FiT Publishing

In 2010, a plan to finance a new spring training stadium for the Cubs through a ticket surcharge on all games in the Cactus League was proposed. We find that the Cubs increase attendance when they are the away team by about 37%. Thus, the surcharge would be economically justified as long as the price elasticity of tickets is less than 0.32, which many prior studies find to be the case. This tax provides one of the few examples in which the cost of a subsidized stadium would be born primarily by the group that benefits the most from the arrival of the subsidized team.Read more

 In the post-9/11 world, managers and owners of large public venues face new challenges. Since stadiums are potential targets of terrorist attacks, sports venues may experience falling ticket sales as the public becomes more concerned about the threat of terrorism. This paper estimates the risk to business disruptions by examining how baseball fans respond to increased terror-alert levels by the U.S. Homeland Security Advisory System. Using game-day attendance for each Major League Baseball team for the period 2002-03, the results indicate that during the early days of the...Read more

Stadium boosters have long used the promise of economic development as a means to gain public support for financing local sports teams. Past research has shown little or no impact on employment or income when viewed at the MSA level. This paper expands the current literature on the economic impact of professional sports franchises. Following Coates and Humphreys (2003), we look at employment and wages at the county level using detailed SIC and NAICS industry codes. We find mixed results on employment within a county but find a negative effect on the payrolls within specific industries.Read more

We investigate the phenomenon in which professional sports teams receive subsidies from cities to induce them to remain in the city. These subsidies often take the form of public funding for a new stadium. Using a dynamic model of bargaining with asymmetric threat points, we show that teams can extract increasing concessions from the city, culminating with the partial public funding of a new stadium. The model is consistent with many observed city/team bargaining relationships where lease renegotiations often favor the team over the city as teams use the threat of relocation as leverage in...Read more

 Conventional wisdom has it that the public share of stadium and arena construction costs has been falling in recent years. Many have attributed this perceived decrease in part to the emergence of the academic literature in the 1990s, finding that one cannot expect that a new team or sport facility by itself would promote economic development in an area. We find that the conventional wisdom is incorrect. In this paper, we use both the available reported cost data as well as adjusted cost data and find that trends in public financing are considerably more complex than...Read more