Archive for Economics

Latinos and College Baseball

A while back I examined the decline of African-Americans playing major-league baseball. James Wagner looks at the racial composition of Division I college baseball and notices a different trend.

College players in the three main divisions are 86% white, according to the most-recent NCAA figures. That’s a big difference from Major League Baseball, where one study puts the number at less than 60%. The most striking difference is in the number of Latinos on the field: They made up about 29% of all major leaguers in 2007 but only 5% of players in college.

While the percentage of Latino players has more than doubled in professional baseball since 1990, accounting for top stars such as Alex Rodriguez and David Ortiz, the percentage of minorities in the college game remains extremely low. That’s especially true for Latinos, for whom college ball’s failure to keep pace with the diversity of the major leagues is most striking. And that’s embarrassing to some….

Minority players clearly aren’t being excluded from major-league stardom and wealth. But because college baseball has had trouble attracting nonwhite talent, minority prospects aren’t enjoying the benefits of a recent shift in the game that puts a premium on college players. Last year, according to data provided by Major League Baseball, 55% of the players picked in baseball’s amateur draft came from four-year institutions, up from 38% in 1998. The number of college players taken in the first four rounds, where teams pay the highest bonuses, has increased by 20% over the past 10 years. The average signing bonus through the first four rounds last year was $790,000.

At the center of the issue is a perennial choice facing young baseball prospects: College seems to afford less opportunity than the fast cash they can get signing with a pro team….

Many forces beyond the easy cash compound this discrepancy. They include challenges in recruiting, a college draft that, unlike the National Basketball Association’s, doesn’t include prospects from abroad, and baseball scholarships that are fewer and less comprehensive than football and basketball scholarships.

Coaches say it is expensive for colleges in the NCAA’s Division I to recruit overseas, even in Latin America. And foreign players often lack the appropriate transcripts, grades and test scores.

I am not concerned about the lack of foreign Latinos in college baseball. There is a very simple explanation that has nothing to do with racism or financial incentives: the TOEFL (Test of English as a Foreign Language). How can these kids go to college in the US if they don’t even speak English?

Thanks to Shyster for the pointer.

Frank Thomas Update

About two months ago, I was pretty hard on the Toronto Blue Jays for dumping Frank Thomas. He had gotten off to a slow start and the Jays benched him, then ultimately granted his release. Based on 72 plate appearances the Jays felt that Thomas was taking up a roster spot that could be better-used by someone else. Here is what I had to say about the situation.

One lesson from principles of microeconomics is that just because you are earning a loss doesn’t necessarily mean it’s a good idea to shut down production. As long as the revenues from production exceed the variable costs, you make money to cover a portion of your fixed sunk costs by continuing to operate. Shutting down increases your losses. If a player is producing more on the field than he costs to keep on the roster, then you should keep him on the roster. The Jays have just gone from a situation where they were getting Matt Stairs and Frank Thomas for $9 million (prorated salaries for the remainder of 2008 of $7 million and $2 million) to having only Matt Stairs for that same expenditure. I don’t see how this is an improvement.

This situation differs from the Russ Ortiz situation in 2006 with Arizona (Keith Law offers a nice summary). Ortiz was in the second year of a four-year, $33-million deal. In 2005 and 2006 he was worse than the options available to the team, and therefore it made sense to send Ortiz on his way. Though the Diamondbacks are still paying off the deal, Ortiz isn’t good enough to pitch on a major-league roster. Had Arizona continued to employ his services he would have made the team worse; therefore, cutting Ortiz was the right move. In Thomas’s case, several teams are interested in acquiring his services because he is better than available alternatives.

And what has transpired since the deal? He’s posted a .319/.417/.516 line which translates to an OPS+ for the year of 125–exactly what it was in 2007. Even if he had been much worse than this, it was a bad move for the Jays. Now the A’s are getting Thomas on the Jays’ dime. This is the most obvious GM blunder that I have seen in some time.

Dennis Coates on Stadium Subsidies

Thanks to Skip for the pointer.

Sports Stadiums and Economic Development: A Summary of the Economics Literature

Dennis Coates (Professor of Economics at University of Maryland, Baltimore County and President-Elect of the North American Association of Sports Economists) provides a nice survey of the academic literature on the economic impact of sports stadiums in The American.

