Thanks to Skip for the pointer.
Friday, May 30th, 2008,
by JC and is filed under "Economics, Gwinnett Braves ".
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JC I’m not sure how much you know about soccer in the UK. Could you comment on why you think it is that local communities in the US continue to subsidise rich sports franchises, while this almost never happens in the UK? The different approaches seems to be the opposite of the different long term philosophies relating to taxes and use of public money in the two economies.
Is there some extra factor in the US with franchises being able to move?
There are a growing number of American based owners of English Premier League teams. Why? It has always seemed to me that sports teams make lousy investments so I’m not sure if we should be expecting owners to make rational decisions based on the relative rates of return. If I was a very wealthy dollar rich sports fan I’d be buying an American sports franchise and letting the city build me a revenue generating building in an environment with less risk of catastrophic loss of revenue from relegation. Not finding $1bn of my own money (or someone else’s I’d have to pay back) before we even get into the playing side of it. I know for many Premier League teams most of their income is from the TV contract but I wouldn’t view that as secure, three teams out of 20 lose that every year.
I am astonished at the level of public support for sports stadiums. I think the support stems from ignorance. Most people I meet think that sports stadiums spur economic growth. When I explain that economists disagree and why, they almost always drop their jaws in disbelief and vow never to support a stadium again.
We’ve got to get the word out.
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