Category: economic impact studies

Friday roundup: O’s owner still wants land atop $600m in state cash, Chuck Schumer lurves the Bills, plus fresh bonkers Titans renderings

access_time personNeil deMause

And here we arrive again at the end of another programming week. It’s a bit demoralizing that this is the slow season for stadium and arena news — no legislatures in session, lots of people on vacation — and yet the news watch is as busy as ever. I’m a little afraid of what’ll happen in September, but we’ll cross that bridge when we come to it.

Meanwhile, here’s what else has been happening:

  • Maryland Gov. Wes Moore, while visiting Baltimore Ravens training camp and wearing a Ravens jersey, because that’s how elected officials roll, announced that he and Baltimore Orioles owner John Angelos have resumed talks over a lease extension. The Athletic’s Ken Rosenthal says the remaining sticking point is that Angelos wants, in addition to $600 million in state renovation money that was already approved, development rights to land around Camden Yards, even though there isn’t really much undeveloped land available. (Which we’ve known since February, really, but it’s nice to get confirmation from The New York Times’ proposed scab sports section.) And Angelos might not get away with it, too, if only because he keeps stepping on rakes.
  • New Tennessee Titans stadium renderings! And it’s a video! Set to a pop cover of Johnny Cash’s “Ring of Fire” for some reason! With children playing jumprope and computer animated people doing rock guitar moves in the concession concourses? USA Today’s Titans Wire, which is no doubt an unbiased source, calls it “just well done overall”; it certainly burns, burns, burns, so the soundtrack was well chosen in that way.
  • U.S. Sen. Chuck Schumer tells the Daily News of Batavia that he has told Buffalo Bills co-owner Terry Pegula to call him whenever he needs something, and “every so often they do, about one thing or another,” and also that he has confidence the new Bills stadium will be built despite cost overruns and “it’s got to be built soon because, you know, the existing stadium is old,” and also he was “furious and frantic” when he thought the Bills might move and “did everything I could to keep the Bills in Buffalo.” The Daily News of Batavia does not appear to have asked Schumer if he thought $1 billion in public money was a fair price to pay for this, and Schumer ran unopposed in last year’s Democratic primary, so democracy is just working well all around.
  • The developers behind Pawtucket’s stalled Rhode Island F.C. soccer stadium say they have finally found money to finish the project, and will restart construction “in the near future.” The city and state still need to sign off on resuming the plan.
  • Don’t like the Philadelphia 76ers owners’ plans to build an arena on a failing mall next to the city’s Chinatown? What if they added a 20-story apartment building with 20% of the units “affordable” (no specifics provided on to which income group), or at least pictures of one?
  • Bronx cricket leagues officially hate the proposed temporary T20 World Cup stadium that would displace their public cricket fields for next year. “You know, you don’t want to come into a community and just throw things down their throat,” said Curtis Clarke, president of the New York Masters Cricket Association, who clearly doesn’t have a good handle on what sports leagues very much do want.
  • No, it won’t.
  • I have not yet had time to read Brad Humphreys and Jane Ruseski’s paper that found that flu deaths rise when a city gets a new major-league sports team, but the fact that the NHL saw the largest effect — a 24.6% increase — checks out when you consider that the league plays in indoor arenas during flu season in disproportionately cold parts of North America. Good thing we all learned from the Atalanta superspreader event and put in place protocols to reduce viral spread at sporting events by … no? Well, maybe next pandemic.
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Friday roundup: OKC mayor wants new Thunder arena because 22-year-old one is “getting older,” and other things to sigh deeply over

access_time personNeil deMause

Before we even get to the bullet points, we need to start with this: Oklahoma City Mayor David Holt announced yesterday in his State of the City speech that he wants to build a new arena for the Thunder to replace their current one, which just turned 22 years old and is receiving a $100 million upgrade begun in 2011. The present building is “simply not what it used to be,” according to Holt, and  “will keep getting older,” which, yep, that’s how time works. “Seats get old, scoreboards get old, elevators break,” said Holt. Everything breaks, dunnit?

To help pay for a new arena, Holt wants to extend the 1% sales tax surcharge that paid for the old one and which is currently set to expire in 2028. Holt described this as “no tax increase will be necessary,” which is true if you mean that Oklahoma City residents won’t have to pay any more in taxes than they do now, but not true if you mean whether they’d have to pay more than they would if the Thunder were forced to continue to play in their aging more-than-two-decade-old arena instead of an aging new one.

