Monday, October 06, 2008
Sports econ potpurri
NFL ticket prices are up this year, in some venues. The average price is 8% higher.
But the bloom may be off the rose. Along with other bits of anecdotal evidence, David Moulton reports that 10,000 seats are covered with a tarp in Jacksonville. Moreover:
At Time Magazine, Sean Gregory discusses the new "Jock Market" at OneSeason.com, where you can trade shares in players. Problem is, there is no intrinsic relation between the value of a share at OneSeason and player performance, other than what traders think of it. I refer to it as "the ultimate beauty contest" and state that I expect the market to collapse. Which would be too bad, because the market is based on real money transactions and the price changes would be interesting to study. Stocks and real estate are passe', so perhaps OneSeason is the next bubble ;)
Finally, anyone who has read this far must be a TSE junkie, so here's the obligatory stadium subsidy piece. This installment has facts and figs on the new stadium for Real Salt Lake, which will have its debut on Thursday. The pics are pretty (pdf).
But the bloom may be off the rose. Along with other bits of anecdotal evidence, David Moulton reports that 10,000 seats are covered with a tarp in Jacksonville. Moreover:
Something strange happened on our radio show this week. We had Miami Dolphins tickets to today’s game against the San Diego Chargers to give away.The question is whether the change is cyclical or permanent. Here's more on the cyclical worries for franchises.
No one wanted them! Free tickets to an NFL game and they had less value than a station T-shirt. 2007 Dolphins tickets, I could totally understand, but these guys just drilled the Patriots.
Now, this moment could have been a fluke, but I don’t think so. I think the sports landscape is changing.
At Time Magazine, Sean Gregory discusses the new "Jock Market" at OneSeason.com, where you can trade shares in players. Problem is, there is no intrinsic relation between the value of a share at OneSeason and player performance, other than what traders think of it. I refer to it as "the ultimate beauty contest" and state that I expect the market to collapse. Which would be too bad, because the market is based on real money transactions and the price changes would be interesting to study. Stocks and real estate are passe', so perhaps OneSeason is the next bubble ;)
Finally, anyone who has read this far must be a TSE junkie, so here's the obligatory stadium subsidy piece. This installment has facts and figs on the new stadium for Real Salt Lake, which will have its debut on Thursday. The pics are pretty (pdf).
Labels: mls, NFL, sports economics, stadium subsidies
Thursday, May 29, 2008
Six grand a seat
D.C. is in the stadium subsidy discussion business again. This time it's for Major League Soccer's D.C. United: a 150 million dollar public subsidy, for a 25,000 seat stadium.
Lets break out the pencil. $150,000,000 / 25,000 = $6,000 per seat. Hmmm... Is a seat at a soccer stadium worth $6,000 to the taxpayers of D.C.? Columnist Marc Fisher, who's displayed a curious and perhaps studious approach to stadium subsidies in the past, doesn't think so.
Lets break out the pencil. $150,000,000 / 25,000 = $6,000 per seat. Hmmm... Is a seat at a soccer stadium worth $6,000 to the taxpayers of D.C.? Columnist Marc Fisher, who's displayed a curious and perhaps studious approach to stadium subsidies in the past, doesn't think so.
Labels: mls, new stadium, stadium subsidies
Sunday, February 18, 2007
Real Salt Lake Subsidy
The following account is from an editorial in the Daily Herald Newspaper, (from the Provo area south of Salt Lake City). It sketches the timeline of negotiations between the MLS soccer club and various government entities in Utah. The subsidy is rather small at $35m, but the sequence of events is fairly typical in the subsidy negotiation game:
Dave Checketts, owner of Real Salt Lake, threatened to move the professional soccer franchise to St. Louis if he didn't receive public funding to build a 20,000-seat stadium in Sandy.Yes indeed. One might argue that the consumption expense is worth it to Utah's public. But equally valid is the claim that this expense is inflated by league restrictions on the number of franchises, and imperfections in the political process.
Real Salt Lake is playing at the University of Utah until it can get a permanent venue, a dream that was momentarily placed in doubt when Salt Lake County Mayor Peter Corroon withdrew the county's promise of $30 million to help Real relocate to Sandy. Corroon had been warned by financial advisers that it was a risky investment.
An alternative proposal from Utah County was snubbed. Anderson Development offered to buy the team and base it at the former Geneva Steel site in Vineyard. Checketts insinuated that we're second-class citizens down here and rejected the deal.
In the eleventh hour, the Utah Legislature, goosed by Gov. Jon Huntsman Jr., came through, pledging $35 million in public money. The cash is supposed to come from taxes on hotel rooms and rental cars.
House Minority Whip Brad King, D-Price, called it a chance to promote Utah to the world. "This is worth millions and millions of dollars we will never commit from state coffers to promote us," King said.
Checketts is not the first sports team owner to get help from state government. Utah Jazz owner Larry H. Miller leases the land under the former Delta Center for $1 a year until 2040. Salt Lake City is also using taxes to pay off the center's $25 million bond.
There may be times when it's proper for government to help a business get started, but we are not convinced this is it. A soccer stadium hardly qualifies as an economic kick-start.
This is a subsidy for a special interest, in our view.
We console ourselves with the fact that $35 million is a small amount compared to other stadium deals. But that doesn't change the principle.
Salt Lake County's financial advisers said that revenue projections by Checketts were "too optimistic." Likewise, economists Roger Noll of Stanford University and Andrew Zimbalist of Smith College -- co-editors of the book "Sports, Jobs and Taxes" -- say that stadiums are more of a consumption expense than an economic booster.
Labels: mls, soccer, stadium subsidies
