Category: economic impact studies

Friday roundup: DC hires same clown consultants for Commanders deal who screwed up DC United math

access_time personNeil deMause

Before we get to the weekly news roundup, a commenter asked me a question yesterday — I mean, I think they may actually have been trying to troll me, but it was in the form of a question — about how it could be better for Missouri to risk the Kansas City Chiefs moving to Kansas and losing all the tax revenue that comes with games. After initially going the “because economists say so” route, I tried to write up an actual detailed answer, and I want to include it here, because I, at least, found it instructive to see how quickly these kind of “sports stadium pay for themselves through economic activity” arguments fall apart once you subject them to actual math:

I found where your numbers are from, and they’re not from any economic impact study by the sports authority or an independent auditor or anyone else. They’re from a consultant hired by the Chiefs, who declared that the team and the stadium “generate $28.8 million in direct, indirect and induced tax revenue for the State of Missouri annually.” (The supposed $572 million is just “economic activity,” and the $28.8 million is the presumed taxes on that; if you include both, you’re double-counting.)

So, we already have Missouri spending $500 million in order to save $28.8 million a year, which would be a negative return on investment right there. But where does that $28.8 million figure come from? The Chiefs consultants, Econsult Solutions, only released a one-pager with no footnotes or other methodology, so we have no idea.

Most importantly, we have no idea if Econsult included money that would otherwise be spent elsewhere in Missouri if the Chiefs left. Is that all of it? No, of course not. Is it enough that it would reduce the $28.8 million a year in new taxes to a level where Missouri would be better off if the Chiefs left? Given that Missouri would be better off even if the real number were $28.8 million a year, yeah, that’s a near certainty.

But there’s an easier way to figure this out than guesstimating where people would be spending their money in some hypothetical situation: Look at cities that have gained or lost teams, and see what happens to local tax revenues. Innumerable economists have now done this, and found that the resulting losses are somewhere between 1) nothing and 2) next to nothing. (It’s actually worse than that: Some cities brought in *more* tax revenue without a team.) And that’s cities — the numbers are going to look even worse for states, since you can’t even make it up by stealing tax revenues from the suburbs.

No matter how you slice it, the numbers show that at the price points we’re talking about, $500 million and up, there is no way on earth for local governments to do better with the teams than without. You can wish it were otherwise — and team owners will certainly hire people to claim that it’s so — but good luck finding any data to support your case.

And now, on to the news:

  • Speaking of economic impact reports, Washington, D.C. Mayor Muriel Bowser just released one for her proposed Commanders stadium that would cost the city upwards of $7 billion, and you’ll never guess who wrote it: That’s right, Convention, Sports & Leisure, everyone’s favorite Dallas Cowboys–and–New York Yankees–owned clown consultants! I have no plans to go over it in detail (though the page with the large heading spelled “MULTPLIERS” does stand out), but I am obligated to point out that the last time D.C. hired CSL to do a stadium study, it was immediately revealed that about two-thirds of the projected city benefits weren’t benefits at all, forcing the consultants to put out a letter “clarifying” that its 400-page report didn’t actually say what it said it said. That CSL they got hired again by D.C. to do their next big stadium study is either a sign that Bowser wasn’t paying attention in 2014 (when she was a city council member) or that stadium consultants aren’t getting hired for the quality of their work, but rather for how reliably they report what team owners and elected officials want to hear, yeah, that’s undoubtedly the one.
  • Sports economist Geoffrey Propheter read far enough into the CSL report to find this knee-slapper: “Suppose I attend a conference in Denver, get a hotel room, and eat a Subway. According to CSL, the Subway gets to count my conference fees, room fees/taxes as economic impact. And so can the conference and the hotel. So now all my spending gets counted x3. Please stop being terrible at thinking.”
  • The Chiefs and Royals owners may now have blank checks from the state for up to 50% of their stadium costs (or will once the Missouri state house passes the bill and Gov. Mike Kehoe signs it, which should happen soon), but they still want even more city and county money to pay for their stadium dreams, and that could require more public referendums. The Kansas City Star reports that the two teams are likely looking at separate ballot measures after a combined one failed spectacularly last April; no word yet on when these would happen, but the teams are clearly going to have to ask the state of Kansas to renew its offer of state money for stadium there beyond its June 30 expiration date, or else “We must outbid the evil barbarians from beyond the western realm!” is going to have somewhat less impact on election day.
  • The plan by Ohio state senators who accepted tons of campaign donations from Cleveland Browns owner Jimmy Haslam to raid the state’s unclaimed funds account to borrow money for a Browns stadium may be stoking outrage from residents about what one called “legal theft,” but it’s doing wonders for publicizing the existence of the unclaimed funds and getting Ohioans to start claiming them.
  • Also, the Browns’ stadium hasn’t even been approved yet, and it’s already racking up cost overruns: The city of Brook Park just asked for $71 million in state road improvements for the planned stadium site, on top of the $1.2 billion in public money that’s already been proposed.
  • Want to read an article about how a min0r-league baseball stadium has “revived a struggling downtown” in a South Carolina city, while quoting only the mayor, the team owner, and the stadium developer? Sorry, I’m going to link to it anyway.
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Friday roundup: Browns officially demand $1.2B in tax money, DC and San Antonio residents call out public cost of sports plans

