4 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." 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
  It’s fine, but it means that the revenue generating projections from sports teams are reflecting the amount of diverted entertainment spending, not net new money. And the frame is often the latter, which is both wrong and deceptive. If teams presented their cases more truthfully - this stadium won’t make any more money than other options, but the people of this city like sports, so please subsidize the rich owners- I would have less of an issue. (Said from San Diego, where this former chargers fan is ecstatic to see the city didn’t kowtow to the team’s demands for a new stadium. They are now in LA, and I get 16 Sundays per year back into my life. )
  - ericmay 5y ago
    > It’s fine, but it means that the revenue generating projections from sports teams are reflecting the amount of diverted entertainment spending, not net new money. And the frame is often the latter, which is both wrong and deceptive. Yea I mean they probably don't depict this in the best way possible, but undoubtedly it brings in tourists and other investment, at a minimum. But I think that this could also be used as an argument against, say, an airport because now people have easy access to travel to NYC, or Florida, or California and it diverts money spent from local entertainment to those cities/attractions/etc... Instead of spending money at MoMA in NYC why don't you spend it at the Columbus Art Museum? (I do say this to illustrate a point, but I actually agree we should spend money more locally). I really wish we could get away from "XYZ rich owners" comments though because the government subsidies all sorts of people, rich or otherwise. Also it's not just the owners but the players too. They make millions upon millions of dollars. Intel coming to Columbus with tax breaks subsidizes the rich shareholders and CEO. The federal government maintaining a shipyard in New England subsidizes wealthy dock workers and the shipyard CEO. Roads? Same thing. Hospitals? Wealthy doctors. Wealthy defense contractors making bombs that our tax dollars are paying for to defend Ukraine from Russia. And you can play this game with any public investment or economic decision.
    - edmundsauto 5y ago
      I don’t think that it’s true of airports, for example. I am not an expert in this, and have mostly focused on the baseball side of things, but the work I have seen from neutral economists are pretty clear that these taxpayer dollars are not high RoI. Your comment boils down to “all government spending on this list of items is equally inefficient, so why not build stadiums instead of airports.” I think that ignores the fact that airports are infrastructure, whereas sports are entertainment. Personally, I don’t think the govt should spend money on entertainment when the financial beneficiaries could easily cover the costs. Also, in baseball, the owners are the last types of people I would support. They don’t even care all that much about the product on field - there is not a structural incentive to put a better product on the field. The comparison of billionaires to millionaires is also deceptive - that is a huge chasm, and players are being paid for producing value, using the income from their labor. Owners are paid because they have odd tax breaks (did you know they can depreciate their team purchase cost, despite team values consistently beating index returns?) Lords of the realm is a great book to get insight into MLB owners.

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
It’s fine, but it means that the revenue generating projections from sports teams are reflecting the amount of diverted entertainment spending, not net new money. And the frame is often the latter, which is both wrong and deceptive. If teams presented their cases more truthfully - this stadium won’t make any more money than other options, but the people of this city like sports, so please subsidize the rich owners- I would have less of an issue. (Said from San Diego, where this former chargers fan is ecstatic to see the city didn’t kowtow to the team’s demands for a new stadium. They are now in LA, and I get 16 Sundays per year back into my life. )
- ericmay 5y ago
  > It’s fine, but it means that the revenue generating projections from sports teams are reflecting the amount of diverted entertainment spending, not net new money. And the frame is often the latter, which is both wrong and deceptive. Yea I mean they probably don't depict this in the best way possible, but undoubtedly it brings in tourists and other investment, at a minimum. But I think that this could also be used as an argument against, say, an airport because now people have easy access to travel to NYC, or Florida, or California and it diverts money spent from local entertainment to those cities/attractions/etc... Instead of spending money at MoMA in NYC why don't you spend it at the Columbus Art Museum? (I do say this to illustrate a point, but I actually agree we should spend money more locally). I really wish we could get away from "XYZ rich owners" comments though because the government subsidies all sorts of people, rich or otherwise. Also it's not just the owners but the players too. They make millions upon millions of dollars. Intel coming to Columbus with tax breaks subsidizes the rich shareholders and CEO. The federal government maintaining a shipyard in New England subsidizes wealthy dock workers and the shipyard CEO. Roads? Same thing. Hospitals? Wealthy doctors. Wealthy defense contractors making bombs that our tax dollars are paying for to defend Ukraine from Russia. And you can play this game with any public investment or economic decision.
  - edmundsauto 5y ago
    I don’t think that it’s true of airports, for example. I am not an expert in this, and have mostly focused on the baseball side of things, but the work I have seen from neutral economists are pretty clear that these taxpayer dollars are not high RoI. Your comment boils down to “all government spending on this list of items is equally inefficient, so why not build stadiums instead of airports.” I think that ignores the fact that airports are infrastructure, whereas sports are entertainment. Personally, I don’t think the govt should spend money on entertainment when the financial beneficiaries could easily cover the costs. Also, in baseball, the owners are the last types of people I would support. They don’t even care all that much about the product on field - there is not a structural incentive to put a better product on the field. The comparison of billionaires to millionaires is also deceptive - that is a huge chasm, and players are being paid for producing value, using the income from their labor. Owners are paid because they have odd tax breaks (did you know they can depreciate their team purchase cost, despite team values consistently beating index returns?) Lords of the realm is a great book to get insight into MLB owners.