Thursday, May 15, 2008
LA sports study
Here are some choice quotes, with contrasting views:
--"This is one of the strongest sports markets in the country, and the study shows what kind of an impact it has on the local economy," said David Simon, president of the L.A. Sports Council.The article notes that Majestic Realty is owned by Ed Roski, developer of the Staples Center, who is backing the current $800m "plan it and the NFL will come" football stadium in LA. The LA Sports Council paid for the study.
--That $2 billion industry employs about 3,385 people in full-time jobs, according to the study. That's less than the 4,500 employed by the county's mining industry, according to Jack Kyser, the chief economist of the Los Angeles Economic Development Commission.
--"I always chuckle when people say that sports have no economic benefit," said [John] Semcken [vice president of Majestic Realty]. "Before Staples, that neighborhood was full of run-down day hotels, and prostitution was the only local industry ... today it is one of the entertainment capitals of the country."
Draw your own conclusions, but for me, this just makes Modesti's spoof that much funnier.
Labels: economic impact
Wednesday, May 14, 2008
Economic impact: the missing items
$743,000 to auto-body shops for repairs made necessary by fender-benders at exits from Dodger Stadium parking lot.
$249 million to tattoo parlors and hair stylists from David Beckham.
$24.9 million to tattoo removers from parents whose kids emulate David Beckham.
$76,000 in co-payments to HMO urgent-care facilities from patients requiring extractions of four-inch splinters picked up from Coliseum seats.
$6 million for extra fuel for traffic helicopters reporting on congestion stemming from major events at the Rose Bowl.
$954,000 to lawyers to defend city and county against Al Davis lawsuits.
$160,000 from USC football office to print "alternate" promotional material omitting name of Reggie Bush.
$27,000 to cardiologists for treatment of palpitations brought on by watching Angels bullpen lately.
$29.95 to commission studies showing that sports contribute a lot to the economy.
Labels: economic impact, humor
Sport as a window on society
.I will root for Rangers, who could complete a remarkable season by winning three trophies in the next eleven days, with this year's CIS Cup already in the bag. But Rangers are emblematic of sectarian violence, as discussed by Foer, and I won't be singing along with chants against the pope tonight.
Zenit are favorites to win their first European trophy. A Zenit victory would symbolize the rise of the Russian economy, and the rise of Russian football as well. Zenit, as well as Russian football, are emerging from relative obscurity. How far can they - and the economy itself - go? There are some eye-opening facts about Zenit in this story from the BBC, including the fact that Zenit are owned by Gazprom, now the fourth largest company in the world. Gazprom has been pouring money into Zenit - making Zenit the Russian version of Chelsea, who are also lavishly funded by Russian oil wealth.
But the most amazing, and disturbing thing in the article is the following discussion about race. Zenit is an all-white team, by design according to their coach Dick Advocaat:
Unfortunately the club also have a hard core of racists among their supporters. Zenit are the only club in Russia never to have signed a black player, and their fans were accused of racist taunts during the Uefa Cup win over Marseille earlier this season.Customer discrimination is a concept that dates back to Gary Becker. The fans' behavior in this case is awful, but not without precedent in Europe (hence the kick racism out of football campaign). What is quite remarkable though, is the explicit policy statement of customer discrimination by Zenit's manager. I've not come across anything quite like it.
Marseille defender Ronald Zubar said: "They threw a banana at us and made monkey sounds."
Manager Dick Advocaat has even admitted that the fans' attitude has affected his transfer policy.
"The problem is our fans," he says. "I would be happy to sign anyone but the fans don't like black players.
"I don't understand how they could pay so much attention to skin colour. For me, there's no difference between white, black or red.
"But the fans are the most important thing Zenit have. That's why, in future, I have to ask them outright how they'll react if we sign a dark-skinned player.
"If the fans don't agree with me, I won't do it. I won't buy a player who won't be accepted by the fans."
Ultimately, virulent discrimination is a limiting factor for any football club, indeed any economy. Perhaps Dick Advocaat should be channeling Bear Bryant, who learned that lesson long ago. Bryant integrated the Alabama football team after getting whipped on the field by black players from Southern Cal. Although some argue that he was late to the party, better late than never.