access_time personNeil deMause

And how’s your city’s week going? That good, huh? It’s going around.

I would share more Bluesky snark with you, but there’s stadium news to be gotten to:

  • The Cleveland Browns owners have formally issued their request for funding for a $2.4 billion domed stadium in Brook Park, and it includes $1.2 billion in taxpayer money. (The breakdown is $600 million state, $178 million county, $422 million city, if you’re an Ohioan and are wondering which of your government budgets the money would be coming out of. Also, though it’s being described as “new tax revenue,” it really isn’t; hey there, Casino Night Fallacy!) Team owner Jimmy Haslam is describing this as a “50/50 public and private partnership,” though of course that’s only on the spending end; the chances of taxpayers getting an equal cut of stadium revenues are estimated as ROTFL. At least one of the elected officials being asked for cash was extremely unenthusiastic: Cuyahoga County Executive Chris Ronayne, who has stated that he’d rather the Browns remain within the city of Cleveland, said, “We have to throw a flag on the play” and “it’s a Hail Mary to throw out numbers that don’t square,” sorry, we’ve reached our maximum daily exposure to football metaphors, we’ll have to pick this up again next week.
  • D.C. Mayor Muriel Bowser told a community meeting that she wants to build a Washington Commanders stadium at the RFK Stadium site, and according to WTOP, “When someone asked whether Bowser would commit to not offering a subsidy, she said no.” News reports didn’t describe the crowd reaction to that non-pledge, but given the overall skepticism about a stadium plan expressed at the meeting, we can picture it for ourselves.
  • Speaking of resident reaction, “‘Highly speculative’: Residents bristle at lack of answers on funding for new Spurs arena” is a pretty evocative headline, well done, San Antonio Express-News. And unlike in D.C., in San Antonio massive public scorn matters, because the Spurs arena development plan — which goes by the truly jaw-dropping name Project Marvel — is going to require a public referendum to pass, so the Spurs owners have some bristling to address.
  • The United Soccer League says it’s planning to launch a new top-tier division in 2027 to compete with Major League Soccer, made up of some of its existing second-tier franchises and some new ones, and you know what new soccer teams means: new soccer stadium demands! USL officials talked a lot about how the U.S. needs a system more like Europe, where there are tons of soccer teams in cities large and small, but left out the part about how those teams’ stadiums are typically built without large public subsidies, curious, that.
  • And speaking of soccer stadiums, a clown study by the Connecticut Center for Economic Analysis claims that a new soccer stadium in Bridgeport would “generate $3.4 billion in economic output and sustain 1,300 new permanent jobs annually until 2050.” Wait, 1,300 permanent jobs annually? Like, 1,300 jobs one year, then another 1,300 jobs the next? It will not surprise you to learn that the Connecticut Center for Economic Analysis is connected with UConn’s business school, not its economics department, though it may surprise you that the report was apparently issued last August but only got reported on by the Hartford Business Journal this Wednesday, slow week in the stenography industry, I guess.
  • You may think you don’t want to read a long profile of College of the Holy Cross economist Victor Matheson in the school’s magazine, but what if I told you he provides scientific tips on which lottery numbers to avoid picking? Matheson also discusses stadium funding (“Let’s just say that I’m fairly happy that I have long-term job security as a critic of spending massive amounts of taxpayer money”) and the fact that he wears a different soccer jersey to class each day, which, yes, requires a lot of soccer jerseys.
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Allen Sanderson, stadium economist and sports fan, has died at 81

