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Who paid for stadiums in early history
Fully paid from owners
Where were early stadiums located
urban neighborhoods
Why were early stadiums placed in urban neighborhoods?
To take advantage of the population density
What was the outcome of early stadiums being placed in urban neighborhoods
Stadiums had quirky characteristics that have been romanticized
Jewel Boxes
unmistakable oddities in ballparks. Ballparks provided little comfort or convenience for fans.
Which cities had circular, dual purpose (football and baseball) stadiums in the 1960s
Cincinnati, New York, Philadelphia, Pittsburgh, Atlanta, and St. Louis
Who was the first team to build seperate facilities
Kansas City
Why is it beneficial to not have two teams share a stadium
To maximize revenue
What do venues that have hockey and basketball require
the upper deck needs to be set farther back so fans can see both goals
Who controls the supply of teams
the league
(T/F) Early sports teams had the same bankruptcy rate as start up businesses
True
What two things did establishing an exclusive market do?
Formed a fan base
Other members would not play a member of a competitor in the market space
Which event caused proliferation for the demand of sport
Baby boom
What happens if a city is without a franchise
They are losing out on human capital
What is the best way to lure a franchise
Building a stadium
Do venues produce positive economic effect on real estate development
Yes
Which city launched the modern era of public support (city pays for venue)
Milwaukee
How have leagues snuffed out rival leagues
Through expansion
Which team had the first successful relocation threat
Indianaplois
What did indianapolis gain from the relocation threatg
THey got to keep income from luxury seats
Which decade saw dozens of facilities built with public money
90’s
Was the public or private sector responsible for matinence costs of venues
Public
What did state of the art clauses define
what is appropriate for tax-payers to foot the bill for
Downside to more teams
prices may decline as supply increases
Two key factors cities and teams must consider in decision making process
The extent to which a professional sport venue aligns with citywide development plans
Whether the venue design will contribute to an iconic exterior design that will define the urban space
Yankee Stadium
New has twice the retail space. 13 restaurants and pubs compared to 4 in the old ballpark
New has 56 luxury suites and 410 party suites. Older had 19
The new stadium is 63% larger than the size of the facility it replaced even though playing fields were identical
How many square feet is the mercedes benz stadium in atl
1.6 million sq feet of space (300,000 more than Dome)
One of the most important issue when choosing location
Availibility of land
What are benefits of having a stadium in a business district
better modes of transportation than suburban options. Less congestion can reduce consumption costs
Consumption Costs
as relate to sport attendance, cost of tickets and transportation to and from the game, as well as the amount of time the fan invests in attending the event
Which league should remember consumption costs the most
MLB
Which league should remember consumption costs the least
NFL
Which sector offer incentives to keep the economic vitality of aging downtown areas
Public
How many seats maximize sight lines and
provide best range of seating options
45,000
Larger ballparks that offer more seats must place the extra seats where?
Upper outfield decks
(T/F) When fans know that there will not be tickets available, they easily make advanced purchases
False; When fans know that there will always be tickets available, they are reluctant to make advanced purchases
Is it more beneficial to have too few or too many seats
Too few
Facades
create an image for a team and city
Monumental Design
Dramatic and becomes a destination. Dwarfs the surrounding environment
Neighborhood Design
Fit into neighborhoods and facilitate development. Often nearby structures that are larger in height
How many events must arenas host per year
100
Why is college attendance declining
not paying attention to Disneyfication of sports
Private Financing
Team ownership contributes to the construction of the venue
Public Financing
Local city/county/state government contributes to the construction of the venue
What do people against public financing want
either want the tax dollars going elsewhere or do not like that owners are billionaires
Two ways public financing is awarded
Politicians have the ability to simply legislate a public stadium subsidy for a franchise
The potential for the award of the public subsidy can be placed up for a public vote
What have the majority of public stadium subsides come from
politician legislation with no public vote
How many publically funded projects awarded using legislation since 2000
50
How many stadium subsidy projects brough to a public vote since 2000
15
What is unique about sports venue construction?
Team owners are being subsidized by local governments (indirectly through taxpayers/consumers)
Why are Team owners are being subsidized by local governments (indirectly through taxpayers/consumers)
Local governments feel pressure to keep the franchise in their local market
Fans do not want their local team to move
Politicians do not want to be “the one in office” when the team decides to relocate
Why does the franchise owner have the advantage?
