Economic impact of stadiums and teams: The case of minor-league baseball

 
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Professional sports stadiums are typically built with significant public assistance, despite the fact that they are primarily used by a single, for-profit tenant. Though new stadiums and sports franchises are often a public relations boon — and are touted as helping local businesses — studies have questioned whether they are worth the cost, and researchers have cautioned against boosterism.

A 2011 study published in the Journal of Sports Economics, “The Economic Impact of Stadiums and Teams: The Case of Minor League Baseball,” looks at these lower-level professional franchises over the period 1985-2006 and analyzes their effects on per capita community incomes. The researcher, based at the University of San Francisco, examined data from 238 metropolitan areas that hosted minor league teams at seven different levels, from Triple-A to rookie league, and separated out results for two different scenarios: the building of a new stadium; and the introduction of a new team.

The study’s findings include:

  • The presence of certain types of minor league teams and new stadiums may increase income in a community, albeit by modest amounts. Per capita income was raised $67 by the introduction of a new Triple-A team and $118 by a High-A team. In addition, building a new Double-A stadium was associated with a $161 increase in per capita income and a new rookie league stadium was associated with a $202 increase.
  • 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.
  • Overall, there were no significant negative income effects associated with any team or stadium type. In other words, where the measurable impact was not positive, it was neutral and not statistically significant.

The author cautions that “no cost-benefit analysis was conducted, so there is no implication that cities should invest in AA or rookie stadiums.” Indeed, the vast majority of academic research in this area has shown “nonpositive effects” on income, employment, sales tax revenues and spending, the study states. (For a critical review of related literature, see the 2007 University of Maryland study “Stadiums and Arenas: Economic Redevelopment or Economic Redistribution?”)

Also of interest is a 2008 study, “Assessing the Economic Impact of College Football Games on Local Economies,” which found “no statistically significant evidence that college football games in particular contribute positively to a host’s economy.”

Tags: sports, entertainment, municipal

Last updated: May 15, 2012

 

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Citation: Agha, Nola. “The Economic Impact of Stadiums and Teams: The Case of Minor League Baseball,” Journal of Sports Economics, October 2011, doi: 10.1177/1527002511422939.