The Sports Economist

Some data on Glendale's Super Bowl

2008-05-12T15:38:00.003-04:00

Super Bowl wasn't a windfall
Glendale spent more on game than it made

Carrie Watters
The Arizona Republic
May. 12, 2008 12:00 AM
Glendale did not recoup what it spent to host Super Bowl XLII, according to a new study that showed out-of-towners here for the game added an estimated $1.2 million to the city's tax coffers.

The city laid out $3.4 million preparing for and hosting the Feb. 3 game.

Bottom line: The city spent $2.2 million more than its estimated take in connection with the game.

That deficit could be lessened by NFL spending or local visitors' spending, which were not part of the study by Scottsdale-based Elliott D. Pollack & Company.

City leaders have long said they did not anticipate that the city would immediately recoup its expenditures.

"You can look at it from getting the actual dollar back," Councilman David Goulet said. "But I think there is a bigger picture to look at than just the pure law of numbers."

He foresees a return on the investment over time as the game bolstered the city's image as a destination.

In two weeks leading up to the game, the city was mentioned in more than 5,000 broadcast stories, a publicity value that Cision, a media-monitoring company, pegs at nearly $27 million.

Worth what to whom? There is no way in hell that the citizens of Glendale would view $27 million of broadcast spending as an investment with positive returns.

There's much more in the story, including economic impact projections which might, if true, be worth cheering about. But the comment section suggests there are plenty of skeptical readers.

Thanks to Brent Stoddard for the link.

Gene Doping - The New Frontier of Doping

2008-05-11T22:50:00.000-04:00

This morning's Kansas City Star has an interesting piece on the new frontier of doping: gene doping. The whole article is worth a read, but here are the opening paragraphs.

Scientists have seen the future of sport. It involves mice that can lift three times the average, humans who can run 90-minute marathons, and ligament tears that can be fixed by injection.

It is genetic engineering, therapy and doping, and it is the arrival of the bionic athlete. At the extreme, this is either the advancement or end of the human race. At the minimum, it is the unavoidable change to the way our sports — baseball, football, the Olympics, you name it — are played.

One thing that the article mentions is that the genetic doping is a way for the human body to exceed its natural athletic capacity.

If confined to natural training, elite athletes are said to be now using 99 percent of their natural physical capacity, compared to just 75 percent in 1896, the year of the first modern Olympics. Given those parameters, academics say there would be no new world records after the year 2060.

But that’s in a world with no genetic engineering. Scientists think a series of gene-doping breakthroughs could boost endurance by up to 10 percent and, according to one study, allow a runner to complete a marathon in 90 minutes — more than a half-hour faster than the current world record.

In an absolute sense, doping should generate more interest from fans as athletes get bigger, stronger, and faster. But I wonder if there is diminishing marginal utility on the point of view of fans. "Wow, Brady Jones has hit his 500th home run that traveled more than 600 feet. Big deal!" Does the display of athletic talent get so extreme that fans are no longer all that excited (all else equal)?

Another interesting issue is what happens to the supply of athletic talent in team sports. Assuming a safe type of genetic doping is found that increases the human capacity to run, jump, etc., this should increase the supply of talent, leading to lower salaries "per unit of talent." And what of competitive balance? If the number of teams stays more or less constant, competition should become almost perfectly balanced, non?

The NFL in Toronto

2008-05-07T19:43:00.000-04:00

When readings Skip's post on the CFL this afternoon, I noticed this article listed as being one of the most popular over at the Toronto Globe and Mail. It describes the pricing of tickets to Buffalo Bills games being played in Toronto in the next few years:

Tickets for the Buffalo Bills' eight-game series in Toronto will average $183 per seat — more than triple the cost for the team's home games at Ralph Wilson Stadium this season.

The ticket prices, ranging from $55 to $295, were released Wednesday by the Toronto-based group hosting the series, which will have the Bills play five annual regular-season and three preseason games at the 54,000-seat Rogers Centre through 2012.

The prices are in Canadian money, which is currently near par with the U.S. dollar, and do not include a large bulk of VIP sideline and hospitality suite seats, which will raise the average even higher.

