I am quick to attack sports journalists who do a lousy job explaining stadium economics, so let me just say that the Boston papers are doing a bang-up job so far this year: First they tore through the city’s rhetoric about a “no public money” Olympic bid to reveal all the likely hidden costs, and now the Herald has responded to Pawtucket Red Sox owner James Skeffington’s claims that a new stadium in downtown Providence would be an economic boon by asking an actual economist. Who says exactly what you’d expect him to say, because it’s what damn near every economist who’s looked into the matter has concluded:
When we look at cities that have built new stadiums, we’re just not seeing that bump in economic activity,” [Holy Cross economics professor Victor] Matheson said. “In most cases, you’re just shifting around an entertainment dollar. You’re not seeing new dollars, and that’s especially true with minor league sports.”
Okay, citing one local economist (and a study by the Cato Institute) isn’t the most exhaustive report the Herald could have done, but cut them some slack, they’re a tabloid. At least they have reporters who call around for second opinions rather than just reprinting whatever the local stadium advocate says, like some people I could mention.
When proponents of new stadiums talk about an increase in revenue, they ought to start clarifying that they are referring to those who own the teams.
Neil, what is the last arena project that ran in the black, without any local tax increases?
I think this eliminates Brooklyn and Kansas City, but I’m not sure of that.
I’m talking about projects that increased tax revenues by itself, just from the increase in business.
Ran in the black for arena operations, for the team, for the city, for all of the above added together? I don’t quite understand your question.
Arenas that make a profit. Once the bond payments and the maintenance/operations costs are added up, produced tax revenues in excess of those expenses.
I think Orlando would not be such an example.
Arenas don’t collect taxes, though, cities do.
Can I get this in the form of “arenas where ____ collected more in ____ than ____ spent on ____”?
First of all, I am generally one of the anti-stadium guys Neil often quotes, but I can give some general answers related to this. First, we have a fairly large number of basketball/hockey arenas that are largely or entirely privately financed: Boston’s TD BankNorth Garden, NYC’s Madison Square Garden, Wells Fargo Center in Philly, Staples Center (for the most part). In the NFL the Patriots play in a privately financed stadium. In MLB the SF Giants are in a privately financed stadium.
Other stadiums with public financing have been parts of successful urban development projects such as Coors Field in Denver and PetCo in San Diego. Of course, these areas may have developed into vibrant entertainment areas without a subsidized stadium, but both LoDo in Denver and the Gas Lamp district in SD are now bustling areas where considerably less existed before the stadium.
@Victor Matheson
I think it’s pretty cool that you comment at Field of Schemes. For situations like Denver and San Diego where a stadium is part of an urban development project, isn’t the problem not so much that the stadium was subsidized but that the revenues that the subsidized stadium creates are often split along the lines of Team 100% Public 0% ?
It just seems to me that Glendale, Orlando, Indianapolis and Hamilton County are all much closer to being the rule than to being the exception. It seems to me there are essentially two kinds of projects:
1) When the developers are certain the project will make a profit, there are only private investors;
or
2) When the developers are way less certain the project will make a profit, government is the largest contributor.
I think Sacramento is a category 2. I always knew that thing would be built — I just don’t think it’ll have even one year in the black.
The Kings are a mess. They have no prospect of being at or above .500 in 2016. If they move in there with their usual winning percentage of around .350, and then double their ticket prices, they’ll be in the red in year one — and it’ll only get worse from there.
http://www.sacbee.com/sports/spt-columns-blogs/ailene-voisin/article15203723.html
I love vaportecture.
http://www.csnbayarea.com/warriors/warriors-updated-mission-bay-arena-renderings
There are arenas that run in the black if you don’t count construction costs. The number that generate positive numbers even after accounting for construction debt and operating expenses and maintenance is … not zero, but awfully close to it. (The ones that the indeed pretty cool Victor Matheson mentioned above are some of the few possible exceptions, because they’re in giant cities and can stay busy 200-300 nights a year.) I tried to address this question here:
http://www.slate.com/articles/sports/sports_nut/2012/08/seattle_sonics_arena_is_chris_hansen_s_promise_of_a_no_strings_attached_sports_facility_too_good_to_be_true_.html
Will somebody please explain why the stadium deal here in San Diego depended on a vote by San diegan city citizens to vote on or against an increase in hotel tax.The San Diego chargers are governed in the city of San Diego but they are not just a city team. They are a San Diego county team with fans outside the city in populated San Diego county cities that include chula vista, national city, la Mesa, elcajon, spring valley, Alpine, el central, Escondido, temecula, leucadia, San Carlos, imperial Beach, San ysidro, pine valley, descanso, campo, canyon city, potrero, dulzura, Ramona, Julian, ocotillo Wells, borrego springs. Bordering San Diego county South is Mexico cities that support chargers at border crossings include tecate and tiajuana. The economy here in San Diego county has not recovered from the recession unemployment 17% yet we still have kept the stadium sold out or close to it most games. The hotel tax was just one idea to help fund the stadium and to obtain it a vote that would left hotel industry in city of San Diego at a competitive disadvantage to the county cities. Does that deal decided by San Diego city voters not the hotel industry make sense please explain