Professional Sports are Here to Stay

By Alec Laube Photo by Mark Whitt

Currently, as anyone from Southern California probably knows, the owners of the San Diego Chargers are considering relocating the team to Los Angeles. Also, the St. Louis Rams have officially closed a deal with the city of Los Angeles to relocate for the 2016-17 season.

Teams have moved from city to city and changed names throughout the history of professional sports. These changes have sparked a need to study the effects of having professional sports teams. Research has shown that the economic benefits of professional sports teams are rather negligible, while the cultural benefits can offer great things to local communities.

Firstly, the economic benefits of professional sports teams are so minimal that they verge on being hindrances to their cities. According to economists, one reason these benefits are so low is that new stadiums don’t spur new spending. This is because, for most people, money spent on attending sporting events falls under the entertainment category. The spending in this category is usually a set amount, meaning that money spent on going to a football game at a new stadium is the same money that could have been spent on some other luxury, such as going to the movies or out to dinner. This system does not create new revenues, but rather shifts money from other markets. On top of that, stadiums tend to push away locals. Instead of creating a roaring new center of activity, many shy away from attending any events in the area. People avoid other local events since sports stadiums tend to be very noisy and the cause of nuisances such as traffic delays. People therefore avoid stadiums during games, which often take place during peak social hours. All in all, the stadium may raise revenue, but it is revenue that is being siphoned from other markets, and a void is created in the local neighborhoods from pushed away business. The economic benefits simply aren’t there to have a sports team build a stadium in your city. In fact, Victor Matheson, a sports economist at College of the Holy Cross, found that Inglewood, where the Los Angeles Lakers played prior to the Staples Center, has  actually been better off since the Lakers left.

Another cost to bear in mind is the cost to the taxpayers. Whenever a team is looking to build a new stadium, the team asks the city to pay for a portion of the cost of construction. This cost can be upwards of half a billion dollars; such was the case in Miami in 2008. In this instance, the city of Miami paid more than $478 million for a new stadium for the Miami Marlins. That’s nearly half a billion dollars of taxpayer money spent on a stadium that simply won’t provide the economic benefits that one would hope for. On top of that enormous payment, cities offer several tax subsidies to stadiums and teams, which could add an additional $20 million to annual costs. Even with all of these costs, politicians continue to vote in favor of these deals and subsidies. This is because politicians are “afraid” to lose a team while they are in office. The truth is that teams get to choose their cities, but cities do not get to choose their teams, so cities must do what they can to keep teams once they are there. In trying to keep them, cities offer teams hundreds of millions of reasons to stay.

There are certainly a lot of costs associated with building a stadium for a team, but there are great cultural benefits as well. Having a sports team to cheer for in a city unites people, since it gives members of the community a commonality. That is what creates our culture and changes how we interact with one another. It’s the same concept as calling ourselves Americans to give ourselves purpose as individuals and as a group. Being a Chargers fan or a Niners fan means that you are part of a group of people that feel the same way you do when the team wins or loses. These intangible benefits, on top of the fear of the political ramifications, are what will keep cities offering so much money for teams to come and to stay. Although there aren’t many economic benefits to having a local sports team, the cultural benefits are too great for cities to not do everything they can to keep a team. Professional sports simply play too big a role in American culture for a city to turn them away.

The people of St. Louis will surely miss having the Rams play there, but at least they have the Cardinals for baseball and the Blues for hockey. If San Diego can, it should do everything in its power to keep the Chargers in San Diego -- the city simply wouldn’t be the same without the franchise. Not only does the team give the city a greater collective identity, but the rivalry between the Los Angeles Rams and the San Diego Chargers would be great entertainment for the people of Southern California. As the mayor of Los Angeles said, “We'd welcome any team to come here, but I love the idea of a great rivalry to the South.”