bring in some additional cash, many other MLS facilities use HSF as a cash cow. It’s why we have ‘football’ lines in ‘soccer specific’ stadia all over the country.

    If this stadium generated more than $20M in ‘related spending’ annually, I would be surprised. But maybe they are planning to sell the premium seats at Yankee Stadium prices or something… oh, yeah, I forgot…

  4. I’m pretty appalled by the poor quality of the information in the document. Not only is the study poorly written (among other revelations, Lew Wolff actually owns both the Quakes and John Fisher… pg 88), it is wildly inaccurate in many respects.

    They manage to list minority owners of the Whitecaps, but leave out the founder, principal owner & primary source of funding for the club since the 1980’s at least.

    It is less a stadium study than a brief for prospective owners on MLS expansion. Let’s hope it gets filed where it belongs, appropriated cover images and all…

  5. If any club in MLS deserves a stadium it’s DC United (this coming from a New York fan)

    Hopefully the financing will come largely from the ownership. At least the government in Baltimore is more willing to listen to United’s plea for developing the stadium; unlike the DC government that spent hundreds of millions on one of the most technologically advanced sports stadiums only to see it half full on a good night.

    The one thing I have always liked about MLS is the ability to build low costing stadiums in comparison with NBA and NHL (Comparable stadium sizes)

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