Latest / Trumponomics / 48: Why Do Sports Make Sane People Lose Their (Economic) Minds?

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48: Why Do Sports Make Sane People Lose Their (Economic) Minds? · Trumponomics

• 0:00
  Speaker 1: Bloomberg Benchmark is brought to you by Stage Summit, the
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  Speaker 1: stage summit dot com for justin and there's no way
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  Speaker 1: that you can pay back a billion dollars stadium with
• 0:20
  Speaker 1: a bunch of hot dogs and beer. Hi, and welcome
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  Speaker 1: back to Bloomberg Benchmark, the show about the global economy.
• 0:32
  Speaker 1: It's Thursday July and I'm Kate Smith, an editor for
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  Speaker 1: Bloomberg News here in New York. I'm joined today in
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  Speaker 1: the studio by my co host, Dan Moss, Executive editor
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  Speaker 1: for Economics. Hi, Kate, you know, with the Summer Olympics
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  Speaker 1: early next month, it seemed like an appropriate time to
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  Speaker 1: talk about the economics of sport. Forget GDP, forget the
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  Speaker 1: trade balance, Let's talk about something interesting. No just joking.
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  Speaker 1: After all, experts estimate that Brazil's final cost to host
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  Speaker 1: the Games this summer, let's direct and indirect costs could
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  Speaker 1: reach billion dollars. And let's put that twenty billion into
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  Speaker 1: some context. That's more than double what the country got
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  Speaker 1: from tourism in according to the World bank. And let's
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  Speaker 1: also not forget where Brazil is right now. They're in
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  Speaker 1: the midst of their worst recession, so there's really they're
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  Speaker 1: in no position to be spending this kind of money.
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  Speaker 1: Your Diniro declared a state of financial emergency just two
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  Speaker 1: months ago, and those financial issues have also spilt into
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  Speaker 1: the political arena. Of course, you know, we were seeing
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  Speaker 1: these headlines on the news about this police strike caused
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  Speaker 1: a huge spike in crime, and then to top it
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  Speaker 1: all off, there's a threat of zeka in Rio, and
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  Speaker 1: it's so serious that a number of athletes have actually
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  Speaker 1: refused to travel to the Games, one of those, of
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  Speaker 1: course being Irish golfer Rory McIlroy. Officials have warned that
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  Speaker 1: if you get sick, don't get sick. We don't have
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  Speaker 1: to have hospitals. That's what that's what their message is.
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  Speaker 1: And to be fair of Brazil, this situation is not
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  Speaker 1: entirely unique, and spent over ten billion dollars to host
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  Speaker 1: the Games in and Beijing paid a whopping billion, And
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  Speaker 1: of course one of the most notorious is Athens, so
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  Speaker 1: Greek's capital spent eleven billion dollars to host the two
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  Speaker 1: thousand four Summer Games, and more than had ever been
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  Speaker 1: spent at that time, most of which was financed by
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  Speaker 1: public debt. Days after the closing ceremony, literally days, Greece
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  Speaker 1: began to warn people that hit public debt and the
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  Speaker 1: deficit was going to be much worse than expected. Of course,
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  Speaker 1: we all know where that story goes, and we took
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  Speaker 1: the zone with them exactly exactly. I mean, they became
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  Speaker 1: the first country to be placed under fiscal monitoring, and
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  Speaker 1: they really just spiraled into one of the biggest sovereign
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  Speaker 1: financial collapses we've ever seen. But let's hold the violins.
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  Speaker 1: These weren't just misfortunes that happened to Rio or Athens
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  Speaker 1: on their way to the opening ceremony. Quite the opposite.
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  Speaker 1: Cities va to host the Games in two thousand and nine,
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  Speaker 1: Brazil lobbied against the US lobby to gainst Spain lobby
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  Speaker 1: to get into Japan for the opportunity to host the Games,
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  Speaker 1: and eventually they want and countries and cities keep coming
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  Speaker 1: back wanting to host major sporting events despite some of
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  Speaker 1: the economic arguments to the contrary. And that's what I
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  Speaker 1: find and I think what we both find so interesting
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  Speaker 1: is that why do cities still line up and fight
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  Speaker 1: it out to host the Olympics, even when you have
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  Speaker 1: so many examples, I mean Athens, which really right in
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  Speaker 1: recent history. So even for their back of Montreal, their
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  Speaker 1: nineteen seventy six Olympics that was bankrupted the city. They
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  Speaker 1: had one and a half billion dollars of Olympic debt
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  Speaker 1: that took thirty years to pay back. Going back over
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  Speaker 1: to Athens, they built twenty two different structures to host
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  Speaker 1: these games, twenty one of which are in disrepair. They're
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  Speaker 1: unusable because maintaining these facilities is also very expensive. So
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  Speaker 1: what drives otherwise financially saying public officials to lose their
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  Speaker 1: economic minds when it comes to hosting major sporting events.
