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October 7, 2011
Silver lining in the Yankees disaster
Crains NY Business
by Greg David
The former Crain's editor, who has championed Atlantic Yards and its taxpayer-burdening arena from the get-go, is suddenly a critic of subsidies for sporting venues.
He must've listened to the clip of The Brian Lehrer Show we posted this morning.
The Yankees are crying in their beer (or cursing A-Rod) but there is one silver lining to their unexpectedly quick loss in the baseball playoffs: The defeat won’t damage the city’s economy much. Baseball, you see, isn’t like the sporting events that really power the economy—namely the New York City Marathon and US Open Tennis Championship.
It's more like basketball. Nets basketball.
The best study of the economic impact of a major league playoff game was published in 2008 by economics professors Victor Matheson and Robert Baade. It should be noted that Mr. Baade has been a critic of public money that is used to subsidize sports stadiums. Nevertheless, his research is pretty thorough. He found that the average playoff game generates about $7 million in economic impact for the home city. The figure would probably be a little higher in New York, so let’s say the benefit might be $9 million.
...None of this should come as a surprise. While the Yankees are a tourist attraction, the majority of fans are New Yorkers. Season and multi-game ticket packages account for the vast majority of ticket sales for the Yankees, as anyone trying to go to a single game knows. Many tickets are resold by Yankee fans looking for some extra dough, so the number of out-of-towners is larger for playoff games, as is the out-of-town media contingent. Still, seats are primarily occupied by New Yorkers who drive and take public transit, and go home after the game.
...The irony, say people like Professor Baade, is that baseball stadiums get the biggest subsidies. In New York, the situation is more perverse. The Bloomberg Administration wants to charge the marathon a fee for the police and other services it provides. That may be understandable, but shouldn’t Yankees pay for the extra burden of the playoffs too?
NoLandGrab: As Baade explained this morning, people who attend baseball (or basketball) games are spending money that they might spend on other entertainment, like a movie or theater. They don't generate new and separate economic activity. Plus, movies and theater aren't subsidized like baseball (or basketball) games are. And no one ever factors in the substantial costs, like police overtime (or massive - and noisy - infrastructure upgrades.
Posted by eric at October 7, 2011 4:16 PM