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    Government’s Hoop Dreams Never Come True

    Sacramento mayor and former NBA star Kevin Johnson is desperate to keep the city’s struggling NBA franchise. So much so that he pledged $258 million of public money to build a sparkling new arena.

    But Seattle also wants the team. So city and county leaders have promised $145 million of public money to build their own sparkling new arena. Politicians in Seattle and Sacramento insist that a booming economy is just around the corner if voters will just let them borrow millions to build a parquet-floored palace.

    The sad news for both cities is that sports teams, stadiums and arenas — especially when funded by the local government — don’t help the area’s economy at all. After decades of intense study, economists from the left, right and center agree on this point

    There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economic journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.

    Politicians always promise that a new stadium or arena will lead to economic growth. But professional sports teams and their facilities don't create new economic activity, but merely take the place of other economic activity.

    If I have $100 to spend on entertainment, I might take my bride to a basketball game. If there isn’t a team, then I’ll take her to a concert or the theater or a nice dinner. Even if we just decide to stay at home and watch TV, we’ll still spend that $100 on local stores or services. 

    That C-note is going to be spent, whether big government wastes millions on a sports palace or not. The only thing that would increase my economic activity is if the government taxed me a bit less so I could spend $110.

    But what about the money paid to professional players and team owners? Surely that has to boost the local economy, right? No so much.

    The richest pros and financiers tend not to live in the local community so the majority of their money is shipped well out of town. And this doesn’t get to the moral failure of taking money from taxpayers to give to millionaire athletes and billionaire owners.

    Despite the strong-arm tactics of politicians, citizens are showing up to sound the alarm.

    ”Mr. Mayor, your attempts to pull off an upset win could adversely affect this community for decades,” said attorney and professed Kings fan Jeffrey Anderson, who asked the council to put the plan before voters or he would file a lawsuit to stop it.

    Other speakers said the timing of the deal was ironic given that nearby Stockton is in bankruptcy court after over-extending itself with debt, including a minor-league hockey arena.

    If politicians really want economic growth and not just money for their influential friends, they should return tax money to citizens. If we each have a few more dollars to spend on date night, that will do more for the economy than any basketball arena.

    Follow Jon on Twitter at @ExJon.

    1 comments
    Adele Baker
    04/23/2013

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