The tax extension would at least require a public vote, as the original one did. Still, J.C. Bradbury has a point:

Nothing wrong with getting a new arena every year, so long as you’re not the one paying for it. And now, on to the week in bullet points:

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Hold onto your hats, the Worcester stadium economic impact wars are heating up again

access_time personNeil deMause

The Worcester Telegram ran a super-weird “guest column” (i.e., op-ed) on Thursday on the Worcester Red Sox‘ new stadium, which as you may recall was the recipient of $150 million in tax money and the subject of a bitter battle between economists Victor Matheson and Andy Zimbalist, only one of whom turned out to have been paid $225 an hour by the team for his opinions. First off, the op-ed was unsigned, except by the Worcester Regional Chamber of Commerce; second, it asserted that, contrary to what Matheson and other economists had projected, “the ballpark is indeed paying for itself, and [is] a major success for the city”:

It was clearly demonstrated that the revenues from the [District Improvement Financing] – taxes, parking, permits and the team’s rent – are more than covering the expenses related to the park, just as they have done every year, without taking from the municipal general fund.

Sure, if you count kicked-back taxes from a stadium district as “covering expenses,” then it’s easy to get a stadium to pay for itself: Just keep drawing the lines around the district bigger and bigger until you have enough tax revenue to call it profitable — and never mind if you’ve now siphoned off a bunch of tax money that would have come to the city with or without a stadium.

The unnamed authors, though, went a step further, taking a dig at Matheson’s Holy Cross economics department colleague Robert Baumann and Kennesaw State College economist J.C. Bradbury for their paper projecting that the Worcester stadium would cost the city a net loss of $40-60 million:

The recent report that called the park a net loss to the city leaned heavily on the outdated pro forma and the application of an academic notion called a “crowding out effect,” which essentially states that stadiums crowd out existing spending for businesses in the area since people have limited entertainment budgets and tend to choose one activity over the other.

The vast majority of academic literature analyzing the crowding out effect uses case studies of massive projects that host major league events like SoFi Stadium in Inglewood, California; Truist Park in Cobb County, Georgia; or when cities construct stadiums to host the Olympics or World Cup. These are not the same conditions that apply to Worcester.

Oh, noooo, you do not want to pick a public fight with a man with the Twitter bandwidth of Bradbury, especially not without doing all your research first. Which, as Bradbury has been tweeting for several days now, neither the Worcester chamber nor the Telegram editorial page appears to have done:

As someone with a fair bit of experience with op-ed pages of my own, I think it’s fair to say that it’s not unusual for them to have two different fact-checking standards, one for opinions that the editorial page editors agree with, and one for those written by naysayers with no ties to the local political-business leadership. Yes, this is a violation of basic newsroom ethics, but so is letting sources express opinions behind the cover of anonymity, and newspapers do that all the time as well for friends in high places, so this should really come as no surprise. An outrage if you think that accurate journalism is an important necessity for a functioning democracy, sure; a surprise, not so much.

Anyway, this probably still isn’t bad enough to displace that horrible Philadelphia Inquirer column on the proposed 76ers arena as worst pro-sports-subsidy op-ed of 2023, but it might win special notice in the minor-league stadiums division. If only we could know who to send the trophy to…

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Friday roundup: A’s now open to “different” Vegas sites, stadium reno could leave Jaguars homeless, Zimbalist says he may have been wrong about Worcester ballpark benefits

access_time personNeil deMause

Time for our weekly speed run through the rest of the week’s news! Let’s get started, because there is a metric crapton of it:

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Actual economists look at Coyotes arena’s projected $154m in tax gains, find it’d actually be $7m in losses

access_time personNeil deMause

When Arizona Coyotes execs wanted to argue that a new Tempe arena would generate hundreds of millions of dollars in new taxes for the city, they hired consultants Conventions, Sports & Leisure International, who can reliably be counted on to come up with eye-popping numbers, even if they often turn out to be based on things like not understanding the difference between U.S. and Canadian dollars. Now the Grand Canyon Institute, which calls itself “Arizona’s centrist think tank,” has done a more independent analysis of the numbers using actual math, and has determined that, as the Arizona Republic puts it, “The $154 million in new tax revenue that the Coyotes forecasted ‘entirely disappears’ when Wells corrects what he contends are inaccuracies in the team’s earlier analysis.”

