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Ice Hockey Success in the Sun Belt

2012 May 30
by Dennis Coates

A couple of weeks ago I was contacted by John Miller about a story he was writing on the Phoenix Coyotes. As readers of The Sports Economist are well aware, evidence that sports franchises and stadium and arena construction generate large impetus to economic growth and urban development exists only in the minds and reports of consultants to sport franchises and their rent-seeking employers. Subsidies for such activities is especially troubling when city and state budgets are in disarray with service reductions and layoffs of public employees from teachers to police and firefighters. Miller’s story, Taxpayers take the puck, describes how the Goldwater Institute in Arizona is a thorn in the paw of the NHL as the hockey league tries to get Arizona taxpayers to bail out the failed Phoenix franchise.

It would be nice if the NHL recognized that ice hockey in the sun belt is probably not likely to be a successful venture, at least not without massive public subsidies. Brad Humphreys and I presented a paper on hockey attendance at the 2011 Western Economic Association meetings in which we estimated the impact of game uncertainty on attendance; a revised version is forthcoming in the Journal of Sports Economics. The working paper version includes a table of the home team fixed effects which was dropped from the forthcoming JSE paper. After accounting for home and visiting team quality at the time of the game, the home team effects strongly suggest that hockey attendance in the south and southwest, Atlanta, Carolina, Nashville, Florida, Phoenix, Tampa, and southern California, is substantially lower on average than in most of the more northern locations. Of the ten smallest home city attendance impacts, the New Jersey Devils, New York Islanders, and Columbus Blue Jackets are the only ones not from the south. No southern team ranks in the top ten in largest home team effect on attendance.

It would also be nice if more state and local politicians resisted the urge to provide corporate welfare to sport franchises. It’s unusual for the opponents of public subsidies for professional sports to be as well funded and high profile as the Goldwater Institute. Maybe the combination of terrible public finances and well-regarded opponents will help the Arizona politicians to resist the rent-seekers.

2 Responses
  1. Krux permalink
    June 1, 2012

    You know where you lose your credibility? The funding of schools and teachers DOES NOT come from the citys or countys in Az. The money ANY AZ city spends has ZERO effect on ANY SCHOOL. Please do youe homework before writing a story that you want people to think you have a clue about. Schools are funded and supported by a seperate tax. Your comment was complete BS!

    Also…….read the judges interpritation of the AZ gift law. The Goldwater group has NO chance at using it right now. Gifts from cities ARE NOT illegal in AZ. Please educate your self before spewing garbage

  2. Dan permalink
    June 4, 2012

    “It would also be nice if more state and local politicians resisted the urge to provide corporate welfare to sport franchises.”

    Ha-ha-ha! That is really funny. We all know politicians are only good at spending other people’s money. It’s what they live for.

    In St. Louis the Rams want the city to spend around 400 million to upgrade the dome because their lease says it has to be in the top 25% of football stadiums or else the team can pack off for another city. So taxpayers, none of whom are as wealthy as ‘Stan the K’ and few of whom are as rich as most of the players, are supposed to pay more to keep the team in St. Louis.

    And you know who agreed to putting that clause into the lease? Politicians like Tom Eagleton and Freeman Bosley. It’s like they didn’t care what it would cost to keep the dome in the top 25% – it’s not their money. And besides, that 25% thing is way in the future. I can get people liking me today for getting a team here. It’s just like politicians upping Medicare benefits or Social Security benefits or pension increases for public employees. They know when the crap hits the fan they’ll be long gone and their successors will be vilified for being the meanies that took money away from people.

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