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Resolved: On balance, public
subsidies for professional athletic
organizations in the United States
Why this topic?
•
“Since 2000, 28 new major league stadiums
have been built costing over $9 billion
Important Terms in Resolution
•
On Balance – just to create a broader resolution and to
prevent cherry picking
•
Public subsidies – money from the government (specifically
tax payers) to a organization, specifically for this resolution –
a sports team, for something that benefits the public.
Framework Arguments
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Cost Benefit Analysis
•
Pro – Only non economic impacts must be weighed
•
“…one cannot answer the question ‘Is it worth it?’ solely by focusing on economic data. Theultimate value of a sports facility or event is more or less than its net economic impact.” (Johnson and Sack, 1996)
•
“the focus on economic impact, both by its advocates and critics, misses the true source of public support of subsidies to sports stadiums.” (Owen, 2006)•
Con – Obviously you want to weigh economics
•
Weighing in terms/perspective of the local community
Pro Arguments on the Topic
•
Spin Off Development– Defining the topic as an tool for infrastructure, therefore
you gain benefits for infrastructure. Think of these stadiums as multi-use arenas.
•
“Major league teams have become a critical talisman of the status of cities and metropolitan
areas because of the popularity and visibility of professional sports. Art museums, symphony
orchestras, theaters, and zoos are all marks of major cities, as are libraries and universities,
leading law firms and banks, and great commercial and industrial corporations, but big
league teams are seen by many as more easily and widely recognized symbols of a place’s
importance.” (Danielson, 2007)
Jacobs Field
Cleveland, Ohio
Pro Arguments on the Topic
•
Community Pride – Pro teams will have to look at intangible benefits, like
‘psychological income.’
•
“The justification of subsidies tends to be based on the concept of ‘psychological
income,’ that is on the effects of identification or stimulation and on the feelings created
within the community. Thus subsidies are justified by their internal rather than their
external effects.” (Szymanski, 2005)
Pro Arguments on the Topic
•
Property Values Increase with Sports Facilities
•
“the presence of both facilities has a significant positive effect on the
value of surrounding houses and this positive effect decreases as the
distance from the facilities increases” (Feng, 2008)
•
“these results suggest that there were expectations of amenity effects
of a Cowboys stadium but these benefits were outweighed by the
Nationwide Arena
Columbus, OH
Pro Arguments on This Topic
•
Human Capital
•
“As a result, linking real estate development and revitalization efforts to the building of big ticket amenities has the potential to eliminate negative impact of subsidies and avoid conflict based approaches to negotiations with team owners.” (Rosentraub, 2010)•
“Instead of choosing one approach or another, perhaps the evidence is that a balance between big-ticket images and neighborhood scenes is key to human capital attraction.” (Rosentraub, 2010)Pro Arguments on the Topic
•
Regionalism – subsidies require governments to work
together
•
“The big-ticket projects were undertaken to maintain some degree of
centrality and vibrancy for Cleveland, but were financed at the county
level requiring cooperation for development from residents of 57
Consol Energy Center
Pittsburgh, PA
An Answer to Civic Pride using
CVM (Contingent Valuation
Pro Arguments on the Topic
•
Community Visibility – remember though ‘local community’
•
“Professional sports increase community visibility given the magnitude of media coverage
that is showered upon major sports franchises. When a major sports franchise is
mentioned throughout the print, television, and electronic media, the host city is typically
given positive exposure.” (Shwester)
•
Since direct expenditures result in indirect expenditures, the direct expenditures
are said to “multiply” through the economy. Economists attempt to quantify this
effect by calculating a “multiplier.” For a given level of direct expenditures,
higher multipliers indicate higher levels of economic impact.”
Con Arguments on the Topic
•
Sports Economics – A strong con argument, since every study concludes
neg.
•
"In no instance did a positive, significant correlation surface among stadiums,
professional sports, and city income as a fraction of regional income.” (Baade, 2000)
•
“Increased export sales result from attracting net new inflows of spending from outside
Con Arguments on the Topic
•
Subsidies Harms Economies – focus on local economy
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“Many public subsidies do little to promote economic equity, and rather than correcting formarket failure, they induce distortions in economic decisions and behavior; such programs may justifiably be scaled back or terminated when they come under increased scrutiny” (Treist, 2009)
•
“it creates lost tax revenues that under normal circumstances would be assessed and paid. Toillustrate the effect, consider the following: for a stadium completely financed with tax-exempt bonds, costing $225 million, and built today, it is estimated that the lost federal tax revenues will total $75 million over the life of the bonds.” (Jensen, 2000)
