Archive for the ‘Finance & Economics’ Category

Can Detroit Support a New Arena

Thursday, November 21st, 2013

Detroit, as we all know is in shambles, public institutions and services are falling apart, the art museum is being sold piece by piece and yet Detroit’s mayor, Rick Snyder, has approved the construction of a new Red Wings arena. This news comes shortly after the city declared bankruptcy. This $650 million stadium (half of which is public funds) will be the third publicly funded major stadium along with the Lion’s stadium and the Tiger’s stadium. Both built on the premise of investing in the future, Snyder is now promising the same. The problem is the first two were not only unsuccessful but they also exacerbated the the central issues Detroit is facing.In a city that can hardly afford to fund hospitals and schools how can it afford another stadium for a team that sucks (Avs Fan!):) This is just another case of billionaire team owners cutting line to public funding regardless of the public’s interests.

http://www.thenation.com/blog/175467/vultures-and-red-wings-billionaire-gets-new-sports-arena-bankrupt-detroit

Building new stadiums can sometimes be easier when times are hard, do to its unifying affect for the city. For example game attendance usually increases after a disaster or tragedy.  Whenever a new Major Sorts project is breaking ground we must ask ourselves was this what is best for the future of residents and fans or was it schemed up by corporate moguls who have politicians in their pockets.

Top Dollar Athletes…Are They Worth The Change?

Thursday, November 21st, 2013

Do you like to play sports? Do you like to get paid? How would you like to get paid anywhere from hundreds of thousands of dollars to tens of millions of dollars to play professional sports for just one season? Sounds pretty great right, what more could someone ask for? You’re getting paid to play sports for a living. Well how about asking for more money on top of the millions you’ve already been paid?

This seems to be a very common occurrence nowadays doesn’t it? It seems like we are hearing of lockouts or strikes every other professional sports season. While we all want to be paid more for the services or work we perform, most say it is ridiculous how multi-million dollar athletes are demanding more money, and this undoubtedly affects the sports industry one way or another.

So, where is the additional money going to come from to pay top athletes more? If you said higher ticket costs, more expensive concession foods, pricier parking fees, and higher priced officially licensed products, we would certainly not be wrong. But what effect does this have on the sports industry? Well, for starters, if ticket prices rise, it may be likely that fewer fans will go to games. Fewer fans at games, equals less concession sales, fewer concession sales, results in less additional revenue coming in. This is obviously a negative impact for the sports industry.

From examining two different articles, Two Sides to Every Coin: Are Professional Athletes Overpaid?, and Athlete’s Salaries Too High? Sports Fans, Blame Yourselves, a common conclusion was shared between them; the fans or consumers are the ones to blame for the high amount of money paid to professional athletes today. While they demand more by strikes or face lockouts, the sports industry suffers even more while these events unfold. But again, it is the consumers’ fault that athletes are paid so much, and gain a sense of entitlement to more money.

While the increase in prices might seem like it would negatively affect the sports industry, there are always going to be sports fans willing to pay the price for a unique sporting experience. These large, multi-million dollar contracts could, however, help strength the economy or financial situation of certain sports leagues by intriguing old and new fans alike to see whether the players are actually worth it. They want to see if the athlete has the skill to justify the amount their team is paying them, thus consumption will increase in that regard. As one of the article’s title states, there are two sides to every coin. This side is obviously the positive as it has the potential to create interest and excitement among loyal sports fans.

 

So, as we can see, there are both positive and negative sides to how much athletes are paid.  To get an idea of how much top athletes are paid, please see the video: http://www.youtube.com/watch?v=ya7y5Tke7uc

 
For the articles, please visit the following links:

http://bleacherreport.com/articles/1089195-two-sides-to-every-coin-are-professional-athletes-overpaid

http://www.fee.org/the_freeman/detail/athletes-salaries-too-high-sports-fans-blame-yourselves#axzz2l7vJ5rNY

21 is the new old..

