Assignment 4: Subsidization of Professional Sports

Assignment 4: The Subsidization of Professional Sports Arlene Miller Dr. George A. Uhimchuk ECO 405 Economic Problems and Issues December 1, 2011

Assignment 4: Subsidization of Professional Sports How important is a professional sports stadium to a community, town or state? Well it depends on the attractions, entertainment, job creations and amenities a professional sports stadium brings along with it. A professional sports stadium brings opportunity, business growth

and development, and also impacts the communitys quality of life. Professional sports stadiums not only bring entertainment, business opportunities, job creation and population growth but it substantially brings a boost to the economy. While there are considerable costs involved many people would argue the benefits are well worth it. Some of the costs to consider when building a professional sports stadium are designs, architectures, purchase of the land, involvement of government officials, owners of the team, development teams, and engineers. To begin the process the cost must be established for the purchase of the land found. This allows for space for the new stadium to be built. Once plans are underway this helps determine space needed for parking and other amenities. The next phase of cost is to determine design and plans of how the layout and the structure of the stadium must be done in order to insure enough space and seating is allowed for. Then there are meetings between government officials, team owners, and development teams to go over plans, cost, and budget. It costs millions of dollars to build a professional sports stadium. Bonds are a way for a city government to generate money needed for the construction of a new or revocation of a sports facility or arena. A bond is defined as an interest-bearing certificate issued by a government or corporation promising to pay interest and to repay a sum of money (the principal) at a specified date in the future (Financing options and Facility Development, n.d.). Once the architecture plans are finished they are then approved by the engineers. Another contributing factor of cost comes at the expense of the tax payer dollars. Taxes are imposed on stadium activities such as ticket sales, concessions, and merchandise sold by local vendors.

Assignment 4: Subsidization of Professional Sports Construction of a professional sports stadium requires several construction companies and employees working on a project this massive. A professional sports stadium can take anywhere from three to five years before it is complete. Some benefits of public financing of a professional stadium include restaurants, hotels, souvenir shops, convenience stores, and shopping malls for the tourists to visit and boost the local economy. By building a professional sports stadium it attracts people from all over the world including tourist and foreigners. With a new professional sports stadium this helps bring new businesses like restaurants, hotels, and gift shops which helps to boost the economy. This allows people, tourists and foreigners, to spend money in all these places, which puts money

back into the local economy. By building a new sports stadium this creates jobs for the economy. This helps the economy by investment of jobs, and growth of new business opportunities being created. In turn this creates population growth and development of new business opportunities for the community. Arguing for or against the use of public funds to build sports stadiums. I am in support of financing a sports stadium to a local economy. The reason I am in support of the use of public funds is because it creates opportunity for development of new business, job creation, and a host of other economic growth factors and other amenities which will boost the economy and job growth and development. The amenities of new hotels, restaurants, new business developing means a chance for opportunity and the economy to start re-growing. This means jobs for locals and to attract more business to help the economy.

Assignment 4: Subsidization of Professional Sports References Financing Options and Facility Development. (n.d.). Retrieved November 21, 2011, from The Sport Journal website: http://thesportjournal.org/article/financing-options-and-facilitydevelopment Reynolds, A. (n.d.). How to Build a Football Stadium. Retrieved November 30, 2011, from eHow website: http://www.ehow.com/how_5684891_build-football-stadium.html

Sharp, A., Register, C., & Grimes, P. (2010). ECO 405: Economics of social issues: 2010 custom edition (19th ed.). Boston, MA: McGraw-Hill. Sports Stadiums + Public Subsidies. (n.d.). Retrieved November 30, 2011, from University of Michigan website: http://www.umich.edu/~econdev/stadium_subsidy/