Earlier this week, while driving to work as usual I had my radio tuned to KPCC, the public radio station out of Pasadena, and there was a feature on the moves being made to bring an NFL team to Los Angeles. The central focus of the story was the impact of sports stadiums and the teams that play in them have on the economies of their civic hosts.
"There are a lot of things economists disagree about, but the economic impact of sports stadiums is not one of them." That is how the KPCC story began, and I have to admit I figured that it must mean the consensus was that stadiums and professional sports teams brought financial rewards to their cities.
“If you ever had a consensus in economics, this would be it," said Michael Leeds, a sports economist at Temple University. "There is no impact."
Leeds studied Chicago – as big a sports town as there is – with five major teams.
“If every sports team in Chicago were to suddenly disappear, the impact on the Chicago economy would be a fraction of 1 percent,” said Leeds.
Leeds pointed out that a major league baseball team has about the same economic impact as a small department store, and that is with 80 home games a year. An NFL team only plays eight home games in a season, unless they are a playoff team with home field advantage, in which case they could get one or two more.
Those of us who live in the greater Los Angeles area, once home to the mighty NFL Rams and Raiders, and for one season the Chargers, have been without an NFL team for about 20 years. Some of us are just fine with that. After all, we have the Lakers, Clippers and Sparks, the Angels and Dodgers; we have the Ducks, Kings and the MLS Galaxy. But many other Angelinos, politicians, developers and business leaders, including basketball legend and sports icon, Magic Johnson, consider an NFL team both a matter of civic pride and an irresistible economic opportunity and are working hard to lure a team to our sprawling metropolis.
As there are three NFL franchises with a connection to the Los Angeles area, the Raiders, the Rams and the Chargers, whose stadium leases expired this year, the fully inflated football franchise tree appears ripe for the picking. The burning questions on the minds of many are which team(s) will it be and where in the L.A. will they play?--or will the city be disappointed as Lucy pulls the proverbial football away from Charlie Brown once again?
There is still the stadium issue here, but the most important green stuff is now in place — the Clippers' recent $2-billion purchase price has made the NFL owners understand this market's enormous financial potential. This realization has led a renewed effort to make a stadium deal happen either downtown, Hollywood Park, City of Industry, or even on Frank McCourt's parking lots — ouch! — in Dodger Stadium.
Like Magic said to Yahoo Sports, "I think for the first time, I truly believe we're going to get a team." http://www.latimes.com/...
The breaking news since I began writing this diary is that the Raiders and the Chargers have announced they are working on deal to share a yet to be built stadium in Carson, about 18 miles outside of L.A. This is the leading story on most local news programs and the stories are full of happy Carson residents and local politicians smiling broadly and pronouncing their joyous support. Additionally, because one of the investors in the Inglewood property is the owner of the Rams, Stan Kroenke, who is planning to build a stadium there, it is not out the realm of possibility that there may soon be three NFL teams playing in the L.A. area.
This seems like a win for everyone. Los Angeles football fanatics get their gridiron pride back, their NFL mojo if you will, the league gets access to the nation's number two media market, and Los Angeles gets all the jobs, all that money pouring into the city and surrounding communities! Conventional wisdom would have it that major stadiums and the professional sports teams that play in them are an economic boon to their communities. All the pitches made by owners and developers of course include the positive economic impact the endeavor will have on their city.
If you build it, they will come … with wallets bulging, eager to exchange greenbacks for peanuts, popcorn, hot dogs and beer, and T-shirts and ball caps with team logos. And then there is all the business to be generated in sports bars and restaurants and the like.
At least that’s the theory embraced – time and time again – by mayors and city council members hoping to lure professional sports teams to their cities by promising to build new arenas for the teams. http://news.illinois.edu/...
Chris Meany, a senior executive with the joint venture designing and financing the project is leading the effort to build an Inglewood stadium site. Construction has already begun on the 238 acres permitted in 2009.
This summer, Meany hopes Inglewood voters will approve a ballot initiative to add a stadium on 60 more acres, but he stresses that it — and any NFL team — is only the cherry on top.
“We’re going to create something that is active 365 days a year,” he said. http://www.scpr.org/...
And according to Meany, no tax payer dollars will be used for the project. Wow! That's great. Where do we sign?
But wait, not so fast Mr. Meany. There are people here who are actually paying attention.
But a generation of Angelenos grew up without a local NFL team. Many scorn the idea of sapping public tax dollars for a return to pro football, whether that’s for rearranging roads or reallocating cops on game days.
Politicians, including L.A. Mayor Eric Garcetti, are listening to that constituency.
“The mayor is a fan and would love to see football here in L.A. But we do not support the use of city resources for stadium construction,” said Yusef Robb, Garcetti’s spokesman. “Any deal would have to make sense for our quality of life, our neighborhoods and our economy.” http://www.nbcnews.com/...
Ah, there are some key words: "quality of life" and "economy." But more on that later. What is this about "public tax dollars?" Remember Meany was boasting that no tax payer dollars would be used.
While the plan does not include any upfront tax money to build the 298-acre community of homes, offices and entertainment venues, a 187-page outline released by developers includes provisions for multimillion-dollar public paybacks to them over time from tax dollars generated by the project, which would cover costs ranging from installing street lights and fire hydrants to running shuttle buses and providing police security on game days.
The documents submitted to officials in Inglewood, where the stadium would be built, say that if annual tax revenue to the city from the completed project exceeds $25 million as expected, the developers, including a company controlled by the owner of the St. Louis Rams, would be entitled to reimbursements for funds they invested in streets, sewers, parks and other projects deemed dedicated to the public.http://news.yahoo.com/...
"Entitled to reimbursements"--sweet! But those reimbursements are coming from tax revenue which means tax payers would actually be contributing to the project, on the back end, rather than up front when they could see to what they were agreeing before a vote.
Chicago-based sports finance consultant Marc Ganis said claiming no tax money would be used in the project is "hyper-spin" and could damage the project's credibility.
"It's not an outright lie ... but there will be people who think it is," Ganis said. "They might be prospective tax dollars, and it might make sense for Inglewood to contribute them to the project, but they are tax dollars." (Yahoo)
So if you have made it this far, you might be inclined to follow below the fold for the point of this whole piece, how sports stadiums and the teams that play in them actually do nothing for the economy of their civic hosts, and why the NFL, and some other professional leagues are subsidized by us.