Thursday, November 21st, 2013

The Atlanta Falcons’ came out with a plan back in April of 2013 to build a brand new $1 billion retractable-roof stadium by 2017 in downtown Atlanta.  After over two years of negotiations, the city’s economic development armed voted 8-1 in approving the issue of over $200 million in bonds from Atlanta city’s hotel-motel taxes to help with the funding of the new stadium.  Since the current Georgia Dome stadium was built only 21 years ago in 1992, this raised a lot of questions and concerns.  The questions are exemplified by something along the lines of why now, why is this necessary, the stadium just turned old enough to drink! Falcons owner says

We’re not simply swapping one stadium for another. We’re building a best-in-class facility that will help us attract new events and retain the Falcons.

http://www.cbssports.com/nfl/eye-on-football/22007606/falcons-1b-retractableroof-stadium-gets-public-funds-green-light

The remaining money to support the costs of the stadium will come from other private funds as well as the Atlanta Falcons.

In another Q&A article found at: http://www.sbnation.com/2013/3/7/4076234/new-falcons-stadium-deal-atlanta it is asked “Since this is an NFL stadium deal, how much blatant robbery of public money occurred here?” Following the response:

A bit, but that’s money long since stolen via the hotel tax, which by law must go towards ‘Promoting tourism, conventions, and trade shows.’ There are local costs to it, as there are with any tax, but the direct amount of money in theory is coming from tourism taxes levied on hapless conventioneers breezing through town.

When it comes to using public funding, it seems like something that is rather hard to swallow.  If after 21 years, the Falcons for some reason need a new stadium that is still relatively new, shouldn’t we be asking more questions?  It seems as though this hotel-motel tax could be used for a cause beneficial for more people as well as a better cause.  $200 million is no small fee, which yes, gives the new stadium a good step in the financial direction that they need but it could be better used for other things within Atlanta.  Using this $200 could be used towards education, construction in the city, or many other aspects that could be beneficial to many people around the city, rather than just the team and the people surrounding the sport.

Car-pe Sta-diem

Thursday, November 21st, 2013

Sports and sporting events have been a part of human civilization from the very beginning. Sport core values lay in the need for survival of our species. However, now that humans have obviously ensured their stay on this planet, why do sports still encompass such a large part of society? Now, it is not being suggested that we should denounce sports and leave them in the pages of history, but do we really need to continue to allocate such a vast amount of our resources towards them? Sports stadiums may provide one of the best examples of how distorted our priorities as a society are. According to Aaron Gordon of the Pacific Standard,

“Over the past 20 years, 101 new sports facilities have been opened in the United States, “

He goes on by saying,

“The average public cost for a sports facility at the end of the 2000’s is 241 million.”

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

I’ll let you do the math, but this is an enormous  number. A monetary number that could go towards public schooling, infrastructure, medical advancement, or all three. The Constitution, referenced in chapter 17,  states that public sports organizations have to comply with several requirements in the management of their business activities. So why isn’t the public’s voice being heard? In the article, proof is shown that the people don’t always vote for increasing taxes to fund a new stadium, yet stadiums continue to be built using the peoples tax money.

“The problem becomes unsolvable when voters rarely get to actually vote on the issue and when they vote “no” the stadiums get built anyway.”

The first photo is a stadium for the Carolina Panthers that want $200 million in public funding to renovate their stadium and the second photo is in Chester, Pennsylvania which was referenced in the article.  The total cost of the stadium in Chester was $117 million and 97% of the funding is coming from the people who live there.

Bank of America Stadiumpennsylvania stadium

 

Public funding for stadiums, what to do what to do…

Thursday, November 21st, 2013

In the state of Minnesota a professional baseball team, the St. Paul Saints, is looking forward to developing a brand new stadium in the heart of St. Paul. Their recent stadium is about 30 years old with sewage, piping and many other issues that make it reasonable for a new stadium to be constructed.  Local high school and college sports teams use the old stadium to this day, so to have a new one built it would not only benefit for the St. Paul Saints, but for many other baseball teams in the St. Paul area. The new stadium is proposing a Bonding Bill of 27,000,000 dollars that will begin construction in 2014. If the bill gets passed, it is said that the stadium will create up to 21,000 jobs, positive change for the entire neighborhood as well as local shops and stores in the area, and it will build on the economic vitality of the city. Previous invests such as the light rail and the union depot has produced positive change and if the city were to invest in the bonding bill, it would establish the cities vibrant and viral attributes. All this money would be generated by tax payer money and the governor as well as  the St. Paul commerce of city agree that it will produce a positive change with their city.

