Clown study claims Philadelphia can too support two arenas, no really it’ll be great honest

Philadelphia Mayor Cherelle Parker released the city’s studies of a new 76ers arena on the edge of Chinatown yesterday, including an economic impact report by everybody’s favorite LOLconsultants, CSL. And what does that study, confusingly dated “July 2024” which it hasn’t been for a while now, say?

KEY TAKEAWAY: CSL estimates the Philadelphia CBSA, with the presence of a second major league arena, could host 53 ANNUAL INCREMENTAL TICKETED EVENTS and generate approximately 613,000 ATTENDEES.

So if Philadelphia had two arenas instead of one, it would get an additional 53 non-Sixers and –Flyers events (35 concerts, 15 “family shows,” and 3 other sporting events) compared to what it does now. CSL calculated this by looking at the average number of events hosted by arenas in cities with one venue vs. those in cities with two — which seemingly doesn’t account for the fact that cities with more arenas tend to be larger, and so should expect to host more events anyway. It would make more sense to look at how many more events, if any, Philly had back when it had two arenas, before the Spectrum was torn down and turned into a parking lot because the Flyers owners figured it would be more lucrative that way, but LOLconsultants.

(The report did look at the increase in events in New York City and Dallas-Fort Worth when new arenas were built, but the New York City area has more than triple the population of Philadelphia, so maybe isn’t the best comparable.)

CSL goes on to estimate that all these new vaporconcerts would generate an additional $11.9 million in annual tax revenue for the city, $4.3 million for the local school district, and $6 million a year for the state. Divided by 613,000 annual attendees, that comes to $36 in taxes per ticket buyer, which seems like an awful lot, but it’s hard to argue with math like — well, the report doesn’t actually show its math, but surely it must have used some kind of math.

Contrast all this with a study commissioned by Comcast Spectacor, the Flyers owners, which concluded that “there isn’t sufficient content to support two buildings” and “no comparable markets have two arenas in the same city,” and that a new arena would only result in 8 to 12 new events in Philadelphia. That study also didn’t show its math — or maybe it did, but the study summary page links to an expired WeTransfer download, so we’ll never know — and obviously the Flyers owners have an incentive to claim that a new competing arena to theirs is a bad idea for the city. But then, CSL is owned by Legends Entertainment, a joint venture of the Dallas Cowboys and New York Yankees, so really it’s just competing conflicts of interest all the way down.

Parker’s administration also released a community impact analysis by a passel of consultants — BJH Advisors and Sojourner Consulting in partnership with Urban Partners, AKRF, Drs. Susannah Laramee Kidd and Laureen Hom, and Creative Development Partners, if you were wondering — that studied both the proposed Philly arena site and the neighborhood impact of new arenas in Brooklyn, Sacramento, and Washington, D.C., and its findings are quite a bit less rosy:

Although the project will not lead to direct housing displacement, there is evidence for increased indirect displacement of small businesses and low- and fixed- income individuals through gentrification and loss of cultural identity in Chinatown if the 76 Place were built…

One out of five small businesses in Chinatown are positioned to experience positive net economic benefit from the Arena. These businesses are mainly in the entertainment, food, and hotel sectors.

Half of the small businesses in Chinatown are not positioned to benefit from the Arena and may experience negative impacts. Most of these businesses are in the financial and professional services, healthcare, supermarket/grocery, and wholesale sectors.

Tl;dr: Chinatown is already facing gentrification pressures, and an arena on its doorstep would only make this worse.

The math used to arrive at these numbers is a little hard to follow as well, but at least it’s included — and based on “focus groups, interviews, and in Chinatown, three types of surveys (travel surveys, street intercept surveys, and small business surveys), business inventory, property tax analysis, and a historical literature review,” which is maybe a little better than “we looked at other cities with two arenas and they seem happy.”

The news coverage so far appears to be giving equal weight to both reports (plus design and traffic analyses), even the outlets that don’t know the mayor’s name, so that’s something. Though ultimately the fate of the arena plan is likely to come down to the local councilmember, Mark Squilla, who says he’s “comfortable making that decision” and has hedged like crazy about where he’ll come down on it. Maybe the public feedback form responses will sway him? Probably not, that’s not usually how local politics works, but it can’t hurt to try.

UPDATE: College of the Holy Cross sports economist Victor Matheson chimes in (in an email to a mutual connection, reprinted by their permission)

1. Including NYC and LA into comparisons with Philly for event utilization is complete economic malpractice. These are metro areas that are 2 to 3 times as large as Philly and have the population base to demand 2-3 times as many concerts. In addition, the arenas are serving much more geographically diverse locations. The proposed Philly arenas are like 6-7 miles apart, maybe 20 minutes even in traffic. The Forum and Honda center in LA are about 60 miles apart and Prudential Center in Newark is about 50 miles from UBS Arena on Long Island and both are way over an hour separated during normal traffic conditions. Any suggestion that a 2nd Philly arena will generate business like additional arenas in those two places is absurd. 

2.  There are other multiple sport arenas in DC, Toronto, Boston (and LA) that have more events than Philly, so that arena isn’t even at capacity now. If it isn’t at capacity now, why would one project a huge increase in events?

3. When comparing cities with multiple arenas, one should be looking at the smaller of the two arenas in comparable size cities to see the incremental impact. So, Phoenix, a similar sized city has an arena with 48 events like Philly and their second venue has 23 events. Minneapolis/St. Paul have one with 37 and a second with 27. A new arena is likely to add more like 25 new events, not 53 as projected. And you are not likely to add lots more high-demand events, because they already come. The new events you will get are the lower-tier events that are currently crowded out by the big events.

4. New events coming to Philly doesn’t mean more tax revenue for Philly. It means more money for out-of-state artists on tour and more tax revenue collected at the venue, but it means less revenue for other activities in the Philadelphia area. Concerts and entertainment tours are terrible in terms of leakages as local consumers put money in the pockets of out-of-state entertainers and not in the pockets of local small businesses.