The most basic question about stadiums, arenas, and sports franchises is the extent to which they contribute to the vitality of the local economy. Supporters of publicly financed stadiums argue that the benefits are substantial, while opponents say they are small and highly concentrated among the wealthiest citizens. To buttress their case, supporters mostly use economic impact studies that predict how the local economy will be affected by the stadium, while opponents compare the economy before and after the facility is constructed. Supporters tend to imply that redistribution of economic activity from the suburbs or outlying areas of a city to the downtown is desirable, while opponents generally oppose this sort of redistribution and focus instead on job and income creation.

The typical economic impact study gathers data on all aspects of spending related to a stadium, including the money spent to build it and the money spent by fans in connection with the stadium (including on tickets, at restaurants, and at hotels). The impact of this spending ripples outward into other areas of the economy through a multiplier. By linking spending to employment, the study then calculates how many jobs a stadium has created. It does not perform a cost-benefit analysis, which would address the opportunity costs of raising taxes to pay for a stadium and consider alternative uses of those funds.

Academic researchers have examined the prospective economic impact studies and found a variety of methodological errors in them, all of which raise doubts about the magnitude of the predicted spending and job increases. Other scholars use data from multiple years before and after stadium construction to measure the impact of the stadium. These ex post studies reject stadium subsidies as an effective tool for generating local economic development.

My own research, conducted with economist Brad Humphreys (who is now at the University of Alberta), has used perhaps the most extensive data, incorporating yearly observations on per capita personal income, employment, and wages in each of the metropolitan areas that was home to a professional football, basketball, or baseball team between 1969 and the late 1990s. Our analysis tried to determine the consequences of stadium construction and franchise relocations while controlling for other circumstances in the local economy. Scholars Robert Baade, Allen Sanderson, Victor Matheson, and others have taken slightly different approaches, but the results are fairly constant from one analysis to another. There is little evidence of large increases in income or employment associated with the introduction of professional sports or the construction of new stadiums. (Emphasis added)

What Caused the Decline of African-Americans in Baseball?

With the celebration of Jackie Robinson Day earlier this month, I read quite a bit of commentary on African-American participation in baseball. This post contains some of my thoughts on the issue.

There is no denying that the percentage of Americans-Americans in baseball has declined over the past few years. A recent report The 2008 Racial and Gender Report Card: Major League Baseball by Richard Lapchick with Nikki Bowey and Ray Mathew has documented this trend over the past few years. The report is an excellent source of data on the recent racial trends in baseball.

The game has the lowest percentage (8.2) of African-Americans in the two decades that we have published the Report Card. That number is less than half what it was in 1997 on the 50th anniversary of Robinson’s debut with the Dodgers, when African-Americans made up 17 percent of the players, and less than the percentage of blacks in the general population of the U.S. (12.3 percent).

I understand that this is disappointing, but the overall trend of African-Americans and Latinos is positive. When we look at African-Americans and Latinos together, the percentage of non-whites rose from 1991 until 1997. And a large contingent of Latinos includes players who would have been considered black during MLB’s days of segregation.

In fact, the percentage of players who are white has dropped substantially since 1991.

According to the Report Card:

MLB has been remarkably consistent in terms of the percentage of white players. Between the 1997 and the 2007 seasons, 58-60 percent of the players have been white in each season.

Yes, but this is misleading. Look at what happened from 1991–1996. In 1991 68% of major-league players were white. The percentage of white players slowly decreased until 1997 when it reached 58%. (Aside: What the heck happened in 2004? It looks to be an outlier, and it is hard to tell because the 2003 data is not reported in the study. I am suspicious of a data-gathering problem, but it is also within the realm of random fluctuation.) It seems that both black and white players are being replaced by Latinos. Now, some of these Latinos are Americans, but many of them are immigrants who were groomed in training camps in their home countries. Teams have found it cheaper to rely less on the amateur draft and sign players whom they can identify before other teams. Because of the relative poverty to US and Canadian players, these players are a cheap substitute.

But, we really already knew this. I am still curious why African-American participation has declined in the past decade, while white participation has stayed the same. A discussion of potential explanations for the black-white racial gap in baseball follows.