Despite the hefty price, organizers anticipate the games selling out after 180,000 ticket requests were registered on a Web site last month. About 30,000 tickets per game will be distributed in two weeks by lottery to Internet registrants as well as a limited number of Bills and CFL Toronto Argonauts season-ticket holders.

Compare those prices to the prices of Toronto Argonauts games. Single game tickets are not for sale yet for the 2008 season, but choice seats in their 3-game package go for $189 total and season tickets range from $300-$700 for a 9 game home season plus a few other other goodies.

Which brings me to one of Skip's thoughts about why government subsidies have been hard to come by for CFL teams:

It is possible that the CFL makes so little money and has such a small impact that the relocation threat is not operative. There is in fact relatively little demand for football stadiums, public or privately financed.

It's anecdotal, I realize, but there seems to be high demand for NFL football in Toronto. That may simply be due to the novelty of NFL football being played in Toronto. Or perhaps it's due to the value of the NFL brand name, a value the CFL may not have in it's country.

Why has Canada not subsidized the CFL?

2008-05-07T06:59:00.004-04:00

This article claims that the Canadian Football League is "could be on the verge of a construction boom."

Five CFL teams – the Montreal Alouettes, Winnipeg Blue Bombers, Hamilton Tiger-Cats, Saskatchewan Roughriders and the ownership of a conditional Ottawa franchise – are aggressively pushing plans to build new stadiums or drastically alter and refurbish old ones.

Factor in the anticipated makeover of Vancouver's B.C. Place Stadium, which could add a retractable roof to the facility, and a potential redesign of Toronto's BMO Field to accommodate the Argonauts, and the CFL could be looking at well over a half-billion dollars invested in stadium infrastructure during the next five years.

Many would suggest it's long overdue.

It's the overdue question that intrigues me. The article notes that no stadium has been built for football since the 1960s, although some teams play in venues built for another purpose. Some are dilapidated.

Why the lack of public investment? The CFL, like other prominent North American leagues, is a closed set of teams that controls entry. The incentive to obtain a stadium subsidy that derives from the league structure and the relocation threat thus exists. The view of Canadian government as fairly liberal with the checkbook would imply public-private "cooperation" on stadium ventures.

The article suggests at one point that "local and provincial governments are wary about investing in pro sports facilities of any kind," but that doesn't wash with me. Brad knows all about the current subsidy issue over a hockey arena in Alberta, for instance ;)

I can see two possibilities.

It is possible that the CFL makes so little money and has such a small impact that the relocation threat is not operative. There is in fact relatively little demand for football stadiums, public or privately financed.

Second, the political distribution of power differs in Canada from the U.S. This renders the execution of a relocation threat pointless, since (by assumption) there is not a significant source of local public revenue. [bleg: Anyone know the facts?]

I lean towards the first. But the second is testable: hockey arenas should have a greater fraction of public funding south of the U.S. border, despite the fact that hockey is Canada's national sport.

NCAA Football Politics

2008-05-06T13:31:00.002-04:00

Several years back, I thought that the process toward a playoff would have played out by now. The 1998 BCS agreement struck me as a key step toward a playoff in that it eliminated a major impediment -- the exclusive tie-in of the Pac-10 and Big Ten to the Rose Bowl. Now, ten years later, it appears that we are still at least six years away from another step as
Dan Wetzel of Yahoo! writes in his consideration of the failure semi-final/final proposal by the SEC Commissioner in Too Good to Go

In the end, according to interviews with people in the room, the decision to proceed or not probably came down to the Big East and Big 12.

The Big Ten and Pac-10, thanks to an economically advantageous relationship with the Rose Bowl until at least 2014, were going to oppose just about anything put on the table. The smaller conferences and Notre Dame were likely to support whatever the majority did as long as their access and revenue weren’t cut. The ACC was in favor of the SEC’s proposal.

That left two swing votes, the Big East and Big 12, who had they pushed for further discussion could have weakened the Big Ten and Pac-10’s silly obstruction talk – “they’ll have to pry a playoff system out of my cold dead hands,” the Ohio State president barked last year.

