Recently arenas and not being able to utilize

Recently Nevada has received $750 million
to build a stadium for the Raiders. Fox sports (2016) calculate in the past two
decades over $12 billion of tax payer’s money has gone to stadiums of that
seven has gone to NFL stadiums in some way. This then institutes a massive
transfer of money from everyday people to owners and players involved in the
sports franchises. Generally, the main people who benefit from the stadiums are
the owners, players, fans, and construction companies. Some of the stadiums
such as football and baseball are worse off because of the size of the arenas
and not being able to utilize them for much else more than the games. Public
subsidies for sports facilities is a great option for those involved except for
the pubic itself.

            When building new stadiums there are a few general
slogans that are used to get the mayors or cities on board with the idea. The
five things include, creating jobs, construction money goes back to the city,
attracts business, will bring media attention, and positive psychic and social
benefits (Coakley, 2015). Studies by sports economist have been done to try to
prove or disprove the claims stated above., such as research done by Baade(1994).
His research was to use economic theory and empirical techniques to assess the
contribution of professional sports to metropolitan area economic development
in the United States (Baade, 1994). The findings in this study suggested that
there wasn’t much relationship between teams and income growth, but the cities
pride was affected in a good way.

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            In a book Sports,
Jobs, and Taxes economic development was studied from all possible avenues.
From their studies the results seemed to be the same every time. The sport
stadium offers small benefits in the economics and providing jobs. Not many
stadiums have reached an amount of money that would be able to return to the
public what was taken.

            It is possible for sports to lead to economic growth from
stadiums, but the correct steps would have to be taken (Delany & Eckstein,
2007). Stadiums do get money from licensing and media, but it is not equivalent
to the money that is being put out to build them. When a new stadium is built
the attendance, rate goes to because everyone wants to see all of the new
improvements. Gradually the numbers will go back down.

            The first point is that stadiums create jobs. Although
the building of many new facilities in downtown areas has attracted millions of
visitors to areas previously avoided by most residents, there is no evidence
that these facilities have significantly changed employment or residential
location patterns. The jobs that they are given are generally low income or
part time jobs (Delaney & Eckstein,2007).  Some jobs that were successful were hotel
jobs. For jobs to be created more money must be put in.

            When it comes to construction most of it is done through
contractors and materials and other products used are typically bought outside
of the city they are building in. Swindell and Rosentraub (1998)
went over the five main points stated above and if they were true.  They did so by conducting surveys of
the sports teams and other civic assets that were in the city of Indianapolis.
The research was conducted by calling 1,5000 randomly selected residents over
the phone asking five different questions about their city; civic pride,
national reputation, others mention, visitor see, and loss hurts reputation.
From the findings it showed that the only benefits that were received were that
of pride for living in a city with a team and media support. Most people agreed
that the team was doing a public good by being there and that its presence was
enjoyed by all those living in it. As for media, they have a large roll in how
the public view stadiums. When Delaney and Eckstein (2007) studied Cincinnati
and other cities they found that media on all accounts was supportive of the
stadium, by reinforcing that the stadium will be good for the community, but
this shows that there can be bias in the media. It can be said that when other
teams come to the home stadium there will be more media coverage, but the
expenses are basically evened out when the team goes away for a game and their
games must be covered as well. (Siegfried & Zimbalist, 2000)

The stadium
could bring business to areas around the stadiums, but it could also drive them
away. The types of business that is normally created are restaurants, bars,
hotels and other form of entertainment for after games (Coakley, 2015). The
problem with these are they are generally not located near the actual stadium,
so people must drive to either a different part of town or another city to
enjoy the businesses. Unless the clustering effect is used which is when public
transportation is easily accessible to the stadium along with other business
ventures, not just the stadium in the middle of the city or edge
(“Clustering”,2009). With building of the stadiums space is needed to some
business may be bought out to have space for the upcoming stadium.

            In sports leagues there are things called monopolies.
Which are the exclusive possession or control of the supply or trade in a
commodity or service given the definition from Oxford dictionary. The monopoly
power of leagues is at the root of essentially every problem that plagues pro
team sports, from competitive balance to out-of-sight player salaries to the
blackmailing of cities,” says Washington State University Professor Rodney
Fort. The monopoly sport leagues and those involved operate in many ways. These
leagues can increase members profits by keeping the number of sports franchise
low for the number of cities that want or can afford to have teams. To get a
team, the cities must go through a process known as bidding wars (Swindell &
Rosentraub, 1998). The bidding war is not for the amount it takes to make a
team but the amount a city is willing to pay to show how much they want the
team.

            The teams have been able to lure the state and government
into a frenzy of who wants it more and that  is how they have learned to receive the funds
for the stadiums (Siegfried & Zimbalist, 2000).
Monopolies control all premier sports. They have the power to create new teams
which gives them power of the placement of the franchise to get subsidies from
communities that are willing to give the amount of money if it will help give
pride to their city or state (Siegfried & Zimbalist, 2000). One way monopolies
can control the cities are by the mayors and threats. Most of the time the
people who propose the idea of a new stadium to the people is the mayor (Siegfried
& Zimbalist , 2000). This person generally believes that the points given; create
jobs, money back into the community, attracts business, media attention, and
public pride are true. They are willing to willing give the money.