The changes included applying certain inflation adjustments and tweaking tax rates that GCI identified as being incorrect. After those adjustments were made, the report found Tempe would ultimately lose $7 million in potential tax revenue over the next 30 years.

Projecting $154 million in new tax revenue when it would actually be a $7 million loss is quite the math error, and is worth diving into the report’s technical appendix to see WTF exactly CSL did here. It gets a bit, uh, technical, but the main points are: CSL applied an economic multiplier (for how money gets respent more than once in a geographic area) for the entire Phoenix metro area and applied it as if it were only for Tempe; failed to account for $47 million in lost taxes that would have gone to the city treasury if locals spent their money elsewhere in Tempe, but which would now be siphoned off to help pay for the arena; and used the wrong multiplier for hotel spending. Here’s a nifty, if wonky, chart:

The upshot: “When these changes are made the project instead of having a gain in nominal dollars of $136 million comes out as a negative $7 million.”

But that’s not all! The GCI study also found that projections of an arena hosting 45 non-hockey events a year “may be optimistic” and would likely cannibalize concerts from Phoenix’s and Glendale’s arenas — which admittedly doesn’t hurt Tempe, but it would mean the overall Phoenix area would be largely just shuffling around the same spending while taking on a half-billion dollars in arena expenses. And it projected that Tempe would do slightly better, tax-wise, by building the same mixed-use project the Coyotes have planned for around the arena, but no arena itself.

Coyotes attorney Nick Wood responded to the report by calling it “silly,” while team CEO Xavier Gutierrez declared, “we feel incredibly confident in [CSL’s] analysis,” though the Republic doesn’t indicate if he did so while keeping a straight face.

While it’s probably a bit much to hope for this to shift the arena debate beyond a boilerplate “experts disagree on the economic impact,” the timing really couldn’t be worse for Coyotes owner Alex Meruelo, what with early voting starting tomorrow for the May 16 vote on approving the arena. Early polling shows … hmm, no early polling? That’s fine, polls are garbage anyway, we’ll just have to wait till May 16 to find out whose argument wins the day, the team of actual economists or the clown car full of paid consultants whose record of having to walk back their predictions is now nearing a perfect 100%.

 

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Friday roundup: Jays plan $¯\_(ツ)_/¯ in SkyDome renovations, figure it out yourself, journalism can’t help you

access_time personNeil deMause

Happy Friday! I don’t know about you, but for me this was a great week: I got a new coffee mug, and also it’s now almost over! The week, I mean, not the mug. You’re smart, you probably figured that out already.

And now, how’s about some news:

  • The Toronto Blue Jays owners are planning $230 million in renovations to the stadium formerly known as SkyDome but now named for the team’s corporate owners, or maybe it’s $300 million in renovations, what is money, anyway, especially Canadian money? The CBC’s report says that the redo will include saying “goodbye to the nosebleeds,” as the top 500 level deck will be “completely removed and replaced with non-ticketed spaces,” and oh, here’s a rendering with the 500 level still very much visible, hmm. The stadium is owned by the Jays after Ontario built it and took a huge bath on it, so presumably the renovations will be funded by the team, though Jays president Mark Shapiro called this just a “medium-term solution,” so there’ll still be plenty of time to demand a new stadium later, don’t worry.
  • WPRI in Providence breaks down why Pawtucket’s new USL soccer stadium will cost taxpayers $60 milllion and not $45.5 million like its developers claim, which is helpful and all, except when you add up all the numbers it actually looks more like $80 million? ($46.2 million in state tax breaks, $10 million from the city, plus $27 million in additional money redirected from state infrastructure spending — yup, that’d be more than $80 million.) The fog of stadium wars is soupy indeed.
  • If the Philadelphia 76ers owners succeed in building their own Center City arena and no longer renting from the Flyers, “The companies that would benefit are Live Nation and AEG, because they would have two buildings in Philly to play off each other, so the rent expense would go down,” former Spectrum manager Ed Rubinstein tells Venues Now. “That’s the reason why we never wanted another arena built.” This would be the Sixers owners’ problem, on the one hand, but also Philly taxpayers’ problem if the idea of giving the Sixers arena a giant tax break would be to help the local economy when it would only end up shuffling concert spending around from one part of town to another.
  • There are new Tennessee Smokies stadium renderings, and — oh, come on, you’re not even trying! I get that the plans need to be downscaled some because the stadium is over budget, but at least you can afford some clip art fireworks or people playing random sports. Show some self-respect.
  • Somebody dug up this consulting report that everyone’s favorite economist-for-team-hire Andy Zimbalist did on mixed martial arts — okay, sure — and I must report that previous reporting that Zimbalist earns $225 an hour for his services is out of date: His “customary rate,” he wrote in the 2017 document, is actually $850 an hour. And that’s before any surcharges Zimbalist now imposes for supply-chain issues. Please draw your own conclusions as to whether that rate could be an incentive to report the findings that your client is hoping for, or at least look really hard for them.
  • Your occasional reminder that sports team owners don’t have a monopoly on getting billions of dollars in public money for no damn reason: Here’s a report on Kansas giving Panasonic $800 million in subsidies for a battery factory in exchange for a commitment of zero new jobs, and here’s Bernie Sanders talking about how a new bipartisan bill to compete with China on electronics somehow involves giving $76 billion to microchip companies. The New York Times called the latter “a remarkable and rare consensus in a polarized Congress,” which is both true and all too telling about what our elected representatives (and major newspapers) can agree on.
  • “It’s morally corrupt that new arenas for professional teams worth billions of dollars are majorly publicly funded — especially when the tax dollars could be going to other areas in the city in actual need of the money,” writes Norman Transcript sports reporter intern Clemente Almanza of devoting public dollars to a new Oklahoma City Thunder arena like the team’s owners want, “but” — you knew there was a “but” coming — “that comes with the territory of having a franchise. 18 of the 29 NBA arenas are owned by a government multiplicity” — he’s an intern, he can’t be expected to own a dictionary — and “losing the Thunder would cause catastrophic levels of damage that the state would never recover.” Um, you don’t want to recover the damage … hey, Norman Transcript, don’t you have any copy editors? No? I guess “let the intern sit down and keyboard out a column on why a new arena is necessary” is just how journalism goes these days — that coffee mug gets righter and righter every day.
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The latest Bradbury v. Zimbalist economist slap fight over Braves stadium, explained

access_time personNeil deMause

If you’ve been waiting patiently for the next shoe to drop in the exciting economist war of words between Kennesaw State University’s J.C. Bradbury and Smith College’s Andrew Zimbalist over the economic impact or lack thereof of the new Atlanta Braves stadium, you will be happy to hear this news: Bradbury has fired back at Zimbalist’s Braves-commissioned trashing of his economic studies, and does not pull any punches. In a 64-page response — “I wish this reply were shorter, but its extensive length results from the magnitude of errors that I am forced to address,” Bradbury writes — he goes through Zimbalist’s criticisms and excoriates them in language that … okay, it’s not that spicy for normal human discourse, but for an academic paper it is fire. Some of the highlights, and my attempts to translate them into trash talk fit for a layperson:

  • “Andrew Zimbalist’s review of my retrospective analysis is deficient to the point of negligence,” writes Bradbury, and furthermore “has violated the standard protocols of scholarly discourse.” Most of this, Bradbury writes, involves 1) making assumptions that benefit his client’s desired outcome — namely, that the Braves stadium isn’t actually a huge money pit for Cobb County taxpayers — and 2) consistently accusing Bradbury of failing to do things that he explicitly did in his original study.
  • One case where Bradbury accuses Zimbalist of cherry-picking: Zimbalist cites two studies showing increased property values around new stadiums as examples of how “some sports facilities have produced salutary financial outcomes.” Except the co-author of those studies is West Virginia University’s Brad Humphreys — who happens to be a co-author with Bradbury on other work — and Humphreys himself has written that those two studies probably aren’t representative of any larger trends, but just indicate that for stadiums built in areas primed for redevelopment, property values then go up because they would have gone up anyway, duh. (This is a big part of Bradbury’s argument about the Braves deal: Property values went up in Cobb County after the stadium was built, but no more than they did in surrounding counties, so you can’t credit the stadium with being the cause.)
  • There’s a long section about Zimbalist griping that Bradbury said it was “egregious,” “specious,” and “incomprehensible” for the Braves to assume that revenue from new hotel and business taxes imposed around the stadium should count as the result of the presence of the stadium. Bradbury writes that that assumption is too all those things, because slapping new taxes on all spending in a seven-square-mile area around the stadium and then calling the revenue “stadium-related” makes about as much sense as taxing blue cars and then declaring that because blue cars weren’t taxed before the stadium was built, the blue car tax money was generated by the Braves. For good measure, he then cites Zimbalist himself, in a 2013 essay, as noting that an increase in spending right around a stadium doesn’t necessarily mean an increase in overall spending, so you can’t count it as a net gain.
  • Bradbury cites several instances where Zimbalist accuses Bradbury of not explaining his methodology, to which Bradbury responds by citing exactly where in his paper he explained his methodology, and notes that Zimbalist could have easily found this if he’d bothered to use the search function.