access_time personNeil deMause

If Allen Sanderson, who died recently at the age of 81, will be remembered most for one thing, it will likely be a single remark: “If you want to inject money into the local economy, it would be better to drop it from a helicopter than invest it in a new ballpark.” That statement, which Sanderson used variations on multiple times (I first saw it in reference to a proposed Minnesota Twins stadium in 1997), ended up inspiring a movie title (as well as a Field of Schemes coffee mug) and generally encapsulated the attitude of pretty much every economist toward sports subsidies: Spending money on anything will result in some economic impact, but it’d be hard to find one with less bang for your buck than a pro sports stadium.

Sanderson should be remembered for much more than that, though: As a longtime professor at the University of Chicago — according to his faculty page, he’s taught more students there than anyone in school history — he co-wrote a ton of important studies of sports stadium economics, including three chapters in the great 1997 tome Sports, Jobs, and Taxes and more recently a study making the case for paying college athletes. And he was always happy to provide journalists and the public with plain-English explanations of economic concepts, whether about why income inequality drives higher ticket prices or the lack of an Olympics bump for cities that host the Games; his other frequent aphorisms included “There are two things you should never put on a valuable piece of property: a cemetery and a football stadium” and, with regard to claims of stadiums’ economic impact, “Take whatever number the supporters are giving you, move the decimal point one to the left, and you’re pretty close.” (Here’s a nice video of one of his talks if you want to see him in action.)

Allen was also a big sports fan, particularly of the Chicago White Sox, something he would invariably admit with chagrin. He once told me about a memorable conversation he had with a sports marketing expert to whom he was complaining about all the unnecessary noise and ad boards and attempts to sell you things that have become part of the modern live sports experience. The marketer, as Allen told it (I’m paraphrasing from memory here), replied, “We have different categories that we separate fans into, and you’re what we call a ‘traditional fan’: You go see sports just to watch the game. Let me tell you something, Allen: There aren’t that many of you.”

There definitely aren’t that many Allen Sandersons, and now we have one fewer. RIP, and thanks for all the insight and good humor that you brought to the world.

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Friday roundup: Rays to play 2025 in Tampa, and other things to make people mad

access_time personNeil deMause

The verdict is in for where the Tampa Bay Rays will play the 2025 season while waiting for their roof to be (probably) repaired, and the answer is: Steinbrenner Field in Tampa, spring-training home of the New York Yankees and rest-of-the-time home of the Tampa Tarpons. I’m going to go ahead and call this a fine enough decision: The stadium holds 11,000 people, not too far off of the Rays’ average 2024 attendance of 16,515; as a spring training site, it has major-league amenities; and it’s still in the Tampa Bay region, so Rays fans won’t have to drive across the state or the country to get to games. Plus, there are multiple fields on the site, so there’s no worry about schedule conflicts, since the Tarpons can just play on one of the back fields while the Rays take over the main one.

Of course, it’s also not in Pinellas County, which is already ticking off Pinellas County commissioners who already held up a vote on approving bonds for a new Rays stadium last month amid concern that the team might play elsewhere for a season or three. Commissioner Chris Latvala, who voted against the stadium deal in July, called the decision “unfortunate,” saying, “there’s going to be over $1 billion public funds dedicated from Pinellas residents to the Tampa Bay Rays, and the thank you that the Rays gave them was to play the games across the bridge in Hillsborough County.” Commissioner Rene Flowers, meanwhile, who voted for the deal in July, told the Tampa Bay Times she’s now not sure if she’ll change her vote, saying, “I’m waiting to see how it looks for us financially” — spoilers, Rene, it still looks just as bad as it did then.

