Posted: March 18th, 2023
New sports facilities do not stimulate local economies.
The purpose of this study is to examine: (1) the lack of benefits to the local community as a result of new stadium construction, (2) the lack of economic improvement in areas where new stadiums have been constructed, and (3) how the costs of building a new stadium outweigh the benefits. The essay will be written with the average tax paying citizen in mind and intended to dissuade those who have a vote in such referendums.
New stadium construction is a contentious issue at best with proponents stating the many reasons that can be found to support construction of a new stadium while opponents state the unrealistic view of many of the supporting reasons provided by those who desire that a stadium be constructed in their community, town or city.
FACTORS AFFECTING NEW STADIUM CONSTRUCTION
The work of Marcheck (2004) entitled: “Minor Baseball Stadium Construction” states that the process of constructing “a new sports facility is much more complicated than the physical act of building the venue.” There are stated to be four primary factors that must be managed in construction of a stadium including:
public and political support; land acquisition; physical stadium construction; and financing issues. (Marchek, 2004)
Key findings in Marchek’s report on new sports facility construction include the following:
Political support is essential to secure funding – a well reasoned business plan, and logical finance plan, are, alone not sufficient to garner public funding. To be successful, a team or development group must work to gain the support of key public officials, especially the ones that have influence over budgeting matters.
Political support is hard to predict – for a myriad of reasons, stadium construction projects can easily fall to the bottom of the priority list for civic leaders. Thus, in order to attract attention and support for the project, a strong PR and/or advocacy campaign aimed at generating support at the grassroots level can be very important;
Downtown Model – hot trend in stadium construction over past 10+ years – for reasons of accessibility, urban revitalization, and additional revenue generating opportunities, the construction of new stadiums in urban areas, as opposed to suburban areas has become the dominant trend in stadium construction over the past decade;
Municipal bonds are primary financing vehicle for publicly funded stadiums – low interest, long-term municipal bonds are responsible for up to 85% of the capital structure of stadium projects that are financed with public funds. Often the team use concessions, parking revenue, and special taxes to generate the revenues for debt service on these obligations. In addition, stadium-naming rights have become an expected source of revenue generation related to debt service. (Marchek, 2004)
In the event that the stadium project is not supported by the public then public funding will not be available and will be reliant on:
1) Grassroots support; and 2) Political support. (Marchek, 2004)
Marchek states that this distinction is “important to make, because although Grassroots support can lead to political support, political support does not always lead to grassroots support, political support does not always lead to grassroots support.” (2004) This is a complicated process in and of itself as political support is one of the most “unpredictable – variable facing a group that is trying to coordinate a stadium construction project. Even the best-laid plans can fail to garner the support of civic leaders for a myriad of reasons, many of which have nothing to do with the project itself.” (Marchek, 2004) Marchek states that this is due to many factors but may include those as follows:
Timing of an election;
Issues of an Upcoming Election;
The State of the Local Economy;
Pecking order of proposed projects; and Public Support for the Project. (Marchek, 2004)
Another key issue is that relating to land acquisition which involves careful selection of the site for the construction. For example, traditionally there have been two stadium models:
1) the downtown model; and 2) the suburban model both of which has advantages and disadvantages. There are also serious issues relating to the stadium design and construction and the financing issues are quite complicated in nature.
The work of Jimmy Nesbitt (2008) entitled: “Two Measures of Stadium Reveal Different Results” states that Whataburger Field, home of the Houston Astros double a affiliate Corpus Christi Hooks, “opened in 2005 after voters approve a one-eighth cent sales tax increase to pay for the $27.7 million stadium…” The report states that the stadium had been “projected top make money or break even” however it is reported that “if you were to include the cost for all insurance and everything it truly costs us to operate, it loses money. The city subsidizes around $800,000 a year for insurance expenses, management fees and computers and other equipment used for arena operations.” (Nesbitt, 2008)
Ronald a. Wirtz (2001) reports in the work entitled: “Stadium and Convention Centers as Community Loss Leaders” that it has been indicated by current research findings that stadiums “have a particularly bad track record when it comes to delivery on promises of community economic windfalls.” Additionally stated is that Mark Rosentraub and Mark Swindell, university researchers state findings following three decades of study that “lead to the inescapable conclusion that the direct and indirect economic impacts of sports teams and the facilities are quite small and do not create much in the way of new jobs or economic development.” (Wirtz, 2001) According to Rosentraub “Given the relatively small to nonexistent benefits from teams sports at the higher levels, one should not expect anything or very, very little from minor league activities.” (Wirtz, 2001)
Also reported is the statement of Brookings Institution’s book of sports teams and stadiums which “noted the economic impact of a minor league baseball team is “equivalent to a large pet shop” in terms of revenue. A 1994 report investigated the impact of a $6 million stadium for a minor league baseball team in La Crosse, Wis. The report estimated total new annual spending at about $500,000, noting the impact was “substantially smaller” than claimed by stadium proponents. It suggested that public subsidies for such projects “should be carefully studied.” (Wirtz, 2001)
Wirtz states that there is a problem in the position taken by advocates who rely on “models and assumptions that are very wrong…” since these models are “simply unrealistic.” (2001) the greatest part of analysis is inclusive of “average spending estimates for local and nonlocal event goers. These figures are usually provided by local or national associations…” (Wirtz, 2001)
Additionally “…compounding any errors in average spending are estimates on the ratio of out-of-town attendees, who are assumed to spend significantly more on meals and lodging than local event goers. And the trifecta for some reports on economic impact is the inclusion of spending multipliers — the number of times a dollar will be spent or turned over once it is brought to a community. Kaatz said he’s seen reports with multipliers as high as six; he believed a more reliable multiplier was about two on the high end.” (Wirtz, 2001) These factors can lead to “significantly different” and often deceptive conclusions.
