Sunday, July 22, 2012

People only have so much recreational money to spend

So, the city of Seattle is purportedly doing something revolutionary in the field of building stadiums by proposing to pay for only (?!) 41% of the cost of a new arena with taxpayer dollars. Even so, experts are not buying the unsustainable PR myth that pro sports facilities are huge financial windfalls for municipalities:

Economists agree that the proposed $200 million in public financing for the $490 million arena is a good deal — and in line with the national trend for less taxpayer investment in new facilities.

But they're skeptical that these facilities generate much new spending. Rather, experts say, cities see a "substitution effect" as people spend money on a pro basketball or hockey game rather than a restaurant and movie or a college basketball game.

"The economic impact is approximately zero. All you're doing is recycling fans from one game to another," said Allen Sanderson, a senior lecturer in economics at the University of Chicago who specializes in the business of sports.

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