Population Size
First, let’s look at the simplest explanation. Could it be that the population of baseball-age African-American men has decreased relative to white males? The graph below maps the percentage of U.S. males ages 25 to 34 for African-Americans and whites.

The white percentage is actually decreasing while the African-American percentage increasing. However, the change is small for both races. So, let’s cross this explanation off our list.

Brawn Drain
The most popular theory that I hear is that African-American athletes are choosing to play football and basketball over baseball. The popularity of these sports in the 1980s and 1990s—along with the success of a few notable black athletes—caused young African-Americans to choose these sports. But this theory has one big problem, according to the Racial Report Cards for the NFL and NBA, there hasn’t been much change in racial make-up since 1991. In the NBA, African-Americans have typically comprised 75% of the league. In the NFL, African-Americans have comprised 66% of the league.

The competing leagues lack MLB’s trend of declining African-American participation, which indicates that what is affecting baseball’s racial make-up is not affecting the NBA and NFL. More important is the fact that these sports do not appear to be substitutes for baseball. African-American athletes don’t appear to be abandoning baseball for the other major American sports leagues. Some athletes may choose other sports, but those who don’t play football and basketball, choose to do something other than play baseball.

One difference between white and African-American communities is wealth. Could the difference in wealth affect the ability of these two groups to play baseball? It is possible that baseball requires more financial resources than other sports; thus, African-Americans, who are poorer than whites on average, are crowded out from playing baseball.

Looking at both the past—when current baseball players may have made an early decision to shun baseball—and present, there does not appear to be any obvious changes financial differences that might explain the fluctuation of the racial gap in baseball participation. Though African-Americans are less wealthy on average, the changes in wealth track the changes in whites closely over time.

Community Support
Another possible explanation is that playing baseball requires greater community involvement than other sports. Basketball involves a small number of participants, a hoop, and a ball. Community and school leagues are widespread. Organizing full-fledged football is a bit more complicated than basketball, but simple games of touch football are quick and easy to organize. The strong support in schools, with weekly games also serving as an important social gathering, may also contribute to the popularity of the sport.

While baseball can be played on a sandlot, it is not as easy to self-organize as basketball or football. Though I always loved baseball and played in organized leagues until I was 14, I don’t recall a single informal neighborhood game. The biggest obstacle is the need for an umpire. I played numerous pick-up basketball and football games despite never playing in an organized league. If a community lacks the resources to organize local youth leagues, as well as travel leagues for exceptional adolescents, then potential baseball players may not have the opportunity to play baseball. And because of a lack of early exposure, even athletes who wash out of basketball and football don’t have an interest in playing baseball.

What measures might we use to measure community support? The General Social Survey has a few questions about sports participation, but I could only find one that is captured over time: Membership in Sports Club. The graph below plots the responses by race over time.

The dotted and dashed curves represent quadratic fits of the data. Participation in sports clubs has been dropping for both races, with the biggest drop-off beginning in the late-1980s. This could explain the drop in baseball participation for both African-Americans and whites, but it doesn’t say much about the disparity between the groups. Anyway, I’m not even sure what a “sports club” really means, but it includes participation in all sports, not just baseball. I’m not sure that this survey information provides a good measure of community support, but it was the best that I could find.

Family Support

Similar to the need for community support, it is possible that family support is important for supporting a athletic activity. The demands for family participation may be greater in baseball than for other sports, because of higher costs of organization for baseball, relative to other sports. If there are changes in family structure that may hinder family support, then this could affect participation in baseball.

Below, I list two graphs of family characteristics by race. The first lists out-of-wedlock births by race; the second lists the percentage of 16-year-olds living with both parents. The marker labels indicate the average year at which youth in each cohort will make their major-league debut.

There is a noticeable difference in out-of-wedlock births for African-Americans beginning in 1965–1969, which includes players who will enter the majors in 1991. The out-of-wedlock birth rate is declining for both races, but there is a bigger drop-off for African-Americans. In terms of living with both parents at age 16, the decline doesn’t fit with the drop-off of African-Americans in the majors.

Differences in family structure might explain some of the difference in baseball participation, but this isn’t a very satisfying explanation all by itself. If I saw a similar divergence in sports club participation, then I might have some more confidence that family and community structure are the main problem—it still might be, I’m just not convinced, yet. Still, I think it highlights the potential importance of MLB’s RBI initiative (Reviving Baseball in Inner Cities), which promotes youth baseball for disadvantaged youth.

