Professional Sports, Hurricane Katrina, and the Economic Redevelopment of New Orleans:

Abstract

Hurricane Katrina devastated the city of New Orleans in late August 2005, resulting in damage to much of the city's sports infrastructure and the departure of both of New Orleans' major-league professional sports teams, the National Football League Saints and the National Basketball Association Hornets. What should the city provide in the way of financial accommodation to encourage them to return? This paper suggests that post-Katrina New Orleans will have a difficult time retaining their franchises over the long run and in attempting to do so may hinder the redevelopment of the city. Furthermore, the very incentives designed to attract teams in the first place leave cities vulnerable to their departure in times of crisis. Finally, playing host to professional sports and mega-events does have symbolic significance, but it is arguable that this is an amenity the city cannot currently afford. (JEL H25, H71, H40, L83, Q54) (1). INTRODUCTION Hurricane Katrina devastated New Orleans physically and economically after making landfall on August 29, 2005. Full recovery, which generally follows natural catastrophes in the United States given the inflow of funds for reconstruction, seems less certain in the Crescent City. Citizens and businesses that left New Orleans following the storm have exhibited a reluctance to return. The city's professional sports teams are included among those enterprises that departed New Orleans in the wake of Hurricane Katrina. The National Football League (NFL) Saints played home games in three different cities (San Antonio, Baton Rouge, and New York City) during 2005. The National Basketball Association (NBA) Hornets took up residence in Oklahoma City for 35 of their 41 home games during the 2005-2006 season, returning to Louisiana (although playing in Baton Rouge and not New Orleans) for a largely symbolic six games. The Arena Football League's Voodoo abandoned their entire 2006 schedule. The University of New Orleans and Tulane, both National Collegiate Athletic Association (NCAA) Division 1 schools, either canceled entire seasons for individual sports or played barnstorming seasons with no home games. What is the future of professional and spectator sports in New Orleans and what roles do sports play in the economic redevelopment of the city? The purpose of this paper is to analyze the extent to which the City of New Orleans should direct its redevelopment dollars toward its sports infrastructure. Has New Orleans benefited economically from its role as host to major professional sports teams and a disproportionate number of mega-sports events given its size and demographics? Do commercial sports enable a rebuilding of New Orleans' storm-ravaged infrastructure or does it force civic trade-offs made even more painful by the storm? Independent scholarship in general has not supported the thesis that professional sports induce significant increases in economic activity for host cities. New Orleans, however, may be different. The city is smaller and less affluent than other host cities in general, and it may be that the frequency with which large sports events are hosted by New Orleans makes the area an exception to the experience of most cities with regard to sports and economic development. The gravity of the city's economic situation in the wake of Katrina necessitates an individual and more complete appraisal as strategies for economic redevelopment are explored. Answers to the questions raised in this introduction require a review of, among other things, New Orleans' place in the national sports landscape, the extent of the damage Katrina wrought, the amount of redevelopment money the city must commit, and the evidence with regard to the impact sports has on host city economies, with special attention to the circumstances that surround New Orleans in its rebuilding period. II. NEW ORLEANS PRIOR TO KATRINA While New Orleans hosts major-league franchises in both the NFL and the NBA, with a pre-Hurricane metropolitan area population of less than 1. …