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Cobb traffic is no picnic. Yet we can't keep dumping the entire burden of big league sports on the city of Atlanta. A small jurisdiction with only 425,000 residents (a quarter of whom live below the poverty line) simply cannot handle the entertainment needs of a region more than ten times its size.
In a way Cobb is the victim of its own success. Its extraordinary growth and quality of life have made it a mecca for businesses and residents alike.
And let's put the Braves in context. In the past year or so, the county has authorized many bond issues -- $25 million for Novelis, $53 million for UCB, $110 million for Kennesaw State, $103 million for the new office tower and residential at Riverview, $24 million for Home Depot, $25 million for Presbyterian Village, and on and on. And nobody complained about any of these.
In that light, snagging a marquee operation like the Braves makes sense.
Wow. That's actually one of the best defenses of the new stadium that I've seen.
In fairness, as several have mentioned, the devil is in the details. The fact that the vote happened so quickly has raised a lot of concerns of potential surprises that may begin to surface, such as the existence of a major gas pipeline.
I don't object to any of the offered studies on public finance for sports stadiums. But, you have to be able read and understand the studies. I could give you any number of studies showing that most new restaurants lose money and go out of business within 3-5 years. Does that mean no one should be in the restaurant business? No. It does suggest that one ought to know as much as possible about why some restaurants fail and some succeed before going into the restaurant business.
In terms of sports stadiums, when you dig into these studies, you find that the big problem for public finance is spending substitution effects. The typical stadium deal is like selling a bucket to a thirsty man. "If you want water, you need to buy my bucket." The man who is both thirsty and perceptive will observe that the actual water is coming outta the hose lying next to the bucket.
So you own the Atlanta Braves and you tell me, "If you build me a new stadium, fans are going to spend $100 million. Otherwise, I'm moving to Boise." Problem is, most of those dollars are coming from local consumers. If the Braves move to Boise, those consumers don't follow them; they spend more money on the Falcons, Hawks, local restaurants, clubs, theaters, etc. The stadium isn't creating the economic activity, it's receiving it. The stadium is a bucket, not a hose. Note that if the sports franchise were bringing enough money in from outside the area -- dollars that otherwise would not have been spent in the local economy -- the calculus might be different. For the most part, though, pro sports teams just don't drive that much tourism.
Okay, so will the new stadium drive economic growth in the Atlanta metro? No, not appreciably. It will capture some dollars that otherwise would have been spent elsewhere in the local area.
However, the new Braves stadium will redistribute economic activity within the Atlanta metro. Dollars that would have otherwise been spent in the city of Atlanta and Fulton County will be spent in the CID and Cobb County. Those dollars will drive sales tax revenues in Cobb County instead of Fulton County. Private investment will flow into Cumberland that would otherwise have gone elsewhere. That investment will increase property values and thereby increase property tax revenues.
The new Braves stadium won't appreciably increase the size of the Atlanta pie. It will give Cobb a bigger piece. Incidentally, this isn't news to sports franchises or to local governments. These days, it's often more effective for franchises to let municipalities and counties within a metro compete for their business than it is to threaten relocation to another city. There was a deal on the table to build a new stadium for the Minnesota Vikings in Anoka County. That didn't happen, and instead the team got a stadium deal in the city.
And that's why your studies aren't inconsistent with the stadium deal being a winner for Cobb County.
Just coming back to this after being out of town. So your suggestion is that yes, building new stadiums to attract sports teams from other towns do harm the city. But if they are relocating to another area in the metro provides a net benefit to that area? Do you have any evidence of this? Because I think a out-of-state team relocation is more beneficial (well, less harmful) than one relocating from in-town.
Just coming back to this after being out of town. So your suggestion is that yes, building new stadiums to attract sports teams from other towns do harm the city. But if they are relocating to another area in the metro provides a net benefit to that area? Do you have any evidence of this?
Yes. My evidence is the studies you referred to. There was one summary of an actual study you linked to (as opposed to the Economist screed, etc.). Go look at it. It's based on spending substitution effects. People in Washington DC are going to spend money on entertainment. If you leave the MLB team in Montreal, Washingtonians will spend their money on other things.
When the Braves relocate to Cobb County, the dollars that were spent at Turner Field will move with them. That money will not be spent in Fulton County; it will be spent in Cobb County. The net impact for the Atlanta metro is negligible -- money has simply been redirected from one county to another. But it's a win for Cobb County and a loss for Fulton County and the City of Atlanta.
Whether or not it's a $300 million win over thirty years remains to be seen. I think it's very likely to net out, just based on direct spending on the Braves (including retail/lodging) and the $400 private development that comes with it. It's not a sure thing. There is risk. But I think it's likely to be a solid investment.
Quote:
Because I think a out-of-state team relocation is more beneficial (well, less harmful) than one relocating from in-town.
Your studies don't agree. The greater the distance of the move, the more spending substitution effects kick in, the less impact there will be.
Yes. My evidence is the studies you referred to. There was one summary of an actual study you linked to (as opposed to the Economist screed, etc.). Go look at it. It's based on spending substitution effects. People in Washington DC are going to spend money on entertainment. If you leave the MLB team in Montreal, Washingtonians will spend their money on other things.
You are going to have to link me directly to it I am not seeing anything showing strong links to distance based substitution.
Here is a link to the actual paper referenced in the first article if that is what you are talking about:
Economists reach the nearly unanimous conclusion that “tangible” economic benefits generated by professional sports facilities and franchises are very small; clearly far smaller than stadium advocates suggest
and smaller than the size of the subsidies.
