Externalities Of Sports

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Recommended: Public money for private gain on sports stadiums

The topic that I have chosen is how externalities of a professional sports team affects the city, town, or state that it is in and how also it can increase or decrease the economic value of the current place that it resides in. There are plenty of professional sports teams in America, and some cities even have multiple teams inside of them, such as Boston, New York, Atlanta, etc. With numerous sports inside of the United States, the demand for a sports team is required; with this type of demand it could be beneficial or harmful for whichever city that it exist in. One of the many positives externalities that professional sports teams can generate is increasing the city’s revenue. With a city having a professional sports team, the people that …show more content…

One of the negative externalities that professional sports teams serve is that can put the city into potential debt. Many think once a sports team is here, they are here to stay. They are wrong. Professional sports teams are a big investment to a city, and with investments you will always have a risk. If the sports team does not do good for a long time and the massive amounts of fans do not show up to each game and does not support them the team could go into great debt. The expenses can overweigh the revenue. The big stadium that they play in, the expenses they have to pay are extremely high and with employees and staff of the team also having to get their fair share of money, and it can be harmful to the team and the city to keep the team going. In San Diego, California there is QUALCOMM stadium and they host many events; in 2007 their final expense cost was $16,325,013; within 2 years in increased to $19,788,498 (San Diego Government). This is almost a 4-million-dollar increase over two years in a well-populated city, so imagine what will happen if this happened to a city that is not as popular as San Diego? The potential debt could skyrocket if the team doesn’t do good every year. With the city potentially going into debt, almost every single one of those small businesses that entrepreneurs made whenever the city was expanding, they will most likely go into debt and be forced to closed down. Traffic control is the next negative externality I will discuss. On game days, teams have thousands of people packed into one section of the city and people who are not attending the game can find this very annoying. Non-fans might want to go out and enjoy their day, but the overwhelming amounts of crowds of people can disturb them. The next and final negative externality I will discuss is stadium subsidiaries. Stadium subsidiaries are legal aids that the government gives cities to build new stadiums, but the

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