The interests of the Pac-10 and Big Ten are transparent enough. Wetzel exposes the "lengthening the season concerns" and other such nonsense for just that in his piece. The behavior of the Big East and Big 12 is the real question. Are they just risk averse -- not knowing very well how they will fare in such a system and therefore reluctant? Concerns about the impact on the regular season seem to be at the core:

Best I can tell, after years of discussions with the people in power by me and my colleague Josh Peter, is that while there isn’t a single reason, the oft-cited “protection of the regular season” is a critical one.

Increasing the value of some games without diminishing the value of others, is, indeed, tricky business. The current BCS system makes a lot of regular season games count. The downside is that it makes only one post-season game count. In addition, it can make winning a conference championship meaningless, even for a highly regarded conference because of too many losses for the champion. The old polling system to determine a national champion placed weights on a combination of regular season and bowl game results. A "plus-one" system as proposed might diminish the regular season's value more than a "6-plus-2" playoff involving six conferences winners (ACC, Big 12, Big East, Big Ten, Pac 10, SEC) and two at-large teams. Such a system would value regular season games by putting a premium on winning one's conference, while also putting attention on the post season.

Competitive Balance in European Soccer

2008-05-05T09:50:00.002-04:00

It's the same old story again in Europe this year. Last weekend Real Madrid clinched the league title in La Liga, its 31st league title overall and its 25th in the past 50 years. Bayern Munich clinched the Bundesliga league title, its 20th title since the formation of the league in 1964. Lyon and Inter Milan, last year's champions in France and Italy, remained on top of the tables in their respective leagues with two games to go. In England next week's games will determine whether powerhouse Chelsea or powerhouse Man. U, the top two teams in the standings last season, will be crowned champion. Even in the smaller leagues, the traditional powers are on top. In Scotland, the next couple of weeks will tell whether Rangers can overtake Celtic for the lead. No other team outside the Glasgow pair has won the Scottish league since 1985, and only once in the past 13 years has another team even come in second place.

While the annual races for the championship are usually close, at times coming down to the the last minutes of the last game of the season, interseason competitive balance is notoriously absent in European Leagues using promotion and relegation systems.

Longtime American soccer columnist Paul Gardner sums up his thoughts about promotion and relegation thusly:

The purists keep telling me that soccer will never make it here until we adopt
promotion and relegation. I think they're dead wrong. I think it's much more
likely that the rest of the world, this damned, abominably commercial world,
will be forced to recognize the merits of the American franchise system.

Us economists often have a soft spot for promotion and relegation, but Gardner makes some interesting observations about the costs in competitive balance.

Self-congratulations Part Deux

2008-05-02T10:16:00.001-04:00

People interested in more of my rantings about stadium subsidies might like this.

Emerging scandals?

2008-05-01T07:31:00.003-04:00

If the favorite, Big Brown, wins the Kentucky Derby, expect the tone of the news coverage to change. His trainer has a history of doping that the mainstream press is putting aside in the usual rose-colored pre-race stories. Journalist Paul Moran has the story though, at his blog. Oddly, the story comes via the New York Times top horse racing writer Joe Drape, whose blog "The Rail" gives outstanding coverage of the Triple Crown. This is my first stop for horseracing news these days.

As an aside, I think that doping and horses provides a good example of the social costs of doping in general. The Nash equilibrium is to dope, and it has been going on for decades. But doped, muscle-bound thoroughbreds are more likely to suffer a catastrophic injury than horses that run clean. (Granted, I think the links here are much stronger than with humans.) Drape has a good post on this issue as well, "The Last Winstrol Derby?", which discusses the possibility that American racing will ban & test for steroids in the near future. Winstrol has been used on horses long before it was injected - allegedly - into Roger Clemens' butt.

And now to the land of scandals, European soccer. This time we go off the beaten path, to Romania, and the run-in for the league championship. The story has everything: ethnic tension between the two protagonists, allegations of payments to referees, payments to opposing teams, and mafia-like sniping between the clubs.