Labels: discrimination, sports economics
A sober assessment from the Swiss
Hundreds of thousands of soccer fans will spend millions of francs on beer, bratwurst and beds at Euro 2008 next month.A fraction of the half million rooms might represent displaced visitors. But on net, if you own a hotel, an event like Euro 2008 should provide a significant revenue boost. Profits too, provided that the fans don't tear up the place.
The world's third-largest sports event will be no more than a drop in the ocean for the Swiss economy, however, and will not save the Alpine nation from following the rest of the world into slowdown.
"The economic effect is so small, it will be hard to detect in the statistics," said Urs Mueller, director of Switzerland's BAK Basel economics research institute.
Up to 1.4 million foreigner visitors will add business for hotels and restaurants and for retailers selling merchandise and food, and may create 7,500 jobs, though most of them will be temporary.
That could create an additional gross value added of up to 860 million Swiss francs ($813.6 million), a Swiss government study showed, making up less than 0.2 percent of the Swiss economy which has a size of some $420 billion.
..."The World Cup [Germany, 2006] has put millions in the coffers of FIFA and the German Football Association DFB but the economic impact of the sport event was very limited," concluded the German DIW research institute in a study last year.
Germany hosted four times more matches than Switzerland will, with 32 teams participating in the World Cup comparing to the 16 at Euro 2008.
Some sectors might get a boost from the world's third-biggest sports event after the World Cup and the Olympics.
Swiss hotels expect more than half a million additional overnight stays, coming on top of last year's record 36.4 million stays.
Labels: economic impact, mega-events
Tuesday, May 13, 2008
Arizona State Eliminates Three Sports
Labels: college sports, NCAA, Title IX
Monday, May 12, 2008
Some data on Glendale's Super Bowl
Super Bowl wasn't a windfallWorth what to whom? There is no way in hell that the citizens of Glendale would view $27 million of broadcast spending as an investment with positive returns.
Glendale spent more on game than it made
Carrie Watters
The Arizona Republic
May. 12, 2008 12:00 AM
Glendale did not recoup what it spent to host Super Bowl XLII, according to a new study that showed out-of-towners here for the game added an estimated $1.2 million to the city's tax coffers.
The city laid out $3.4 million preparing for and hosting the Feb. 3 game.
Bottom line: The city spent $2.2 million more than its estimated take in connection with the game.
That deficit could be lessened by NFL spending or local visitors' spending, which were not part of the study by Scottsdale-based Elliott D. Pollack & Company.
City leaders have long said they did not anticipate that the city would immediately recoup its expenditures.
"You can look at it from getting the actual dollar back," Councilman David Goulet said. "But I think there is a bigger picture to look at than just the pure law of numbers."
He foresees a return on the investment over time as the game bolstered the city's image as a destination.
In two weeks leading up to the game, the city was mentioned in more than 5,000 broadcast stories, a publicity value that Cision, a media-monitoring company, pegs at nearly $27 million.
There's much more in the story, including economic impact projections which might, if true, be worth cheering about. But the comment section suggests there are plenty of skeptical readers.
Thanks to Brent Stoddard for the link.
Labels: economic impact, stadium subsidies
Sunday, May 11, 2008
Gene Doping - The New Frontier of Doping
This morning's Kansas City Star has an interesting piece on the new frontier of doping: gene doping. The whole article is worth a read, but here are the opening paragraphs.
Scientists have seen the future of sport. It involves mice that can lift three times the average, humans who can run 90-minute marathons, and ligament tears that can be fixed by injection.
It is genetic engineering, therapy and doping, and it is the arrival of the bionic athlete. At the extreme, this is either the advancement or end of the human race. At the minimum, it is the unavoidable change to the way our sports — baseball, football, the Olympics, you name it — are played.
One thing that the article mentions is that the genetic doping is a way for the human body to exceed its natural athletic capacity.
If confined to natural training, elite athletes are said to be now using 99 percent of their natural physical capacity, compared to just 75 percent in 1896, the year of the first modern Olympics. Given those parameters, academics say there would be no new world records after the year 2060.
