NCPA - National Center for Policy Analysis

More Evidence Sports Don't Impact Local Economies

March 28, 2001

Pity the poor professional sports hero. He's much less important to his community than he thinks.

First, studies demonstrated that stadiums and professional sports teams have little, if any, positive economic impact on their host city. Then researchers concluded that intangibles such as civic pride aren't enough to justify public subsidies.

Now an article in the Southern Economic Journal finds that local economies don't suffer when their hometown teams stop playing because of a strike or lockout.

University of Maryland researchers Dennis C. Coates and Brad R. Humphreys looked at 37 cities that had a pro baseball, football or basketball team at any time between 1969 and 1999. They wanted to see if a city's per capita income was at all harmed by a work stoppage in baseball or football -- or by the loss of a basketball franchise.

  • They found that strikes or lockouts in pro baseball or football had no measurable impact on an area's per capita income.
  • The departure of a pro basketball franchise didn't matter either.
  • They concluded that pro sports make no sense as a cornerstone for regional economic development.
  • Communities that spend dollars to lure or keep teams are wasting taxpayer money.

Yet despite such clear evidence, voters in Houston and Phoenix recently passed referendums to subsidize new stadiums.

Source: Charles, J. Whalen, "Economic Trends: Football Strikes? Who Cares?" Business Week, March 26, 2001.

 

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