This discussion is related to our class because it deals with financial situations in us pro sport. 213 billion dollars is generated annually in the sport industry and we know that sports play a big part in public spending. The problems that are generated in sport are in small and large markets. With this being in St. Paul, it deals with a small market that needs something to spark up the sport industry. Once this new stadium is built it will generate more attendance at games, more media coverage resulting in a larger profit. The video that I am attaching to this blog explains the topic I am discussing, how and why it will improve the overall cities well being.

http://www.youtube.com/watch?v=FZxOabI3cc8

You get a stadium and you get stadium! Oh wait…

Wednesday, November 20th, 2013

Public funding for stadiums and arenas has seemed like a grand idea for cities for a long time, but is that really the case?

Since 2000, 28 new major league1 stadiums have been built costing over $9 billion dollars. More than half, over $5 billion, of the costs of the new stadiums were funded using public dollars

http://www.imakenews.com/cppa/e_article001083889.cfm?x=b11,0,w

I believe that publically funding stadiums is a good idea, it brings people of the city into the events and festivities. With this, finance generation is possible through more than one avenue, creating a multitude of ways for residents to get involved.

If a decision has been made to use tax payers money for a stadium, finance generation is possible through: (a) Government backed bonds (b) Excise duties (c) Personal seat licenses (d) State lotteries (e) Tourism taxes (f) Sales taxes (g) Ticket surcharges (h) General fund revenues, and, (i) Lodging taxes

http://www.moneyandsports.com/financing.htm

Bringing a sports team to a city and building the venues for those sport teams has been said to bring many benefits such as: increasing revenue, creating jobs, and benefiting the overall economy. When asking any residence of a city if they would like to have a major sports team reside in their city, few would say no, because of the “known” benefits and possibly personal satisfaction. What some people don’t realize it that the actual economic gain seen from publically funded stadiums is a shocking number, zero.

Milwaukee County did a report to determine the actual impact the city would see as a return on its significant investment of funding a new arena. A sports economist cited in the report stated that..

One should not anticipate that a team or a facility by itself will either  increase employment or raise per capita income in a metropolitan area

http://www.jsonline.com/news/milwaukee/publicly-funded-sports-arenas-add-little-to-local-economy-report-says-cc9ehcj-201706591.html

Again, the proponents for a new arena often say construction of a new facility will create jobs;  that those who attend sports events generate new spending; that a sports  franchise attracts tourists and companies; and that the new spending produces a  so-called multiplier effect in terms of additional spending. What is actually happening is an economic term called the “substitution effect”.

The substitution effect basically explains that instead of residents spending their money on local restaurants or movie theatres, they are spending it at the sporting arena or sporting events. So in fact, there is no gain of revenue but rather putting that revenue in a different spot. This keeps the overall entertainment spending constant, with the overall effect being that a city might actually lose money.

http://www.jsonline.com/news/milwaukee/publicly-funded-sports-arenas-add-little-to-local-economy-report-says-cc9ehcj-201706591.html

There are many studies that contradict the typical thoughts of a sports stadium benefiting the local city. With the evidence that I’ve seen, I no longer believe that a new stadium would be best for most cities. The construction and possible final cost of the project could prove detrimental if the team or funding doesn’t work out. Of course there is always the argument of personal satisfaction though. Does building a new stadium or getting a major sports team benefit society in a way that isn’t measureable?

The quality of life argument is brought to light because people of a city might be uplifted or benefited in intangible ways that make the building of a new stadium worth it. This of course would be hard to measure academically because of its qualitative values, but I believe it’s worth a shot.

Overall, building a new stadium and getting a town involved in a new project would seem like a good idea, but unfortunately is not. The fiscal benefits aren’t there and the value of the city could quite possibly go down. I do believe the quality of life measurement is the next step to go before people completely rule out the idea of a new sporting venture.

 

NFL $alaries: Are they too much?

