Expert dismisses state cash for sports

[sunshine]

By Beth Kassab | Tallahassee Bureau

Posted April 6, 2005

TALLAHASSEE -- Spending state money on sports arenas or stadiums generates little or no financial benefit for the public, a Senate economist told lawmakers Tuesday.

"Every single study indicates that there is no positive economic benefit -- net positive economic benefit -- for publicly funding professional sports teams or stadiums," said Ross Fabricant, an economist who works for the Senate budget office.

Six cities, including Orlando and Daytona Beach, are asking for a combined $200 million to help build facilities for the Orlando Magic, NASCAR, Florida Marlins and three spring-training teams.

In a presentation to the Senate's committee on commerce and consumer services, Fabricant said his conclusions were based on 40 studies conducted throughout the country by independent analysts.

He said the bottom line is that whatever money is spent at a sporting event would likely be spent in that same city at another restaurant, show or other recreational event if the sports team didn't exist there.

Fabricant also disputed contentions that the facilities generate jobs, construction spending and other value to the community. He said residents would derive even more benefits if the state chose to spend money on other public projects such as schools or highways.

Fabricant said only one of the proposals would have "zero impact" on the state's budget: Daytona Beach's idea to sell specialty NASCAR license plates to repay the state for tax money it would spend to help it build a NASCAR Hall of Fame.

That proposal, he said, is in "a category by itself."

Sen. Jim King, R-Jacksonville, said the NASCAR proposal sponsored by Sen. Evelyn Lynn, R-Ormond Beach, could go further than the others because of the license plate.

"I do think that Sen. Lynn's approach is different and very unique in that it doesn't cost the state any money," said King, who also represents part of Daytona Beach and is chairman of the Senate committee that will next consider the bills.

The future could be less bright for Orlando, Miami-Dade County and the three cities looking to retain their spring-training baseball teams: Fort Lauderdale, Winter Haven and Sarasota.

Orlando officials want $99 million in sales-tax money during the next 30 years to help build a better arena for the Magic. They fear the team could leave the Orlando-owned TD Waterhouse Centre without a major tenant if the Magic leave town for a better venue.

Rep. David Simmons, R-Longwood, wants the state to pay the city $3.3 million a year for 30 years in sales-tax money for work on the arena.

"I believe the [economist] who came and railed against all of this missed the most salient part of it," Simmons said of the presentation. "The sales tax that is generated from one of these publicly owned facilities is simply retained by a local government rather than by the state government."

Sean Mussenden of the Sentinel

staff contributed to this report.

Beth Kassab can be reached

[bobliocatt]

Well for what its worth, the city of Winter Haven has already officially stated that they want the Cleveland Indians to leave town and would like to tear down the stadium to developed the site into a dense mixed use development. I wonder how they ended up on this list?

Btw, I disagree with the economist. Getting the Jags, has directly resulted in the old Gator Bowl being upgraded into a state-of-the-art stadium and name recognition for the city. Without the team, there would be no Super Bowl, ACC Championship game or NCAA Elite 8 games coming to Jax.

The Super Bowl itself, led to many improvements around town that have enhanced the local quality of life. These include an extended Riverwalk, Bay Street Town Center, repaving of numerous city streets, new sidewalks, historic street lights in downtown, improved landscaping around town, lighted bridges, etc. Its very arguable that, if the team never came to Jax, this place would still be just as depressed, as it was during the 1980's.

[afh]

Well for what its worth, the city of Winter Haven has already officially stated that they want the Cleveland Indians to leave town and would like to tear down the stadium to developed the site into a dense mixed use development.  I wonder how they ended up on this list?

Btw, I disagree with the economist.  Getting the Jags, has directly resulted in the old Gator Bowl being upgraded into a state-of-the-art stadium and name recognition for the city.  Without the team, there would be no Super Bowl, ACC Championship game or NCAA Elite 8 games coming to Jax. 