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  Speaker 1: In a moment, we'll talk with someone who studied the
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  Speaker 1: issues for more than two decades. He's a true expert
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  Speaker 1: in understanding why municipalities through the United States have fallen
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  Speaker 1: prey to the same poison chalice that luered some of
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  Speaker 1: the world's biggest cities to host the money losing Olympics. First,
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  Speaker 1: a word from our sponsor, Bloomberg. Benchmark is brought to
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  Speaker 1: and medium Businesses featuring Sir Richard Branson, July Chicago, Register
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  Speaker 1: just so here to talk to us about what goes
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  Speaker 1: on in the US. Specifically is Neil Demas. Now. He's
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  Speaker 1: the author of the book Field of Schemes, How the
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  Speaker 1: Great Stadium Swindle Turns Public Money into private profit. Now.
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  Speaker 1: One thing I really like about Neil, and I've been
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  Speaker 1: talking to him for a while about this kind of stuff,
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  Speaker 1: is before he put his microscope on the sports business world,
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  Speaker 1: he actually was a question writer for the game at
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  Speaker 1: Trivial Pursuits. So, Neil, thanks for joining us. Glad to
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  Speaker 1: be here. I am totally in all. You did that
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  Speaker 1: for like twelve years, right about about ten. It was
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  Speaker 1: sort of overlapping with the stadium works, so I had
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  Speaker 1: to juggle a couple of hats at once for a while,
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  Speaker 1: or a couple of cheese wedges. How did you get
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  Speaker 1: a job like that? Um, it's a long story that
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  Speaker 1: mostly ends up involving standing in the right place at
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  Speaker 1: the right time, as most do. So we wanted to
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  Speaker 1: talk about kind of the economics of these facilities. But
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  Speaker 1: of course, before we can do that, we need some backgrounds.
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  Speaker 1: So we're in the era of the billion dollars stadium now,
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  Speaker 1: but we weren't there always. So I mean, can you
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  Speaker 1: talk to us about how we got there in the
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  Speaker 1: US in terms of the price or in terms of
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  Speaker 1: the cost of the public, or in terms of both,
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  Speaker 1: In terms of the price itself. Yeah, I mean even
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  Speaker 1: when my co author joined KIG and I first started
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  Speaker 1: researching this in the you know, made nineties, it was
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  Speaker 1: still you know, two three or million dollars was sort
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  Speaker 1: of the going price for a for a sports stadium,
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  Speaker 1: and probably a little less than that for an arena.
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  Speaker 1: And at the time that felt extraordinarily hot, you know,
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  Speaker 1: I mean that was typically stadium stadiums in decades past
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  Speaker 1: had been you know, a hundred thousand dollars, sorry, how
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  Speaker 1: do a million dollars or less? And what was going
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  Speaker 1: on then and this continued to go on now, is
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  Speaker 1: just that you're not just building a stadium anymore. Right.