School Incentives
Baseball is supported at most middle and high schools, which ought to help make up for deficiencies in providing youth sports opportunities that are not supported outside of school. But I wonder: what incentives to coaches face? At most high schools, football is king, with basketball a close second. A coach who wants to keep his job will steer the best athletes to these sports. In addition, college recruiters have incentives for building strong relationships with high school coaches to encourage students to attend particular schools. In return, recruiters may offer favors to coaches—favors that MLB scouts cannot or will not offer in return.

This would explain the decline in baseball participation for African-Americans and whites, but I’m not sure it explains the disparity. It is possible that black youths are more likely to get a job than play baseball than whites, so that if when these sports fill up, whites go play baseball while African-Americans abandon athletics.

As a final note, I wonder why more African-American athletes chose to play football and basketball over baseball. With the minor leagues, the financial payoff is more certain and higher than the other sports, where you must work as an unpaid college athlete before earning a real paycheck. And if education is a concern, it shouldn’t be. MLB offers a scholarship program for any player who signs a minor league contract. You get a scholarship after your playing days are over. Why aren’t we seeing a movement of African-American talent towards the sport with the highest financial returns? I think this question is key to understanding the racial disparity in baseball.

There are just my thoughts on the issue. Nothing really jumps out at me as an obvious cause, nor do I think there is an easy solution. MLB’s current focus on providing support for youth leagues in the inner city is probably a good idea for promoting baseball to African-Americans.

Matt Morris and Sunk Costs

On Sunday, the Pittsburgh Pirates released veteran right-handed pitcher Matt Morris. This closes a book on one of the hardest-to-understand deals that I can remember. Just before last season’s trade deadline the Pirates sent reserve outfielder Rajai Davis to San Francisco for Morris, leaving the Pirates on the hook for Morris’s remaining salary: a prorated portion of his 2007 $9.5 million salary, $9.5 million in 2008, and a $1 million buyout of 2009. When the trade occurred Morris was a few days from turning 33 and his best days were clearly behind him. Why the Pirates at 42-62 felt it was a good idea to take on this contract was a mystery to everyone.

Morris’s 2008 season has been a disaster. In 22 1/3 innings of work he has given up six homers and seven walks, while striking out only nine batters, and posting a 9.67 ERA. The Pirates did what many have suggested and cut him.

The Pirates are still on the hook for the remainder of his contract, but it’s a sunk cost. Right? Well yes, and that is why I am not so sure that cutting Morris was the right move. His contract ought to be irrelevant to the team’s decision to keep him. What is relevant is the quality of pitching and the additional salary of his replacement.

The Pirates called up John Van Benschoten from Triple-A to take Morris’s spot on the roster. Phil Dumatrait is taking Morris’s spot in the rotation. Van Benschoten, a 28-year-old right-hander, has posted an unimpressive 44 strikeouts, 48 walks, and 7 home runs in 67 2/3 innings of work in his major-league career, and his minor-league numbers don’t indicate that he is a better pitcher than he has shown. Dumatrait is a 27-year-old lefty with a career major-league line of 22 strikeouts, 25 walks, and 8 home runs in 38 2/3 innings pitched. Yuck.

Though Morris has been awful this season—and it is possible that he is done—his recent history suggests that he is not this bad of a pitcher. And even if he is not what he once was, I think he is likely to be no worse than his replacements over the course of the season. In the past two seasons, he has averaged 4.84 strikeouts, 2.75 walks, and 0.88 home runs per nine innings for over 200 innings a season. It’s not ace material, but it was worth about $9 million per season in revenue to his teams.

So, instead of getting Matt-Morris-quality pitching for free—the contract is sunk—the Pirates have to pay other pitchers to cover those innings. And it doesn’t appear that the replacements offer any improvement over Morris. It’s the same reason I didn’t like the Frank Thomas release. In this instance, I believe the Pirates forgot about ignoring sunk costs and dropped him because of the size of his deal. The move looks smart, but it isn’t.