There’s much more, but most of Bradbury’s upshot comes down to: Bradbury looked for any evidence that the Braves’ new stadium has caused Cobb County’s financials to improve significantly relative to neighboring counties and found none; Zimbalist’s retort is well, but maybe that will change in the future, if these several unlikely things happen:

When I reconstruct Zimbalist’s model to evaluate its projections, I demonstrate that its estimates are the product of the favorable assumptions he chooses. Zimbalist bases his optimistic conclusions on a limited set of projections that produce the greatest fiscal impacts. Using more reasonable assumptions, his model estimates negative fiscal impacts.

I want to be clear: this is not a case where two scholars hold a good-faith disagreement after presenting equally-compelling arguments regarding esoteric phenomena.

And if that’s still too oblique for you, Bradbury helpfully shared a meme on social media:

The takeaway from all this is, well, that economists can really, really hate each other, or maybe more specifically that economists can really, really hate Andy Zimbalist. (I recall one sports economist telling me years ago when I asked about Zimbalist’s longstanding penchant for trashing his colleagues — sorry for the anonymous quote, but I genuinely don’t remember who said it — “There’s a reason Andy doesn’t co-author too many papers.”) But also that when sports team owners presented with a study saying their stadium is a dud find a guy with academic credentials who will take their money and provide the conclusions that they want, it becomes way too easy to present the resulting dispute as “economists disagree” rather than “the guy working for the team says one thing, while everyone else says the exact opposite.”

All of the above is one-sided by necessity, as Zimbalist hasn’t yet replied to Bradbury’s reply to Zimbalist’s reply to Bradbury’s paper. I emailed Zimbalist yesterday to ask if he had anything to add, and he said he’s on vacation but is working on a re-re-rebuttal. They will fight eternally.

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Friday roundup: When stadium CBAs go sour, Zimbalist explains why he takes team money, and Rob Manfred doesn’t understand how road games work

access_time personNeil deMause

Happy Friday! Before we get to the new stadium news, here’s some hot-off-the-presses old stadium news from me for City Limits magazine, for which I took a hard look at the enforcement problems around the community benefits agreements surrounding the Brooklyn Nets and New York Yankees development deals. The nut graf, as we say in the biz:

One big problem with CBAs: They’re not laws, but rather private contracts between a developer and community groups—in the case of the arena project, groups that were not only hand-picked by the developer but in some cases funded by him. And if those groups aren’t around to hold a developer accountable—or the developer isn’t around and there’s no successor clause—there’s little anyone else can do to enforce an agreement.

That was certainly the problem with the Nets deal, where most of the signatories to the CBA are now long-defunct. And for the Yankees deal, it was even worse: The only people to sign the agreement were elected officials who are now long out of office, and promised regular reports on the community fund’s spending have been withheld from the public on the grounds that no one is authorized to see them — though the fund’s initial administrator says there’s a simpler reason for why no reports have been issued: “During my time, no reports were written.”

