In economic terms, 1 baseball team = 1 midsized department store

Following up on the academic consensus that sports do not economically benefit communities, one economist notes the economic impact of sports teams:

“If every sports team in Chicago were to suddenly disappear, the impact on the Chicago economy would be a fraction of 1 percent,” Leeds says. “A baseball team has about the same impact on a community as a midsize department store.”

The reason?

Economists say the biggest reason sports teams don’t have much impact is that they don’t tend to spur new spending.  Most people have a limited entertainment budget, so the dollars they are spending when they go to a game is money they would have spent elsewhere, maybe even at a restaurant or small businesses where more money would have stayed in the community. Plus, Matheson says, rather than draw people to a neighborhood, games can actually repel them.

Don’t underestimate the money generated by large retail stores. When I worked a short stint at a local Target at the end of high school, I remember seeing the board in our office that listed daily sales. The figure was typically around $100,000. That generates a lot of tax revenue through sales taxes and property taxes.

This is more evidence that the more important feature of sports teams in major cities is their social and cultural value. Teams provide something for a city to rally around and contribute to the city’s collective identify. In major cities with millions of people, it is difficult to find features or events that can bring large numbers of people together. Sports teams also provide opportunities for leisure, whether through enjoying the stadium experience or experiencing the game from afar. Now, if only we could find politicians that would admit the taxpayer money going to stadiums or teams was due to the interest in having a common sports identity and leisure experience rather than some grand economic impact…

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