            The money used to pay for stadiums is generally in the
form of subsidies, which could be public, favorable leases, direct cash
payments, tax-exempt bonds, and private money (Weiner, 2004). The Government has
been involved in the building of stadiums sense after World War II. With publicly
constructed structure the public generally pay for the construction and up keep
of the stadium (Weiner, 2004). Favorable leases are when the team and the state
sign a lease agreement, but it is hard for the public to judge if said lease is
favorable because they are normally keep under the radar. With these types of leases,
it seems like it would be alight because there is algal document between the
two, but turns out in the end the government generally gets the short in of the
stick in the situation (Weiner, 2004). Another form of subsidy is direct cash
payments, this is when the city or state government directly gives money to the
team to either stay or come to the city (Weiner, 2004). It seems like this form
of subsidy is not used as much with teams because it returns generally the
cities receive nothing back because the money is viewed as a gift and when
people gives gifts you don’t always have to return one. Though local governments
such as mayors should not have all the blame as the federal government as well
because they are responsible for tax-exempt bonds. These bonds are used to pay
for some expenses of construction that have a lower interest rate than per se
private bonds (Weiner, 2004). Over the years stadiums have gotten more expensive
causing team to lean on the tax payers’ dollars more.

The last form
of money used is private funding which it seems like most stadiums are beginning
to implement into their proposals. This form of funding doesn’t have much
research done about it, but what has been said thus far is that private funding
is better for the community somewhat because there is less money taken from
them and how the teams pay the fund back is through raising the prices of
tickets, naming rights, and other things. The model of private funding generally
works okay if some public funding is added which as well make the increase of
price not as drastic along with being able to use the stadium for more than
just one specific event. The amount of money given from different private
investors may also not be a sufficient amount hence forth why the public may
still have to be asked. When just private funding is used the motive to pay back
the money is higher, and this leads to higher ticket prices.  An example is Levi stadium in San Francisco
where they have lost a decent number of longtime fans due to the extreme
increase in prices and not having a well thought out stadium design which lead
to extra monies being spent on renovations (“Levi’s Stadium is a model for
privately financed venues”, 2016).

Over the past
decade the government has tried to puta sop to large sums of public subsidies
going to stadiums such as 1986 tax reform and in 2016 president Obama proposed
getting rid to tax free bonds (Povich, 2016). The tax reform was that teams
will be denied federal if not using taxable not tax-free dollars when no more
than 10 % should be covered by accumulated revenue, but team owners found ways
around the bill. What Obama tried to do was do away with the subsidies because
about $146 million of U.S money is used to pay for stadiums a year. But the
idea was not followed though due to other members of the government turning
down the proposal.

Both ideas
were a great start but go no where if they are not backed up. More regulations must
be given to team owners to try to change the way stadiums are built so that they
may be able to benefit teams and the community. Something that could possibly
change how the monopoly system works is by not allowing teams to move after
certain amounts of time or without paying their loans back. Where as they can’t
use the tactic of relocation to scare cities into giving them more money.

            The public opinion must be heard when talking about their
money. Coates (2007) recorded that about 80% of the stadiums that were built
the public said they did not want to sponsor but they were built any ways. If
more voting was used, they could use to analyze what the people would like to
see more of and capitalize from that. Generally, they would take a little
remission then bring the proposal back again changing a few words here and
there hoping it would change the people minds and after a few attempts it does.
It will take people to really stand up for what they want change to occur and
that is what has happened in a few of the more recent stadiums, but also there
must still be support of the teams or else money will be lost. Something that
may also help is doing more research on the cities that stadiums are in or
being built in. The metaphor of buying a house was used by Coates (2007) when
describing how to think of the area of the stadium. When looking to buy a house
normally people look up the demographics of the neighborhood, geography, history
of the house, estimates on how much the house will sell for in the future,
crime rates, so forth and so on. When doing a thorough consideration of how it
seems the stadium may do then it should be decided if that stadium is built
there.  The last thing that could be done
is looking at taxation. In the revenue that is acquired by sports areas into
city a decent part is taxation for things such as hotels and cars (Baade,
1994).

            Overall,
it may be said that yes sports stadium do have some effect on economy but in a
very intangible manner such as positive views towards your city and media
coverage but no tangible economic effects such as money.  The 5 major claims or goals that are normally
stated have been limited to be factual. Even though they are not true they will
continue to prevail due to the monopoly system, government assistance, and the
public not being heard or considered.  They
can be profit and better on the public if joined with private funds and the
proper research is done on the area. If public money is used for building stadiums
there will always be research done on the topic, but there are so many avenues
that have yet to be explored on how the issue could be resolved. The private
and public funding is a good start to ways in which stress could be taken from
the public.