https://economics.umbc.edu/files/2014/09/wp_03_103.pdf. The article tries to approve and disapproves how professional sports facilities and franchises are a source of economic development in urban centers where they are situated. The article reviews the argument on the economic impacts of sports facilities and franchises in urban centers development.
Sports facilities and franchises are seen as potential candidates in revitalizing the economy of urban surroundings. Despite this belief, there is growing evidence that sports facilities may not be the energy gearing up economic growth in the urban centers. The research and studies in the article shows that there is no direct connectedness between economic growth in the urban centers and the sports facilities that is home to it .There is the enormous construction of sports facilities using public funds. Most of the professional sports facilities under construction are getting subsidization from the public resources, with the expectation of positive economic impacts to the urban centers that home this facilities.
There are two categories of evidence on economic impact from the research in the article. The evidence shows impacts of sports facilities in the urban economies. Before construction of a sports facility, an economic impact study is carried out to give the go-ahead the spending of public funds on these facilities. Most of the times these studies do not give the correct prospect of the economic impacts, and they majorly rely on multipliers that are not realistic. The article states that many assumptions are made just to meet the motives of the individuals advocating it. On the hand, there is of retrospective economic research that provide the solid evidence of the impacts of sports facilities and franchises in urban economies. The article explains reasons behind the no effect brought by the sports facilities. There is much spending by the household directly on sports. Sports expenses include the purchase of entry tickets and indirect expenses on of food and beverages in the sports facilities. The expenditure increases the spending budget for the household, which can eat up on their savings. On the larger side, the funds used in constructing sports facilities can be used to build other useful public facilities that can improve the economy such as roads. The building of sports facilities is in the expense of other productive structures that are forgone. The result is that the economy is affected negatively.
In an attempt to justify the subsidies to the taxpayer on sports facilities, the article talks about external benefits. It shows how certain cities have received commanding status due to the availability of sports facilities in the city. They are a challenge in transferring this status into a market where its value can be determined. The success of a local team can increase per capita income of the city. The success happens when the workers gain motivation from the success of their team, which will make them productive. No pecuniary benefits of sports facilities show some positive outcome. On the other side, mega-events are supportive when dealing with the negative results of sports facilities in an urban center and aid in the growth of local economy. The research in the article shows how the economy of cities that have hosted mega-events improved. The earnings increased, and many jobs were created during the event which benefited the locals.
From the article, there is evidence that mega-events have economic benefits to the cities hosting them. Mega-events redistribute spending to the other parts of the city economy; this is proved from the two cities, Atlanta and Georgia after they host Olympics.
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