But that’s in a world with no genetic engineering. Scientists think a series of gene-doping breakthroughs could boost endurance by up to 10 percent and, according to one study, allow a runner to complete a marathon in 90 minutes — more than a half-hour faster than the current world record.
In an absolute sense, doping should generate more interest from fans as athletes get bigger, stronger, and faster. But I wonder if there is diminishing marginal utility on the point of view of fans. "Wow, Brady Jones has hit his 500th home run that traveled more than 600 feet. Big deal!" Does the display of athletic talent get so extreme that fans are no longer all that excited (all else equal)?
Another interesting issue is what happens to the supply of athletic talent in team sports. Assuming a safe type of genetic doping is found that increases the human capacity to run, jump, etc., this should increase the supply of talent, leading to lower salaries "per unit of talent." And what of competitive balance? If the number of teams stays more or less constant, competition should become almost perfectly balanced, non?
Labels: doping
Wednesday, May 07, 2008
The NFL in Toronto
When readings Skip's post on the CFL this afternoon, I noticed this article listed as being one of the most popular over at the Toronto Globe and Mail. It describes the pricing of tickets to Buffalo Bills games being played in Toronto in the next few years:
Tickets for the Buffalo Bills' eight-game series in Toronto will average $183 per seat — more than triple the cost for the team's home games at Ralph Wilson Stadium this season.
The ticket prices, ranging from $55 to $295, were released Wednesday by the Toronto-based group hosting the series, which will have the Bills play five annual regular-season and three preseason games at the 54,000-seat Rogers Centre through 2012.
The prices are in Canadian money, which is currently near par with the U.S. dollar, and do not include a large bulk of VIP sideline and hospitality suite seats, which will raise the average even higher.
Despite the hefty price, organizers anticipate the games selling out after 180,000 ticket requests were registered on a Web site last month. About 30,000 tickets per game will be distributed in two weeks by lottery to Internet registrants as well as a limited number of Bills and CFL Toronto Argonauts season-ticket holders.
Compare those prices to the prices of Toronto Argonauts games. Single game tickets are not for sale yet for the 2008 season, but choice seats in their 3-game package go for $189 total and season tickets range from $300-$700 for a 9 game home season plus a few other other goodies.
Which brings me to one of Skip's thoughts about why government subsidies have been hard to come by for CFL teams:
It is possible that the CFL makes so little money and has such a small impact that the relocation threat is not operative. There is in fact relatively little demand for football stadiums, public or privately financed.
It's anecdotal, I realize, but there seems to be high demand for NFL football in Toronto. That may simply be due to the novelty of NFL football being played in Toronto. Or perhaps it's due to the value of the NFL brand name, a value the CFL may not have in it's country.
Labels: cfl, demand for football, NFL Buffalo Bills
Why has Canada not subsidized the CFL?
Five CFL teams – the Montreal Alouettes, Winnipeg Blue Bombers, Hamilton Tiger-Cats, Saskatchewan Roughriders and the ownership of a conditional Ottawa franchise – are aggressively pushing plans to build new stadiums or drastically alter and refurbish old ones.It's the overdue question that intrigues me. The article notes that no stadium has been built for football since the 1960s, although some teams play in venues built for another purpose. Some are dilapidated.
Factor in the anticipated makeover of Vancouver's B.C. Place Stadium, which could add a retractable roof to the facility, and a potential redesign of Toronto's BMO Field to accommodate the Argonauts, and the CFL could be looking at well over a half-billion dollars invested in stadium infrastructure during the next five years.
Many would suggest it's long overdue.
Why the lack of public investment? The CFL, like other prominent North American leagues, is a closed set of teams that controls entry. The incentive to obtain a stadium subsidy that derives from the league structure and the relocation threat thus exists. The view of Canadian government as fairly liberal with the checkbook would imply public-private "cooperation" on stadium ventures.
The article suggests at one point that "local and provincial governments are wary about investing in pro sports facilities of any kind," but that doesn't wash with me. Brad knows all about the current subsidy issue over a hockey arena in Alberta, for instance ;)
I can see two possibilities.
