Ben Konop and George Sarantou on the new arena project...

As I read the article in today's Toledo Blade and from prior encounters with both Ben Konop and George Sarantou they both do have similar beliefs when it comes to support of the plan for a new arena downtown. After I read this section of the article:

Despite the new restaurants and businesses that have sprung up near Fifth Third Field in Toledo's Warehouse District, a 2003 survey of academic research on new arenas and stadiums by economists Dennis Coates and Brad Humphreys undermines claims by politicians of job and income growth.

"No retrospective econometric study found any evidence of positive economic impact from professional sports facilities or franchises on urban economies," it reads.

The study notes that government subsidies, which would cover about 70 percent of the Toledo arena's costs, often come at the expense of police, street repairs, and education.

It attacked "economic impact" studies on arena proposals.


So I became curious as to what else did this study say. In searching for a 2003 version, it became clear that both Dennis Coates and Brad Humphreys have written previous studies that make similar claims. In 1998 they released a study entitled, "The Growth Effects of Sport Franchises, Stadia and Arenas". The abstract for that study states:

This paper investigates the relationship between professional sports franchises and venues and real per capita personal income in 37 Standard Metropolitan Statistical Areas in the United States over the period 1969 - 1994. Our empirical framework accounts for the entry and de- parture of professional football, basketball and baseball franchises, the construction of arenas and stadia, and other sports related factors over this time period. In contrast to other existing studies, we find evidence that some professional sports franchises reduce the level of per capita personal income in metropolitan areas and have no effect on the growth in per capita income, casting doubt on the ability of a new sports franchise or facility to spur economic growth. We also find evidence that results obtained from estimating reduced form relationships, a common practice in the literature, are not robust to alternative reduced form specifications.

I then located "Professional Sports Facilities, Franchises and Urban Economic Development" which was written in 2003. The abstract for this report states:

Local political and community leaders and the owners of professional sports teams frequently claim that professional sports facilities and franchises are important engines of economic development in urban areas. These structures and teams allegedly contribute millions of dollars of net new spending annually and create hundreds of new jobs, and provide justification for hundreds of millions of dollars of public subsidies for the construction of many new professional sports facilities in the United Sates over the past decade. Despite these claims, economists have found no evidence of positive economic impact of professional sports teams and facilities on urban economies. We critically review the debate on the economic effects of professional sports and their role as an engine of urban economic redevelopment, with an emphasis on recent economic research.

I suggest reading the information, especially the 2003 report and making your own conclusions. I think there are some valid concerns about this arena project that doesn't mean it should not be built but that looking at all of the information presented on both sides can be helpful.