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  Speaker 1: The first one that really broke the bank was SkyDome
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  Speaker 1: in Toronto, and that was I think somewhere around five
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  Speaker 1: hundred million dollars and you weren't just building a stadium,
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  Speaker 1: you were building a hotel. You were building all of
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  Speaker 1: these food courts and hard rock cafe and um retractable roof,
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  Speaker 1: and it was sort of seen as the first of
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  Speaker 1: the mall parks, you know, where you're you're building something that,
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  Speaker 1: as the Yankees CEO Lawn Trost wound up saying about
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  Speaker 1: their new building is designed to be a four star
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  Speaker 1: hotel that just happens to have a baseball field in
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  Speaker 1: the middle of it. And so that's really what's going
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  Speaker 1: on is as team owners have realized, oh, hey, it's
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  Speaker 1: great to make money just selling tickets, but we can
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  Speaker 1: also make money selling pulled pork sandwiches and hotel rooms
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  Speaker 1: and you know, all the other stuff that otherwise people
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  Speaker 1: are going to spend across the street from our stadium. UM,
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  Speaker 1: we can make a lot more money that way, so
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  Speaker 1: long as this ballooning construction cost gets pinned on somebody
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  Speaker 1: else other than us. And that's the second piece of
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  Speaker 1: the puzzle. And to what extent was Toronto's perspective shaped
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  Speaker 1: by the debts that Montreal in could with the seventy
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  Speaker 1: six Olympics. I think that there was certainly a cautionary
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  Speaker 1: tale around the Olympic Stadium from Montreal. UM but you
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  Speaker 1: know the problem is, you know, Toronto didn't go in
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  Speaker 1: intending to spend six hundred million dollars. I think the
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  Speaker 1: original price tag was two or three hundred million. But
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  Speaker 1: the way that these things work is that the price
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  Speaker 1: tag tends to go up and up and up. With
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  Speaker 1: with most construction projects, where you aren't just you know,
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  Speaker 1: picking something off of a out of a catalog, but
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  Speaker 1: you're having to design it from scratch, which is every stadium,
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  Speaker 1: an arena kind of has to be has to be
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  Speaker 1: designed on a case by case basis. So I think,
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  Speaker 1: you know, it wound up being a bit of a
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  Speaker 1: disaster from a fiscal perspective, but in terms of team
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  Speaker 1: owners looking at sky Dome and at some of the
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  Speaker 1: other stadiums that came around the same time the early
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  Speaker 1: nineties and seeing, oh, this is what we should be
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  Speaker 1: after it really started a gold rush where every team
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  Speaker 1: owner was thinking, hey, I gotta get me one of those,
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  Speaker 1: but I don't want to spend six or a million dollars,
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  Speaker 1: So how can I figure out a way to to
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  Speaker 1: stick this to the public. And so I imagine that's
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  Speaker 1: where the city funding became routine. Yeah, I mean city
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  Speaker 1: funding really started becoming. There's three phases to to uh
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  Speaker 1: to stadium in arena construction. The first was the one
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  Speaker 1: that that was in place for most of the twentieth century,
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  Speaker 1: which was, if you own a team and you want stadium,
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  Speaker 1: you go and you build a stadium. If you can't
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  Speaker 1: afford a whole stadium with all the bells and whistles,
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  Speaker 1: you build a smaller stadium, and then once you sell
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  Speaker 1: that out, then you add some more seats and add
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  Speaker 1: some more seats, and all the old ballparks like old
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  Speaker 1: Yankee Stadium, Wrigley Field, if you look at old time photos,
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  Speaker 1: you know, in the early years, there was just they
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  Speaker 1: were much smaller, and they kept you know, they'd extend
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  Speaker 1: the seats down to the left field line, and they'd
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  Speaker 1: add a second deck in a third deck. That came
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  Speaker 1: to an end in the fifties and sixties when team
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  Speaker 1: owners realized, oh, we can move to other cities because
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  Speaker 1: suddenly jet airplanes have been invented, and we can use
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  Speaker 1: that as leverage to try to either get you know,
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  Speaker 1: new cities on the West coast to offer us new stadiums,
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  Speaker 1: or existing cities to offer us money not to leave.
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  Speaker 1: So you know, fifties, sixties seventies, you had a bunch
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  Speaker 1: of stadiums built, mostly those sort of big concrete donut
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  Speaker 1: multi purpose baseball football ones. But typically what would happen
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  Speaker 1: would be that the city or the state would put
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  Speaker 1: up the money and then we get paid back by
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  Speaker 1: rent from the team. Okay, they would front the money,
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  Speaker 1: but by and large usually they got it back over time.
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  Speaker 1: What happened in the eighties and nineties was you started
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  Speaker 1: to see cities, especially after you had large cuts in
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  Speaker 1: federal funding to cities under Reagan, cities sort of start thinking, Okay,
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  Speaker 1: the only way that we're going to get economic activity
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  Speaker 1: is to try and basically bribe companies to come here.
