why pay so much for new stadiums

Economic impacts of sporting events and facilities bring to light the idea of growth of sport industries. Not all impacts are good. According to the text by Paul M Pederson, Janet B Parks, Jerome Quarterman and Lucie Thibault, experts disagree about the potential of sporting events and facilities to generate such economic growth and activity.

Economists have long known stadiums to be poor public investments. Most of the jobs created by stadium-building projects are either temporary, low-paying, or out-of-state contracting jobs, none of which contribute greatly to the local economy. Today the locals spend less money at sporting events simply because costs are too high. Economic impacts done to the local economy drastically reduces the real gain that is said to do in the first place. Not all facilities bring economic gain. According to the article by Aaron Gordon, “America Has a Stadium Problem” Despite every number suggesting they shouldn’t, American cities keep building sports stadiums funded with public money. Topics discussed by economists of Americas cities have also been, according to Gordan, drastically underestimating the true cost of these so called “projects”. They fail to consider public subsidies for land and infrastructure, the ongoing costs of operations, capital improvements, even upgrades such as new score boards.

the basis behind subsidies for sports stadiums is as follows: owner wants new stadium to make more money and increase the value of the franchise. Owner threatens to move team. Politicians save face by pretending they won’t offer millions of dollars in subsidies. Politicians eventually offer millions of dollars in subsidies and keep the team in the city. If there’s a justification for all this, it comes from the concept of a public good.

http://www.psmag.com/business-economics/america-has-a-stadium-problem-62665/

 

These acts for building new stadiums on taxpayers budgets are outrageous. The discussion in the text describes how certain key findings we can take away from theses outrageous spending done on behalf of the economy. A financial manager can take into consideration how much money the organization needs to meet the long term obligations of use of the organizations funds. To be thinking broader than selling tickets and merchandises to increase revenue, and rather thinking about other ways to increase revenue for the organization. This is all easier said then done, who knows what the future brings for these “brilliant”  organization financial managers.

 

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