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Recommended: Sports facilities and government funding
Jarrett Greene
Skeeter Richardson
Micro Economics
May 12, 2014
Subsidies & Sports
While going to sporting events, have you ever taken the time out to check out the surrounding area? Whether the arena is dilapidated? If the arena is worn down, in what ways besides sports revenue do they build the arena to be up to par. These are all questions that one might say correlate with the topic of Stadium Subsidies. The purpose of this report is to relay what a subsidy is and how sports in America interact with it to make it a big topic. When looking at this topic there are many things we must look at like the impacts that stadium funding has on the immediate public, if it actually benefits the public and the actual good or bad that it does.
Let’s start by understanding what a subsidy is. A subsidy is “ a benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some type of burden and is often considered to be in the interest of the public. Politics play an important part in subsidization.” *
You ask how do subsidies and sports intertwine, well here is your answer. Americans crave sports, so why not shovel out millions and billions of dollars to create a home base for a sports team when you’ll receive that money back essentially in double the amount. “61 percent of Americans identified themselves as sports fans in a Marist poll last November.” These teams have trillions of fans but sports as a whole acts like a monopoly. A monopoly is “a market structure in which one firm makes up the entire market. It is a market structure in which the firms faces no competitive pressure from other firms.”
The leagues whether it be NFL, NBA, NHL, MLB etc....
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...mployed with MSG last year during the Knicks season and once summer came she was unemployed due to renovations of the arena. Although it was a temporarily layoff, essentially working during the season already isn't a real job because out of a eighty-two game season only about fifty percent of the games are actually played at home. Another example would be the fairly new Yankee stadium. The way the new stadium looks is outstanding but what about when the stadium isn't used by baseball. in 2014, there are a total of three events occurring over the summer besides the baseball games. Honestly the amount of money spent to build a stadium right ACROSS THE STREET isn't worth it at all.
In any situation there are pros and cons to a situation. When talking about stadium subsidies there are few on both sides. Below is a chart that states the pros and what exactly occurs.
Siegfried, J., & Zimbalist, A. (2000). The economics of sports facilities and their communities. The Journal of Economic Perspectives, , 95-114.
In the last decade, almost all the big cities in the United States, and a few small cities as well, have battled with each other for the right to host big league franchises. Cities spend hundreds of millions of dollars to build new stadiums and offer enticements to private franchise owners. Politicians often push for stadiums and other favors to teams despite not having support from neighborhoods and general opposition across the whole city, especially where these high dollar stadiums would be built.
There seems to be a domino effect through out the U.S., new stadiums are being built, teams are demanding that their city build them a new stadium to play in but it is not necessary to build these stadiums. The most obvious change in new stadiums is coming from baseball. In the last 10-15 years many new baseball stadiums have been built, but who is paying for these stadiums? The teams and the owners that are demanding the stadiums, or the taxpayers? The answer is that taxpayers are picking up a huge amount of the cost to build a new stadium.
Money Hurts College athletes attend post-secondary schools in order to receive an education and to participate in sports. “Student athletes participate in an organized competitive sport sponsored by the educational institution in which he or she is enrolled. Student athletes must typically balance the roles of being a full-time student and a full-time athlete” (“Student athlete” 1). Additionally, some people believe athletes should receive a salary. However, paying college athletes hurts the school, the sports, and the athletes.
Ever since college students started playing sports, back in 1879 when Harvard played Yale in the first collegiate sports game, the question of whether college athletes should be paid was addressed. From that point on athletes, coaches, and college administrators have brought forward points agreeing or disagreeing with the notion of paying college students. The students argue that they deserve to be paid due to the revenue that they bring for the college and because of the games they play and the championships they win. At first the idea of paying college athletes was out of the question, but now the argument has gone from a simple yes or no to a heated debate. Since college athletes are given a free education, they should not also be paid.
Abstract: The Stadium construction boom continues, and taxpayers are being forced to pay for new high tech stadiums they don’t want. These new stadiums create only part-time jobs. Stadiums bring money in exclusively for professional leagues and not the communities. The teams are turning public money into private profit. Professional leagues are becoming extremely wealthy at the taxpayers expense. The publicly-funded stadium obsession must be put to a stop before athletes and coaches become even greedier. New stadiums being built hurt public schools, and send a message to children that leisure activities are more important than basic education. Public money needs to be used to for more important services that would benefit the local economy. Stadiums do not help the economy or save struggling towns. There are no net benefits from single purpose stadiums, and therefore the stadium obsessions must be put to a stop.