Self-congratulations

2008-04-29T19:36:00.001-04:00

I can't resist noting this:

CLEVELAND--The Greater Cleveland Sports Commission has been named "2007 Sports Commission of the Year" by the National Association of Sports Commissions.

The award was chosen by a national panel of Sports Commission executives and was presented at the 2008 NASC Sports Event Symposium held in Omaha.

What possible purpose can a National Association of Sports Commissions serve?

Sports Econ Musings

2008-04-29T08:04:00.001-04:00

A Real-Time Economic Indicator from Sports World: One of my colleagues returned from Talladega, reporting that crowds for the Sprint Cup and Nationwide Series races were way off from last year. He described the Nationwide attendance as sparse.

Free-Agency & MLBPA: Buck Martinez (TBS Analyst for NYY-Cleveland Game)went to some lengths describing the pressure put on C.C. Sabbathia, potentially the marquee free agent pitcher for next off-season, by the MLBPA to follow through and become a free agent rather than resign -- which is what Sabbathia says he prefers. Martinez' imputed rationale for the MLBPA is that getting the top guy on the market sets higher prices for everyone. That's a testable proposition for the sports economists out there with the free agent data sets -- does a higher quality player in the pool raise average offers?

My Ongoing NBA Playoff Beef: (See "Where Hardly Any Game Matters") Sixers beat the Pistons in Detroit, win in Philly, but must win two more to advance and one more to put the Pistons at the very brink of elimination. In spite of the Sixers play, there's been about as much drama as a Seton Hall-Providence matchup. A Celtic-Lakers matchup may be entertaining, but getting there will seem a lot like the WWF.

The Dynamo stadium game

2008-04-28T07:27:00.002-04:00

The Houston Dynamo, having failed to secure a publicly funded stadium in their prior guise as the San Jose Earthquakes, are now hitting some snags on the same issue in Houston. The terms of the deal are not quite clear from the stories in the press - $20m worth of city land, a city-owned but Dynamo financed stadium [?] - but the relocation card has been played by the reigning two-time MLS champions. Mayor Bill White did not take well to the ploy, and the media has his back. I don't think the mayor would lose an election by standing up to AEG, who own "more sports teams and events than any other company in the world," including the Dynamo. And surely AEG can't maximize the value of this franchise by barnstorming from city to city. Stay tuned!

Allan Sanderson: Consider the Options

2008-04-28T07:25:00.003-04:00

Allan Sanderson tells his readers that TANSTAAFO (Olympics, not lunch).

Whether to support the Games themselves or merely the city's official bid, the latter carrying a price tag of $50 million to $100 million, one hears that "only private money" is underwriting those activities; no tax dollars will be spent. "Private" implicitly refers to donations from corporations and wealthy citizens. However, in jargon that students learn on the first day of Economics 101, virtually all expenditures or allocations have an opportunity cost, whether it be for a firm or family.

If Boeing, Sears, Motorola or McDonald's gives $1 million to help finance our Olympic bid, that is $1 million that does not get returned to stockholders as dividends or plowed back into the company for new projects and production. In addition, that is $1 million that does not, then, support an exhibition at the Field Museum, a new gallery at the Art Institute, or an after-school youth program.

When I sit down each December to write out checks to local, national and international charities and other non-profit organizations, I am implicitly choosing how to allocate, say, $2,000 among various groups and activities. The slice that goes to WTTW Ch. 11 doesn't go to the Chicago Coalition for the Homeless or the American Cancer Society—or to the University of Chicago. It's still just $1 million or $2,000 no matter how a corporation, a wealthy benefactor or I cut it.

There is no free lunch in this world and no free Olympic Games either.

Via Stephen Karlson.

Money on the line

2008-04-27T19:25:00.002-04:00

Following up on Robert's post (& Nick's comment) on the NFL draft, check out this article by the Dallas Morning News' Rick Gosselin.

Blame all this on Max Starks.

Starks started on the offensive line in the Super Bowl for the Pittsburgh Steelers three Januarys ago. But he couldn't hold onto his starting position, losing the right tackle spot to Willie Colon last training camp.

