5 ms·

The owner is making money, but so are the players, the referees, the concession staff, parking attendants, stores and shops that sell licensed apparel, and the

The owner is making money, but so are the players, the referees, the concession staff, parking attendants, stores and shops that sell licensed apparel, and the bars, restaurants, and other adjacent businesses. Not to mention the marketing team, strength and conditioning coaches, web developers, and others who work for the team. And although temporary, it does create new construction jobs. This is true for football, soccer, baseball, basketball, and other sports. But this is less true when the stadium is built and then surrounded with parking lots that you have to drive to to go park your car. It's more true when the stadium is built in a neighborhood or at least a walkable area. Recently Columbus was going to lose the much beloved Columbus Crew soccer team. We had a stadium off of I-71 that was, you guessed it, surrounded by parking lots and not much else. You couldn't grab a beer before or after the game. People couldn't go camp out at a nearby bar and while you're not in the stadium you're close by and part of the atmosphere. Fortunately the state and local business leaders rallied together to #SavetheCrew and we were able to keep the team and we're building a new stadium next to Nationwide Arena in downtown Columbus where you can walk to the stadium. Hell, you can actually bike there from the suburbs using an existing bike trail and check-in your bike. Similarly, Ohio Stadium on the campus of Ohio State University is very walkable. People go and grab brunch before the noon game, they buy apparel, etc. So I think that yea, a football team is likely to make money for the team owner and cities and governments should be weary of this. And I also haven't read the article so maybe the benefits I mentioned are washed away somehow, but I can't imagine Columbus without Ohio State football, Bluejackets hockey, or Crew soccer. I think it makes the city a better place, even if the owner (of the latter two) makes money.

