Sports teams are
popular for improving brand image of a city and encouraging greater
investment in downtown districts. People become attached to the image of a sports
team as a representation of their city. The economic advantage of sports teams
can be difficult to define as traditional economic measurements look for close
relationships. Putting the advantages of sports teams in perspective may help encourage focus on other economic fundamentals.
Arenas are
expensive and methods of financing them come from multiple sources. According
to one study of American and U.S. facilities 70% of the money is from public coffers
even though the teams are private (Siegfried & Zimbalist, 2006). The large
cost of construction and the land and zoning requires require public involvement.
There should be
a difference between a sports team and an arena. The arena is the physical
facility that sports teams play in and are often financed through public
monies. The team is licensed by a league and works independently from
individual cities. The two are seen as the same thing in people’s minds even
though teams can pack their bags and leave when contracts end.
The economic
benefits of sports teams can be difficult to define from a pure numbers point of view. A review of sports teams
over a decade found that sports teams don’t always result in distinct
advantages for urban economies (Coates & Humphreys, 2003). The benefits of
new jobs and new business can be somewhat limiting when compared to the costs
of building large facilities.
These studies
are dated but do bring forward the idea that sports teams may not be what makes
or breaks an area economically. It is much better to view sports teams as an
enhancement to an area that provide local branding advantages and secondary
support to local businesses. Long-term
sustainability of a city may rely on other factors beyond the public image a
team offers.
Calculating the full
economic impact of a sports team requires the understanding the nature of
branding and business, costs of construction, associated vendors, and the
secondary impact of mass amounts of visitors on local businesses such as hotels
and restaurants. The level of benefits can be difficult to define and calculate
appropriately leaving decision-makers in the lurch.
Losing a professional
sports team may impact the perception of an area and hurt egos but may not make
or break a local economy. A thorough investigation of its total impact,
directly and indirectly, would be needed to ensure that the loss has a
significant influence on the area and what type of replacements might help
alleviate the problem. Perhaps focusing on more fundamental aspects of the
economy and business can create higher levels of long-term economic benefit.
Coates, D. &
Humphreys, B. (2003). Professional sports facilities, franchises and urban
economic development. Public Finance and Management, 3 (3).
Siegried, J.
& Zimbalist, A. (2006). The economic impact of sports facilities, teams and
mega-events. Australian Economic Review,
39 (4).