Well, lesson learned! Or not, given that the rest of the nation seems intent on repeating the same mistakes over and over and over and…

  • MLB commissioner Rob Manfred said for the umpteenth time this weekend regarding the Oakland A’s and Tampa Bay Rays stadium demands that “we need a solution in both those markets and the time has come for that solution,” which is both some of his typical awkward-as-possible wording and also an excellent example of how sports team owners love to define their not-as-high-as-they’d-like profits as a problem in need of a solution, preferably with someone else’s money. Manfred added re the Rays: “We are getting to the point where wherever it is in the region that has an interest in having 162 baseball games, they need to get to it, get with the club.” Um, the region has 162 baseball games now (really 81, but let’s not bother Manfred with concepts like “road games”), and the Rays don’t exactly have an offer on the table from another city with a stadium, or even the promise of a stadium, so it’s not like if their lease expired today they would be gone. But when you’ve got one move and it’s vague threats, you’ve got to make the most of it, I suppose.
  • Sports economist Andy Zimbalist has fired back at critics of his criticism of sports economist J.C. Bradbury’s study of the Atlanta Braves stadium deal in an interview with Sportico (which didn’t bother to interview Bradbury that I can tell [CORRECTION: it did, it just didn’t quote him much]), saying among other things that getting paid by a team owner to conduct a study of the team’s nine-figure stadium subsidy isn’t a conflict of interest because “If I didn’t get paid there is an element in it that says I am not a professional, I am doing it for some other reasons. The payment thing is, ‘damned if you do, damned if you don’t.’” I am pretty sure that phrase does not mean what you think it means, Andy.
  • Speaking of paid consultants, Nashville Mayor John Cooper and the metro area council are considering hiring one to analyze whether it would really cost taxpayers $1.8 billion to maintain and upgrade the Tennessee Titans‘ stadium for the six-year remainder of the team’s lease, a key cog in the team’s argument that the public should just build a new stadium instead. This is an excellent idea, but may I just suggest that one particular person not be hired for the job?
  • And speaking of Bradbury, he has an excellent rundown in Global Sport Matters (for which I also write) of what every city should know before publicly funding a stadium or arena deal, which pretty much comes down to “don’t.”
  • NYC F.C. fan site The Outfield, which has done an excellent job following the bouncing ball of the MLS team’s never-ending search for a site on which to build a stadium of its own, reports that the club’s owners are reopening talks on building at a site on railyards along the Harlem River, completing a memorandum of understanding with the state Department of Transportation to lease the site. This is still likely just kicking-the-tires stage — The Outfield also notes that “NYCFC still seems to be engaged to a degree in feeling out development in Willets Point,” across the street from the New York Mets‘ stadium — but as a reminder, here are some pictures of what the Harlem River Yards stadium was supposed to look like in 2018, and here’s a projection from the time of how the deal would involve possibly $400 million in state land subsidies, and here’s the team itself backing away from the plan at the time as fast as possible.
  • If Anaheim tries to sell Angel Stadium land to Los Angeles Angels owner Arte Moreno again after the stench of the bribe-solicitation scandal that forced the resignation of the old mayor wears off, a new bill in the California state legislature is seeking to require that the city open it up to competitive bidding first. This is another excellent idea, if only to find out what the land is actually worth, which has been a bit of a point of contention.
  • “Arizona Coyotes plan to privately finance new arena, entertainment district, team president/CEO says” reads the ESPN headline, but the story itself reports that Coyotes CEO Xavier Gutierrez actually said, “It’s going to be privately financed. … And then we have made a request to have the city issue bonds whose sole collateral would only be the land and the real estate, so the taxpayers would never be at risk.” Which is not how “privately financed” or “not at risk” actually work — regardless of the collateral, Tempe taxpayers would be out at least $200 million — but “[person with a fancy title] says” allows for a lot of non-reporting by news outlets like ESPN, the better to move on to writing the next six posts of the day. (An even better time saver: Just make quotes up! Those articles about McDonald’s employees leaping out drive-through windows to save people choking on chicken nuggets aren’t going to write themselves!)
  • And speaking of journalism with room for improvement, here’s GOPHNX reporter Craig Morgan’s opening sentences in his article this week on the arena plans: “Before the special Tempe City Council meeting on June 2, there was genuine concern about the fate of the Coyotes’ proposed arena and entertainment district along the south bank of the Salt River. Some insiders worried that the opposition was too strong, that the issues were too numerous and that the council was lacking the votes necessary to push the project forward.” Or, you know, some people, that aforementioned opposition, did not “worry” those things but presumably “hoped” them. Can someone please tell Craig that there’s no cheering in the press box?
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Braves hired Andy Zimbalist to fire back on stadium impact criticism, and it went about as well as you’d expect

access_time personNeil deMause

When Kennesaw State economist J.C. Bradbury issued his comprehensive study in March showing that the new Atlanta Braves stadium was leaving Cobb County taxpayers on the hook for $15 million a year, Braves execs were not happy. And now, apparently on the principle that the best answer to a good economist with a study is a hired-in-house economist with a study, the Braves have commissioned a report from … oh, my goodness, it’s Andy Zimbalist!