Wednesday, November 20th, 2013

According to an article by William L. Anderson, high salaries of professional football players may be a sign of economic prosperity and rebound, not foolish spending on “poor role models.” The number of Americans attending professional athletic events was increasing as of the year 2000, but the athletes were often criticized for their high pay and off-field behavior. His colleagues were concerned that “we should not be paying great sums of money to people who are not proper role models for our children.” As teachers who earn a much lower salary, this was a valid concern. Anderson’s colleagues suggested that Americans do not value education.

images

http://www.fee.org/the_freeman/detail/in-praise-of-athletes-high-salaries#ixzz2lDKdS8qJ

However, Anderson mentioned that salary increase may mean that more citizens have the financial ability to attend games, purchase team merchandise, and enjoy the sport in other ways. One of his examples used a teacher as the subject: If the teacher is paying less for rent, gasoline, food costs, etc., he or she will have more to spend on leisure activities- i.e., attending an NFL game. He suggests that this is a sign of economic prosperity.

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Therefore, one can hypothesize that player salaries may have a positive impact on the economy AND show a reflection of the improving economic conditions. This relates to the chapter in many ways if the athlete is looked upon as a “product.” Economic interactions occur when fans buy appropriately priced tickets. Market equilibrium exists stadiums sell (mostly) all of the tickets. The price of tickets can be categorized as a market shortage if the tickets sell out (priced too low) and many fans are left unhappy. Scarcity determines football salaries: If there were a million quarterbacks that were all amazing, there would be an overabundance of badass quarterbacks and no one would be worth very much. However, there are very few that are outstanding. Thus, they are paid more and are worth more.

A Hit or Miss????

Tuesday, November 5th, 2013

Are the plans for Sochi 2014 achievable? Sochi’s plan for hosting the Winter Olympics has six different plans in mind. They start with healthy living, barrier-free world, modern technologies, in harmony with nature, economic prosperity, and finally culture and national values.

For starters I believe the healthy living plan is a great idea. I really agree that with the hosting of the Winter Olympics it should bring motivation to locals, children and participants in sports and physical activity. In my opinion if I knew Durango was going to host the Winter Olympics, you better believe I would want to be come more involved with participating in these sports or just to simply improve my physical fitness level. I also totally agree that medical services will rise in quality and bring forth more attention.

On the barrier-free world I can also see this plan working out. I have worked with people and children that have disabilities. It is remarkable how their attitude changes so drastically when they realize that they can also participate in the same activities that all the others can. I believe we  can all work together to help these unfortunate people understand that their importance in life, especially sport, is just as important as anyone else.

With the face paced growth of technology I completely believe that their aspect of modern technologies will work . In the technology world almost anything is possible. These new advancements of the UIS portal is a fantastic idea it can help participants and spectators, internationally, be able to easily make their stay a less of a hassle.

In harmony with nature is one of the most important steps I believe in the plan. It should be mandatory at all big sporting events like these to make rules and regulations on how much of an impact any set up can take on the environment. Nothing would make a person more upset than if a huge event like this was supposed to help their local economy but instead it completely destroyed their scenery and surrounding environment.

The last step of the plan I agree with is the economic prosperity. The object of this step is to help the local economy as much as possible. This means new jobs, volunteer movement and the upbringing of more business to local companies. If it works according to plan the place of Sochi should see a huge economic gain.

The last step of the plan I am questionable about. When bringing up cultural and national believes it is a touchy subject. Some countries care so strongly about their culture that any  new interruptions to that can cause some tension. If someone has a set belief on something it is very difficult to change their mind.

In this YouTube video it shows just a glimpse of what creations they are going to and have added to the location to make it easier for spectators and participants. It shows the technology part of the plan does not seem to be an issue.

http://www.youtube.com/watch?v=uluVnk7kBgE

Over all I believe Sochi’s plan for the Winter Olympics in 2014 is a great idea. If the plan works it could be a huge economic and intellectual gain for the area.

so so so Sochi 2014 Olympics

Tuesday, November 5th, 2013

The Sochi organizing committee for the Olympic and Paralympic games have outlined seven key objectives for the games coming up this winter. Those objectives are vision, strategic aim, legacy, the Russian diamond, brand, sustainable development and the Olympic games impact. As i looked into the sustainable development section the committee focused in on six areas,1) a healthy life style,2) harmony with nature,3) barrier free environment,4) modern technologies,5) economic prosperity and 6) culture/ national values.

