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Opening Arguments

Lies, damn lies and statistics

The Pacers have been trying to shake down Indianapolis because they don't want to keep paying the $15 million a year in operating costs for Conseco Fieldhouse. Under consideration -- "We might move if you don't agree!" -- is for the Capital Improvement Board to take over the costs and still let the Pacers play there. Sweet deal. The latest tool to be trotted out is that old standby, the economic impact statement:

A new study has concluded that Indianapolis businesses would lose $55 million if the Indiana Pacers left town.

Hunden Strategic Partners conducted the research for the Marion County Capital Improvement Board, which shared the findings Monday.

That's pretty much a shameless lie. Somebody should read "Sports, Jobs and Taxes: The Economic Impact of Sports Teams and Stadiums," a book from the Brookings Institution Press in 1997:

This edited volume, derived from an October 1996 conference, presents convincing evidence that building new stadiums to attract or retain professional sports teams often produces much smaller economic benefits than commonly claimed.

[. . .]

The reasons for the minor economic impact of sports stadiums and teams are fairly straightforward. A sports team's revenues are usually modest compared to a metropolitan economy. Most of these revenues would be revenues for other entertainment or consumption providers in the local economy if the sports stadium did not exist and the team left. The main direct, tangible economic boost that results from building a stadium, and keeping a sports team, is the new dollars brought into the metropolitan economy by the additional fans attracted. Empirical studies suggest that the amount spent by these outside fans due to the stadium or team is modest, as outside fans are just a portion of the attendance and most outside fans would have visited the city for other purposes even without the sports team. 

There's even a name for the phenomenon -- the substitution effect. More recently, in 2004 a couple of professors from the University of Illinois at Urbana-Champaign did both new research and analyses of previous studies from 37 major metropolitan areas with major-league teams and concluded that professional sports "generate little, if any, positive effect on a city's economy."


tim zank
Tue, 05/11/2010 - 8:25am

Raise you ticket prices or move. I think we'll survive.

Bob G.
Tue, 05/11/2010 - 9:42am

Yeah, Tim...This is exactly what happens when a SPORT stop being a "sport"...

But WE already knew that, right?