Monday, March 18, 2013

I love sports, but I hate cronyism more

Here's an encouraging article from a Florida newspaper.  The author (alas, there is no by-line for the article) takes on the cronyist practice of providing subsidies to help finance the building of sports stadiums.  Most impressive is that the article attacks the oft-argued point that the presence of sports teams -- and their stadiums -- provide net positive economic gains to the local economy.  Consider this:
The problem with that theory is that there is scant evidence that such economic benefits actually occur. Numerous studies done over the last 25 years have found that professional sport teams have little, if any, positive effect on a city’s economy. Usually, a new team or a new stadium location doesn’t increase the amount of consumer spending, it merely shifts it away from other, already existing sources. Entertainment dollars will be spent one way or another whether a stadium exists or not. Plus, the increase in jobs is often modest at best — nowhere near enough to offset the millions invested in the projects.
Read the entire article here (HT: Crony Chronicles).

Related: Here's a post that came out today from The Sports Economist analyzing the details of a proposed new mega-football stadium "palace" in Atlanta.  Author Skip Sauer says:
This is a significant subsidy, one that the Falcons’ ownership will take happily to the bank.  But it’s standard operating procedure in the monopolized world of North American professional sport.  Monopoly control over the number of franchises creates potential competition from a host city without a team, and through that an exit threat for which citizens in towns with current teams must compensate.  As an economist, with my normative hat I decry the system which generates this diversion of funds between now and 2050 to a sports entity, rather than projects which would truly help develop Atlanta’s economy.
You can find this interesting article here.