During the recent Minnesota Twins and Minnesota Vikings stadium discussions, a stadium’s positive and negative impact upon its home community has been the subject of a great deal of controversy.

Experts have lined up on both sides of the issue. Stadium opponents declare that the facilities and the teams that play in them have no immediate or permanent economic impact. Further, they claim that the jobs created by a new stadium are minimum wage positions; therefore, public financing of new sports stadiums is unbeneficial to an entire community and therefore, inappropriate.

One fan’s opinion

In my opinion, the issue can only be properly addressed by considering the stadium, the team that will play there, and overall utilization. A look at the stadiums and arenas individually reflects a marked difference between baseball, football, and basketball attendance and their respective economic impacts. In addition, it goes without saying that the teams must be at least marginally successful both in playing their respective sports and in winning the hearts and minds of the local public.

I am not a great believer that public dollars should finance 100 percent of new stadiums. Nor do I think the team owners should be entirely responsible for financing them, either. The issue of stadium finance is far more complicated than simple dollars and cents. In my mind, it is also about city image and civic pride. We are a sports-crazy nation, and a new stadium is a visible public attraction that people enjoy and are generally proud of.

Twin Cities residents say that voters are against any type of public financing of a new Vikings stadium because of many socioeconomic concerns. The same can be said for other parts of the country, yet new stadium finance measures do get approved during general elections. In Denver, the community approved new stadium financing while they voted down a bond issue for new schools. This does not make sense; however, the people had the opportunity to decide, and that is what they selected. It was their choice.

In other communities, the public also voted with its wallet. According to a USA Today study “45 new stadiums were built in the 1990’s at a cost of over $9 billion.” Thus, numerous cities have had and will continue to have their say on this issue, and the opponents of total or partial public stadium financing will keep on grumbling.

Stadiums encourage civic pride

While city image is difficult to define, let me give a personal example. I live in the Twin Cities but travel extensively. Whether I am in Great Britain, Russia, or Green Bay, the people I meet want to know about Daunte Culpepper and Randy Moss. The Purple People Eaters of the 1970’s may have put the Twin Cities on the map but the current Vikings’ high-flying offense has remade the Twin Cities into a year-round Purple Paradise.

Through the years, both at home and on the road, I have hosted pregame tailgate parties that have been attended by Vikings fans from each of the 50 states and 12 different countries. Over the last several years I have had numerous occasions to discuss the stadium issue with my guests. In addition, I have evaluated the impacts of stadiums on downtown areas throughout the United States and Canada and studied the opportunities for restaurants and stores in numerous shopping malls, amusement parks, airports, schools, universities and other businesses. I have also compared the benefits of single-use versus multi-user stadiums.

I have reviewed both sides of the issues, the debates, the emotion and the hype. Neither side is truly correct; however; both the pros and the cons make salient points regarding the benefits and the drawbacks of a new stadium.

A look at some of the impact issues

Football stadiums have the least overall economic impact in the sports stadium/arena marketplace. The teams play only 10 games annually. At a maximum annual rent of $10 million, they cannot support financing of more than $90 to $100 million. Most stadiums today cost a minimum of $400 to $500 million to build, not considering the infrastructure costs born by the city, county and state in which the stadium is located.

Politicians who are sensitive to their constituency and re-election opportunities often do not make stadium decisions based on what is best for the entire city. For example, when selecting locations for new stadiums, they tend to target areas where there will be the least opposition or at the least opposition that is “acceptable.” Also, many new stadiums are placed next to the old stadiums that will be torn down because fewer people oppose reusing these locations rather than going someplace new.

Stadiums could have more of an economic influence if they would be placed where a positive impact could occur, such as developing urban residential neighborhoods. Thomas Chema, of the national law firm of Arter and Hadden, believes sports stadiums are effective at generating economic activity. He criticizes Robert Baade, a professor at Lake Forest College located outside Chicago and a leading critic of public financing of sports, for having published results of a study that found sports stadiums had a negligible impact on economic growth.

Chema claims Baade researched "essentially non-urban facilities" which, unlike recent stadiums in urban areas, were not intended as economic development catalysts. As for the stadiums that were built in urban areas, Chema believes, "the relatively few urban venues might as well have been in the suburbs because they were separated from their host city by a moat of surface parking."

