IJSF Issue 1:4

Contents for IJSF Issue 1:4

Communities and Sport Finance: New Perspectives
Authors: Brad R. Humphreys
Abstract:An introduction to a special issue of IJSF: Communities and Sport Finance: New Perspectives.

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Executive Interview
Authors: Daniel Rascher
Abstract:An interview with Dennis R. Wilcox of Climaco, Lefkowitz, Peca, Wilcox & Garofoli Co., L.P.A.

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Facility Finance: Measurement, Trends, and Analysis
Authors: Andrew Zimbalist, Judith Grant Long
Abstract:Conventional wisdom has it that the public share of stadium and arena construction costs has been falling in recent years. Many have attributed this perceived decrease in part to the emergence of the academic literature in the 1990s, finding that one cannot expect that a new team or sport facility by itself would promote economic development in an area. We find that the conventional wisdom is incorrect. In this paper, we use both the available reported cost data as well as adjusted cost data and find that trends in public financing are considerably more complex than traditionally thought. We proceed first by discussing issues in the measurement of costs, then by elaborating the methodology we employ for our estimates, next by expositing our results, and lastly by offering an interpretation for our findings.

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Sports Facilities and Urban Redevelopment: Private and Public Benefits and a Prescription for a Healthier Future
Authors: Mark S. Rosentraub
Abstract:Governments still labor to form public/private partnerships to develop sports facilities that will retain teams while also creating benefits for communities. This work is undertaken as advocates point to a stream of possible benefits from a new sports facility, while detractors argue a sports tax is nothing short of corporate welfare. This retrospective analysis of the experiences of several cities identifies the range of private and public benefits that can accrue and then highlights what Major League Baseball owners and players have gained from the era of new ballparks. With the level of private benefits created for team owners and players as a background, the tactics used by some cities to secure public benefits are summarized to help create a framework for a public/private partnership that truly works to the advantage of taxpayers and the city that chooses to build a sports facility.

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Addressing the Small Market Problem for Canadian NHL Franchises: On-site Gaming as a New Revenue Stream
Authors: Daniel S. Mason
Abstract:This paper identifies the unique problems faced by Canadian small market (CSM) franchises in the National Hockey League (NHL). While featuring characteristics similar to other major leagues in North America, CSM franchises are also burdened by currency and taxation issues that favor US-based teams, as well as a reliance on gate revenues, which have exacerbated the problem for NHL teams. Three general alternatives devised to address the small market problem are introduced in this paper: (1) allow other stakeholders, such as levels of government, to subsidize weaker teams; (2) create revenue sharing agreements among teams to distribute money to weaker franchises; and (3) create artificial restraints on player salaries in order to reduce the ability of large market teams to stockpile talent (Cocco & Jones, 1997). These are reviewed in the context of the NHL and include the Mills Report and Manley proposals, the Alberta Players Tax, lotteries, revenue sharing, and salary caps. A proposal is put forward to explore the use of on-site gaming in arenas in order to provide additional revenues for Canadian-based NHL teams. The benefits of such a proposal are then reviewed, which include: (1) acting as a less regressive tax than other government subsidies by targeting game attendees; (2) having fans who already support the team provide the subsidization, eliminating those who are not followers of hockey from bearing the financial burden; and (3) enhancing the viewing experience of fans. In doing so, it is hoped that an alternative way of assisting small market Canadian teams can be achieved that does not require substantial legal or labor negotiations, while not altering the structural characteristics of the league as a whole.

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The Tax Benefits of Hosting the Super Bowl and the MLB All-Star Game: The Houston Experience
Authors: Dennis Coates
Abstract:This study adds to our knowledge of the effects of mega-events like Super Bowls and Major League Baseball All Star games by looking specifically at a long time-series of monthly sales tax revenues to assess the impact of these events on the host city’s revenue. The analysis indicates that sales tax revenues in Houston may be statistically significantly higher as a result of the Super Bowl by as much as $5 million over the time of the game and its preceding festivities. The MLB All-Star game has a much smaller effect on revenues, though possibly as much as $1 million in extra sales tax revenues. Interestingly, there is no consistent evidence that these events raise the level of taxable sales activity, in total or in the retail or services sectors.

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Called up to the Big Leagues: An Examination of the Factors Affecting the Location of Minor League Baseball Teams
Authors: Michael C. Davis
Abstract:In this study we analyze the factors that determine whether a particular city has a minor league baseball team and the level at which that team competes. Using the generalized ordered logit model we determine that higher population, personal income, and time from nearest Major League Baseball team all have a positive effect on the city’s having a minor league baseball team and having one at a higher level. The finding that personal income has a positive effect on the level of the baseball team, combined with past studies suggesting income does not affect minor league baseball attendance, leads us to conclude that higher income fans cannot take off more time to attend baseball games but want a higher quality product when they do attend. Rankings of the most over-represented and under-represented cities, based on the model, are presented.

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