Monday, April 17, 2017

How Paid Consultants Fool You on Economic Impact Reports

Ever wonder how easily teams can make small economic impact look like huge economic impact (typically, when they're lobbying for your tax dollars)?

I can explain it to you in 90 seconds. View the short video below:

https://www.facebook.com/10NewsWTSP/videos/1538086016225145/





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Sunday, April 16, 2017

Florida's Leading Economist on Sporting Events Is Not an Economist

The state of Florida spends nearly as much money every year on professional sports stadiums as it does maintaining the Sunshine State’s top tourist attraction, its beaches. However, my latest WTSP investigation found the author of so many economic impact reports that support public sports subsidies may not be the expert economist state leaders believe he is.

The resume of Dr. Mark Bonn, a professor at Florida State University’s Dedman School of Hospitality, boasts of dozens of reports compiled for municipalities all across Florida, including some statewide organizations. Bonn’s side company, Bonn Marketing Inc., recently received $23,000 from just one study, commissioned by the Toronto Blue Jays and city of Dunedin to show the economic impact of spring training.

But emails uncovered by WTSP suggest Bonn encouraged the gaming of numbers to help justify a large public stadium renovation project. And several established economists call Bonn’s work deeply-flawed, resembling marketing propaganda more than an economic analysis; which may be appropriate, since Bonn’s background is in marketing, not economics.

Fuzzy Math

Bonn’s economic impact estimates have become the go-to statistic for politicians who either don’t know better or don’t care. But it doesn’t take an expert economist to recognize his reports often make unfair assumptions to get to a rosy conclusion about his clients’ projects.

For instance, Bonn’s recent report that claimed the Blue Jays created $70.6 million in economic impact for Pinellas County each year failed to take into account the fact that many out-of-town visitors who came for baseball attended multiple games; Bonn’s report considered every ticket-holder for every game a unique visitor to the county. He also seemed to forget in his initial draft to take into account that many spring training ticket-holders were Pinellas County residents.

Bonn’s Blue Jays report also failed to take into account some basic economic principles, such as substitution (where one business, such as baseball, cannibalizes economy from other local businesses, such as movie theaters or restaurants, rather than create new economy) as well as “leakage” (where money spent locally, such as at Dunedin’s stadium, doesn’t stay locally because out-of-state businesses get much of the revenue).

And a public records obtained by 10Investigates revealed Bonn was encouraging his clients to use inflated numbers to make their case for taxpayer subsidies stronger.

Emails sent by the Blue Jays revealed apparent frustrations at time with their consultant, including a suggestion on Dec. 17, 2016 that Bonn use more realistic numbers in one of his calculations.

Bonn responded, “This is your call, but as your consultant, I do not recommend going down this path, as it generates only a negative outcome and provides a good argument to defeat your proposal.”

Emails also indicate that Bonn was concerned with preserving robust estimates. And he suggested removing the methodology from his report to reduce the number of questions county leaders might ask.

The investigation also found:
  • Beaches are barely funded better than pro sports stadiums in Florida, despite a state survey that suggested 26% of out-of-state visitors came to Florida for beaches, versus just 6% for sports.
  • Many local counties allocate far more bed tax dollars to sports venues than beaches, including Pinellas.
  • Dr. Bonn teaches wine tasting and marketing at FSU, but not economics.
  • When asked why economists take such issue with his work, Bonn said, "well, I have economics classes...it’s basically a fine line."
  • When asked how he could suggest using bigger numbers to get to a desired result, Bonn said "it’s natural, I’m a consultant."
  • When asked if being a consultant is different than being an economist, Bonn responded, "no; I consider myself an economics background."
For more, continue reading the story on WTSP.com.


RELATED:
2017 - Please Stop Acknowledging "Economic Impact Reports" 2016 - Yankees Pinch Pennies, Produce Laughable Economic Impact Report Without Having to Hire Economist
2015 - Teams Prove the Scary Repercussion of Not Publicly-Financing Stadiums...is They Have to Pay for it Themselves
2013 - You Can Make an Economic Impact Report Say Anything

   



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Wednesday, April 12, 2017

Rays' Franchise Value Soars Again; Still Lowest in MLB

Last year, the Rays' estimated value, according to Forbes, "only" grew by $25 million. Well, what a difference a year can make.

According to the newest Forbes MLB valuations, the Rays' franchise is now worth $825 million, a 27% increase since last year and nearly a 400% increase since Stu Sternberg bought the team in 2005.

Of course, the Rays are still the league's least-valuable franchise (A's are next at $880 million), thanks to the fact that everyone is getting really really rich from TV and digital deals.

ALSO: Rays have 99 problems, but gettin' rich ain't one

Forbes estimates the Rays pull in $205 million a year in overall revenues, with $32 million in operating income.

Basically, everyone's getting rich.  Especially the highest-valued teams (Yankees - $3.7B; Dodgers $2.8B; Red Sox - $2.7B).