Unfortunately, that will probably not happen because the average citizen who elects the politicians does not want the facility in their neighborhood. Nevertheless, stadiums in urban residential neighborhoods can have a great economic impact.

Rick Horrow, an NFL consultant, wrote a recent article in Tennessee's Business in which he advocated public financing of sports facilities, saying investing cities have received "significant, long-term economic benefits" in the form of tax revenue, direct spending (salaries, supplies, food, insurance, visitors) by the sports team, and the direct impact of new jobs and community development. As an example of the direct spending associated with such a project, Horrow cited a University of Cincinnati Center for Economic Education study in 1996 that projected the impact of construction on two local professional sports stadiums to be $1.1 billion.

Proponents argue that the positive impacts coming from sports franchises include the generation of tax revenue, direct spending by teams and owners in an area, new jobs and community development (stadiums can also be used for concerts, conventions, and festivals), and improved infrastructure. Matthew Peters also proved that a stadium is more attractive to tourists and shoppers than heavy industry in a 1996 Tennessee's Business article.

Baseball stadiums currently have the greatest economic impact of all sports venues because there are at least 81 home games per season, compared with basketball's 41 and football's 10. In the restaurant industry, the fact that most events are night games causes attendance increases to occur in the early dinner hours. However, this impact has been declining because stadiums have begun to improve their food service facilities in order to attract the dinner crowd. NFL events actually have a better impact on game days than their counterparts, because the games are usually in the afternoon and it is common to stop for dinner and/or drinks after the game.

Payroll of the Vikings players, management, staff and ground crews is a significant cost of between $60 and $70 million. Admittedly, not all of the players live in the community year round but even those who live there only during the season must pay rent, utilities, and taxes.

One criticism raised has been that stadiums only generate jobs for millionaires and minimum wage workers. That is generally true. However, vendors, restaurants, bars, and stores create numerous other jobs. While most of these jobs are low paying, they nonetheless are jobs that feed, clothe and house people. Most are seasonal or part time and because of that the teams have been criticized. That is the nature of sports - it is seasonal!

However, I wonder if the critics have ever talked to these employees to find out how they feel about their jobs. I have. Interestingly, I found that many wanted these jobs because they loved the sport, could watch the game for free and had another job for the rest of the year. I also found that the turnover of help was much lower than in the restaurant industry. Only a few said that this was the only job that they could get.

Strikes highlight economic impact

One need only consider the economic impact of the baseball strike of 1994 and the football strike of 1982 to gauge the economic void the Twin Cities could see should either the Twins or Vikings be forced to leave the area. Whether you are a baseball fan or not, one cannot ignore the fact that the strike cost over $800 billion nationally.

In Minneapolis, businesses near the Metrodome were badly hurt during the strike. Hundreds of people were laid off; restaurant sales declined drastically; taxicab fares were way off; city, county and state taxes were negatively affected and parking revenues disappeared.

For football fans on the day of the NFL strike, it was as though America was trying to convince itself that September 26, 1982, was just an ordinary day.

It wasn't, of course. It was the first full day of the football players' 57-day strike. It would reduce the season from 16 games to nine, costing league cities thousands of dollars in taxes that would have been paid on tickets, food and concessions.

In each city where football was a Sunday staple, an estimated $2 million was lost on restaurant meals that weren't eaten and hotel and motel rooms that remained unoccupied. Other businesses that relied heavily on football also suffered: sports bars, usually packed in midafternoon, had few, if any, customers.

Beyond that, 15,000 people with football-related jobs, ushers, security guards, vendors, grounds crews were out of work and without income. Charities that maintained stadium concessions as fundraisers lost thousands of dollars.

In the Twin Cities alone, Metrodome concessionaires had shortfalls of over $5 million and laid off their staff. Waiters and waitresses told how they made substantially less income than during a normal season. They had counted on those additional funds to pay for daycare services for their children or to save for a trip or education. Even the gasoline service stations felt the impact.

When critics say stadiums do not produce an economic impact, they have not done their homework. Through interviews of the players, management, ground crews, and more importantly, the staff of nearby businesses, one finds that the multiplier impact is significant. These are real people - not statistics.

