Monday, September 25, 2006

Do Sports Have Social Value?

In accordance with this blog's recent sports-theme, here's a photo of the latest from New Orleans: the reopening of the Superdome for tonight's game. It hasn't been cheap:
The $185 million job included a new roof, thousands of new seats, new video and sound systems and new concession stands. It was all preceded by an enormous cleaning and gutting job after as many as 30,000 storm victims who took shelter there had been taken out of the city.

I haven't yet been able to track down how much of this is public money, except that there's at least $45 million from restructuring some existing state bonds. But sports arenas are heavily subsidized, and there's little reason to think this is any exception.

Are these expenditures of public funds justified:

(1) Because of economic externalities such as increased tourism?
(2) Because of intrinsic value of the game (like saving the redwoods or the Mona Lisa)?
(3) Because of the social cohension provided to the city? Is the value of this increased in a post-disaster situation?
(4) None of the above?


Blogger Chris Castanes said...

FEMA has footed a large portion of the bill to repair the Superdome. This is the same FEMA that has thousands of trailers sitting unused and spent way too much on cruise ships.
Is this what our forefathers were thinking of when they started this nation?

9/25/2006 11:16 PM  
Blogger Jim Chen said...

As is suggested by my pictorial post, I am willing to entertain possibility #3, social cohesion. There's value in bringing the entire New Orleans community back around a sports team. Whether that value is worth $45 million is a question for further debate.

9/26/2006 3:20 AM  
Anonymous Anonymous said...

Have there been any congressional hearings as to how the teams and owners are colluding to make cities compete against each other and thus , are "gouging" the taxpayers to subsidize the astronomical contracts for the players? ;)

9/26/2006 8:02 AM  
Blogger Frank said...


"The . . . Brookings Institution recently published Sports, Jobs & Taxes, a collection of academic studies on the economic impact of new stadiums. "The overwhelming consensus of opinion in these studies," Brookings concluded, "is that the local economic effect of a sports facility is between nonexistent and extremely modest."

The cohesion point makes some sense. But perhaps it should be balanced by the subjective disutilities of marginalization of those who can't be bothered to follow sports. And the "crowding out" effect on other, possibly more important or elevating topics of concern. (Panem et circenses, anyone?)

9/26/2006 8:34 AM  
Anonymous Anonymous said...

I might agree with the Brookings findings, with one exception, being New Orleans. Having lived there for six years, people really do come and stay and spend money around big events. The Superdome is responsible for bringing 100,000 plus people to New Orleans for the Bayou Classic; 100,000 plus for the sugar bowl; and then there are the superbowls, final fours, etc.... People come, they stay in hotels, they spend money. Money that translates into more jobs and more houses. That economy is almost solely dependent on tourist dollars. With the Oil Industry move to Houston in the early 1990s, the city's major economic boost is tourism -- which the dome and the civic center play a major role. The Economics are more significant than you might think.

9/26/2006 9:33 AM  
Anonymous Anonymous said...

As I understand it, the unanimity of the studies showing that public support for stadiums makes little economic sense is quite unusual for empirical work in economics. However, I seem to recall that the Super Bowl is something of an exception--unlike, say, the World Series, the Super Bowl brings in a lot of outside money. The Sugar Bowl and other major college bowl games may be similar. New Orleans may be unique in its ability to bring in that kind of event regularly, and in its reliance on tourism. Thus, I could be persuaded that New Orleans is a plausible exception to the general rule that subsidizing stadiums is a waste of money.

9/26/2006 11:18 AM  
Anonymous Anonymous said...

Here's a view on sports' social value, at least in re: New Orleans and the Saints:

The "Smith: New Orleans needs the Saints " story is located at

9/28/2006 8:41 PM  

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