The Economic Benefits of Sport Stadiums

The sports in today’s world have evolved and are very different from their form 20-30 years ago. The level of competition, the rules, the creation of free agency, equipment, and many other factors of sport have evolved and improved to produce the products we see and talk about today. One of the other factors that has evolved in the last three decades is stadiums. During the October 23^rd lecture of my American Sport in the 21^st Century class we discussed the economic benefits that sport can have on athletes, the owners, the fans, and others. The one subject that I am going to focus on is the economic benefits of sport stadiums. With the progression of sport, has come the progression and advancement of stadiums.

Nowadays, we see professional teams and even some universities building these elaborate, brand new stadiums. In Major League Baseball the design of a team’s stadium has more to do with being a sexy attraction, rather than just being concerned with the regulations and dimensions. Organizations in all professional and collegiate sports are building these luxurious stadiums to house their team. The question is where does the money come from? The team owners of an organization are the ones with decision making and top-level power, but they do not just pull out $100 million dollars out of their own pocket to build a stadium. The money to construct today’s masterpiece pro stadiums comes from aid funds that ownership receives from the public. During our class discussion, we reviewed the four areas of public assistance and I have listed them below:

Public Assistance for Team Owners

Ø  The use of public funds to construct and maintain facilities

Ø  Income deduction on tax revenues

Ø  Tax breaks and rebates

Ø  Control of revenues in public facilities

These facts show that it is the local people who provide a lot of the money to fund the constructions of new stadiums. So shouldn’t it be easy to rule that these new lucrative stadiums are a waste of money and resources? Not so fast, according to Jay Coakley’s text stadiums provide a lot of benefits that justify and repay the community’s financial efforts. On pages 375 and 376 in Coakley’s text, five benefits are stated supporting stadium subsidies:

Arguments to Support Stadium Subsidies

v  A stadium and pro team creates jobs; those who hold the jobs spend money and pay taxes in the city so that everyone benefits

v  Stadium construction infuses money into the local economy; this money is spent over and over as it circulates, generating tax revenues in the process

v  The team attracts businesses to the city, and this increases local revenues

v  The team attracts regional and national media attention, which boosts tourism and contributes to overall economic development

v  The team creates positive psychic and social benefits, boosting social unity and feelings of pride and well-being in the local population

 

Even though stadiums provide these benefits and opportunities, obviously other factors influence the actual effectiveness of enhancing a city. For the people who still see these new sport stadiums as a waste of money or a rip-off to the non-sports fans, I have real-life proof that shows the economic benefits of sport stadiums. The NHL lockout has had a major negative impact on all markets, but locally speaking Pittsburgh. At the beginning of October the NHL cancelled the preseason, directly causing many Pittsburgh restaurants and others to lose business. To closely see the benefits of a stadium through the negative effects of the lockout, look at the Souper Bowl restaurant.

When the NHL announced the cancellation of the first two weeks of the regular season, including three Penguins home games, the owner of the Souper Bowl restaurant, Dave Sypherd replied: “We’ll be in trouble. It will kill us”. Dave Sypherd would continue by saying the lockout is taking away roughly 70% of his business with the removal of Penguin home games. Sypherd also shared that on hockey nights in Pittsburgh; the Souper Bowl has 15 employees on duty to handle the crowds and stays open until 2 a.m. On non-event days, the restaurant has eight employees on hand and stays open until 8 or 9 p.m. As a negative effect of the lockout, Penguin home games are canceled, resulting in those extra seven employees not getting a call into work. The same effect can be found at Cafe Fifth and other local Pittsburgh businesses that taste the whiplash from the NHL lockout. My point for illustrating this article to tie-in with my class information, because stadiums create and provide many jobs, attract business to the city, and infuse money into the city’s economy. As a direct result of the lockout, Pittsburgh and other NHL markets are being deprived of these benefits, creating unemployment and costing each city millions of dollars. Sport stadiums have a major impact on any city and its citizens, making them a beneficial part of the economy.

To read the full article follow the below link:
http://www.post-gazette.com/stories/local/neighborhoods-city/nhl-lockout-is-bad-news-for-businesses-near-consol-656250/