Mitten, Matthew J., James L. Musselman, and Bruce W. Burton. "Targeted Reform of Commercialized Intercollegiate Athletics." San Diego Law Review 47.3 (2010): 779-844. Academic Search Complete. Web. 17 Nov. 2013.
While the coaches of these sports teams are benefitting greatly the players still receive nothing. The coaches are receiving way too much. One of the main points about the unfairness of coaches compared to players is that the coaches are allowed to advertise while players are not. The coaches receive very generous compensation for advertising, so why is it a big deal if a college athlete is being paid for being in an advertisement? Coaches are able receive huge deals from companies, and can make way over one million dollars a year. The only way college coaches are able to receive all these deals from shoe companies and others are by how the players perform. When the coaches have players that per...
Colleges, especially big Division 1 universities, bring in millions during football season. But when the die heart fans purchase their ticket and walk through the stadium entrance, who are they coming to see? Are they coming to see the coach? No, they are there supporting the players and the team who have worked so hard. My personal opinion is to pay each player $500 a game, that’s not too much to ask.
Financial aspects and profitability of college athletic programs is one of the most important arguments involved in this controversy. A group of people expresses that college athletic programs are over emphasized. The point they show on the first hand, is that athletic programs are too expensive for community colleges and small universities. Besides, statistics prove that financial aspects of college athletic programs are extremely questionable. It is true that maintenance, and facility costs for athletic programs are significantly high in comparison to academic programs. Therefore, Denhart, Villwock, and Vedder argue that athletic programs drag money away from important academics programs and degrade their quality. According to them, median expenditures per athlete in Football Bowl Subdivision were $65,800 in 2006. And it has shown a 15.6 percent median expenditure increase fro...
The mixture of these four factors creates great rivalry among teams chasing sponsors, licensees and fans for a fixed pool of revenue with covering high and often increasing costs.
The complaint of the academic institution receiving the TV and merchandising money while players get next to nothing is a ridiculous sentiment. The apparatus of said institutions is not set up to drain players but the opposite. Student-athletes get room and board, the opportunity to show their skills to professional scouts, and most importantly a free education (Ramey 1). Though even with this provided, a collection of athletes somehow struggle to make ends meet. Out of all college athletes living on-campus, a whopping 86 percent drop below the federal poverty line (Alford 1). Faith Alford, journalist for the Daily Cougar, claims that the student-athletes cannot afford food at times, considering their sport is their full time job (1). Even so, that’s another day in the life of any other college student. College students make cutbacks all the time, staple foods are ramen noodles and great value counterparts to popular brands. Everyone has to make sacrifices. There is acknowledgement to be made to Alford 's statement, regardless, as of January 27th, 2015, College athletes are getting more than just tuition, room, and board under a vote taken at the NCAA 's annual convention (Berkowitz 1). These added benefits are called stipends, which could also be a problem for schools like TU. Stipends are not as simple as one would think. If these plans were to follow through in all places with players getting $2,000
Bissinger states in his essay that local high schools these days are spending millions of dollars on things such as elaborate stadiums, gymnasiums and even chartered planes to transport their team to big play-off championship games. In the past, schools would sponsor fundraisers to RAISE the money for these t...
A recent article in Readers Digest estimates that most Americans spend at least 13% of their income on sporting events and sport related products. Sports has entertained American people and drained money out of their pockets making sporting events an arena of pure economic activity. It has been proven that Americans will purchase tickets to attend sporting events, but this alone does not create enough revenue to keep sports teams profitable.
"Money makes the world go 'round." Sports could not exist without the presence of money. You have high paid athletes asking for multi-million dollar contacts, while at the same time you have doctors not even making close to that amount. There are corporations buying out sports teams, buying stadiums, and buying everything that has to do with sports. Someone may ask why they do this. Sports are one of the most profitable industries in the world. Everyone wants to get their hand on a piece of the action. Those individuals and industries that spend hundreds of millions of dollars on these sports teams are hoping to make a profit, but it may be an indirect profit. It could be a profit for the sports club, or it could be a promotion for another organization (i.e. Rupert Murdoch, FOX). The economics involved with sports has drastically changed over the last ten years. In the United States, we spend about 13% of all money on sports and entertainment. Sports has obviously done its job; entertained and drained money out of our pockets.