I think that a better move would have been to do what the Giants have done with Barry Zito: move him to the bullpen. This would have given him the opportunity to work out his recent problems to see if he was really as bad as he has pitched this season. Plus, because he wouldn’t have to pace himself like he does when he starts, he might be an effective reliever. If he turned out to be finished and the Pirates become contenders, then you can cut him. If he improved, he could help the team, or be shipped to a contender with the Pirates eating a smaller portion of his contract. At this point in the season, I don’t see how this is a smart move. And I will not be surprised if Morris pitches in the big leagues again this year with much better results.

The lesson here is that sunk costs don’t mean that cutting an underperforming is always good idea. Cutting a player who is no worse than his replacements actually increases your losses.

Was Dumping Frank Thomas a Good Idea?

On Sunday, the Toronto Blue Jays released veteran DH Frank Thomas. While many have attributed his benching and release to his slow start, the more likely reason for cutting Thomas was a vesting option in his contract that would guarantee him $10 million in 2009 if he collected 376 plate appearances in 2008.

Supposedly, the Jays asked Thomas to take a lesser off-the-bench role to keep the option from vesting. Thomas was not happy about this, and the Jays simply released him, eating the remaining portion of the $8 million that the team owes Thomas this season. While I understand that the team probably wishes that it had not agreed to the original contract, I’m not sure that cutting bait was the best remedy.

I estimate that Thomas was worth $9.9 million to the Jays in 2007, which is about what the Jays paid for his services in 2007 ($1 million signing bonus + $9.12 million). This was similar but less than Thomas’s 2006 estimated production with Oakland that would have been worth about $11.9 million in 2007. I don’t think anyone expects him to repeat 2006 again, but Thomas is still a good hitter. And even if he wouldn’t be worth the $10 million he would get next year if his option had vested, it’s likely that his production would not be too far below this value.

By simply cutting Thomas, the Jays must pay Thomas $7 million not to play. I don’t get this, because Thomas is still a productive hitter—the type of hitter the Jays will miss if injuries hit the team and the team has a shot at the playoffs. Either you sit down and explain to him the contract he agreed to—“hey, you agreed to this vesting option, so become a bench player or go on the restricted list and get zilch”—or you trade him to another team and eat a smaller portion of his contract.

Even if the option had vested, it wouldn’t have been a disaster given what it will cost to replace his production. Let’s say Thomas is a $7 million player in 2009. Isn’t it better to pay $3 million more than what you are getting in 2009 ($7 million — $10 million = –$3 million) than $7 million than what you are getting in 2008 ($0 — $7 million = –$7 million)?

One lesson from principles of microeconomics is that just because you are earning a loss doesn’t necessarily mean it’s a good idea to shut down production. As long as the revenues from production exceed the variable costs, you make money to cover a portion of your fixed sunk costs by continuing to operate. Shutting down increases your losses. If a player is producing more on the field than he costs to keep on the roster, then you should keep him on the roster. The Jays have just gone from a situation where they were getting Matt Stairs and Frank Thomas for $9 million (prorated salaries for the remainder of 2008 of $7 million and $2 million) to having only Matt Stairs for that same expenditure. I don’t see how this is an improvement.

This situation differs from the Russ Ortiz situation in 2006 with Arizona (Keith Law offers a nice summary). Ortiz was in the second year of a four-year, $33-million deal. In 2005 and 2006 he was worse than the options available to the team, and therefore it made sense to send Ortiz on his way. Though the Diamondbacks are still paying off the deal, Ortiz isn’t good enough to pitch on a major-league roster. Had Arizona continued to employ his services he would have made the team worse; therefore, cutting Ortiz was the right move. In Thomas’s case, several teams are interested in acquiring his services because he is better than available alternatives.

Of course, there is the possibility that the Jays think Thomas is done. It doesn’t look like it to me, but I’ve seen exactly zero of his at-bats this year. Maybe those reports of a slowing bat aren’t just front office propaganda. But, he would have to fall awfully far to be worth dumping.

The Economics of the Longoria Deal

The Tampa Bay Rays have just signed top prospect Evan Longoria to a long-term deal only a few games into his first major league season. The deal guarantees Longoria $17.5 million over six seasons, and it includes team options for three more years.

