Pro sports facilities are an 'investment': Yeah, right

Nobody believes sports economic impact studies. So why do them?
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A drawing of the proposed Seattle SuperSonics arena in Renton. (Sonics)

Nobody believes sports economic impact studies. So why do them?

Debate over the future of pro basketball in our region just took a familiar turn: the release of the economic-impact study. The Sonics study (summary PDF, full report PDF), like previous ones done on the Mariners and the Seahawks, is intended to bolster arguments for public funding of sports facilities. The argument goes like this: Vast sums of money can be attributed to "economic activity" associated with the team. Certain jobs and tax revenues can be attributed to that "activity." Therefore, public dollars to build the facility is an "investment." According to the City of Renton, a new study by Berk and Associates has found that a new Sonics facility "shows potential for more than $400 million in annual economic activity and 5,800 jobs statewide." The report, paid by the team and the City of Renton, also says state and local governments could reap up to $340 million in taxes over 25 years. Renton alone would get $20.5 million during that time. The Sonics want $300 million in public funding for a proposed $500 million facility in Renton. Much as I love the team, and want them to stay, it's hard to find anyone who completely believes these studies. A study for the Seahawks, for example, claimed that some "economic activity" could be attributed to the team by a fan at home watching a commercial. Despite all the impressive spreadsheets and tables, the studies are less about economics than public relations, giving supporters a patina of science to their arguments. Supporters quote top line estimates and let critics pour through the appendix to find qualifiers and assumptions. In 1995, supporters of a new stadium for the Mariners said losing the team would cost King County $115 million a year in economic activity. Turns out that number was an estimate of total economic activity attributable to the team, but only half that number was "new money" – or money that wouldn't be spent here if the team didn't exist. Look for Sonics advocates to quote that $340 million tax-revenue figure – never mind that the figure is based on stacked assumptions of playoff games, unspecified "high-impact" conventions, and a National Hockey League franchise here. My favorite line in the Sonics report is this: "It is important to note that this is not a comprehensive cost-benefit study, as the cost implications of the project are not part of the review." Exactly. It's just numbers. But quote them at will.


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About the Authors & Contributors

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O. Casey Corr

O. Casey Corr is a Seattle native, author and marketing communications consultant.