It is possible that the CFL makes so little money and has such a small impact that the relocation threat is not operative. There is in fact relatively little demand for football stadiums, public or privately financed.
Second, the political distribution of power differs in Canada from the U.S. This renders the execution of a relocation threat pointless, since (by assumption) there is not a significant source of local public revenue. [bleg: Anyone know the facts?]
I lean towards the first. But the second is testable: hockey arenas should have a greater fraction of public funding south of the U.S. border, despite the fact that hockey is Canada's national sport.
Labels: cfl, nhl, stadium subsidies
Tuesday, May 06, 2008
NCAA Football Politics
Dan Wetzel of Yahoo! writes in his consideration of the failure semi-final/final proposal by the SEC Commissioner in Too Good to Go
The interests of the Pac-10 and Big Ten are transparent enough. Wetzel exposes the "lengthening the season concerns" and other such nonsense for just that in his piece. The behavior of the Big East and Big 12 is the real question. Are they just risk averse -- not knowing very well how they will fare in such a system and therefore reluctant? Concerns about the impact on the regular season seem to be at the core:In the end, according to interviews with people in the room, the decision to proceed or not probably came down to the Big East and Big 12.
The Big Ten and Pac-10, thanks to an economically advantageous relationship with the Rose Bowl until at least 2014, were going to oppose just about anything put on the table. The smaller conferences and Notre Dame were likely to support whatever the majority did as long as their access and revenue weren’t cut. The ACC was in favor of the SEC’s proposal.
That left two swing votes, the Big East and Big 12, who had they pushed for further discussion could have weakened the Big Ten and Pac-10’s silly obstruction talk – “they’ll have to pry a playoff system out of my cold dead hands,” the Ohio State president barked last year.
Best I can tell, after years of discussions with the people in power by me and my colleague Josh Peter, is that while there isn’t a single reason, the oft-cited “protection of the regular season” is a critical one.Increasing the value of some games without diminishing the value of others, is, indeed, tricky business. The current BCS system makes a lot of regular season games count. The downside is that it makes only one post-season game count. In addition, it can make winning a conference championship meaningless, even for a highly regarded conference because of too many losses for the champion. The old polling system to determine a national champion placed weights on a combination of regular season and bowl game results. A "plus-one" system as proposed might diminish the regular season's value more than a "6-plus-2" playoff involving six conferences winners (ACC, Big 12, Big East, Big Ten, Pac 10, SEC) and two at-large teams. Such a system would value regular season games by putting a premium on winning one's conference, while also putting attention on the post season.
Labels: NCAA; college sports; football
Monday, May 05, 2008
Competitive Balance in European Soccer
While the annual races for the championship are usually close, at times coming down to the the last minutes of the last game of the season, interseason competitive balance is notoriously absent in European Leagues using promotion and relegation systems.
Longtime American soccer columnist Paul Gardner sums up his thoughts about promotion and relegation thusly:
The purists keep telling me that soccer will never make it here until we adoptUs economists often have a soft spot for promotion and relegation, but Gardner makes some interesting observations about the costs in competitive balance.
promotion and relegation. I think they're dead wrong. I think it's much more
likely that the rest of the world, this damned, abominably commercial world,
will be forced to recognize the merits of the American franchise system.
Friday, May 02, 2008
Self-congratulations Part Deux
Thursday, May 01, 2008
Emerging scandals?
As an aside, I think that doping and horses provides a good example of the social costs of doping in general. The Nash equilibrium is to dope, and it has been going on for decades. But doped, muscle-bound thoroughbreds are more likely to suffer a catastrophic injury than horses that run clean. (Granted, I think the links here are much stronger than with humans.) Drape has a good post on this issue as well, "The Last Winstrol Derby?", which discusses the possibility that American racing will ban & test for steroids in the near future. Winstrol has been used on horses long before it was injected - allegedly - into Roger Clemens' butt.
And now to the land of scandals, European soccer. This time we go off the beaten path, to Romania, and the run-in for the league championship. The story has everything: ethnic tension between the two protagonists, allegations of payments to referees, payments to opposing teams, and mafia-like sniping between the clubs.
Labels: horse racing, scandals, soccer
