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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

    Writer: | Last updated: May 15, 2012

    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.

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    Media analysis

    Review postings at the journalistic website Field of Schemes. Identify several ongoing sports-related infrastructure stories where public financing is at issue.

    1. Given the insights of the study and the website, what critical issues should sports and municipal reporters keep in mind as they cover these topics?

    Study analysis

    Read the full study titled “The Economic Impact of Stadiums and Teams: The Case of Minor League Baseball.”

    1. What are the study's key technical term(s)? Which ones need to be put into language a lay audience can understand?
    2. Do the study’s authors put the research into context and show how they are advancing the state of knowledge about the subject? If so, what did the previous research indicate?
    3. What is the study’s research method? If there are statistical results, how did the scholars arrive at them?
    4. Evaluate the study's limitations. (For example, are there weaknesses in the study's data or research design?)
    5. How could the findings be misreported or misinterpreted by a reporter? In other words, what are the difficulties in conveying the data accurately? Give an example of a faulty headline or story lead.

    Newswriting and digital reporting assignments

    1. Write a lead, headline or nut graph based on the study.
    2. Spend 60 minutes exploring the issue by accessing sources of information other than the study. Write a lead (or headline or nut graph) based on the study but informed by the new information. Does the new information significantly change what one would write based on the study alone?
    3. Compose two Twitter messages of 140 characters or fewer accurately conveying the study’s findings to a general audience. Make sure to use appropriate hashtags.
    4. Choose several key quotations from the study and show how they would be set up and used in a brief blog post.
    5. Map out the structure for a 60-second video segment about the study. What combination of study findings and visual aids could be used?
    6. Find pictures and graphics that might run with a story about the study. If appropriate, also find two related videos to embed in an online posting. Be sure to evaluate the credibility and appropriateness of any materials you would aggregate and repurpose.

    Class discussion questions

    1. What is the study’s most important finding?
    2. Would members of the public intuitively understand the study’s findings? If not, what would be the most effective way to relate them?
    3. What kinds of knowledgeable sources you would interview to report the study in context?
    4. How could the study be “localized” and shown to have community implications?
    5. How might the study be explained through the stories of representative individuals? What kinds of people might a reporter feature to make such a story about the study come alive?
    6. What sorts of stories might be generated out of secondary information or ideas discussed in the study?