And then there’s this tidbit:

The Yankees will receive about $15 million in revenue for hosting the Rays, a person familiar with the arrangement told The Associated Press, speaking on condition of anonymity because that detail was not announced. The money won’t come from Tampa Bay but from other sources, such as insurance.

Um, Associated Press, you drunk posting? First off, “Tampa Bay” is not a government entity, it’s a collection of disparate municipalities and counties, so who isn’t the money coming from, exactly? And “such as insurance” is both awfully vague and puzzlingly specific, as the only insurance policy that’s been discussed is that held by the city of St. Petersburg, which is already committed to paying for a chunk of the estimated $55 million cost of repairing the Tropicana Field roof.

Still many questions, in other words. Anyone else want to chime in?

“I’ll be excited to set a record for rain delays in a season,” Rays reliever and union player rep Pete Fairbanks said.

And as for the week’s other news:

  • Orlando’s stadium formerly known as the Citrus Bowl is set to get $400 million in county-funded renovations, something that Orlando mayor-for-life Buddy Dyer first proposed last year and which the county gave preliminary approval to back in January. The money would come from the “tourist development tax” — the same pool of hotel-tax money that Pinellas County is currently debating whether to hand over to the Rays — which according to the authorizing legislation can be used for building stadiums, or building auditoriums, or funding aquariums or museums or zoos or beaches or advertising tourism or a whole lot of other things, so long as the purpose is to get more tourists coming to your county. It’s actually somewhat difficult to argue that renovating a stadium that hosts a handful of college football games each year in order to make it “fully symmetrical” is what’s needed in order to encourage tourists to go to freaking Orlando, but this is what the county commission is being asked to vote on in the next couple of weeks, with a straight face.
  • A report by consultant Econsult Solutions Inc. commissioned by the city of Cleveland claims that the Browns leaving downtown would cost the city $30 million in annual economic activity and $11 million in annual tax revenue, which on the face of it doesn’t make any sense since Cleveland doesn’t have any taxes that are at 36.7%. A quick look at the report itself doesn’t reveal any more methodological details, except that Econsult apparently calculated its estimate that Cleveland would lose 29% of Browns-related spending by dividing the population of the city by the population of Cuyahoga County, LOLconsultants.
  • Personal seat license prices at the new Tennessee Titans stadium are in some cases going up from $750 per seat to $10,000 a seat, and season ticket holders are not pleased. But at least the PSL money will help pay off the public’s $1.2 billion share of the construction — oh, what’s that, the seat license money is entirely going to pay off team owner Amy Adams Strunk’s share of the costs? The Hog Mollies didn’t mention that part!
  • The city of Oakland’s sale of its half of the Oakland Coliseum site to private developers is on hold, apparently because Alameda County is dragging its feet on the transfer of its half of the site which it had previously sold to A’s owner John Fisher. No, that doesn’t make sense to me either, it looks to involve a lawsuit in progress charging that the sale violates the state’s Surplus Land Act requiring that public land first be offered up for development as affordable housing — similar objections were raised about the Los Angeles Angels deal, you may remember, but that fell apart before it was ever resolved, so who knows what’ll happen here.
  • One long-rumored stadium site the Kansas City Royals definitely won’t be moving to is the old K.C. Star building, because it’s being converted into an “AI innovation facility.” A local wine bar owner called this “not the most exciting thing for the neighborhood” but at least a plan that wouldn’t require displacing local businesses, which is probably about right.
  • Diamond Sports Group, aka Bally Sports aka FanDuel Sports, has emerged from bankruptcy reorganization, with lots of consequences for the MLB, NBA, and NHL teams it formerly provided cable broadcasts of. ESPN has a rundown, but the main takeaway is that a bunch of teams are going to getting less TV money than they expected, which will effect everything from their player budgets to the relative importance of market size in terms of team profitability, while fans will get some new options including the ability to do pay-per-view of single games for a mere (?) $7 a pop. More on this as more dominoes fall, maybe, or check Marc Normandin’s Marvin Miller’s Mustache newsletter later this morning, if I know him he’ll be weighing in on this.
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Friday roundup: Everyone’s building soccer stadiums, no one’s sure how to pay for them

access_time personNeil deMause

This was a rough week for anyone in the U.S. who is an immigrant or looks like they might be, is trans, might ever need an abortion, is Palestinian, is a federal government employee, is a local government employee, is an employee of anything that depends on international trade, lives near sea level or in places that get hot or are at risk of hurricanes, likes democracy, or cares about a relative, friend, or neighbor who does. Not that it would have been an amazing week for most of those people if the presidential election results had gone another way, but a whole lot of folks are somewhere on the spectrum from anxious to terrified right now, so if you need to check in with each other right now before getting back to life as we know it, that’s not only reasonable, it’s a fine tradition.