For those who came in late, Zimbalist was part of the first generation of economists to turn a skeptical eye on sports stadium and arena deals, notably co-editing with Roger Noll the 1997 book Sports, Jobs, and Taxes, which remains an excellent overview of why claims of economic windfalls from sports subsidies are hoohah. Zimbalist was also one of the first to turn his expertise into a lucrative ($225 an hour) consulting business, taking on gigs from the likes of Brooklyn Nets owner Bruce Ratner, New York Yankees president Randy Levine, and the cities of Anaheim, Seattle, and Worcester to write reports and/or testify publicly on the costs and benefits of sports venues.

These reports were, ah, not always conducted with the rigor of Zimbalist’s other work. Memorably, his report for Seattle — which was arguing in court that losing the Sonics to Oklahoma City had cost the city money — turned out to be largely copied from his report for Anaheim — and since Anaheim was arguing that the presence of the Los Angeles Angels didn’t create a huge economic benefit, Zimbalist simply reversed his conclusions at the end. In the case of Worcester luring the Pawtucket Red Sox to town with a new taxpayer-funded stadium, he: cited University of San Francisco economist Nola Agha’s work to argue that minor-league subsidies are more justifiable, only to have Agha reply that that “virtually never works”; earned criticism from economist Victor Matheson, who actually works in Worcester at College of the Holy Cross, that “Andy is using his credentials and his prominence to basically give cover to the Worcester city council and [city manager] Ed Augustus to go forward with this project”; and later admitted (to me, for an article in pre-decimation Deadspin) that he hadn’t calculated all the costs of, for example, providing schooling to all the new residents he was crediting the Worcester stadium project for attracting.

As for the latest Zimbalist missive on behalf of Cobb County, let’s let the Marietta Daily Journal provide the takeaway:

Accompanying the county’s own numbers was a new, Braves-commissioned study prepared by Smith College economist Andrew Zimbalist, which is pitched as a corrective to Bradbury’s findings. The lead finding is that by 2046, the county is expected to see a return on its initial investment of between $19.6 million and $125.6 million.

Braves management touted the study as a long-awaited vindication of the deal, saying in a news release, “This should put to rest any questions on whether this project has been a win for Cobb County taxpayers, who have seen a major return on their investment.”

But have they really? The strength of Bradbury’s study was that he looked at the actual numbers for economic activity in Cobb County before and after the stadium — sales tax receipts, property values, and so on — and compared them with other neighboring counties to see if Cobb did significantly better as a result of the stadium. (Answer: It did not.) Zimbalist’s report, meanwhile, starts off with a long section on how the Braves owners put up a bigger share of construction costs than many other teams (the public share for Cobb County being 45% vs. an average for all stadiums from 1970 to 2010 of 70%, though as he doesn’t footnote the latter figure it’s possible he’s not comparing apples to apples here), charges Bradbury with providing “no foundation, either methodological or empirical,” for his sales tax figures, and accuses him of focusing solely on short-term losses for Cobb County when the real gains will be, he says, far into the future.

The MDJ didn’t bother to call Bradbury for comment for their article, but J.C. doesn’t need no legacy print newspapers when he has Twitter:

Phew! No reply yet from Andy on Twitter, but given that he tweets about 0.0001% as often as Bradbury, that’s probably no surprise. And anyway, as J.C. rightly points out, the proper forum for hashing this stuff out is in a peer-reviewed academic journal, whereas Zimbalist just typed out a Word file and sent it along to his client, which passed it along to reporters. This resulted in the MDJ’s headline “Braves tout new study on fiscal benefits, landing between ‘home run’ and ‘pop fly’,” as well as a way more skeptical article in the Atlanta Journal-Constitution (“Visitors paying less, businesses more for Cobb stadium bonds”).

