Far too often, a wealthy sports team owner grifts a city out of taxpayers’ money for a new stadium they could pay for themselves. They do so by claiming that success, especially a championship, will bring a lot of money to a city and boost its economy. But recent research shows this isn’t true. It turns out that title money rarely trickles down into the local economy in any meaningful way.
Championships don’t bring in as much money as you’d think
There’s nothing like the pure joy of celebrating a title. It’s the dream that every franchise chases year after year. Fans of every team would convince themselves that this was the year — well, everyone except fans of the Detroit Lions fans.
No one ever has to justify basking in the afterglow of winning the championship in any sport. But if anyone ever says that finishing a season on top of the mountain will bring more money to the victor’s city, know that they are either incorrect or lying their way to tax exemptions, according to The Morning Call.
The repeated refrain that titles or other big sporting events have a large impact on the economies of host cities is false, according to studies. In this case, “The Economic Impact of Postseason Play in Professional Sports,” a 2002 study by sports economists Dennis Coates and Brad R. Humphreys, examined the economic effect of playoff games in cities from 1969 to 1997. Their findings stated, “Postseason appearances are not associated with any change in the level of real per capita income”.
Of course, a lot of money gets spent during a playoff run. But those earnings don’t stretch as far as you might think. For example, the total economic impact of the two Royals home games ($12 million) during the 2014 World Series equated to 0.0099 percent of the city’s GDP. And that’s while assuming the estimates of that impact are accurate. A Super Bowl-winning city may see an increase in per capita personal income of a whopping $140. The number of tourist dollars is also overstated.
Most of the money spent on supporting a successful team is often money that would’ve been spent on other entertainment. As Coates so eloquently put it “Because of the playoff and (World Series) games, people buy K.C. Royals clothing and go to bars. Apparently people in K.C. go naked and do not eat or drink if the Royals are not in the playoffs.”
And there’s also the substantial outlay from cities to organize around these events. Extra policemen, street closures, cleanup after mass celebrations — that all has to be covered by public resources. People love cheering on a winner, but that affection only goes so far.
A lot of sports infrastructure is built on misleading people for money
Championships aren’t the only part of the sports world that are far more inefficient than they let on. Much of the business around funding new stadiums involves some level of deception. Local governments are forced to spend taxpayer money on new stadiums; the public is convinced that these are worthwhile long-term investments.
American sports are far from innocent in this regard. But the worst offenders of these practices are the Olympics and FIFA World Cup. Both competitions demand that the host city spend tons of time and resources on infrastructure that loses its usefulness as soon as the event ends.
The Olympics haven’t been profitable for nearly four decades. This is a growing movement to keep the event out of LA in 2028 because of the prohibitive cost associated with it, as the Daily Beast reports.
FIFA is no stranger to forcing host countries to build new stadiums with poor results once the party ends. Several of the stadiums from the 2014 World Cup in Brazil have fallen into disrepair. No one has any idea what to do with them, details These Football Times. Some of these venues were built in particularly poor areas where the money could’ve been more useful in uplifting the local community. As fun as these events can be, the cost of creating them can be too much to bear.