Open markets that are a “real” relocation threat
Think of the open markets in NFL, MLB, NHL and NBA
Ways public can contribute to stadium funding
Higher property taxes
Higher standard sales taxes
Additional new taxes on specific items
Diversion of taxes from the general fund to the stadium construction fund
Sin Taxes
Taxes on rental cars, alchohol, tobacco, and gambling
The brunt of the stadium costs are paid by who if the venue is privately funded
Fans since they pay for tickets and parking
IF the venue is publically financed, who bears the brunt of the costs
Taxpayers
What arguement do politicians use to agrue for public funding of a stadium
Four positive externalities
Positive Externalities
scenarios that improve life or another person’s welfare
4 Positive Externalities
Creation of Social Capital
Relocate economic activity
Define the identity of the city/region
Economic development
Ticket Tax
tax added to the cost of the ticket. Can be a percentage or fixed fee
What can ticket tax also be considered
Amusement tax
Who does ticket tax only impact
Users
Result of Ticket tax
fans pay higher ticket prices, team receives less ticket revenue and fewer fans attend games (but depends on consumer willingness to pay)
Parking tax
usually occurs at parking lots and structures by the venue and during an event held at the venue
How can parking tax be structured
Percentage or flate fee
Who does parking tax only impact
Users
Can parking tax impact team revenues
Yes
In-Facility Sales Tax
additional tax on all transactions within the facility
Is In-Facility Sales Tax a % or flat fee
Usually a %
Who does In-Facility Sales Tax affect
Only impacts users
What happens if fans avoid in facility purchases
Hurts team revenue
Sales Tax
a small increase in the general sales tax for all retail sales that goes towards venue construction
Who does sales tax impact
Since all purchases in a city have the tax, it impacts users and nonusers of the facility
Why do sales taxes work?
The small increase usually has little political opposition
Even a small % increase generates a large amount of $
Impact on the individual taxpayer is very small
Property Tax
very small increase in the rate at which real estate is taxed
How is property tax calculated
Tax on the “assessed value” of a property for property owners
Does property tax generate a significant or insignificant amount of revenue
Significant
Who would oppose property tax
those on fixed-incomes and those who believe increased property taxes should support education/other public services
Income Tax
small increase on household income taxes
Does a small increase in income tax generate small or large revnue
Large
Sports District Tax
taxes generated in a specific area around the proposed venue are used to help fund the venue construction
Sin Tax
tax on the purchase of alcohol or tobacco
Who does sin tax affect
Only users of those products
Is sin tax considered voluntary or involuntary
Voluntary
Gaming taxes and lotteries
tax on gambling winnings or lottery ticket purchases...or…Lottery proceeds for a period of time can go towards venue funding
Tourist Tax
tax on hotel rooms or rental cars
Why do tourist taxes have a lower level of voter opposition
Since the tax largely falls on visitors
What happens if tourist taxes are too high
it could shift tourism patterns and reduce economic activity in an area
Food and Beverage Tax
tax on food and beverages sold at restaurants and pubs within a given geographical area
Is food and beverage tax voluntary or involuntary
Voluntary
What are sports venues complimented by
additional development and other amenities, can contribute to the revitalization of urban neighborhoods and enhance adjacent property values. Many team owners have changed their business models to include real estate development
First stadium to develop aroudn the facility
Orioles
Two Development Approaches
Real estate outside venues on adjacent land (build new neighborhoods for Padres, District in Detroit
Build new entertainment complexes on small acreage to include restaurants, pubs, live performance spaces
Increasing Value of Downtown Locations for Sport (4)
Located at the nexus of many transit systems
Now include amenities that are available before, during, and after games and
events
Horizontal integration of sport with entertainments options is more popular
Sport has sustained its popularity across several decades
Transportation
When switched to cars as main mode in 60’s, many teams went to suburbs for parking (especially in west and south). But once luxury seating came, businesses were interested in suites and B2B deals. Cavs, Wizards, S.F. Giants, Lions, Pistons all moved to suburbs and came back to downtown.
Decentralization of economic activity
Despite this, banks, law firms, real estate all hold office space in financial districts. This portion of teams fan base needs easy access to facilities. Many downtown revitalization strategies were enhanced by sport venues
Who lives downtown
Young professionals
What types of apartments and condos are in demand
Apartments and Condos in demand that offer easy access to restaurants and entertainment
What are stadiums similar to
ballparks and stadiums are similar to large-scale real estate projects. Very similar to malls which offer large tracts of space that managers need to maximize revenues on
6 Pieces of Real Estate that must be maximized
1. Luxury seating
2. Seating deck
Normal seats/bleachers
3. Concourses and entrances
4. Scoreboard and electronic displays
5. Playing surface
6. Naming rights