"It is likely that the District of Columbia residents who purchase food, beverages, and clothing while attending games would have chosen to eat and purchase clothes in the district – and pay taxes on those purchases – in the absence of the stadium and franchise. In other words, revenues generated inside the stadium may not be new revenues, even if they are dedicated specifically to paying for the new stadium."
“As sport- and stadium-related activities increase, other spending declines because people substitute spending on sports for other spending,” Humphreys said. “If the stadium simply displaces dollar-for-dollar spending that would have occurred otherwise, there are no net benefits generated.”
"It is likely that the District of Columbia residents who purchase food, beverages, and clothing while attending games would have chosen to eat and purchase clothes in the district – and pay taxes on those purchases – in the absence of the stadium and franchise. In other words, revenues generated inside the stadium may not be new revenues, even if they are dedicated specifically to paying for the new stadium."
“As sport- and stadium-related activities increase, other spending declines because people substitute spending on sports for other spending,” Humphreys said. “If the stadium simply displaces dollar-for-dollar spending that would have occurred otherwise, there are no net benefits generated.”
This says nothing about it being distance based or looking at what happens when a team relocates to the suburbs. You have no source backing your claim. The easier conclusion is: Those in the city will now simply choose to spend their entertainment dollars elsewhere in the city from the Braves. While some in Cobb that would have spent the money in Cobb anyways will now spend it at the Braves.
In reality: Cobb is paying for 100% of the subsidy to the Braves which they are almost certain to not come close to recovering (based on these sources). While the benefits are spread across the region.
This says nothing about it being distance based or looking at what happens when a team relocates to the suburbs. You have no source backing your claim.
It's inherent in the concept of substitution effects. If you want substitution effects, you need two things:
1.) available substitute goods
2.) a reason or incentive to switch
In either scenario, you get (1): there are plenty of options for spending on entertainment in the Atlanta metro. If the Braves move to Boise, you get (2). From an economics perspective, the Braves move to Boise (dramatically) increases the cost of the product. Now I'd much rather go to two Falcons games, a Hawks game, and a show at the Fox than travel to Boise for a Braves game on the same entertainment budget. Local spending that was captured by the Braves now goes to other local entertainment options.
If the Braves move to Cobb County, you get no substitution effects. The cost of the product stays the same or actually decreases for the majority of Atlanta-area customers. Those local dollars that were spent on the Braves will still be spent on the Braves -- they're simply spent in Cumberland/Cobb instead of in Atlanta/Fulton.
TL;DR: The marginal rate of substitution increases with distance because cost (for the local consumer) increases with distance.
It's inherent in the concept of substitution effects. If you want substitution effects, you need two things:
1.) available substitute goods
2.) a reason or incentive to switch
In either scenario, you get (1): there are plenty of options for spending on entertainment in the Atlanta metro. If the Braves move to Boise, you get (2). From an economics perspective, the Braves move to Boise (dramatically) increases the cost of the product. Now I'd much rather go to two Falcons games, a Hawks game, and a show at the Fox than travel to Boise for a Braves game on the same entertainment budget. Local spending that was captured by the Braves now goes to other local entertainment options.
If the Braves move to Cobb County, you get no substitution effects. The cost of the product stays the same or actually decreases for the majority of Atlanta-area customers. Those local dollars that were spent on the Braves will still be spent on the Braves -- they're simply spent in Cumberland/Cobb instead of in Atlanta/Fulton.
TL;DR: The marginal rate of substitution increases with distance because cost (for the local consumer) increases with distance.
I disagree. I think the easier conclusion is: "Those in the city will now simply choose to spend their entertainment dollars elsewhere in the city from the Braves. While some in Cobb that would have spent the money in Cobb anyways will now spend it at the Braves." You have not provided evidence otherwise.
But regardless, economists are nearly unanimous in concluding that public subsidies for private sports teams are bad policy and do not bring anywhere near the proposed benefits. Cobb is now taking on 100% of those subsidies for the Braves while benefits are felt across the entire region.
I disagree. I think the easier conclusion is: "Those in the city will now simply choose to spend their entertainment dollars elsewhere in the city from the Braves. While some in Cobb that would have spent the money in Cobb anyways will now spend it at the Braves." You have not provided evidence otherwise.
So you think overall spending on the Braves will decline when they move into a new stadium closer to the majority of their customers. Okay. I think that's absurd. I can't imagine that you have anything on which to base this prediction beyond wishful thinking. If you do, I'd love to hear it.
As for "evidence," again, the relationship between costs and substitution effects is inherent to the concept as it's used in economics. It doesn't require a study -- it's definitional.
Here:
Substitution Effect:
The idea that as prices rise (or incomes decrease) consumers will replace more expensive items with less costly alternatives.
But regardless, economists are nearly unanimous in concluding that public subsidies for private sports teams are bad policy and do not bring anywhere near the proposed benefits. Cobb is now taking on 100% of those subsidies for the Braves while benefits are felt across the entire region.
Not sure why we need to go in circles. The studies you've offered are largely based on substitution effects. The Braves move to Cobb County will not induce substitution effects. Spending on the Braves in 2017 will equal or exceed spending on the Braves in 2013. That spending will be in Cobb County, instead of Fulton County, because the Braves will be in Cobb County.
I never said that overall spending on the Braves will decline (Though I could see that happening). However, I do think that for those that live in the City of Atlanta their spending on the Braves will decline noticeably because they will substitute Braves with another entertainment option since the Brave are now farther away. No?
But even if they don't, isn't Cobb on the losing end of this by paying the subsidies?
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