Starks wound up starting only four games for the Steelers in 2007. He became a disposable player, right?

Starks became a free agent this off-season, but the Steelers slapped a transition tag on him to prevent him from leaving. They were willing to guarantee him $6.8 million in 2008 to have him ride their bench again.

That displayed the value of offensive linemen in today's NFL – and the 2008 draft drove that point home.

Michigan's Jake Long became the first offensive tackle selected No. 1 overall in a draft since 1997 when the Miami Dolphins gave him that honor Saturday.

Seven more offensive tackles were selected in the next 25 picks – and Atlanta, Carolina and Kansas City traded up to get theirs. That's eight offensive tackles in the first round.

There is an element of anecdote to this, but 8 tackles out of the first 25 picks is really a stunning figure. I'd be interested to see some time series data on picks by position in the first round. Surely this is a) an outlier and b) unlikely to persist. Has Michael Lewis ignited a fad? I imagine that Richard Thaler would argue that he has.

Britain's jock tax may haunt them

2008-04-27T17:24:00.002-04:00

Britain is apparently the only country in the world that taxes endorsement income of non-residents. So when Tiger Woods plays in The Open Championship, he has to send a check to the British Treasury for income he earns from, say, his Buick endorsements. This borders on extortion, and tournament organizers are paying notice. Here is Kevin Mitchell, writing in The Guardian:

When the Prime Minister addressed a schools sports conference in Telford in February, the 2012 Olympics awarded to London were supposed to be the nation's feel-good centrepiece for nine major international sporting tournaments, starting with the the 2009 World Twenty20 and the 2010 Ryder Cup in south Wales.

Mr Brown had good reason to be cheerful. The next Ryder Cup was in the bag, obviously, as were the London Olympics, the 2014 Commonwealth Games in Glasgow, the 2014 Ryder Cup at Gleneagles, and the 2019 Cricket World Cup. But now, thanks to a fastidious and, no doubt, smug desk Johnny at the Inland Revenue responsible for pointing out the devil in the detail of the Income and Corporation Taxes Act of 1988, four of the events yet to be allocated - the 2013 rugby league World Cup, the 2015 rugby union World Cup, Euro 2016, and the 2018 football World Cup - are all in jeopardy.

And here is why. When Thierry Henry steps on to the Old Trafford turf on Tuesday night for the second leg of Barcelona's Champions League semi-final against Manchester United, it will cost the Barça star more than he bargained for. The Revenue's little squeeze, unearthed by said clever-clogs tax mandarin, means Henry, like all visiting international athletes and entertainers who are handsomely rewarded by major sponsors, will have to declare his endorsements and pay a slice of the income from his high-profile global sponsor, Gillette, to the Revenue. No other country in the world applies such a charge - and that seemingly inconsequential quirk is discouraging international sports governing bodies such as Uefa, Fifa, the International Cricket Council and the International Rugby Board from favourably considering staging their events in this country.

If their admittedly pampered practitioners baulk at coming to the UK because of the tax, their event is diminished. The easy alternative, of course, is to take it somewhere else. And, as we have seen with the Champions League, that is already happening.

When the Treasury were made aware of this issue, through a legal challenge in May 2006 by Andre Agassi, they predictably dug their heels in - despite the American tennis player's reasonable assertion that he did not live in this country and that the payments went not directly to him but to a service company, which is common practice.

Agassi brought the action after receiving a demand for £27,500 on his endorsement earnings in the UK during the 1998-99 tax year. The Law Lords ruled that Nike and Head, his sponsors, benefited from his presence at Wimbledon - and so did he. Which is hard to argue with - if you don't take account of the knock-on effect the ruling has. And that is not the brief of civil servants. These are bottom-line merchants and, in the case of the Revenue, that is only about money.

It was a crucial victory for the keepers of the national purse. Had they lost they faced paying out millions to superstar athletes and entertainers stretching back over 18 years. Indeed, when HM Revenue and Customs won the case, they decided to turn the screw even further.