And now, whenever you’re ready, back to sports stadium and arena life as we know it:

  • The owners of Sacramento Republic F.C., who now include the Wilton Rancheria Native American tribe by are still led by minority owner Kevin Nagle, announced plans for a new stadium, and almost none of the news coverage bothered to provide details of how it would be paid for, even those that reported on how it was announced to the tune of “Don’t Stop Believin’.” Finally, way at the bottom of a KCRA-TV report, we learn that the city of Sacramento is expected to put up $92 million in infrastructure money from property taxes on 220 acres surrounding the stadium, plus provide free police, fire, EMS, traffic, and other services for the next ten years. The city council is set to vote on the plan Tuesday, so that leaves three whole days to gather feedback, two of which are weekend days and the third is a holiday when city offices are closed, this is fine.
  • Bridgeport is considering a minor-league soccer stadium that would cost at least $75 million and which would likely include public funds, and Baltimore is considering a minor-league soccer stadium with no known price tag or details on how to pay for it, and Fort Wayne is considering a minor-league soccer stadium that is promised will be “100% privately financed” but we’ve heard that before.
  • Cleveland and Cuyahogo County are continuing to look for ways to fill their budget gap for paying for future upgrades for the Guardians and Cavaliers, and county executive Chris Ronayne says options are “not yet concrete” because “it’s a conversation that’s probably also going to have to include the public.” Signal Cleveland speculates that this could include going back to voters to approve another tax increase, unless Clevelanders go back to drinking and smoking at their old rates, which might not be as likely as you would think.
  • Nearly 95% of campaign donations by U.S. sports team owners went to Republican candidates or causes, according to a Guardian review of donor filings, which, duh, Charles Barkley could have told you that.
  • How are Inglewood business owners around the Los Angeles Rams‘ new stadium and Los Angeles Clippers‘ new arena loving all the new foot traffic? Not so much! “One of my lowest sales days was on Super Bowl Sunday” because of street closures, said a local bakery owner at a press conference this week. “I literally made under $600 for the day. I had to send employees home, and you’re just looking around like, ‘What in the world?'” Checks out!
  • Did a major news site just run an item reporting wild economic impact projections for a proposed Buffalo soccer stadium without saying who conducted the study, while the byline partly credits a City Hall press release? Sure did! Please give to support your independent nonprofit or collectively owned news media, we might just be needing them the next year or four.
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Friday roundup: A’s exec says Fisher really does have Vegas stadium money (no, you can’t see it)

access_time personNeil deMause

Before we get to the bullet points, and I know how much you all love the bullet points, there is pressing news we have to discuss first, which is that Athletics owner John Fisher has the billion-dollars-plus he needs to build a stadium in Las Vegas. Sort of. Maybe. According to a guy:

Athletics owner John Fisher and his family will invest $1 billion into the construction of a stadium in Las Vegas and U.S. Bank and Goldman Sachs will offer a $300 million loan, club executive Sandy Dean said Thursday.

Dean made his remarks to a special meeting of the Las Vegas Stadium Authority board.

Dean said four letters will be presented at the Dec. 5 authority meeting asserting construction details and financing will be in place. Final approvals are expected to be made at that meeting to allow construction of the $1.5 billion, 30,000-seat domed ballpark with a capacity for up to 33,000 fans.

So it’s official: Fisher has financing in place for his Vegas stadium … well, no, he will have financing in place by December … or he’ll have a letter (or four) stating that financing is in place?

[One] letter, Dean said, asserts the Fisher and his family have the ability to meet their financial commitment. Dean said [another] letter from U.S. Bank will show that through a review of the owner’s finances that it “concludes the Fisher family has more than sufficient resources to fund the equity investment that’s required to build the stadium.”

