Happy Feet?

Chris Briem writes that he doesn't know of any studies of the economic impact of the Penguins.

Here's a start: Bruce K. Johnson (Centre College), Peter A. Groothuis (Westminster College), John C. Whitehead (East Carolina University), The Value of Public Goods Generated by a Major League Sports Team: The CVM Approach, Journal of Sports Economics, Vol. 2, No. 1, 6-21 (2001).

The abstract:

This article reports an application of the contingent valuation method to measure the value of public goods generated by a professional sports team, the Pittsburgh Penguins of the National Hockey League. The data and analysis indicate that a major league sports team can produce widely consumed public goods such as civic pride and community spirit and that the value of those public goods may be substantial. However, in the case of the Penguins, the value of the public goods is far less than the cost of building a new arena. Although the analysis of public goods generated by other teams in other cities might lead to different results, the results of this article call into question the widespread practice of government funding of sports stadiums and arenas because it appears that the costs borne by taxpayers exceed the benefits received.


That piece, among others, is cited and discussed in Jordan Rappaport and Chad Wilkerson, What Are the Benefits of Hosting a Major League Sports Franchise?, Federal Reserve Bank of Kansas City Economic Review 2001:1, available at http://kansascityfed.org/publicat/econrev/PDF/1Q01Rapp.pdf

Michael Leeds (Temple University economist) was interviewed yesterday on WDUQ to the effect that the economic impact of the Penguins (like most major sports franchises) is ZERO, but this (I assume) was based on general premises rather than on a study of the Pens per se. He did offer a delightful quote to the effect that professional sports teams represent a "gift" by cities to themselves, valuable (perhaps) for psychic reasons but not justifiable in economic terms.

Unfortunately, I can't find a clip of the interview online.

Comments

2 Responses to "Happy Feet?"

Mark Rauterkus said... 1/10/2007 11:21 PM

The city, county and state should not subsidize the Pens. The team's new hockey venue should be a private building, owned by the franchise.

My plan, call it the think again plan -- or plan Z -- makes for a great counter attack.

No, no, no to building a public venue for the Pens' private use with taxpayer funds. RATHER, let's make the Pens richer by having them building Allegheny County a new Olympic Village that includes a hockey stadium. This vision of a new urban, car-free, dense, high-rise car accessible, transit friendly community of thousands of full-time residents of all ages would be built where there is an abundance of land, close to highways, at river's edge, served by heavy rail, airport and ideal for the Pens' customer base.

Rather than giving them a hockey venue where we already have one. Let's keep the Civic Arena where it is and allow for the Hill District to thrive without the Pens.

Meanwhile, the Pens can get rich on a wildfire development deal by the airport on 500+ acres.

Adam said... 1/12/2007 4:52 PM

I wonder what would happen to teams if there wasn't this "race to the bottom" mentality by local, county & state governments to attract and/or retain these teams. Do teams make enough to provide their own arenas in a creative fashion, or would they parish? Something tells me they're taking rides when free, which they apparently always are.

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Pittsblog 2.0 is written by Mike Madison, a law professor at the University of Pittsburgh. Send email to michael.j.madison[at]gmail.com. Mike also blogs at Madisonian.net, on law and technology. Chris Briem of Null Space drops by from time to time.

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