In any case, this is yet another reminder that not all “reports” are created equal, and it’s important to look at who has paid for them, how rigorous their methodology is, etc. Or, as a far wiser observer once noted, it takes more than a clear plastic binder to make for good research.

 

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Friday roundup: Commanders stadium subsidy dies (for now), Brewers stadium subsidy enters

access_time personNeil deMause

It’s Friday already! Lots to get to, so let’s get to it:

  • The Virginia bill to provide $300 million toward a new Washington Commanders stadium is officially dead, after its state senate sponsor pulled it following comments by team defensive coordinator Jack Del Rio calling last year’s Jan. 6 insurrection at the Capitol a “dust-up.” A D.C. city councilmember also claims that a majority of that council is opposed to a stadium on the RFK Stadium site, both because they don’t want to end up paying for it “no matter what promises the Commanders make” otherwise and also because of Del Rio’s remarks. This is the kind of dead that you can recover from, mind you — Commanders execs issued a statement saying they’ll continue to work on finding a stadium site, and Sen. Richard Saslaw said in throwing in the towel on his bill that “There were just so many things out there that a lot of people are saying, ‘Saslaw, this thing needs to wait’” — so expect to see this revived in a year or two when either Dan Snyder has finally given up and sold the team, when people have forgotten about Jan. 6 amid the monkeypox pandemic, or when at least Del Rio has been fired either for his loose lips or for being bad at his job.
  • A Milwaukee County supervisor wants to develop part of the Brewers parking lots into an entertainment “Beer District” — like the Bucks’ “Deer District,” get it? — with the resulting increased property taxes kicked back to the team for future stadium improvements. Brewers president of business operations Rick Schlesinger replied: “Could the real estate here be part of a solution? Sure. Do I know what that would look like? No.” That’s clear as mud, then, but it does seem like “develop a bunch of public land and give the proceeds to the Brewers” is on the table, at least, so keep an eye on this one.
  • The Sycamore Institute, a seven-year-old “nonpartisan” think tank that is not to be confused with the think tank of the same name at American University in D.C. that formed four years later but somehow grabbed the better domain name, issued a report this week totaling up $1.8 billion in sports subsidies the state has proposed for the Tennessee Titans, Nashville Predators, Tennessee Smokies, and Chattanooga Lookouts, and concluded that that’s a lot of money and such public spending rarely pays off. There’s not much in the report that’ll be unfamiliar to readers of this site — the report’s conclusion is “When evaluating these proposals, policymakers at all levels of government should carefully consider the potential benefits and costs,” which is about as nonpartisan as you can get — but it has a nice list of footnotes to past research and articles on the topic, including my 2011 essay for The Nation “Why Do Mayors Love Sports Stadiums?“, so it’s worth keeping handy for the next time you need to win a Twitter argument by dumping facts on your opponent. (No, this is not actually how Twitter arguments work, but it’d be nice to live in that world, wouldn’t it?)
  • Kansas City could get a new NBA team, according to … uh, the graphic designer for the Royals? Slow news day, KSHB-TV, or did you just really want the clicks from all the people old enough to miss the Kansas City-Omaha Kings?
  • Saskatoon’s nonprofit events center wants to build a soccer stadium, and is generously offering to put up $2 million, while the owner of an expansion Canadian Premier League franchise would put up another $2 million, so long as local government or (waves arms around vaguely at “the community”) puts up the other $24 million. They’ve also included a bunch of economic impact claims and a rendering of a stadium with no fireworks but weirdly synchronized glowing fountains, so you know they’re serious.
  • Pawtucket Mayor Don Grebien is asking Rhode Island for an extra $30 million for a soccer stadium on top of the $46.2 million the state is already providing, on the grounds that “We lost the PawSox because of a lack of leadership. And hopefully we don’t lose this.” Pawtucket doesn’t actually have a soccer team, so it wouldn’t technically be “losing” something it never had in the first place, but it does sound a bit better than “money’s all gone, please send more,” anyway.
  • Hosting World Cup games in Atlanta could bring $500 million in economic benefits, says a study done by a “leading global management consulting firm”; hosting World Cup games in Nashville won’t bring in anywhere close to $700 million like a city tourism agency report claims, say every economist Center Square reporter Jon Styf could find. Guess we’ll all just have to agree to disagree, too bad there’s no way to tell whose numbers are correct by looking at evidence or something!
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