We may all live in a great big global community, but in my Blog, it's my world.

Some years back a co-worker and I were arguing about whether or not it made financial sense for the District of Columbia to spend the kind of money it would take to build a stadium for the baseball team that would be moving or had moved there.  The co-worker hated the idea of any tax money, or any public money really, going to the rich owners of the baseball team.  I argued that the money that was being spent on the stadium would result in a very nice revenue stream that would eventually help to make it a break even proposal.  In the end neither of us changed our minds, but we enjoyed the debate either way.

Today's news (Washington Times newspaper, WTOP News Radio, others) has talk of a report prepared for the Comptroller of the state of Maryland that looks at the lost revenue figures that will be real if the NFL winds up not playing at all this season.  A complete wipeout of the season would result in a loss of something near $40 million in tax and revenues for the state.  That includes two NFL teams that play in the state (the Washington Redskins and Baltimore Ravens) in two different stadiums, but you get the picture that between them that's a pretty significant amount of lost revenue.

No NFL season means no fans at games.  No parking fees to be taxed.  No beer and alcohol sales to be taxed.  No food and other beverages to be taxed, along with a host of other things (jerseys and other fan items).

The NFL does a heckuva lot of business, but realistically, the MLB does more.  NFL games have somewhere around 60,000-95,000 seats available for fans.  MLB stadiums typically hold somewhere around 40,000 fans.  NFL teams have (in a normal year) 12 home games (including exhibition/preseason) if they don't make the playoffs.  MLB teams have 81 games along with perhaps an exhibition game.  The numbers for beer and other alcohol sales go up significantly for MLB teams just because of the number of games that are played throughout the season.  And along with the increase in beer and other alcohol there's the increase in food sales, etc.

In the end, looking at the Washington Nationals and their ballpark, I think the right decisions were made.  While the real estate bubble bursting has horribly slowed the rebirth and rejuvenation that should be happening in the area where the stadium was built, having the team and stadium has been a great thing for Washington, DC.


Comments
on Jun 22, 2011

I find it hard to believe that we would allow a season of NFL to simply go by down the drain when this country was willing to shell out millions to save companies and banks that could have survived the downfall we have been experiencing for the past few years without the help.

It would be a shame as football is the only sport I actually watch. That would definitely ruin the year.

on Jun 22, 2011

Not to mention the impact on Fantasy Football - I heard somewhere it's something in the $billions a year proposition.  Of course, I don't think it gets taxed.

This shows the inherent weakness in relying on economic-activity-based taxes when we know that's a roller-coaster ride.  Would be the same with VAT.  Which is an argument for a light tax footprint on all economic activity to minimize the impact of business cycle fluctuations, and to dis-inhibit economic activity in the first place.

on Jun 22, 2011

Your numbers are a little off.  NFL teams play at best 10 games at home (8 regular, and 2 pre).

As for the revenue hit, that seems like a very small amount.  I am not arguing with it, but consider a couple of things.  First, that is 2 teams, so we are talking about only about $20m per team per year for the locality.  How much does a stadium cost (a heckuva lot more).

Second, while some of that $40m will be put in the bank, not all will.  A lot will be spent on other endeavors (considering it is football, think College games plus hockey and Basketball).  So the real loss is considerably less to the state.

Howsoever, it IS football, and I pray they do not waste the season.  I like baseball (go Mets) but I love Football!

on Jun 22, 2011

Dr. Guy is correct - it's not a zero-sum game and those dollars don't just completely disappear.

Meta
Views
» 307
Comments
» 4
Category
Sponsored Links