This deal is interesting in that it locks in his purely-reserved and arbitration-eligible years for a price that is similar to what Longoria would make if he signed a series of one-year contracts for the next six years. The Rays then have two sets of options. In the seventh year, the Rays can pick up his option for $7.5 million or terminate the deal with a $3-4 million buyout (depending on service time). The second option would pay Longoria $11 and $11.5 million for his eighth and ninth seasons, and includes a $1 million buyout.

What does each party get out of this deal? Longoria gets stability: if he suffers an injury or never develops into a quality major-league player, he still ends up a wealthy man. As for the Rays, it seems that Longoria’s rewards for good performance would have been capped by the CBA rules, but if he ends up not fulfilling his promise the Rays are now locked into his salary and cannot dump him. Longoria’s stability is the Rays liability.

The real deal for the Rays is in the options. If Longoria becomes a good player, he would command well more than $7.5 million on the free agent market. If MLB salaries continue to rise at a 10% annual rate, as they have over the past two decades, then in seven years player salaries will double. For example, if Longoria projects to be a $15-million player today, he could be a $30-million player in 2014 (gulp!). The point isn’t that he is that good of a player—I really don’t know what he will become—but that Longoria is going to have to be pretty bad not to be worth $7.5 million in 2014. Even the $11 and $11.5 million option may not be too pricey even if he becomes a sub-All-Star regular player.

If this is such a good deal for the Rays, why would Longoria agree to it? Professional athletes have most of their net worth tied up in a single asset: their athletic ability. Once that goes, the player’s main source of income disappears. Individuals tend to be risk averse, meaning that they are willing to sacrifice income to reduce risk. Just ask Marcus Giles about what it’s like to go from an All-Star to waiver wire fodder before he even finished his arbitration years. Thus, it’s not surprising to see a player trade away higher probabilistic income for lower guaranteed income.

But don’t the Rays face the same risks? What if he never lives up to his potential and is out of baseball in three years? Then the Rays are on the hook for a player whom they could have waived for free. This is true. But, unlike individuals, firms tend to be risk neutral, and price assets equal to their expected value. Baseball teams are firms that invest in many assets, many of which are players. Teams can diversify risk to minimize losses in a way that players cannot by investing in a bundle of assets. If a player stinks, he stinks; and there is not much he can do about it. Teams have many players. Some players signed to long-run contracts will exceed expectations while others will fail. On average, the successes and failures ought to average out.

By taking advantage of players’ risk aversion, teams can sign several players for less than their expected value and come out ahead in the long run. For example, assume we have two players who are expected to be worth $10 million/year for five years (total salaries of $100 million). Let’s say that one player ends up being worth $5 million/year, while the other is worth $15 million/year, the team still ends up getting $100 million in value. However, this is not where the big savings come in. Had the team gone year-to-year with the players, paying each of them their exact annual worth, the team does not save any money. Because players are willing to trade income for financial security, teams can sign players for less than their expected value. Therefore, the team in our example ought to be able to sign the players for less than $10 million per year each.

As an alternative to signing discounted deals, players could chose to protect their financial security by getting outside insurance, but I think that teams are the best position to insure players. Guaranteeing a player financial security creates an incentive for the insured player to slack off. Why work out or watch your weight when a relatively big payday is coming your way no matter what? Private insurance companies can include some contract provisions designed to limit shirking, but the cost of monitoring is high. Thus, third-party insurance suffers more from a moral hazard problem than teams.

Teams, on the other hand, are in a fantastic position to monitor and affect player behavior. It is probably quite difficult for any insurance agency to tell a player to get into shape. A manager can just say, “hey tubby, it’s time to lay off the patty melts and hit the weight room.” Also, trainers and medical professionals can quickly catch and report any misbehavior. Thus, the discount that teams are willing to offer players for stability are probably a better deal than available third-party insurance.

I have often wondered if some agents offer their clients insurance in order to negotiate better overall deals. Like teams, agents can diversify across many players.

Overall, I like the deal. From the team’s perspective, I might have waited a year or two before locking up Longoria, because free agency is still a while off and I expect the team still may have been able to get a similar discount in the future. Ryan Howard’s arbitration victory may have scared the team to act now, maybe it’s a gesture of good will to fans and players, or maybe it’s a discount that Longoria wouldn’t have accepted down the road.

