Thursday, March 25, 2004
Public Financing of Stadiums Unnecessary, Study Shows
University of Dayton economists Mark Poitras and Larry Hadley have concluded that modern baseball stadia generate enough additional revenue that owners should be willing to build them without a public subsidy:
"With the first season in a typical $268 million stadium expected to produce about $33 million, half the cost of construction would be recovered in five years and all of the cost in 12 years, the study said.
"After 20 years, revenues would exceed construction costs by more than $100 million and by $200 million after 30 years, the study said."
The authors also note that owners forced to spend their own money would likely opt for cheaper designs (no retractable roofs, for instance) that would make their stadia even more likely to turn a profit.
However, Andrew Zimbalist, who reviewed a draft of the report, isn't comfortable with some of the methodology. When most modern stadia receive a public subsidy, an owner asked to build one himself will protest that doing so will still leave his club at a competitive disadvantage. Just because a stadium can be privately financed doesn't mean the owner will finance it if there's any other viable alternative.
I haven't seen the study yet, but I've E-mailed co-author Larry Hadley about it. (Larry has contributed a number of reviews to the Guests section of my Website.) Will post more on this subject as I learn more...
|
University of Dayton economists Mark Poitras and Larry Hadley have concluded that modern baseball stadia generate enough additional revenue that owners should be willing to build them without a public subsidy:
"With the first season in a typical $268 million stadium expected to produce about $33 million, half the cost of construction would be recovered in five years and all of the cost in 12 years, the study said.
"After 20 years, revenues would exceed construction costs by more than $100 million and by $200 million after 30 years, the study said."
The authors also note that owners forced to spend their own money would likely opt for cheaper designs (no retractable roofs, for instance) that would make their stadia even more likely to turn a profit.
However, Andrew Zimbalist, who reviewed a draft of the report, isn't comfortable with some of the methodology. When most modern stadia receive a public subsidy, an owner asked to build one himself will protest that doing so will still leave his club at a competitive disadvantage. Just because a stadium can be privately financed doesn't mean the owner will finance it if there's any other viable alternative.
I haven't seen the study yet, but I've E-mailed co-author Larry Hadley about it. (Larry has contributed a number of reviews to the Guests section of my Website.) Will post more on this subject as I learn more...
|
