The Kansas City Chiefs (actually the owners of the Kansas City Chiefs, but journalists like to refer to team management metonymically this way, even though, like calling the current leadership of the United States “the United States,” it causes all sorts of problems, sorry, where were we?) released an economic impact report claiming that their new stadium will create a huge benefit for the Kansas state economy, and … ugh, do we really have to do this? You know where this is going, I know where this is going, there’s a whole category full of analysis of these clown documents, can’t we just take it as given that they’re not worth the pixels they’re printed in and move on with our day? Though then the Chiefs execs get away with putting out their take in the media and on the socials with no dissent other than the economists who show up in the later paragraphs of the news coverage at best, so fine.
Who did team officials hire this time? Is it the LOLconsultants at Convention, Sports & Leisure? Some bespoke firm with a name like Fiscalmetrics or Lucresolv and a CEO with a degree in business marketing?
According to a report from Econsult Solutions, Inc.
Checks out! At least they have an actual economist on board, that’s something. So how many billions of dollars did they project the Chiefs stadium will bring in to make up for its $4.1 billion in public costs?
The one-time capital investment of $4.5 billion could generate $1.9 billion in “indirect impact,” or business-to-business spending, and $1.8 billion in “induced impact,” or spending of wages. The report describes this as a “total impact” of $8.4 billion during the construction period.
$8.4 billion is bigger than $4.1 billion! It’s also inevitably going to be if all you’re doing is adding up how much will be spent on the Chiefs stadium ($4.5 billion) and then applying a multiplier for the fact that any local businesses that the Chiefs (and taxpayers) pay for construction will then re-spend a portion of those paychecks on other things. If these were the only criteria, anything at all would be a good spending decision — Kansas could spend $4.1 billion on fake blood testing machines and it would be considered a win, because just think of all the spending on PR firms and lawyers that this would generate!
Anyway, let’s take a look at the report, maybe it has some amusing charts or something.
KMBC 9 asked, but neither the Chiefs nor their consulting firm provided a copy of the full study.
Look. I get that the 24/7 news cycle is tough on journalists, and especially TV stations, which are expected to tell you the latest news the second it happens, even if all the details aren’t known yet. And KMBC did talk to an independent economist who warned that the report “just gives us gross output numbers without proving that taxpayers are getting a return on that investment,” unlike some other local news outlets. But how many times do you need to be told: There’s no law saying that just because somebody with a fancy suit issues a press release means you have to write an article about it. Especially when you ask if you can see the report the press release is about and are told, “No.”
Instead, we get a news report that “Supporters, Critics Split Over Impact,” because when you have a secret document showing that $4 billion is $4 billion on the one hand, and an economist saying that’s silly on the other, the truth must lie somewhere in the middle. So we are cursed to do this every time one of these reports is issued — or vaguely referenced in a press statement — until either we get decent journalism in this country or the sun burns out, I think you know which one I’m betting happens first.
I believe it could have a total negative impact to the district’s public budget of $8.4Bn over 30+ years.
I have no trouble believing that number at all when you count the up front costs, lost tax revenue and ongoing public costs of owning and servicing the buildings, safety and security etc.
NY local news going crazy over all the economic activity created for NYC from eight matches in NJ. And yhe source for their data? FIFA.
These “economic impact reports” are also becoming common as public spaces like parks are fenced off and rented to for-profit companies for music festivals and the like (which occur on weekends during the summer, often on holidays, so in other words the exact time when demand for free public spaces by local residents would be at its peak).
I’m sure there’s some nerd with massive integrity running one of these but by and large companies can pay and get whatever results they like, and the local pols get political cover for what are mostly incredibly unpopular decisions.
Billionaires are magicians. We create so many billions when we wave our magic wand hands it’s a wonder everyone in this country isn’t a billionaire by now. If we build a stadium near your house, you’re bound to get rich cuz you paid for it!
So keep that public stadium cash gravy coming our way, folks. The NFL thanks you, Piggy thanks you. And really that should be enough for you plebes, so stop asking difficult questions!
How much benefit can a new stadium benefit the KC metro area? The benefit from Kansas and Missouri residents is near zero, most of that money would have been spent locally anyway. How many fans from visiting cites will attend Chiefs games? Denver, Las Vegas and the LA Chargers are the only teams that visit every year. Even if a few thousand Broncos fans visit, that is a negligible blip in a metro of 2 million. No other NFL city is within 500 miles, with Chicago and Dallas just over that, but they only visit once every 8 years. The other issue is how many more or fewer would visit if there is a new stadium. The construction benefits would accrue if the money was spent on roads, housing or schools. Spending billions on a football palace that will be empty 355 days a year is a waste of resources that could be better used elsewhere.
It probably wouldn’t be more people visiting. The trend is for new stadiums to have fewer seats so they can have more luxury boxes and create artificial scarcity for the regular seats.