alistairSH 5y ago
And I also haven't read the article so maybe the benefits I mentioned are washed away somehow The financial benefits are rarely worth the initial expense for professional sports stadiums. Th article didn't claim governments shouldn't kick in any money, only that funding it wholly (or nearly so) via public funds is a bad use of tax revenue. DC has two recent examples. Nationals Stadium (baseball) and Audi Field (soccer). Both in the same neighborhood downtown (southwest waterfront). The baseballs stadium cost ~$1 billion. It was financed with bonds sold by the city and remains owned by the city. Rent to the baseball team and a portion of ticket/concession/etc are being used to pay back the bonds. As of a few years ago, it looked like the cost was basically a wash. But, that ignores opportunity costs of doing other things with that money (assuming it could be borrowed for other projects), so it's hard to say for sure if the stadium was better than other options.[1] Audi Field's financing was quite a bit more complicated, with multiple land trades with 3rd parties, and mixed financing (the team paid a significant amount of construction costs). The team leases thee stadium for a nominal $1/year, so I have no idea how the city recoups it's investment. Part of that deal also pulled $30 million from public school funding, which seems like a big miss to me.[2] All that said, the neighborhood where the stadiums are located was a derelict slum and industrial site before. It's massively revitalized. Does that development offset the costs of buildings/maintaining the stadiums? That's not clear. And both stadiums seem to have had a better mix of public/private financing than some of the NFL stadium deals of past decades (which are usually more expensive to start as well). 1 - https://www.wusa9.com/article/news/local/dc/nats-park-billion-dollar-gamble/65-70abe9a1-32f6-48f2-853e-9ce61fe63932 https://www.wusa9.com/article/news/local/dc/nats-park-billio... 2 - https://en.wikipedia.org/wiki/Audi_Field https://en.wikipedia.org/wiki/Audi_Field
- ericmay 5y ago
  Great comment. One of the things you mentioned was opportunity cost. I wonder if cities such as Columbus or other similarly sized cities actually lack opportunities and so they always latch on to projects like these? Are there intangible benefits to having an NFL stadium that aren't realized in economic cost-benefit analysis? For example, while Columbus is similarly sized to Cleveland and Cincinnati, if you watch the news or weather channel they always choose to show both of those cities instead of Columbus, the capitol (I know the likely reason is just makes more sense to display both of those). Or if I travel I always have to say Columbus, Ohio instead of just Columbus. Not the case with Cincinnati or Cleveland. Is that because the name of those two cities is so unique, or because we don't have an NFL team to get name recognition? Does that affect investment opportunities when companies are considering locating an office? Are we not front of mind because of that? I don't know either way, but I also wonder how this could be measured and if it provides any economic value.
  - alistairSH 5y ago
    I haven't seen any recent studies/reports about building in small markets vs large markets. I suspect the small markets end up even worse off with such deals. The stadiums are massively expensive, regardless of location, and the smaller cities would be less able to absorb/offset the impacts of those costs. Maybe not apples to apples, but DC's annual operating budget is ~$17b vs Columbus's annual budget of $1b. This despite DC having a smaller population (~700k vs ~900k).
    - ericmay 5y ago
      Yea. I think Columbus is unique too because Ohio State football is probably bigger than either of the NFL teams from a market perspective in Ohio so it's sensible that nobody is adding an NFL team here. Also I think the Columbus population comparison isn't great (omg we're the 15th biggest city !11!) because the city has annexed places that really don't make a lot of sense. Metro population is better to use for a comparison. And then I think for D.C. in particular you have the federal government located there so it's probably just "different". Indianapolis has a budget of around $1.3 billion [1], Columbus is $1.04 billion [2], and Cleveland has a budget of around $1.8 bn [3] [1] https://www.indy.gov/activity/city-and-county-budget https://www.indy.gov/activity/city-and-county-budget [2] https://www.columbus.gov/finance/financial-management-group/budget-management/2022-Operating-Budget/ https://www.columbus.gov/finance/financial-management-group/... [3] https://www.cleveland.com/news/2022/02/mayor-bibbs-2022-budget-priorities-police-reform-top-level-staff-public-health.html#:~:text=CLEVELAND%2C%20Ohio%20%E2%80%93%20Mayor%20Justin%20Bibb,the%20Department%20of%20Public%20Health https://www.cleveland.com/news/2022/02/mayor-bibbs-2022-budg....
pc86 5y ago
Sometimes the folks on this VC-funded tech forum sure do love to demonize making money. Half the comments in this thread are some flavor of "it's horrible that this person is making money from something that was subsidized" or "even if they make money..." Professional sports is incredibly lucrative, and college sports are incredibly lucrative for the coaching staff and some college administrators that don't have anything to do with it. I would much prefer tax money to go toward endeavors and projects that aren't completely self-sustaining and profitable, but until localities are legally prohibited from negotiating tax breaks in this manner, it's not going to happen.
notyourday 5y ago
> The owner is making money, but so are the players, the referees, the concession staff, parking attendants, stores and shops that sell licensed apparel, and the bars, restaurants, and other adjacent businesses. Not to mention the marketing team, strength and conditioning coaches, web developers, and others who work for the team. And although temporary, it does create new construction jobs. This is true for football, soccer, baseball, basketball, and other sports. There's a very simple solution to this issue. Owner wants taxpayer money for the stadium? Taxpayer gets ownership in the franchise.
mdavis6890 5y ago
"The owner is making money, but so are the players, the referees, the concession staff, parking attendants, stores and shops that sell licensed apparel, and the bars, restaurants, and other adjacent businesses. Not to mention the marketing team, strength and conditioning coaches, web developers, and others who work for the team. And although temporary, it does create new construction jobs. This is true for football, soccer, baseball, basketball, and other sports." You're following the 'broken window' theory of economics, focusing on how breaking a window creates a job for a handyman. Of course when put this way you know it's ridiculous - but why? It's because it ignores the thing that the handyman could have done instead which must be foregone. Everything comes instead of something else. If we build a stadium, we necessarily do so instead of a hospital, school, houses, etc or more abstractly we might be giving up haircuts, shoes and some amount of anything else. Money spent near the stadium in a bar isn't getting spend at some other business. All of the benefits of having a stadium come at the expense of giving up something else of greater-or-equal value elsewhere. It's just hard to see this, because the benefits are concentrated in a single, highly-visible endeavor, and the costs are diffused throughout the rest of the economy.
- ericmay 5y ago
  My understanding is the broken window theory relates to destruction and rebuilding and not opportunity cost. I don't think building a new stadium is analogous to breaking a window. > If we build a stadium, we necessarily do so instead of a hospital, school, houses, Maybe as a global society this is true because of absolute capital allocation, but because people have the ability to allocate their own capital in the way that they would like to it's not a mutually exclusive endeavor. Further, building a new hospital, house, or school can be uneconomical and not necessary and also has the same issues you're highlighting. Building new housing for homeless people takes money away from special needs children etc... . It depends on the details and opportunities, so I'd disagree that this is necessarily true except in a specific example that we could analyze together. > Money spent near the stadium in a bar isn't getting spend at some other business. Yea that's fine. Both economically and morally.
  - edmundsauto 5y ago

