Value Added in Major League Baseball
Throughout the years sports have become more popular in our society. The average American watches at least one of the major sports if not more, but how do these professional sports affect our economy? Many believe that they can bring more profit and jobs to an economy, but is that really the case, or do taxpayers spend a lot of money for a sports team that does not draw in the revenue it is suppose to?
According to Siegfried and Zimbalist (2000) there were 46 major league stadiums and arenas built and renovated for the four major professional sports; Baseball, Basketball, Football and Hockey. Along with those being built, they added jobs and increased revenue but not without spending money first. In specific, Major League and Minor League baseball have several perks in regards to value added.
When a new Minor League Stadium is under construction you can have a large impact of up to $5,812,756 in regional sales (Colcough, Daellenbach, and Sherony, 1994). Construction brings the opportunity for a boom in the job market. Once construction is done, it can leave some unemployment for those who were once employed to construct the stadium.
Operating a new stadium would bring new jobs and more revenue. Stadium revenue would consist of ticket sales, concessions, and merchandise. In 1994 ticket prices in the Midwest League ranged between $2.00 to $5.00, so that means that revenue from those tickets would range from $0.61 to $4.00 (Colcough, Daellenbach, and Sherony, 1994).
A loss to value added is when you have two professional sports team within a good driving distance of each other. “Incumbent owners have made it clear...
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... are also times such as the Major League expansion and team relocation that has made both teams lose money and profit for the city.
Baade, R. A., Baumann, R., & Matheson, V. A. (2008). Selling the game: Estimating the economic impact of professional sports through taxable sales. Southern Economic Journal, , 794-810.
Colclough, W. G., Daellenbach, L. A., & Sherony, K. R. (1994). Estimating the economic impact of a minor league baseball stadium. Managerial and Decision Economics, 15(5), 497-502.
Siegfried, J., & Zimbalist, A. (2000). The economics of sports facilities and their communities. The Journal of Economic Perspectives, , 95-114.
Winfree * , Jason A., McCluskey, J. J., Mittelhammer, R. C., & Fort, R. (2004). Location and attendance in major league baseball. Applied Economics, 36(19), 2117-2124. doi:10.1080/0003684042000287664
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