Caught Stealing: Debunking the Economic Case for D.C. Baseball

Introduction

On the 28th September year 2004, Mayor Williams was on a quest to bring the first baseball team to D.C after many years of bargaining with the Major League Baseball since 1971. Williams was faced with the challenge of convincing a better part of the D.C Administration to pass his proposal of using city government power as well as the tax money to construct a new ultra-modern ballpark for the team. Williams was however faced with one major challenge since professional sports teams have been earlier seen to profit at the expense of taxpayers. The deception had in most instances involved an individual franchise being used exclusively to control and extract concessions from the local and state government.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

In his message, Mayor Williams stated that the ballpark would be financed in totality by the teams' owners with not even a single cent from the residents. In his proposal, Williams cited rent paid by the baseball team to use the new ballpark, concessions, parking, taxes on sales of tickets as well as goods and services sold within the facility as the sources of revenue to finance the baseball stadium construction. He also proposed a "ballpark fee" to be charged on some of the giant corporations in the District. The plan by Williams of having the team finance the stadium for 30-years through a lease committing it to a starting rent of $3.5 million every year to later increase to $5 million by the fifth year with a 2% increase thereafter was disregarded by an economist who through calculations realized that with an inflation averaging at 3% annually, after five years the D.C taxpayers would be required to give another implicit concession to the baseball team.

If people decided to eat, drink, park, buy T-shirts, jerseys, hats and other merchandise from within the stadium, as Williams proposed as another source of revenue, it is most probable that the same residents would have spent the same through purchasing clothes and eating food from D.C in the absence of the franchise and stadium. Also, the increase in the tax rate of corporate income or surcharge regarding a "ballpark fee" on largest corporations in the D.C District is nothing more but a tax increase, simple and clear.

However, the District's Office of Deputy Mayor concerned with planning and development of the economy suggested that the professional sport would significantly impact on the economy positively. This would be through the creation of an estimated 360 jobs which would bring about annual earning totaling to $94 million, an outstanding of $261,111 per every job. Considering the broader local economy, the impact of a dollar spent on sports entertainment directly would have a triple effect on the local economy.

Conclusion

In conclusion, as much as the government tries to push for a professional sports franchise to their cities or even to use public funds in the construction of more elaborate facilities to attract them, they bring no positive benefit to the local economy. Presence of professional sports teams has zero correlation with local economies growth. In fact, some economic sectors frequently considered as the primary beneficiaries of stadiums consideration may reap minimal benefits or even end up being harmed by it.

Reference

Coates, D., & Humphreys, B. (2004). Caught Stealing Debunking the Economic Case for D.C. Baseball. Object.cato.org. Retrieved 22 March 2018, from https://object.cato.org/sites/cato.org/files/pubs/pdf/bp89.pdf