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Don’t Forget the Leakages

2015 April 2
by Phil Miller

I think it’s well-known among our readers that the staff members of TSE aren’t big fans of “economic impact” studies… the a-priori kind, such as the one discussed in this LA Times article.

As  plans for an NFL stadium in Carson move toward a vote this spring, supporters released a study Wednesday night detailing how the project could benefit the South Bay city.

Two NFL teams playing in a new stadium could generate more than half a billion dollars in spending, enough to support nearly 9,000 full- and part-time jobs once construction is completed, according to a study paid for by the San Diego Chargers and Oakland Raiders .

Yesterday a book rep asked me why big-time sports aren’t boons to local economies.  Today, a colleague asked me the same thing.  My answer was basically as follows:

These sort of studies are routinely panned by many independent economists, who note most money spent at football games is local spending redirected from other forms of entertainment, be it a baseball game or a night at the movies.

Victor Matheson makes a guest appearance.

“An NFL franchise has very, very little net economic impact on L.A.’s economy,” said Victor Matheson, an economist who studies sports at College of the Holy Cross in Worcester, Mass.

Another thing I’d add is that my guess is that very few of the football players, coaches, training staff, etc. would live in Carson, Ca. meaning their incomes would “leave” the Carson area.  So while there may be quite an injection of spending in Carson from having one or two football teams located there, there will also be quite a leakage as well.

4 Responses
  1. Glenn permalink
    April 4, 2015

    I didn’t need to read any further after this: “according to a study paid for by the San Diego Chargers and Oakland Raiders”

  2. Duane Rockerbie permalink
    April 4, 2015

    Can we also conclude that if the Raiders leave Oakland and the Chargers leave San Diego, there will be no negative economic impact? I have not seen a study that measures this for teams that leave cities, but I am sure someone has.

  3. Phil Lynch permalink
    April 7, 2015

    I’d like to echo Duane’s point. LA lost the Raiders and Rams in pretty short order in the mid-90s. Did it trigger an economic collapse?

    If the studies of the economic benefits of pro football coming to town hold water, their reverse should also hold true. What measurable level of economic pain did LA suffer as a result of the Raiders and Rams packing their bags?

    Such a study would also benefit from being written in the past tense, detailing what actually happened when LA lost the Raiders and Rams, as opposed to the castles in the air that can be built to support something that hasn’t yet happened.

  4. April 13, 2015

    economic impact just what we can say

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