Initially, they calculated the tax as a percentage of 365 working days in a year. They then concluded that, as nobody works every day of the year, they would reduce that total significantly to take into account holidays and time off for injury - so their cut went up accordingly. What started as an isolated case has mushroomed into a serious problem for sport and the government.

'Two major international sports stars, a golfer and a tennis player, are considering not coming here for some tournaments this summer,' a well placed source tells me. 'They will compete at Wimbledon and The Open, obviously, but bypass smaller events. This has already happened and one big golf event last year attracted a poor field because of this tax.'

Henry shares the Gillette spotlight with two obvious suspects in this regard: Tiger Woods and Roger Federer. There is little chance of Woods not playing in The Open, or Federer boycotting Wimbledon. But, for various reasons, they will not be lighting up our summer anywhere else.

Already, Federer opts out of Queen's in favour of the grass of the Halle tournament in Germany. And Woods plays only in those tournaments where his presence is adequately compensated - adequate being $3million. The richest sportsman in the world earns about £1m a week, whether he is swinging a club or not, so he is unlikely to look favourably on handing over any of that to the British taxman.

From Moneyball to Blind Side

2008-04-25T21:54:00.002-04:00

Michael Lewis writes some interesting books on the sporting labour market. Moneyball has been widely discussed, The Blind Side less so. In The Blind Side, Lewis tells the story of Michael Oher, a a massive left tackle who ends up going to Ole Miss on a football scholarship after literally walking out of the tough side of town in Memphis while he was in high school.

Around this amazing personal story, Lewis tells the story of how the Left Tackle position (the offensive linesman whose primary purpose is to protect the (right-handed) Quarterback from being hit on his blind side) has evolved into one ofthe highest paid and most important positions in American football.

Interesting then, that the Miami Dolphins announced they would use their No. 1 pick in the NFL Draft to secure:

Jake Long, the University of Michigan offensive lineman, with their first pick — all 2.01 metres (six foot seven) and 143 kilograms (315 pounds) of him. Then they announced they'd pay him $A61.2 million over five years. The salary's a record — it makes him the highest-paid offensive lineman in the comp

This story was interesting enough to make The Age newspaper in Melbourne (Australia not Florida...). Locals, over to you for more NFL Draft commentary.

How big can cricket get?

2008-04-25T04:28:00.004-04:00

A guy from Mexia, Texas (I've been there!) thinks it can get really really big:

Billionaire Sir Allen Stanford believes Twenty20 cricket can replace football as the biggest game in world sport.

The Texan told BBC Sport he was ready to invest in an English version of the Indian Premier League and predicted it could be worth as much as £500m.

"Twenty20 has the potential to be the most popular team sport in the whole world in maybe less than 10 years.

"But it's going to take a highly organised, highly efficient management team to run this show," he said.

That, and more I suspect. From a US standpoint, cricket seems an unlikely prospect. But India & other places are growing, and American baseball does not have any kind of edge over cricket there, as far as I can see.

Update: Here is some information on the Twenty20 version of cricket. They've tweaked the rules to make the contest watchable and tv friendly.

Canadiens riot

2008-04-22T16:47:00.002-04:00

Christian Trudeau sends this:

MONTREAL - Montreal police said Tuesday that they expected to make more arrests following Monday night's riot after a Canadiens hockey win led to a riot downtown.

Sixteen people have already been arrested.

There were no major injuries, but one policewoman was slightly hurt during the incidents which occurred as fans leaving the Bell Centre took over the streets.

All those arrested were men, three were minors. Some 10 businesses were damaged as well as 16 cars. Some police vehicles were set ablaze during the incident and police estimate damages to their cars at about $500,000.

The 16 people arrested face a number of charges - including breaking and entering a business, armed assault on a police officer, mischief on a police vehicle, assault and various bylaw infractions.

Two 17-year-old males and another 14-year-old boy are among those arrested by police.

Police say they will be out in force after the next game, Thursday, and that they may shutdown some downtown streets.

Closing off public access to Ste. Catherine St. after playoff hockey games is a possibility to avoid violence in the future, said Montreal police Chief Yvan Delorme.

While refusing to talk specifically about strategy, Delorme hinted that shutting the street down was an option even before last night's melee.