The Super Bowl itself, led to many improvements around town that have enhanced the local quality of life.  These include an extended Riverwalk, Bay Street Town Center, repaving of numerous city streets, new sidewalks, historic street lights in downtown, improved landscaping around town, lighted bridges, etc.  Its very arguable that, if the team never came to Jax, this place would still be just as depressed, as it was during the 1980's.

<{POST_SNAPBACK}>

I think the point of the survey was if teams and stadiums provide a economic benefit to cities. In that essence, it has been shown that they do not provide a direct benefit to cities unless the city owns the stadium and is getting apart of the revenue stream from the stadium. In Jacksonville's case, the city is making money off of the stadium. But the way that things are going now, team owners would die if they had to cut the type of deal that the Jags cut with the City of Jacksonville. The city also makes money off of other events held in the stadium and that is why the Jaguars owner is trying to get the City to give him apart the revenue that the City will make from the ACC Championship game and the Gator Bowl game. I do think that at this point and in the future Jacksonville can stand on its own without the Jags.

If the team owns the stadium then the city gets no economic benefit.

[bobliocatt]

Yes, Jax doesn't need the Jags to survive. But being awarded an NFL franchise in 1995, has indirectly led to a number of events that have improved the quality of life in Jax, as well as the city's economic status.

People shouldn't just look to see how much the city government makes off these deals. How about looking at the entire package. I think its more important to also find out how much cash these teams generate in retail, dining and hotel sales within the local economy. Free national advertising, which can enhance a city's image, should be considered also.

[afh]

Yes, Jax doesn't need the Jags to survive.  But being awarded an NFL franchise in 1995, has indirectly led to a number of events that have improved the quality of life in Jax, as well as the city's economic status.

<{POST_SNAPBACK}>

I agree about improving the quality of life.

People shouldn't just look to see how much the city government makes off these deals.

<{POST_SNAPBACK}>

Well, it is important for a city to be able to make money off these deals if there is going to be a claim of economic impact. Also, cities have to be fiscally responsible to the citizens so not giving teams a sweetheart deals ensures that cities will make some revenue, which is important in order to continue to provide vital city services.

How about looking at the entire package.  I think its more important to also find out how much cash these teams generate in retail, dining and hotel sales within the local economy.  Free national advertising, which can enhance a city's image, should be considered also.

<{POST_SNAPBACK}>

With the sports teams in general there isn't too much money they generate in hotel room sales, dining and retail b/c the turn around from team arrival to the team leaving is too quick in some cases. With the NFL a team will arrive on Friday and depart on Sunday. NFL team fans don't normally travel like college team fans so there isn't a economic impact worth noting that is provided by the traveling team and its fans visiting a city. Plus, it's only 8 visits to a city and the teams all have one particular hotel that they will stay in.

In MLB there is some economic impact if there is a 3 game home stand. Even in that case the fan visiting team doesn't bring along a boat load of fans to fill hotel rooms and eat in restaurants. The NBA and NHL are just like the NFL but there are more times that teams will visit cities so the economic impact is likely to be greater but even then the number of nights spent in an hotel room is probably something like 2 nights or less.

As far as national images go, it all about what time is hot. In the NFL the national games are shown on ESPN and Monday night football. You have some Saturday national games later in the year, but in all of the national showtime cases, the good teams are shown and they are normally only shown once. The NBA, NHL and MLB mainly have regional games with a few national games. There are too many games played in those leagues for 2 or even 4 national games for a team to matter. Plus, those sports don't draw anywhere near the viewers that a national broadcast of a NFL game. Ratings from last year showed that Spongbob Squarepants had more viewers than the national games of the NHL, NBA and MLB games shown on ESPN.

I think that over a number of years, a city can enhance it's national image if it happens to be a winner for a period of time. Jacksonville was that team in the late 90s when they were doing there playoff thing and was the darling of the media. On the other end of the spectrum you have the Arizona Cardinals which no one and I mean no will put on tv for a national game.