Except! Here’s video of Dean saying that one of the letters will be “from John Fisher indicating that his family will invest a billion dollars in support of the project here in Las Vegas.” So which is it: Is the Fisher family committing to spend $1 billion on a Vegas stadium, or just avowing that it  is worth $1 billion? We already knew the latter — Vegas convention center authority chief and unregistered A’s lobbyist Steve Hill keeps saying it, among other things — but that’s not the same as actually figuring out what the family would liquidate to pay for the stadium: the San Jose Earthquakes? The Gap?.

(Dean also said Fisher is still looking to sell minority shares of the team at inflated prices because “it would be good coming to Las Vegas to have outside partners from Las Vegas,” but not because he needs the money, oh no: “The ability to finance the stadium is independent of that.”)

The question all this keeps coming back to isn’t “Where can a billionaire find a billion dollars?” but rather “Is the Fisher family ready to throw a billion dollars of its own money down a stadium hole?” The number of stadiums that can cover their own construction costs is slim; the number that have done so that are in their leagues’ smallest market and include a pricey dome is zero. Which is why people are eager to see Fisher put actual money on the table; promises of a letter next month that will maybe describe actual money on the table is not quite the same thing.

Sorry if all that was anticlimactic. And now, this week’s bullet points:

  • Ohio Attorney General Dave Yost wants to intervene in the Cleveland Browns‘ lawsuit against the city of Cleveland seeking to block the use of the Art Modell Law to block the team from moving to a new stadium in Brook Park. Yost says the team’s claim that the law, which requires that teams be offered up for sale to local owners before being relocated from their current home city, is “unconstitutionally vague” is “wrong,” and since Browns owners Jimmy and Dee Haslam only sued the city, he needed to file a motion to intervene on behalf of the state. Feel the excitement!
  • Philadelphia councilmember Mark Squilla may have come down in favor of letting the 76ers owners build an arena next door to Chinatown, but he has an idea for ensuring that the neighborhood isn’t disrupted: a zoning overlay to “require affordable housing, restrictions on types of businesses, and limits on the size of new storefronts to discourage chain restaurants from crowding out traditional Chinatown retail,” in the words of the Philadelphia Inquirer. Adds the Inquirer: “The precise language mandating how any of this would work has yet to be added to the bill.” This is on top of proposing a tax increment financing district to kick taxes collected in Chinatown back to local businesses to offset any rise in rents as the result of increased property values — pretty sure that would only risk encouraging landlords to increase rents more knowing businesses would be getting subsidies to help pay them, need to go back and check my Intro to Economics textbook chapter on microeconomics.
  • The World Series is over and I didn’t get around to discussing the New York City Economic Development Corporation’s claim that each Yankees and Mets home playoff game generated $20-25 million in economic activity, but suffice to say I talked to an EDC spokesperson who told me (on background, so I’m not supposed to quote them directly so I’m not) that the analysis was based off a previous model from 2022 that puts together assumptions from the city tourism board plus assumptions from the Yankees and then applies a multiplier. Also, they look at “anonymized cell phone data”? No, you and I are not allowed to see the actual model, so no further details about WTF this means will be available.
  • Spotlight on America has a piece on how Tempe, Arizona said no to funding an Arizona Coyotes arena and how other cities could follow its lead, which is all well and good until it concludes by lauding late Seattle Seahawks owner Paul Allen for his commitment to Seattle, when Allen actually paid the city to hold a referendum so he could get $300 million in public money for a football stadium, then refused to open his books like he promised in exchange for the money, seriously, what?
  • Perhaps you would prefer a deep dive into the toilets at the Los Angeles Clippers‘ new arena? Perhaps you would prefer I hadn’t phrased it that way? Sorry, you’re getting both!

 

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Friends don’t let friends read economic impact consulting reports

access_time personNeil deMause

The clowning on the CSL International economic impact report claiming a pile of tax revenue benefits from a new Philadelphia 76ers arena continues today, this time in the pages of the Philadelphia Inquirer. The paper spoke to economists J.C. Bradbury and Geoffrey Propheter and real estate professor Arthur Acolin, and the resulting comments were about what you’d expect if you’ve ever spent five minutes talking to sports economists about CSL and its ilk:

“The study is completely useless,” said Geoffrey Propheter, a professor of public affairs at the University of Colorado-Denver and the author of Major League Sports and the Property Tax. “That’s not a commentary on if it’s done well or not. That’s just a commentary on economic impact studies.”