"We have to work with the different merchants on Ste. Catherine St. We have to work together on that but it is a possibility in the future," Delorme said.

The incident broke out hours after the Montreal Canadiens eliminated the Boston Bruins from the NHL playoffs.

Bizarre behavior (a first round playoff victory spawning a riot??)... Shutting down streets is a pretty significant negative spillover.

Problems in St. Louis' Downtown Revitalization.

2008-04-21T07:36:00.006-04:00

A couple of weeks ago, Skip had a post on the lack of development beyond the left-field wall at St. Louis' Busch stadium. The vacant field, seen clearly in this picture and in this image from Google maps, was to become a ballpark village. But that plan has at least been temporarily scuttled by Centene's plans not to relocate to new office space there.

A recent St. Louis Post-Dispatch article notes how difficult it has been for new development projects to get up and running in downtown St. Louis, even with a brand new stadium. The author notes a kind of multiplier effect: when one project fails, several other unconnected projects may also fail.

Business owners usually revel in vanquishing their competition. But when Steve Roberts wears his hat as a downtown St. Louis developer, he roots for competitors.

Indeed, Roberts, a principal in St. Louis-based Roberts Brothers Properties, is concerned about the broader impact of projects stalling or dying.

If the adage that success breeds success, then the reverse could be true: Failure is contagious.

"When you have projects or developers failing it raises suspicions in the minds of potential investors, retailers and even residents," Roberts said. "I don't think one particular project can take down the whole downtown renovation effort, but if you have multiple ones for different reasons, it hurts those of us who have been sowing our fields for many years."

Frequent readers of TSE know that we here generally (generally?) do not support public funding for stadiums. Although the a-priori studies claim stadiums are magnets for development and economic activity, the ex-post studies tell a much different story.

Taking It On the Chin Again

2008-04-20T20:48:00.003-04:00

Longtime readers of the Sports Economist may recall that I have taken my fair share of abuse from the print media in the past. I have been a critic of subsidies for professional sports facility construction for years, and this doesn't always sit well with people -- cough cough sports reporters cough cough -- who have a vested interest in subsidizing sports stadiums and arenas -- cough cough team owners cough cough. A couple of years ago, a Washington DC sports columnist called me a "clown" in his column after I pointed out that subsidies for the new stadium for the Nationals were a bad idea.

I have moved up here to Edmonton, in the Great White North, where the powers that be have decided it's time for a new arena for the beloved Oilers. Last Friday, I gave a lunchtime speech to the Economics Society of Northern Alberta with my usual spiel about the lack of tangible economic benefits from a new arena. Today, I was skewered in the Edmonton Sun by sports columnist John Short who seems to have taken offense at the idea that a shiny new arena for the Oilers on the public dime isn't the best thing since sliced bread. Among the gems in his column

He's an outsider and can't possibly know how much our pride and ego is worth.
Worse, he's an American. He can't know anything about hockey. Background knowledge in this case can't possibly count for anything.

Thanks for the warm welcome to town, John. I don't really feel at home somewhere until I have been pilloried in the local press by a sports columnist. It lets me know I'm still doing my job.

Private Ownership in Australian Rugby?

2008-04-19T11:04:00.002-04:00

Will the rugby union 'elite' overcome their history and start selling equity in rugby union Super 14 franchises in Australia?

15 years ago the sport was amateur, but now rugby seems to be on a path of private ownership. Check this out in The Weekend Australian and at the Australian Rugby Union's website. For a code best known in this nation as a traditional bastion of conservatism, amateurism and self-declared elitism, this is a most radical step indeed.

Wayne Smith, journalist for The Weekend Australian thinks this step (only 20 or 30 years after any other sport in Australian has tried it-and mostly failed to make it work) will leave the other codes Down Under shaking in their football boots.

I can't quite see that myself Wayne-o old chap. If Super 14s Rugby gets two games on Friday night free to air (FTA) TV (like the National Rugby League), or 700,000 participants (like soccer), or 7 million annual attendees and 1 in 38 Australians as club season ticket holders (like the Australian Footbal League) then maybe. But rugby is a long way off any of that with an operating loss of $4.3 million after operating revenue of $77 million, a third-tier national competiton abandoned after just one season, participation at 190,000 and falling, and limited exposure on FTA TV.