alistairSH 5y ago

And I also haven't read the article so maybe the benefits I mentioned are washed away somehow The financial benefits are rarely worth the initial expense for professional sports stadiums. Th article didn't claim governments shouldn't kick in any money, only that funding it wholly (or nearly so) via public funds is a bad use of tax revenue. DC has two recent examples. Nationals Stadium (baseball) and Audi Field (soccer). Both in the same neighborhood downtown (southwest waterfront). The baseballs stadium cost ~$1 billion. It was financed with bonds sold by the city and remains owned by the city. Rent to the baseball team and a portion of ticket/concession/etc are being used to pay back the bonds. As of a few years ago, it looked like the cost was basically a wash. But, that ignores opportunity costs of doing other things with that money (assuming it could be borrowed for other projects), so it's hard to say for sure if the stadium was better than other options.[1] Audi Field's financing was quite a bit more complicated, with multiple land trades with 3rd parties, and mixed financing (the team paid a significant amount of construction costs). The team leases thee stadium for a nominal $1/year, so I have no idea how the city recoups it's investment. Part of that deal also pulled $30 million from public school funding, which seems like a big miss to me.[2] All that said, the neighborhood where the stadiums are located was a derelict slum and industrial site before. It's massively revitalized. Does that development offset the costs of buildings/maintaining the stadiums? That's not clear. And both stadiums seem to have had a better mix of public/private financing than some of the NFL stadium deals of past decades (which are usually more expensive to start as well). 1 - https://www.wusa9.com/article/news/local/dc/nats-park-billion-dollar-gamble/65-70abe9a1-32f6-48f2-853e-9ce61fe63932 https://www.wusa9.com/article/news/local/dc/nats-park-billio... 2 - https://en.wikipedia.org/wiki/Audi_Field https://en.wikipedia.org/wiki/Audi_Field

ericmay 5y ago
Great comment. One of the things you mentioned was opportunity cost. I wonder if cities such as Columbus or other similarly sized cities actually lack opportunities and so they always latch on to projects like these? Are there intangible benefits to having an NFL stadium that aren't realized in economic cost-benefit analysis? For example, while Columbus is similarly sized to Cleveland and Cincinnati, if you watch the news or weather channel they always choose to show both of those cities instead of Columbus, the capitol (I know the likely reason is just makes more sense to display both of those). Or if I travel I always have to say Columbus, Ohio instead of just Columbus. Not the case with Cincinnati or Cleveland. Is that because the name of those two cities is so unique, or because we don't have an NFL team to get name recognition? Does that affect investment opportunities when companies are considering locating an office? Are we not front of mind because of that? I don't know either way, but I also wonder how this could be measured and if it provides any economic value.
- alistairSH 5y ago
  I haven't seen any recent studies/reports about building in small markets vs large markets. I suspect the small markets end up even worse off with such deals. The stadiums are massively expensive, regardless of location, and the smaller cities would be less able to absorb/offset the impacts of those costs. Maybe not apples to apples, but DC's annual operating budget is ~$17b vs Columbus's annual budget of $1b. This despite DC having a smaller population (~700k vs ~900k).
  - ericmay 5y ago
    Yea. I think Columbus is unique too because Ohio State football is probably bigger than either of the NFL teams from a market perspective in Ohio so it's sensible that nobody is adding an NFL team here. Also I think the Columbus population comparison isn't great (omg we're the 15th biggest city !11!) because the city has annexed places that really don't make a lot of sense. Metro population is better to use for a comparison. And then I think for D.C. in particular you have the federal government located there so it's probably just "different". Indianapolis has a budget of around $1.3 billion [1], Columbus is $1.04 billion [2], and Cleveland has a budget of around $1.8 bn [3] [1] https://www.indy.gov/activity/city-and-county-budget https://www.indy.gov/activity/city-and-county-budget [2] https://www.columbus.gov/finance/financial-management-group/budget-management/2022-Operating-Budget/ https://www.columbus.gov/finance/financial-management-group/... [3] https://www.cleveland.com/news/2022/02/mayor-bibbs-2022-budget-priorities-police-reform-top-level-staff-public-health.html#:~:text=CLEVELAND%2C%20Ohio%20%E2%80%93%20Mayor%20Justin%20Bibb,the%20Department%20of%20Public%20Health https://www.cleveland.com/news/2022/02/mayor-bibbs-2022-budg....