Media Bias and Public Stadium Funding

A few weeks back, Skip Sauer at The Sports Economist pointed to an Op-Ed in the Philadelphia Inquirer by Villanova sociologist Rick Eckstein. It is relevant to what is going on in Gwinnett County, especially in reference to the coverage by the Gwinnett Daily Post.

If you build it, they will come. This is usually the mantra of those in favor of publicly financed sports stadiums, including the current proposal for a new soccer stadium in Chester. In this case they are visitors whose spending would turn devastated cities and neighborhoods into exciting destination points. Local schools, merchants, and residents all would benefit as municipal coffers swelled.

There’s only one problem with this scenario. It’s not true. Never has been. They do come, but cities are not saved. Over the past two decades, academic research has generated literally hundreds of articles and books empirically challenging the alleged economic wonders of new stadiums, even when they’re part of larger development schemes. I have been studying and writing about publicly financed stadiums for more than 10 years and cannot name a single stadium project that has delivered on its original grandiose economic promises, although they do bring benefits to team owners, sports leagues and sometimes players.

That much we already knew. But the question remains: if these are such obviously bad deals, then why does the public tolerate the public funding of sports venues? Eckstein has an answer.

In a just-released article in the Journal of Sport and Social Issues, my colleagues and I studied media coverage of 23 publicly financed stadium initiatives in 16 different cities, including Philadelphia. We found that the mainstream media in most of these cities is noticeably biased toward supporting publicly financed stadiums, which has a significant impact on the initiatives’ success.

This bias usually takes the form of uncritically parroting stadium proponents’ economic and social promises, quoting stadium supporters far more frequently than stadium opponents, overlooking the numerous objective academic studies on the topic, and failing to independently examine the multitude of failed stadium-centered promises throughout the country, especially those in oft-cited “success cities” such as Denver and Cleveland.

Today, two local papers reported on the subject of Gwinnett County issuing the final permits to begin construction. Here is the article by Michael Pearson of the Atlanta Journal-Constitution.

Gwinnett County’s planning and development department issued a permit Friday for grading work at the site of the county’s new baseball stadium.

Although some trees had earlier been cleared from the site on Buford Drive near the Mall of Georgia, the permit’s issuance marks the true beginning of construction work on the $45 million stadium.

Project manager Preston Williams did not return a telephone call left at his office late Friday afternoon seeking comment on when work would begin at the site. Williams has previously said that he expected grading to begin within days of issuance of the permit.

The county is under a tight deadline to complete construction of the stadium by next spring’s home opener for the top minor-league affiliate of the Atlanta Braves. That team is relocating from Richmond, Va.

Among the first tasks, Williams has said, will be grading the land that will eventually become the playing surface of the 10,000-seat stadium.

The GCVB, Gwinnett County and the Atlanta Braves signed a contract last week for the ball club’s Triple-A team to relocate from Richmond to Gwinnett County.

Short, sweet, and to the point: nothing but the relevant facts. Pearson, Tim Tucker, and a few others at the AJC have covered the issue in depth, sometimes having to seek open record requests when county officials refused to comment on details. They have also contacted outside sources, including me and others who disagree with me, to comment on the project. I feel that they have done an excellent job.

Camie Young’s version in the Gwinnett Daily Post is similar until the last paragraph.

According to a press release, county economist Alfie Meek estimates the ballpark will generate approximately $15 million per year in new economic activity, including an estimated 200 additional jobs countywide and generate about $6.5 million in new personal income.

The last paragraph is not needed in a story about the issuing of the initial construction permits. If Young wants to report on the potential positive economic impact calculated by a paid employee of the county, it is her duty to contact disinterested experts to comment. I can only guess that the author was trying to inject her own opinion—or, possibly the opinion of the paper’s editor—into the story.

Do they give anti-Pulitzers? If so, the Post’s coverage of this whole affair ought to be nominated.

Freakonomics Posts Bill James’s Answers

Freakonomics has posted Bill James’s answers to reader questions. He even answered my question.

Q: Is sabermetrics the Freakonomic analysis of baseball?

A: There are parallels. What I do was heavily influenced by the University of Chicago economists of the 1960’s. I think Freakonomics comes from the same tradition.

Cool, so we can trace the origins of sabermetrics to the Chicago school of economics.