And:

J.C. Bradbury, an economist at Kennesaw State University, called the CSL report a “concocted PR document” and said the firm was “notorious for doing these for-hire projections for paying clients” that fly in the face of “academic consensus.”

“There is nothing credible here,” Bradbury said. “These are not rigorous studies of observed outcomes; they are fanciful forecasts of an imagined future.”

And:

[Propheter] pointed to a disclaimer at the beginning of the report, which states, “All information provided to us was not audited and was assumed to be correct based on our professional judgement and experience.”

“I always get a kick out of them,” Propheter said of those types of statements.

And:

Arthur Acolin, a real estate professor at the University of Washington who has studied the trajectory of Chinatowns in cities across the U.S. … found that the displacement of nearby businesses and residents caused by the arena project could cost as much as $908 million in lost tax revenue. (Like the Sixers, Acolin’s paper used nominal values, meaning the $908 million finding is comparable to the nearly $1.1 billion tax revenue gain reported by CSL.)

“As part of the public discussion, I was thinking about the people who are currently there and the businesses that are currently there,” he said. “Those neighborhoods on the margins of downtown are very vulnerable to changes. A small change in environment can make the difference of being in business and being out of business.”

None of this is surprising, but it’s all still useful to have in the pages of a major news site, since all too often actual economists only appear briefly at the end of articles laying out the consultants’ BS findings. (Points to the Inquirer for using an actual photo of the proposed arena site, too, rather than the team owner’s vaportecture renderings.) Which is the entire point of the BS findings: It’s not to try to come up with realistic cost-benefit figures for a stadium or arena project — CSL doesn’t reveal who worked on its Philadelphia report, but the lead officer for its Frisco office, which is credited for the report, is a guy with a bachelor’s degree in finance — but rather to flood the zone with fancy charts in hopes that no one will look too hard at whether any of it makes any damn sense. It’ll be a great day when actual economic studies get all the space they need in the newspapers, and sports team owners have to hold a bake sale to get anyone to read their bogus numbers.

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

access_time personNeil deMause

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.

And University of Colorado-Denver economist Geoffrey Propheter adds:

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Friday roundup: How fast is the A’s Vegas stadium going nowhere, and other questions

access_time personNeil deMause

Another week down! Have you been enjoying the Olympics so far? Did you even remember the Olympics were happening, other than to make sure you weren’t going anywhere near Paris during them? I, for one, cannot wait for the 2028 flag football competition.

Meanwhile, here’s what’s been happening:

  • Until now Oakland A’s owner John Fisher’s lack of any options for funding a Las Vegas stadium has just been widespread conjecture, but now a research note by JMP Securities analyst Mitch Germain confirms it: “The Oakland A’s new stadium currently remains in a holding pattern. The last piece of the puzzle was private financing obtained by the owner for the remaining cost of the stadium. Chatter suggests this may have hit a roadblock.” Oh wait, “chatter” could just mean Germain is reading the same conjecture? We can upgrade it to extremely widespread conjecture, at least.
  • Oakland has officially signed a deal to sell its half of the Oakland Coliseum site to the African American Sports & Entertainment Group for $105 million, paid out between now and June 2026. If AASEG fails to make the payments, then … that part didn’t make it into the San Francisco Chronicle story, it’s okay, they had bigger fish to fry.
  • The Massachusetts legislature adjourned this week without rezoning industrial land in Everett for a new New England Revolution stadium, and team owner Robert Kraft said he’s “deeply disappointed,” then threw some passive-aggressive shade by adding, “Massachusetts’ political landscape is one of the only places where creating opportunities in environmental justice communities and rehabilitation is dictated by the needs and bargaining of political leaders with outside influences.” Outside influences, eh? Were they … agitators?
  • Cleveland councilmembers want the Cleveland Browns to keep playing in Cleveland, not so sure about the whole “giving them hundreds of millions of dollars” thing, film at 11.
  • There are two competing proposals to put a sales tax increase back on the ballot to raise money for a Kansas City Chiefs stadiums, and the Jackson County legislature just voted down the one for a 0.125% hike over 25 years but is still working on the one for a 0.375% hike for 40 years.
  • Chicago Bears president/CEO Kevin Warren says he still prefers a new stadium on the Chicago lakefront that would come with billions of dollars in public money, but if that doesn’t work, Arlington Heights is nice, too.
  • Turns out someone did do a more robust analysis than the one by the Pennsylvania Independent Fiscal Office of the number of hotel room stays attributable to Philadelphia Phillies fans, and the finding was “not statistically significant.” I know Springer books are pricey, but the fiscal office really couldn’t afford $180?
  • The Atlanta Braves owners’ decision to build their stadium in the middle of the woods in the suburbs has prompted much debate, but until now it didn’t have its own Tracey Ullman parody song.
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Friday roundup: Olympics remain world’s greatest money suck, TB Times self-extorts for Bucs stadium, Rays $1B deal nears final approval