Wirtz reports “Fargo, N.D., recently proposed building a new multiuse arena to host college hockey and other events. A study of the proposal by Maxfield Research estimated the direct economic impact of the facility at between $3.8 million to $4.4 million; a second analysis by a local university economist tagged the impact at $8.8 million to $15.3 million. Much of the gap stemmed from differing assumptions regarding out-of-town attendees and their spending habits. Voters apparently were unimpressed by the conclusions of either study, as a $48 million referendum on the facility last year “got thumped pretty bad,” according Pat Zavoral, Fargo city administrator.” (2001) Wirtz states that often the impact reports fail to consider other important issues or factors and specifically those referred to by economists as “substitution effects – where spending for one activity merely replaces spending on other previous activities.” (Wirtz, 2001) in other words, spending on games and concerts was spending previously claimed by other businesses in town such as bowling alleys and movie theaters therefore the spending is simply a shift in spending rather than additional spending or revenue realized by the city or town in which the stadium is located.
In September 2008 it was reported in the work entitled: “The Pros and Cons of Building a New Football Stadium in Winnipeg” that those opposed against the new stadium construction stated the following reasons for their opposition:
The anti-sports people;
Better to refurbish the current stadium
Public money would be better spent on reduction of child poverty or providing health care; and the football stadium is only used ten times each year. (River City Sports, 2008)
Another problem with new stadium construction is noted in the work of Piard (2008) who states that traffic congestion is a real problem as well as is pollution and general disruption of the neighborhood and community in which a stadium is constructed. Also noted by Piard is that once a new stadium is constructed the necessity to construct additional parking facilities is dealt with by the community. The city of Auckland Australia conducted an assessment of the costs and benefits associated with building a waterfront stadium and in its reports stated that the projected costs of construction initially stated at $500 million would in the end actually cost $1 billion and that this amount would construct eight high schools and simultaneously Auckland opted out of the stadium construction proposal.
SUMMARY and CONCLUSION
Construction of a new stadium is a serious issue and there are a great many factors that must be taken into consideration and those factors have been noted in this study. Unless there is no stadium existing in the city in which a new stadium is being considered and there is no other option but to build a stadium then due to the reasons set out in this report construction of a new stadium is a no-win situation financially as well as otherwise for the community in which new stadium construction is being considered.
Marchek, Jason (2004) Minor League Baseball Stadium Construction: A Primer on the Key Issues and Considerations. The Confluence Research Group.
Nesbitt, Jimmy (2008) Two Measures of Stadium Reveal Different Results. Courierpress. 21 July 2008. Online available at http://www.courierpress.com/news/2008/jul/21/defining-success/
The Pros and Cons of Building a New Football Stadium in Winnipeg (2008) the River City Sports Blog 23 Sept 2008. Online available at http://www.rivercitysportsblog.com/the-pros-and-cons-of-building-a-new-football-stadium-in-winnipeg/
Waterfront Stadium Fiasco (nd) Auckland Civic Trust. Online available at http://civictrustauckland.org.nz/Documents/WaterFrontStadium.pdf
Will Stadium Parking Become a Ticket to Ride? City Limits Save Our Parks. 2008 Jan 14. Online available at;
Wirtz, Ronald a. (2001) Stadiums and Convention Centers as Community Loss Leaders. Fedgazette March 2001. Online available at http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=2177
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
There is a very low likelihood that you won’t like the paper.
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!
Place an order in 3 easy steps. Takes less than 5 mins.