Pro Franchise Advantages for Many Cities Sitting

Pro Franchise Advantages

For many cities sitting on the fringe of being considered a major city hosting a Major League Baseball franchise is an indication that they have arrived at that status. The competition for this recognition is intense and the cost and time involved in obtaining a franchise is substantial.

Hosting a professional sports franchise has become a public responsibility. Gone are the days when the owner of the franchise also owned the facility in which the team played. Today, the host city is expected to build a first class facility costing hundreds of millions of dollars in order to be afforded even preliminary consideration as a potential host. A community wishing to enter the professional hosting battle for a major league baseball franchise can expect to pay over $200 million dollars.

The cost of hosting a Major League baseball team is considerable but it is argued that doing so stimulates local economic development. This development is expected to create a plethora of new jobs and increase local tax revenue. Studies to the contrary indicate that this assumption may be either incorrect or that the advantages are greatly exaggerated.

The prestige attached to hosting a professional franchise are considerable and this factor alone may justify the expense involved in doing so but the statistics do not support the collateral arguments offered for hosting a franchise. Study after study indicates that the expected economic stimulus is minimal and that it does not rise to the level of even covering the expense of building the requisite stadium (Crompton, 2004). All of these studies conclude that there is no positive correlation between sports facility construction and economic development (Rappaport, 2001).

Job creation is one of the economic benefits offered in support of hosting a professional franchise. Proponents argue strenuously that thousands of jobs will be created both directly and indirectly from the presence of a sports franchise but, again, statistics do not support this argument. Although some cities have been able to demonstrate positive job growth from the presence of a sports franchise the overwhelming result is that hosting a sports team may actually result in net job loss. Such studies can be attacked from a variety of angles. As with any statistical analysis the methodology can skew the results and the statistics can be manipulated, yet, the fact that the overwhelming number of studies has found little positive job growth is telling as to their reliability.

The second main argument used for pursuing a sports franchise is the receipt of tax revenues. These tax revenues are anticipated from a variety of sources including fans' spending before, during, and after games, and income taxes from the anticipated new jobs. Here there can be expected to be some growth in revenue but the question must be asked whether such growth will offset the cost of attracting the franchise and the construction of the stadium that will likely be required in order to be considered. As the studies indicate, any anticipated job growth will be minimal (Crompton J.L., 2003). The players and team staff all enjoy large salaries and will pay substantial income taxes but not nearly enough to generate the nearly $200 million dollars necessary to build the stadium (Swindell, 1998).

Balanced against the economic arguments is the belief that having a professional sports franchise in the community increases the community's civic pride, its prestige, and its quality of life. Unlike the studies that have been critical of the economic advantages of having professional sports franchise the studies related to the quality of life nearly all agree that having a professional sports franchise contributes to the area's quality of life. Unfortunately, measuring what components of the community's quality of life are affected is difficult.

The studies indicate that having a professional sports team in one's community increases the overall happiness of the sports fan. Sports fans enjoy being able to attend games as opposed to merely watching the game on television. Games become social events where friends are able to gather and share the experience. Like visiting a city park, a zoo, or museum there is a civic pride generated that is enhanced by having a professional sports team. It creates the feeling that one in is living in a "world class" city (Whitson, 1993).

Assuming that this increase in quality in life is a reality how does one balance this against the considerable costs of acquiring and maintaining a sports franchise? Dollars and cents are measureable. Personal satisfaction and pride are not.

Taking a strict cost/benefit approach in evaluating the value of a professional sports franchise does not work (Lee, 2002). There is far more to consider than just balancing the two factors. There is far more at stake in having a community host a professional sports team and prestige and quality of life may be enough to override the heavy cost involved.