Major League Sports Facilities Research Articles

Do local businesses benefit from sports facilities? The case of major league sports stadiums and arenas

We use daily mobile foot traffic data covering major league sports facilities and the surrounding commercial establishments in the US to pin down the size and the spatial distribution of foot traffic spillovers from sports facilities to local businesses. By employing the fixed effects and the IV estimation strategies, we show that the spillover benefits are heterogeneous across sports and business sectors. We find that 100 baseball stadium visits generate roughly 29 visits to nearby food & accommodation businesses and about 6 visits to local retail establishments. While the estimates for football stadiums are comparable, basketball & hockey arenas do not appear to generate significant spillovers for the surrounding businesses.

Evaluating Parking Monetization as a Strategy for Subsidizing Major League Sports Facilities

AbstractThe public sector traditionally subsidizes construction of major league sports facilities with bonds. In 2012, the city of Sacramento, California, approved a parking monetization agreement to raise cash for a new arena, thereby potentially avoiding the risks of bond financing altogether. Though the subsidy proposal ultimately fell through, the increasing popularity of parking monetization suggests that it is only a matter of time before other local governments consider the approach. This paper evaluates the use of parking monetization as a financing strategy to construct major league sports facilities. While professional stadia are the primary focus, many of the criticisms apply to large public capital projects more generally. We conclude that parking monetization is a risky facility subsidization strategy and a poor alternative to traditional bond financing.

Book Review: Public/private partnerships for major league sports facilities

Book Review: Public/private partnerships for major league sports facilities

Public/Private Partnerships for Major League Sports Facilities

A review is presented of the book Public/Private Partnerships for Major League Sports Facilities, by Judith Grant Long.

Full Count

Governments pay far more to participate in the development of major league sports facilities than is commonly understood due to the routine omission of public subsidies for land and infrastructure, and the ongoing costs of operations, capital improvements, municipal services, and foregone property taxes. Adjusting for these omissions increases the average public subsidy by $50 million per facility to a total of $177 million, representing a 40% increase over the industry-reported average of $126 million, based on all 99 facilities in use for the “big four” major leagues during 2001. For all 99 facilities, these uncounted public costs total $5 billion.

A Stakeholder approach to Understanding Economic Development Decision Making: Public Subsidies for Professional Sport Facilities

To analyze the politics of economic development decision making through focusing on participants and their interests, this article details a model of stakeholder analysis developed within organization studies by Mitchell, Agle, and Wood for use among policy makers and researchers. Demonstrating the model through the issue of subsidies for the construction of major league sports facilities, a stakeholder map is created to assess the constituent environment based on the degree to which stakeholders possess attributes of power, legitimacy, and urgency.With this map, various situational factors are assessed to demonstrate the utility of stakeholder analysis for decision makers to strategically manage constituent groups and to explain case outcomes and the manner in which policies are determined. Although the findings suggest that decision makers should focus their resources on stakeholders possessing all three attributes, monitoring the environment is essential to identify potential threats and opportunities.

Beyond Economic Impact: An Alternative Rationale for the Public Subsidy of Major League Sports Facilities

Government contributions to the funding of major league facilities ipso facto recognize that some portion of the benefits accruing from such facilities accrue to the public in general, rather than being captured exclusively by the franchise owner. The challenge for facility advocates is to demonstrate the return on investment to the taxpayer. This has been elusive. The canard that substantial returns accrue from the direct economic impact of visitors to games has been discredited. A taxonomy of four alternate sources of spillover benefits that are most frequently cited is proposed: increased community visibility; enhanced community image; stimulation of other development; and psychic income. Justifications using to the first three of these alternates are conceptualized as focusing on external audiences, with the intent of encouraging their investment of resources in the community. In some contexts, some economic benefits may accrue from these sources, but in most cases they cannot be demonstrated to be sufficient to justify the taxpayers’ investment. It is argued that psychic income, which focuses internally on the benefits received by existing residents in the community, is likely to be key to justifying public subsidy of major league facilities. It is suggested that the contingency valuation method is an appropriate approach for measuring the psychic income provided by a professional sport franchise.

Financing Major League Facilities: Status, Evolution and Conflicting Forces

This paper identifies the pervasiveness, magnitude, and trends of public investment in major league sports facilities and describes the forces that typically direct and dictate the debate. In 2003 dollars, the total investment in facilities currently being used by franchises in the four major leagues in North America is almost $24 billion, of which over $15 billion was contributed by public entities. Four eras of funding these facilities are identified and described: the Gestation Era 1961-1969; the Public Subsidy Era 1970-1984; the Transitional (Public-Private Partnership) Era 1985-1994; and the Fully-Loaded (Private-Public Partnership) Era post 1994. There is a consistent trend of private contributions increasing across these eras, but public sector contributions remain substantial. The final section of the paper discusses the four primary sources of momentum undergirding this public investment: owner leverage, the community power structure, the stimulus of increasing costs, and the competitive balance rationale.

Changing Intra-Urban Location Patterns of Major League Sports Facilities

The boom in U.S. major league sporting venue construction has forced many cities to face issues related to the provision of such facilities, including the location choice. Recent data show that the suburbanization trend long assumed in the literature has been reversed, with a resurgence in downtown venues. This paper demonstrates the reversal and discusses the reasons behind this recent trend. These include a concomitant trend toward smaller market franchises, increasing corporate sponsorship, deliberate downtown revitalization strategies, and the advantages accruing to owners when different parts of an urban area compete for franchises.

Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums.

This book examines the economic impact of new stadiums or a sports franchise on the local economy. It explores such general issues as the appropriate method for measuring economic benefits and costs, the source of the bargaining power of teams in obtaining subsidies from local government, the local politics of attracting and retaining teams, the relationship between sports and local employment, and the importance of stadium design in influencing the economic effects of a facility. The book also contains case studies of major league sports facilities in Baltimore, Chicago, Cincinnati, Cleveland, Indianapolis, San Francisco, and the Twin Cities and of minor league baseball stadiums and spring training facilities. The primary conclusions are the sports teams and stadiums are not a source of local economic growth and employment; the size of the net subsidy exceeds the financial benefit of a new stadium; and cities are probably willing to subsidize sports teams because of the intense popularity of sports among a substantial proportion of voters and businesses and the leverage that teams enjoy from the monopoly position of professional sports leagues.