A New Stadium and a Bargaining Chip for the NFL?

2008-04-19T10:49:00.004-04:00

Edward Roski Jr. has unveiled plans to build a new stadium in the Los Angeles metro area to entice a team to move to the nation's second-largest market.

The proposed 600-acre site, near the southern intersection of the 57 and 60 freeways about 20 miles east of Los Angeles, would be surrounded by a shopping mall, and located on a vacant property which Roski already owns. Roski said around 12 million people live within 25 miles of the site.

“We are aware of it and are monitoring all stadium-related developments in southern California,” NFL spokesman Brian McCarthy said from his New York office.

Roski said the cost would be around $800 million, adding the stadium will be built into a hillside meaning far less steel will be required. And that, he said will result in a cost of about $400 million less than it might be otherwise.

Roski notes that there will be no public money involved in the construction of the stadium. The LA market that has been without a team since 1995, probably in part because it is such a lucrative threat point for teams seeking public funding for new stadiums in their current cities.

So, how does this announcement change the stadium game being played by the Minnesota Vikings, who have been trying for years to replace the Metrodome, and the other three teams mentioned in the article as possible tenants (the Saints, the Jaguars, and the Chargers)?

Free Agency for the Australian Football League?

2008-04-19T10:42:00.003-04:00

The Australian Football League has arguably the most restrictive labour market regulations of any pro sport; a player draft, a (relatively hard) salary cap, and player roster restrictions. No free agency of any kind.

According to The Weekend Australian, the CEO of the AFL Players' Association, Mr Brendan Gale, will be meeting the AFL Commission on Monday April 21 to discuss the prospect of some form of veteran free agency. Putting aside the legal arguments surroundingthe common law restraint of trade for now (where the AFLPA has long been a corporate version of 'idle threat man'), Gale is running with the argument that:

'AFL footy clubs sell hope' so 'if a club has a glaring deficiency they can address through free agency, doesn't that help them sell hope? Doesn't it make them more competitive and help competitive balance?'

I like the first line about selling hope. The rest is open to debate.

If You Build It, They Will Come

2008-04-18T23:06:00.001-04:00

Maybe.

If they are subsidized.

The Minnesota Ballpark Authority is expected to announce today a $1 million fund to enhance the area around the Twins new ballpark.

Maybe.

Timeout's and strategy

2008-04-18T11:57:00.003-04:00

Jon Wiseman gives the NBA's timeout strategy crown to Nate McMillan and the Portland Trailblazers, based on post-timeout scoring margin. Curiously, guru Phil's LA lakers rank relatively low on this metric. I'd be interested to know how significant the difference in scoring margin is between the Blazers & Lakers, @ 2.4 points per team, and whether the stat is truly meaningful. Calling Dave Berri!

"Who elected these NCAA people?"

2008-04-18T11:48:00.002-04:00

Here we go again on the BCS - antitrust - legislative hearing merry-go-round:

Three members of Congress want the Justice Department to investigate whether the Bowl Championship Series is an illegal enterprise.

Representatives Neil Abercrombie, Democrat of Hawaii; Lynn Westmoreland, Republican of Georgia; and Mike Simpson, Republican of Idaho, introduced a resolution saying the B.C.S. restricts trade because only the largest universities compete in its games. The resolution would require the Justice Department’s antitrust division to investigate if the B.C.S. violates federal law.
The measure, if it passes, would put Congress on record as supporting a postseason playoff.
The three lawmakers represent home-state universities with recent complaints against the B.C.S.
“Who elected these N.C.A.A. people?” Abercrombie said at a news conference Thursday on Capitol Hill while gripping a souvenir University of Hawaii football. “Who are they to decide who competes for the championship?"

LOL! I'm not exactly the NCAA's mouthpiece, but I'd much rather that the NCAA -- not congress -- designed and managed the competition.