In Orlando, there's great momentum to build an $85 million soccer stadium for a minor-league-but-hopefully-soon-major-league team. But as upwards of $55 million in public money is being discussed for the deal, Orange County commissioner Pete Clarke is suggesting the city secure a share of ownership in the team in exchange for the money.
So rather than just handing the money off to another entity, the city would become an actual investor and actually benefit from the real profit of a stadium generates (ticket sales, stadium revenues, etc).
Now, since Major League Soccer isn't a bunch of individual businesses, but a single business entity (the league owns the teams and the players' contracts), Clarke suggests instead the city guarantee itself a share of new stadium revenues.
Deadspin called it “the best idea for stadium financing I’ve ever heard.”
And Field of Schemes author Neil deMaus sent the following critique to the Orlando Sentinel:
That looks like a great idea. As I’ve always said, the problem with the current stadium business isn’t that the public is putting up money, it’s that the public is putting up money without getting anything back. If Orlando could get an actual share of the stadium revenues – and it’d have to be gross revenues, mind you, not net profits, since it’s too easy for clubs to cook the books with the latter – then this could actually be an investment, and not just a gift.Meanwhile, there are other thoughts coming out of Orlando.....alt weekly Orlando Weekly had some tough words for Bud Selig & MLB in its story titled "Stadiums. Don't. Work."
Here’s an idea: Bring (the Rays) to Orlando. Our local leaders have yet to meet a taxpayer-subsidized sports facility they didn’t love.Needless to say, the story continues to quote numerous economists who have studied stadiums' (lack of) effects...which will obviously still fall on the deaf ears of some of this blog's readers, who I'm sure are anxiously awaiting the opportunity to debunk the evidence with independent economic impact studies of their own...
But the economics literature is clear: Taxpayer-subsidized stadiums are losers. Full stop. Anyone who says differently is either lying or woefully misinformed.
The economic impact studies teams bandy about – Orlando City (soccer club), for instance, promises a $1.2 billion impact over the next 30 years – are hocus-pocus. They “overstate the contribution that professional sports make to an area’s community. … Specifically, because of sport- and stadium-related activities, other spending declines as people substitute spending on one for spending on the other.”
In the 37 metropolitan areas Coates and Humphreys studied, building a stadium had no discernable impact on the growth rate of real per capita income. Once you factor in the cost of building the stadium, per capita income actually decreases.