So as I say every year, this is just one more piece of evidence that any "problem" in Tampa Bay is not the fans' problem, but simply an issue of the league not sharing enough of its profits across its smaller-market teams.





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Wednesday, April 5, 2017

St. Pete Makes Stadium Pitch to Rays

The City of St. Petersburg and the St. Petersburg Area Chamber of Commerce made its ‘Baseball Forever’ stadium campaign pitch today to the Rays; the 43-page plan was presented at Tropicana Field, behind closed doors...although the documents are public.

The best place for the breaking news was @StadiumShadow on Twitter.  Here are some highlights:





For further reading, the Tampa Bay Times write-up is here.  Or, additional Shadow of the Stadium references:






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Budweiser, Official Rays Sponsor, is Clueless Where the Rays Play

Roll of the eyes for this Budweiser goof:

Of course, the Rays don't play in Tampa.  Tropicana Field is in St. Petersburg, which was not lost on fans.  But Budweiser's response seems to indicate the slight was unintentional/ignorant:
Hey, at least Bud's sponsoring $5 Friday night stadium beers. The only catch: you have to drive to St. Pete to get them.





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Tuesday, April 4, 2017

Turns Out College Football Championship Didn't Bring $300 Million to Tampa

The City of Tampa may have a highlight reel to show off its successful 2017 College Football Playoff championship, but Hillsborough County doesn't seem to have the tax receipts to prove the event was an economic success for the region.

Initial data, just released from the Florida Department of Revenue, show no spike in taxes collected in Hillsborough County from sales in January 2017, when it hosted the national championship and a number of large events surrounding the game. The data will be reviewed and adjusted by the state next month.

While many factors play into a county's tax collections on any given month, Hillsborough saw just a 6% gain in tax receipts from the same month in 2016, on-par with the state's 6% growth from the same time period. Hillsborough's gain was also consistent with previous year's reports, where the county posted 4-6% gains most months compared to the same periods in 2015.

Pinellas and Pasco counties also posted similar tax numbers in January 2017 compared to their 2016 trends, each up 4% from 2016's reports. Polk County saw the bay area's best January 2017, reporting 12% better sales than from the previous January.

VIDEO: Why you should never believe an economic impact study

When Tampa landed playoff championship week more than three years ago, Hillsborough Commissioner Ken Hagan claimed the event would bring somewhere between 1,700 and 1,800 full-time jobs, as well as $250 million to $350 million in economic impact.

However, that kind of revenue would have generated an extra $17.5 million to $24.5 million in sales taxes, which there seems to be little evidence to support.

While it is difficult to determine all of the factors for taxable sales countywide, supporters of the national championship game point to large crowds gathering at Tampa-area hotels and establishments the week leading up to the game as proof the event is good for the economy. But economists are quick to point to tax data, which often refutes the robust claims of major events.

Rob Higgins, Executive Director of the Tampa Bay Sports Commission, told 10News the numbers from local hotels and Tampa International Airport were extraordinary. But overall, Hillsborough collected $127 million in taxes from January 2017 sales, compared to $120 million in January 2016.






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Sunday, April 2, 2017

All the Rays Opening Day Reading You Need

  1. FLORIDA'S BASEBALL FAILURES: Rays beatwriter Marc Topkin lands above-the-fold today with a look at why, entering their 20th season, the Rays have not been able to prove Tampa Bay is a viable baseball market...and why so many around MLB are disappointed in the Florida baseball experiment. (Yet Commissioner Rob Manfred still maintains he's "optimistic.")
  2. SHADOW OF THE STADIUM: Get caught up on everything you may have missed in the last week, from Stu Sternberg's non-news news to the nitty-gritty on new stadium revenues to how much you should really pay attention to the Tampa Bay Times' annual Rays frustratitorial.
  3. PAYING FOR A PARK: Joe Henderson strikes the perfect pitch in a column about why the Rays are stuck between a rock and a hard place moving forward on the Stadium Saga. Hint: it's the same reason this blog has lamented about for years...neither MLB nor the Rays want to foot the bill.
  4. UNCERTAINTY: Times columnist Dan Ruth muses about the lack of certainty in the Rays' future, especially when it comes to paying for a stadium.
  5. FLASHBACK: Here's a 2015 Shadow post worth re-reading about why there's never been as much urgency on the Stadium Saga as some would have you believe. And the sequel post on why "the end is near" fears are unnecessary.
  6. CARTOON: South Tampa artist Charles Greacen turns the Stadium Saga into a political cartoon.
  7. MONTREAL: MLB has reportedly told Montreal it can play Rays-Jays home games at Olympic Stadium in 2018, but that would require either the City of St. Pete or the Toronto Blue Jays to give up three home games, which is unlikely.  Meanwhile, Maury Brown reports Montreal isn't as close to landing a team as they'd like to think.
  8. BASEBALL: And of course, there's all that on-field stuff too. The Times has a nice special section this morning worth picking up.  Or, find the coverage online.





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