Few gains from spending public money on sports teams

The Boston Globe has an excellent article on the consensus among sports economists that spending public money on sports teams does little for taxpayers. But this belief, that sports teams helped boost local economies, has persuaded state and local governments to spend tens of billions of dollars on major league sports teams and stadiums. Vanderbilt University economist John Siegfried puts it like this:

What are people going to with their money if they don’t spend it on the Red Sox, flush it down the toilet? No, they’ll spend it on something else: books, maybe, or bowling, things that Boston would benefit just as much from.

University of Chicago economist Allen Sanderson puts it another way:

Cities would be better off if the mayor were to go up in a helicopter and dump out $100,000.

It seems odd, buy the article clarifies:

The jobs stadiums do create are mostly part time-baseball stadiums tend to be used only 81 times a year, football stadiums eight times a year (a few more if they host concerts and conventions)-and low wage: parking lot attendants, security guards, ticket-takers, and vendors.

Of course, a few people in a sports organization are handsomely compensated: the owners and players, who receive the bulk of a team’s earnings. This tends to do the local economy little good, however. Many owners and players don’t even live in their team’s home city (Vanderbilt’s Siegfried has found that only 29 percent of National Basketball Association players live near the city where they play), and even when they do, they tend, like most wealthy people, to save or invest most of their earnings rather than spread them around to local businesses.

And so the article concludes:

Gamely, a few economists have decided that if they can’t persuade fans, they’ll at least try to understand them, and have set out to quantify how much, exactly, having a sports team is worth to people. In a 2002 paper written for the Federal Reserve Bank of Philadelphia, for instance, economists Gerald Carlino and N. Edward Coulson found that people are willing to accept a 2 percent decrease in wages-and an 8 percent increase in rents-to have a National Football League team in their city.

Those gaps, if they’re correct, represent the market price of fandom, the little bit extra we’re willing to pay to have someone to root for.