Diamondbacks Bullpen

[David B]

Interesting, yet disputed, study...

(edited)

In the three years after moving into Miller Park in 2001, the Milwaukee Brewers made a yearly economic impact of $327.3 million on the five-county area that was taxed to build the ballpark, according to a study by the Institute for Survey and Policy Research at the University of Wisconsin-Milwaukee.
Advertisement

The director of the UWM Center for Economic Development offered a different view, saying the study was a "standard nonsensical sports study that inflates the impact of spending on baseball."

The study, which local public relations firm Mueller Communications Inc. commissioned on behalf of Major League Baseball and the Brewers, was completed in January 2005. It is to be made public for the first time Monday, when baseball Commissioner Bud Selig addresses a meeting of the Greater Milwaukee Committee at Miller Park.

Carl Mueller, president of Mueller Communications, said the main reason for finally releasing the study was to let committee members who backed the building of Miller Park see the financial impact.

During the raging debate over the 0.1% sales tax to be paid by the counties of Milwaukee, Ozaukee, Racine, Washington and Waukesha to build Miller Park, the Brewers often cited economic benefits to the area from their playing in a state-of-the-art stadium. Critics, however, questioned the overall economic impact.

The study concludes that the Brewers and Miller Park have a substantial economic impact on the area. "The Milwaukee Brewers have a very significant economic impact, part of which is quantifiable and has been measured in this study, and another part which is not quantifiable but is also of significant economic importance," the report states.

The authors of the study were Leon Schur, professor emeritus of economics at UWM, and Swarnjit Arora, associate professor of economics at UWM and academic program director of the institute.

But Marc Levine, director of the Center for Economic Development, said academic studies on the impact of stadiums around the country have concluded that "spending on sports stadiums and teams is not a positive economic investment for communities."

Specifically, Levine cited the work of Dennis Coates, a sports economist with the University of Maryland at Baltimore County. Coates reviewed decades of spending on sports stadiums around the country and concluded that they were associated with declining per-capita income.

"Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city's economy," Coates and Brad Humphreys wrote in a report issued in 2004.

Moreover, Levine said, the number of jobs in Milwaukee since Miller Park opened has declined by 19,000.

According to the institute study, the direct economic effects of the ballpark and the Brewers included the total yearly spending of those attending games at Miller Park from outside the five-county area, as well as the resulting local employment and earnings. The study says that figure is $292.5 million.

The indirect effects included the total operating expenses of the Brewers, including administrative expenses, as well as the earnings of club employees. That figure is estimated at $34.8 million yearly.

Other effects included the sales tax and income tax revenue that the Brewers generate yearly.

[EvilJuan]

"Figures lie, and liars figure." I've done enough "studies" during my experience in working with legislatures in Illinois and Arizona to know that, unless the people who have requested the study have not already made up their minds about what they want the outcome to look like -- an extremely rare circumstance -- the probability of the resulting study being anything remotely unbiased is nil. (I always included such a study in my initial report; which was undoubtedly a factor in their decision that my services were no longer required... "Here's the real impact, Senator..." "No, bury that -- I don't want people to see that...")

There's no doubt in my mind that the presence of a team, and the stadium or arena in which they play their games, brings more revenues into the local economy. As the report indicated, local sales tax revenues are increased; and the local economy overall benefits from additional spending. If the team has its administrative offices at or near the stadium, there is increased local spending, and tax revenues, as well.

When you buy a ticket, the price includes a tax. When you purchase food, drink, or souvenirs, the price includes a tax. The price to park your car includes a tax -- and even if it doesn't, the property is taxed.

I like tmar's. Is it likely that I'm going to go there if I'm not already at a sporting event in the area? No. (An exception is made for meeting members of this group there. I would go there apart from a gameday for this group.) The Jefferson St. Bar & Grill, enjoyable as it is, is not going to bring me to spend time and money downtown on its own. Nor is there any other business concern in that area likely to do so. Put the ballpark there, and that changes things.

Final comment. The university study, if it does, indeed, downgrade the ballpark's impact because the area has lost 19,000 jobs since the park opened, lacks credibility in that regard. No ballpark is capable of protecting, much less creating, that many jobs. The loss of that many jobs in the period of time in question speaks of issues and problems much, much greater than any ballpark could ever begin to influence.

I'm EvilJuan, and I approved this message.
_________________
Is It Next Season Yet?

[matt]

I don't have anything to back this up but aside from an attendance boost for the first couple of years, the park only adds additional funds to the community if the team was going to leave.

[Hank]

Those who claim that a ballpark has little economic impact simply point out that for every dollar a person is spending at the ballpark or at an establishment nearby, that is one less dollar they are spending at the movie theater and a restaurant nearby the theater. The point is that people have only so much money to spend on entertainment, so the presence of the ballpark merely shifts the money from one activity to another. It does not increase overall spending.

That seems logical. The biggest exception would seem to be if the presence of a ballpark is increasing tourism. That could result in a net influx of money.

[EvilJuan]

[moviegeekjn]

Again small sample size, but I don't think I'm unique.... Each summer I plan a few weekend adventures to ballparks. In a sense this is an "excuse" to visit a few favorite cities, but without baseball I wouldn't be purchasing airline tickets or spending money on lodging and meals in those locales.... let alone the $$ on ballpark tickets & concessions.

[Polar Bear Fan]

Honestly, those numbers aren't very impressive if they're trying to justify the building of Miller Park versus keeping County Stadium. During the last few years of County Stadium, it averaged around 21k per game, while Miller Park has averaged around 27k per game the last three seasons. Of course, the Brewers would like you to believe that all of this increase is due to the new stadium, but that view is too simplistic. Most teams have seen an increase in attendance over that time period, including teams that haven't built new stadiums (e.g. Dodgers, Yankees, Mets, etc.). Taking into account the overall increase in MLB attendance and the fact that the new customers would need to be outside the metro area, the likely impact of the new stadium is probably a few hundred extra customers per night. Overall, the impact of the additional customers due to Miller Park is probably less than $5 million per year (most likely, it is probably much less), and this number wouldn't justify building a new park.

As for the impact of the Brewers franchise, I don't doubt that teams have an impact on the local economy, but this study likely overstates the real impact. Why? Because many visitors would still travel to Milwaukee for entertainment/vacations/business trips, it would just be spent elsewhere in the city or suburbs. To be truly accurate, this study would need to take into account money added to the economy solely due to the Brewers franchise being located in Milwaukee. For example, a baseball-loving family of four from Madison might travel to four games in a season and spend $250 total each time, which would sum to (roughly) $1000 impact in this study. However, the family might decide to forego two non-baseball related visits to the city to partially offset these expenses, and these visits would've cost $500 total. Ultimately, the study includes (roughly) $1000 of impact on Milwaukee's economy when the true (net) impact was (roughly) $500. (Note: this example is overly friendly to the authors of the study. The overall impact is probably much less than 50%. Consider the business traveler who would've eaten a $50 dinner, but instead goes to the Brewers and spends $60 on a ticket, food, and beer.)

[Polar Bear Fan]

[EvilJuan]

[AZ SnakePit]

Another factor could be the expenditure of the players. You're dropping 25 multi-millionaires (on average) into an area, who weren't there before, and they will likely end up buying new luxury homes, plus possibly stuff like cars, etc. and spending their money in other ways on an ongoing basis.
_________________
Jim McLennan
AZ SnakePit

[TAP]

[matt]

[Polar Bear Fan]