access_time personNeil deMause

This has been a long, busy week for a lot of reasons, so let me just thank those of you who re-upped your FoS memberships (your swag will be in the mail shortly!) and get straight to the news, of which there is a ton, because the stadium game doesn’t stop just because it’s summer or there’s other stuff vying for our attention:

  • The Paris Olympics start tonight, and how’s that going? You say France is spending $3-5 billion on the Games in exchange for “uncertain” benefits, tourists are staying away because they don’t want to deal with all the Olympic disruptions and local museums and such are set to lose a ton of money, and Paris is forcibly relocating homeless people to make the city seem more attractive? Good, good, that’s what the Olympics are traditionally all about.
  • The Tampa Bay Buccaneers owners aren’t asking for a new stadium, but that won’t stop the Tampa Bay Times from noting that the stadium is “aging” (aren’t we all, every day) and wondering if the Glazer family will want renovations or a whole new one. “Even after repeated requests from the [Tampa] Sports Authority for information, the Buccaneers have still not provided us with any renovation plans,” Hillsborough County Commissioner Ken Hagan told the paper, while Tampa spokesperson Adam Smith said the Bucs “haven’t approached the city about anything like that” and “we don’t expect them to.” But the Bucs’ lease runs out in 2028, and all the other kids are getting new and renovated stadiums, so Times sports reporter Rick Stroud still spends 2700 words speculating on what a new or renovated stadium could look like and how it would be paid for, it’s always a time saver when your marks take the initiative to extort themselves.
  • Also in Tampa Bay, two Pinellas County commissioners are asking questions about the Rays stadium deal in advance of a Tuesday final vote, questions like “How much will this actually cost taxpayers?” (more than $1 billion, by best estimates) and “Will the public have to put in even more money to make sure affordable housing is built?” Unfortunately, it only takes four of seven commissioners to pass the deal, so there’s no guarantee the dissenters will get answers to their questions before Tuesday, though county officials said they’d ask.
  • Chicago Bulls owner Jerry Reinsdorf and the owners of the Blackhawks are planning a $7 billion mixed-use project around the United Center, no details provided on whether this would involve public money or tax breaks or anything, they didn’t mention it in their press release so it probably isn’t important.
  • The Pennsylvania Independent Fiscal Office did a study of the economic impact of the Philadelphia Phillies and Pittsburgh Pirates stadiums, both of which were built with public money, but unfortunately even though it spelled out that it was calculating spending by both “fans whose main reason for travel is a Phillies game and casual fans who attend games because they happen to be visiting the region,” the final numbers just added up all spending in and around the stadiums and assumed it wouldn’t happen without them, very disappointing.
  • Not telling the Nevada Independent how to do its job, but if you’re going to roll with the headline “How Bally’s buyout might affect resort plans for A’s Vegas stadium site,” you might maybe want to include something about how it will affect that, you know?
  • Oakland A’s owner John Fisher is laying off half the team’s non-baseball staff so he can make Sacramento River Cats employees do two jobs at once, this has been your weekly John Fisher Sucks post.
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