American Consequences - October 2017

Again, if taxpayer-funded stadiums were beneficial to recreation, sport, and tourism, Humphreys would be the first to say so.

The author is Heywood Sanders, the nation’s ranking expert on convention centers. He tells a cautionary tale of how one American city after another is building a massive glut of convention-center space. The cities are doing this even though the convention industry itself warns prospective builders of convention centers that over-supply and resultant price- slashing will lead to economic ills. Furthermore, the taxpayer-funding illness is contagious. Big cities got it first. Then middling cities caught it. Now the epidemic has reached suburbia. David Boaz writes about the plague in his 2017 Cato At Liberty report, “ Stadium Boondoggles Spread to the Minor Leagues :” In Prince William County, Virginia... the board of supervisors is about to decide whether to issue $35 million in bonds to build a new baseball stadium for the Potomac Nationals, a Class A affiliate of the Washington Nationals. The board just rejected a proposal to let the taxpayers vote on the issue. (Emphasis added in case the activists that Rodric Hurdle-Bradford interviewed need more reasons to be bummed out.) Boaz describes how the retired investment banker who bought the team for $300,000 in 1990 estimates that it’s nowworth $15 to $25 million, but moans, “Right now, we have the worst ballpark in the league.” Boaz says, “Seems like an excellent profit opportunity for a business worth tens of millions of dollars. But [the owner] has a better plan: If the county doesn’t pony up, he will sell the team, and new owners will move it.”

He doesn’t. Instead, he and Coates say:

Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. They go on to note that “real per capita income over the entire metropolitan area” actually declined over a 30-year period in the 37 cities hosting professional sports teams that they studied. (Despite the warnings of Coates and Humphreys, the Montreal Expos were wooed and won by D.C. anyway. The economic results have been less than thrilling. And so have the non-economic results... Washington In 2015, Professor Coates, working with the pro-free market Mercatus Center at George Mason University, updated Raymond Keating’s “Sports Pork” Cato analysis in a paper titled “ Growth Effects of Sports Franchises, Stadiums, and Arenas: 15 Years Later .” There is still little evidence that building stadiums or arenas for professional sports franchises leads to significant economic benefits. Sports-initiated development is unlikely to make a community wealthier, and subsidizing professional sports teams may actually reduce economic growth. The problem isn’t limited to sports stadiums... Cato’s David Boaz also pointed us to the 2014 book, Convention Center Follies: Politics, Power, and Public Investment in American Cities . Nationals 2005-2017: A .498 win-loss percentage, playoffs 4, pennants 0.)

P. J. O’Rourke

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