But to NFL fans during the strike, who lost what or how much was not important. On that day they had lost their beloved games, and more than a few fans said, they were losing their minds, not entirely jokingly.

Stadiums and teams generate considerable taxes

If the team owns the stadium, total taxes paid to the city and state including payroll, real estate, sales, amusement, parking, parking license, gasoline, vehicle, franchise, liquor, utilities, parking tickets, and others will run over $2 to $3 million annually.

Concession sales have increased dramatically over the past ten years as more stadiums have focused upon foodservice. Many stadiums have tripled food concessions and have added full-service restaurants. Concession sales for a strong team can exceed $20 million annually and can generate over 500 to 700 part-time jobs.

Parking revenues can be substantial. Much depends upon who gets them. In most new stadium deals today, a large part of the stadium revenue goes to the teams rather than the community. Regardless of who gets the revenue, the dollars are substantial. Parking revenues for football can exceed $200,000 for a single event.

Charter bus companies usually enjoy a strong business from long-distance fans traveling to game outings. The business is stronger for baseball than football, and the degree of the success depends upon the team. Revenues range from $1 to $3 million annually for a good team.

Public transportation always gets a shot in the arm on game days. In a major urban setting, the effects are naturally greater. In Chicago, I found that over 35 percent of the fans traveling to Wrigley Field use public transportation. The primary reasons include the lack and expense of parking and the convenience of rapid transit. Sports-related revenue to the Chicago Transit Authority exceeds $1.5 million annually.

A few years ago my former Minnesota State Senator, Martha Robertson of District 45, replied to an e-mail I had sent her stating my wish that a task force be authorized for the study and feasibility of a new Vikings stadium in conjunction with the University of Minnesota. Ms. Robertson explained that she was a “member of the Education and E-12 Education Budget Division” that was “working on funding needs whose priorities will be set by the majorities of each house”. Ms. Roberston went on to say that “many in Senate District 45 feel that tax funds should not be used to build stadiums, that we need to consider multiple solutions” to other areas.

As a father of a 3-year old and concerned about education I believe Ms. Robertson is missing several key points. While the elitist left may want a bottomless money bucket for education we Garage Logicians would like to point out that the Education budget has increased each year. Perhaps Education needs to look inward to become more fiscally sound with the money it is given and allow parents, not government, to raise their children and be more personally responsible for their upbringing. And let us not forget the often economic and personal impact a sports franchise can bring to a metro area.

In total today, a NFL football team and its stadium can have an impact of between $175 billion and $225 billion on the local economy. Then there are the charitable contributions and community service to consider.

Since 1978, the Minnesota Vikings Children’s Fund has supported over 100 child-related nonprofit organizations in the Upper Midwest, providing grant monies now totaling close to $5 million dollars. It provides 50 percent of the funding for the University of Minnesota Department of Pediatrics to research major childhood diseases and disorders.

The Vikings alumni also give back to the community in other areas. Since 1961 many former players have chosen to remain in the Twin Cities after retiring from football. They have begun businesses, raised families and been elected to public office.

Former Coach Dennis Green gave his players each Tuesday off during the season. Many, many Vikings players choose to use this time to visit local hospitals and to read to children in their classroom. Some, such as former Vikings Randall McDaniel worked in a 5th grade classroom at Pilgrim Lane Elementary in Plymouth. Former Vikings star Robert Griffith was active in the Twin Cities community through the “Vikings Super Challenge” campaign at local schools. Future Hall of Fame inductee Cris Carter worked in the Twin Cities community through “Cris’ C.A.U.S.E.” (Christian Athletes United for Spiritual Empowerment) and is still active in the Big Brother-Big Sister program. I’d like any State Legislator, to place a value on the impact these activities have had on the children’s lives and the smiles they bring.

Professional sports are more than just big business

Do new stadiums provide a positive economic impact on a community? Yes, they do. Do new stadiums pay for themselves? Usually not. Is the public willing to subsidize a part of their funding? Typically, yes.

While professional sports are big business, sports fans still see the industry as exciting entertainment for which they are willing to pay, in order for the chance to one day be part of a winning team.

And that’s what we fans hope for, year after year!

Posted by maasx003 at October 12, 2004 07:22 AM