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  Speaker 1: So you saw them going after auto plants and computer
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  Speaker 1: chip factories and all sorts of things like that, and
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  Speaker 1: it became big money, and I think eventually some of
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  Speaker 1: the sports team owners started saying, hey, you know, we're
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  Speaker 1: a lot more, if not lucrative, we're a lot more attractive,
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  Speaker 1: and you know, seem sexier than a car plant, so
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  Speaker 1: why don't we start playing that same game. And that's
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  Speaker 1: when you started to see the buildings being built exclusively
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  Speaker 1: that there has to be a benefit to a city,
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  Speaker 1: right just to play Devil's addicate here, there has to
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  Speaker 1: be a benefit to a city to have a professional
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  Speaker 1: sports team. I mean, for example, I used to be
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  Speaker 1: in Baltimore and Camden Yards really just totally transformed an
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  Speaker 1: area of the Inner Harbor that was virtually unusable for
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  Speaker 1: kind of the average person. Isn't there the argument that
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  Speaker 1: these stadiums really do help cities. I mean, there's there's
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  Speaker 1: a reason why they should be applicable to tax three
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  Speaker 1: dollars in debt. Well, I mean, you know, first of all,
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  Speaker 1: I'm a sports fans, so I never want to say
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  Speaker 1: there's no value to having a sports team, right. I mean,
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  Speaker 1: there's obviously a value if you're a sports fan of
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  Speaker 1: having a team in town and getting to go and
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  Speaker 1: see it, right, But in terms of the economics, economists
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  Speaker 1: have now been looking at this for thirty years and
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  Speaker 1: no one has found any measurable positive impact to sports
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  Speaker 1: stadiums um And there's two real reasons. One is the
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  Speaker 1: substitution effect, which is that if you know the Orioles
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  Speaker 1: are playing in Baltimore, then sure people are going to
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  Speaker 1: Orioles game ms. But that means they're not doing something
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  Speaker 1: else with their with they're spending money, right, They're not
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  Speaker 1: going to movies, they're not going out to dinner, they're
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  Speaker 1: not going to UH games for some other sports team.
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  Speaker 1: And sure a little of that is going to be
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  Speaker 1: you know, if the oriel is left, probably more people
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  Speaker 1: would go drive down to d C and go to
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  Speaker 1: Nationals games, and that would be a loss to the
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  Speaker 1: Baltimore economy. But the numbers show that it's a tiny, tiny,
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  Speaker 1: tiny amount um. And then there's the problem that if
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  Speaker 1: you go to a restaurant, most of that money gets
• 12:28
  Speaker 1: respent locally, right. Usually it's you know, it's the owner
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  Speaker 1: probably lives locally, the staff probably lives locally. You know,
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  Speaker 1: they go and they go grocery shopping, and it gets recirculated.
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  Speaker 1: Whereas the most of the money that gets spent at
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  Speaker 1: a sporting event goes to the owner and the players
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  Speaker 1: who probably you know, live somewhere else. And so we're
• 12:47
  Speaker 1: not going to be rushing around and buying cans of
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  Speaker 1: tuna immediately. Athletic. Let me just challenge you on that.
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  Speaker 1: I'm glad you mentioned d C, where I lived for
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  Speaker 1: ten years now. The National Stadium is a lovely stadium,
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  Speaker 1: and I don't think anyone would argue with the proposition
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  Speaker 1: that the part of d C where that ballpark is,
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  Speaker 1: once upon a time was not so great and a
• 13:09
  Speaker 1: lot of stuff has gone up around that area of
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  Speaker 1: d C. And there's Look, i didn't grow up in
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  Speaker 1: a baseball country, but I've seen a few games that
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  Speaker 1: it strikes me as a lovely place to watch a game.
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  Speaker 1: And that area was an isole a disaster. Now it's
• 13:25
  Speaker 1: not that right, But the question is was that caused
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  Speaker 1: by the stadium? There are you know, I've I've spent
• 13:31
  Speaker 1: a lot of time in d C and there are
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  Speaker 1: innumerable parts of the city that have seen huge construction
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  Speaker 1: booms in the last ten fifteen years, and lots of
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  Speaker 1: them did not have baseball stadiums there. Obviously, Sure, if
• 13:43
  Speaker 1: you go and you build something new, whether it's a
• 13:45
  Speaker 1: stadium or whether it's a park or anything else, Um,
• 13:49
  Speaker 1: that's attractive. If you're in a city that has a
• 13:52
  Speaker 1: bunch of real estate developers running around and trying to
• 13:54
  Speaker 1: figure out what's going to be the next hot new neighborhood,
• 13:57
  Speaker 1: that's going to be something that will attract them there.