pc86 5y ago

Sometimes the folks on this VC-funded tech forum sure do love to demonize making money. Half the comments in this thread are some flavor of "it's horrible that this person is making money from something that was subsidized" or "even if they make money..." Professional sports is incredibly lucrative, and college sports are incredibly lucrative for the coaching staff and some college administrators that don't have anything to do with it. I would much prefer tax money to go toward endeavors and projects that aren't completely self-sustaining and profitable, but until localities are legally prohibited from negotiating tax breaks in this manner, it's not going to happen.

notyourday 5y ago

> The owner is making money, but so are the players, the referees, the concession staff, parking attendants, stores and shops that sell licensed apparel, and the bars, restaurants, and other adjacent businesses. Not to mention the marketing team, strength and conditioning coaches, web developers, and others who work for the team. And although temporary, it does create new construction jobs. This is true for football, soccer, baseball, basketball, and other sports. There's a very simple solution to this issue. Owner wants taxpayer money for the stadium? Taxpayer gets ownership in the franchise.

mdavis6890 5y ago

"The owner is making money, but so are the players, the referees, the concession staff, parking attendants, stores and shops that sell licensed apparel, and the bars, restaurants, and other adjacent businesses. Not to mention the marketing team, strength and conditioning coaches, web developers, and others who work for the team. And although temporary, it does create new construction jobs. This is true for football, soccer, baseball, basketball, and other sports." You're following the 'broken window' theory of economics, focusing on how breaking a window creates a job for a handyman. Of course when put this way you know it's ridiculous - but why? It's because it ignores the thing that the handyman could have done instead which must be foregone. Everything comes instead of something else. If we build a stadium, we necessarily do so instead of a hospital, school, houses, etc or more abstractly we might be giving up haircuts, shoes and some amount of anything else. Money spent near the stadium in a bar isn't getting spend at some other business. All of the benefits of having a stadium come at the expense of giving up something else of greater-or-equal value elsewhere. It's just hard to see this, because the benefits are concentrated in a single, highly-visible endeavor, and the costs are diffused throughout the rest of the economy.

ericmay 5y ago
My understanding is the broken window theory relates to destruction and rebuilding and not opportunity cost. I don't think building a new stadium is analogous to breaking a window. > If we build a stadium, we necessarily do so instead of a hospital, school, houses, Maybe as a global society this is true because of absolute capital allocation, but because people have the ability to allocate their own capital in the way that they would like to it's not a mutually exclusive endeavor. Further, building a new hospital, house, or school can be uneconomical and not necessary and also has the same issues you're highlighting. Building new housing for homeless people takes money away from special needs children etc... . It depends on the details and opportunities, so I'd disagree that this is necessarily true except in a specific example that we could analyze together. > Money spent near the stadium in a bar isn't getting spend at some other business. Yea that's fine. Both economically and morally.
- edmundsauto 5y ago