Professional Sports it Is Wise

Professional Sports It is wise for a major metropolis to promote professional sports as a means of promoting the city. This may not extend to providing funding for major athletic infrastructure projects, but at least on a small scale the promotion of professional sports has benefits for cities. The impact is felt most acutely on small or mid-sized metropolises that stand to gain more from the exposure a professional team brings. This paper will analyze recent examples to illustrate the benefits.

One of the best case studies comes with the Columbus Blue Jackets, a 1998 NHL expansion team that is organized as a public-private partnership. At the time, Columbus was the largest metro area in the United States without a professional sports franchise. A Rust Belt city, Columbus had top-tier college sports, but also faced competition for investment and business from other nearby cities such as Detroit and Cleveland.

A study released by the team found economic benefits of $7.59 billion in payroll and revenue to local businesses as a result of the Blue Jackets and the Nationwide Arena that was constructed in order to attract the team. The area where the arena is located was a derelict area that once housed a prison, and was redesigned entirely around the concept of an arena and a professional sports franchise.

Over the first ten years of operation, approximately "$850 million in spending in central Ohio can be attributed" to the arena and its tenants. The number of businesses in the area increased by 50% in that period. In addition, a survey of hockey fans at the arena found that 90% of them were proud of Columbus for having a professional team and 78% of them believed that the Blue Jackets "give the rest of the country the idea that Columbus is a big-time city." (Thompson, 2009).

Another case study is that of the NBA Memphis Grizzlies, who relocated from Vancouver over a decade ago into an arena that was funded by the city to attract a professional sports franchise. An economic impact report from the Memphis Chamber of Commerce found that nearly 1400 full-time jobs were created by the move and annual economic impact is around $223 million (Morgan, 2010).

Opponents of the publicly-funded arena argue that the entire Grizzlies payroll is included in that figure, making the claims spurious, and that the actual tax benefits of the Memphis Grizzlies are insufficient to cover the interest payments on the arena (deMause, 2010). These examples show that the advantages are clear -- public perception of the city improves, the team brings economic impact to the city and often a derelict area can be revived with a professional sports franchise.

The disadvantages typically relate to the cost of the infrastructure -- arenas and stadiums cost hundreds of millions of dollars, and in some cases even roadways and offramps to the facilities are built at public expense. The worst-case scenario is when a city builds an arena to attract a team, but fails to do so. Kansas City is an example, having built for an NHL/NBA team that has never arrived. Hamilton, Ontario built an NHL arena in the 1980s but has only attracted minor league hockey.

There is the potential, then, that major investments can result in little more than a white elephant. The benefits differ between leagues as well. The NFL scores high for exposure but has fewer games, whereas MLB has a large number of games. The NHL is only a driver of substantial revenue for hockey markets, so it works better in Columbus than it has in the Phoenix area, for example.

NBA and NHL arenas are cheaper to build than football or baseball stadiums, and they can be dual purpose, reducing the costs even further. It is worth considering that there are different means to attract teams. Building stadiums is the most costly, and the economic benefits may not be apparent depending on the cost of financing the stadium. Tax incentives are less likely an enticement, but carry a much lower cost to the city. It.