Baseball

New study says minor league stadiums have positive impact on local economies

May 7, 2013

Park1
Don’t tell C.C. Elebash, but there is new evidence that baseball stadiums help local economies.

In the June 2013 issue of the Journal of Sports Economics, Nola Agha, Assistant Professor of the Sport Management Program at the University of San Francisco, has published a study that shows that minor league stadiums have a positive impact on local economies.

The study, “The Economic Impact of Stadiums and Teams: The Case of Minor League Baseball,” uses an extensive unique data set to investigate the efficiency of government subsides for minor league baseball teams and stadiums by measuring pecuniary gains in a local economy, according to the abstract.

Specifically, a dynamic panel data model incorporating 238 Metropolitan Statistical Areas (MSAs) that hosted affiliated or independent minor league teams between 1985 and 2006 shows that AAA teams, A+ teams, AA stadiums, and rookie stadiums are all associated with significant positive effects on the change in local per capita income. The presence of positive effects is strikingly different from decades of nonpositive results at the major league level.

Don’t you love it when facts get in the way of hating on Blue Wahoos and the CMP stadium.

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  • Moose May 7, 2013 at 4:31 pm

    I specifically remember the Friends of the Maritime Park saying that this wouldn’t cost anyone living outside of the CRA anything. They even argued that the CRA wasn’t subsidized by the City or County because they paid a fee for police and fire protection in the CRA district. I’m not surprised or angry about the General Fund being used to subsidize the park, nor am I surpised or angry about this argument being used to justify the subsidy. What I think is unfortunate is that all of the people who were attacked and alienated as naysayers or otherwise were pretty much spot-on on how things would transpire. The baseball team maybe doing very well, but if the city can’t support the operations of the park, so goes the stadium and the team.

  • TS May 7, 2013 at 2:33 pm

    Undoubtedly there is some kind of impact as visting teams, umpires, and league officals occupy hotel rooms, consume meals, and perhaps shop in the area when they’re in town. I think much of the argument comes from the fact that this impact would be the same even if the Wahoos were playing at a less expensive site.

  • CJ Lewis May 7, 2013 at 12:00 pm

    As a minor point of clarification, the referenced study was first published on October 4, 2011. Further, “local” means the two-county Pensacola Bay Area, only half of which has any skin in this game. Everyone in Santa Rosa County is getting a free ride at the expense of Escambia County taxpayers.

    A very interesting website called “Field of Schemes” – http://www.fieldofschemes.com – assesses the public financing of professional sports stadiums. A story posted yesterday has the title, “Florida house kills Dolphins subsidy, CEO says, ‘Screw renovations if we have to pay for them.'”

    If I lived in Gulf Breeze or Pace, I would be very enthusiastic about the Community Maritime Park, my only contribution a small slice of the federal taxpayer subsidy resulting from the bond tax credits. Escambia County residents are stuck paying for most of this project with City of Pensacola residents paying twice. Does it benefit Cantonment? I doubt it.

    In 2009, the City Council pencil-whipped completion of the project’s mandatory economic viability study. The study was voted complete never having even been started. Why? I think it was because the City Council and everyone else emotionally committed to this project knew it was not going to show a return on investment.

    Just yesterday, the City’s Finance Division Administrator Dick Barker briefed the City Council that the City Council in its role as the governing body of the Community Redevelopment Agency (CRA) will have to subsidize the failing Community Maritime Park Associates, Inc. (CMPA) by $400,000 in Fiscal Year 2014.

    Until an updated study is done, I will put my faith in Dr. Rick Harper at the University of West Florida whose 2005 Haas Center study “Economic Impact of Proposed Community Maritime Park: Downtown Pensacola Waterfront” assessed, “While the benefits are numerous, there are some risks involved. For example, research suggests that a baseball field has little economic impact. This is because team revenues are considered modest compared to a metropolitan economy. Much of the revenue generated by the team might have instead been spent on other entertainment if the baseball team were not present.”

    It seems most likely that few if any City Council members ever actually read Dr. Harper’s study that was not even posted to the city’s website along with the other key Community Maritime Park documents. My spin having read the study is that a more prudent public investment strategy would have been limited to the $25 million Public Improvement Project to prepare the Trillium site for development. $25 million was well within the bonding authority of the CRA.

    I like baseball as much as the next person has played it all through my childhood. I would have been content if the Studers had built the Blue Wahoos Stadium operating it as a private improvement making lease payments, paying property taxes, paying the upkeep and maintenance and keeping all of the profits renting it out for whatever events they could squeeze in 365 days a year.

    The Pensacola City Council chose a very different path for developing the Trillium property that will be a burden to city “and” county taxpayers long after some or all of them are gone. This is why it is best for local governments to minimize their risk letting the private sector take most of the risk and reap most of the profit and loss too.

  • EPenn May 7, 2013 at 10:55 am

    Here’s some things you forgot to include in your quote form the study:

    “The presence of certain types of minor league teams and new stadiums may increase income in a community, albeit by modest amounts.”

    “no cost-benefit analysis was conducted, so there is no implication that cities should invest in AA or rookie stadiums.”

    “No significant effect was found for the introduction of a Double-A, Single-A, Low-A, rookie league, or independent league team. Similarly, no significant effect was found for a new Triple-A, High-A, Single-A, Low-A or independent league stadium”

    Yeah, a real glowing report… lol

  • EPenn May 7, 2013 at 10:46 am

    Did they say how much debt the local economy has to carry on the stadium before it becomes a drain on that economy? There has to be a tipping point. When does the City of Pensacola reach that point? BTW, when do we start getting all that stuff that was suppose to go along with the stadium? ha ha