I believe the In Harmony With Nature section will definitely be achievable because the world is finally recognizing that we are effecting the environment daily with all the pollution and harmful chemicals we are putting into the air. The committee is adopting the nature and environmental management approach which will allow them to have a better understanding on how to manage the harmony with nature. Our ability to construct and build structures  that are environmentally friendly/efficient has improved tremendously in the past decade, which means that the buildings and stadiums for the Olympics will definitely represent that.

Modern technologies is another section of sustainability which i believe the committee will achieve. We all know our world is about using technology to better ourselves, and with the technology we have today, its very easy to use and implement it in any situation. With the use of innovative technology we can enhance our logistics, communication skills within the Olympics, transportation for spectators and it creates a higher education in sports management.

Now there are two elements of the sustainability development that i do not agree with and do not see the committee achieving. The first is a healthy lifestyle, at every sporting event and even the Olympics there is going to be unhealthy food and lots and lots of alcohol being distributed. No matter what sport or event it is, there will be spectators getting wasted and you cant tell someone to not drink alcohol when it is being offered to them. They also mention they will help to stop smoking, but you cant take away someones right to smoke in a public area, there is and always will be smokers and alcoholics.

Last but not least the culture/ national values will be another tough sustainable environment to achieve. here is one quote that i read in the Huffington post, “Russian President Vladimir Putin in June signed off on a law that bans the dissemination of so-called “gay propaganda” to minors which activists fear could be used for a broad crackdown on gays.” They also stated in the article that any participate disseminating “gay propaganda” will be fined or arrested. “Gay propaganda” is along the lines of wearing the rainbow stripes of the gay rights movement or even as simple as telling miners its normal to be gay. With these statements its pretty clear that cultural and national values are not being supported at the Olympics and there for it will be hard for them to achieve that sustainability.

The video that i am uploading relates to the end of my blog because once Russia realized how politically wrong and incorrect they were, rules had to change and the gay rights movement won the battle.  http://www.youtube.com/watch?v=v41NN2IyQ2c

“Global Warming of Youth Sports”

Monday, October 28th, 2013

” Sports for kids are a great foundation for things like sportsmanship, teamwork, self-esteem, developing habits that lead to being active throughout your life.  These are very attainable goals for kids who are playing sports.

I think the problem arises when we lose sight of that and our focus shifts to less attainable goals: college scholarships, living vicariously through your children, the possibility that your child will be a professional athlete.  When that becomes the focus, then we’re vulnerable to making decisions that aren’t always in the best interest of our kid. ” Mark Hyman

With this quote the author describes the rights to having youth play sports the right to be able to enjoy recrational sports. Where does the fine line between enjoyment and cost be drawn?  In the case of Sondra and her children where cost is a factor. Sondra should not be under any financial obligation to pay fees, even though the argument is that youth sport is a “priviledge.”

With the rise in parents spending more money on youth sports and coaching, rise in commercialization of youth sport has risen (Hyman 2011) .  This Makes it difficult for under priveladge  youth to participate in youth sports these days.

With the rising costs of youth sport participation there are other ways that sondra can determine whats important and get some ideas through research and educate herself. By finding out her options and education herself she may find outlets to getting her children the benefits she feels they deserve.

according to the article by y Karen Datko there are many options parents can discuss and go by when they are challenged by certain obstacles pertaining to finance.

  • Be honest with yourself. Has your child demonstrated remarkable ability in a particular sport that justifies the expense?
  • If not, pick a recreational league sport that doesn’t require fancy equipment — and that your child enjoys.
  • Seek balance. If your child’s sports are preventing her or him from engaging in other normal childhood and family activities, perhaps you’ve gone overboard. The same applies if you have no quality time with your others kids and your spouse.
  • Donate. If you can easily afford to pay the fees and other costs associated with your children’s sports, make a point of donating money to an organization that helps less-well-off kids participate.
  • If you’re not flush, look for scholarships. “True, some leagues — although they don’t openly advertise it — offer scholarships, but it’s just a small percentage,”
So even though Sondra had found herself in a horrible predicament not all is lost there are options she can take and think of, Not all Hope Is lost. The children can play.