• 14:00
  Speaker 1: But the question is figuring out, you know, what's what
• 14:03
  Speaker 1: would have happened if the stadium hadn't been built, there,
• 14:06
  Speaker 1: would eventually something else have have gone into that that
• 14:10
  Speaker 1: area around the Navy yard. Would there have been more
• 14:13
  Speaker 1: developments somewhere in a different part of town, not particularly there,
• 14:16
  Speaker 1: but it would have been the same same scale, or
• 14:19
  Speaker 1: you know, just what you know, could the city have
• 14:21
  Speaker 1: gotten better bank for its buck? I mean, it's spent
• 14:23
  Speaker 1: about half a billion dollars on that National Stadium. Think
• 14:27
  Speaker 1: about what else you could have done to spruce up
• 14:29
  Speaker 1: a neighborhood, or spruce up multiple neighborhoods um for that
• 14:32
  Speaker 1: kind of money. One thing that I always find really
• 14:35
  Speaker 1: interesting and just kind of boil down what you're saying here,
• 14:37
  Speaker 1: it's it's the idea that yes, revenues coming in, and
• 14:41
  Speaker 1: yes it's wonderful for the neighborhood, but unfortunately these facilities
• 14:44
  Speaker 1: are so expensive, Like we were talking about kind of
• 14:46
  Speaker 1: in the beginning of this section, like you know, you're
• 14:48
  Speaker 1: not working with a two hundred million dollars stadium. You're
• 14:50
  Speaker 1: looking at a seven hundred and fifty million dollars stadium,
• 14:53
  Speaker 1: or even sometimes a billion dollars stadium, and there's no
• 14:56
  Speaker 1: way that you can pay back a billion dollars stadium
• 14:59
  Speaker 1: with a bunch of hot dogs and beer? Is that
• 15:01
  Speaker 1: what you're looking at? Sure? And it's worse than that
• 15:03
  Speaker 1: because you're not even getting the money from the hot
• 15:05
  Speaker 1: dogs beer, right that the team owner is getting the
• 15:07
  Speaker 1: money from the hot dogs and the beer and the
• 15:09
  Speaker 1: naming rights and the ticket sales, and all you're getting
• 15:11
  Speaker 1: is whatever incremental tax revenue is coming in over what
• 15:15
  Speaker 1: you would have gotten otherwise. Right, So it's how much
• 15:18
  Speaker 1: you're getting in hot dog tax sales tax money versus
• 15:22
  Speaker 1: how much you would have been getting at you know,
• 15:25
  Speaker 1: from restaurant sales tax money, um, if somebody were eating
• 15:28
  Speaker 1: somewhere else. And again there's a small amount of money there,
• 15:31
  Speaker 1: but it's it's it is never going to pay back. Okay,
• 15:33
  Speaker 1: But let's just zoom out for a second. Dan, you're
• 15:36
  Speaker 1: not from the US. You're Australian. I believe you're. You're
• 15:39
  Speaker 1: asked your accent tips you off? I mean, do we
• 15:41
  Speaker 1: do you still have that same sports craze in Australia?
• 15:45
  Speaker 1: You know, the face painted Jets fans and the tailgating
• 15:48
  Speaker 1: and all the paraphernalia. Well, it's a sportsmad culture, but
• 15:54
  Speaker 1: it's only comparatively recently that there's been a corporate framework
• 15:59
  Speaker 1: for the sporting life in Australia. Let's take the principal
• 16:04
  Speaker 1: summer sport in Australia, which is cricket. For most of
• 16:08
  Speaker 1: the time, cricket has been based around a national team,
• 16:12
  Speaker 1: state teams and small small clubs. The idea that that
• 16:18
  Speaker 1: players would be under contract, the idea that the teams
• 16:23
  Speaker 1: would be sponsored, the ideas that the players individually would
• 16:27
  Speaker 1: be sponsored, and you know, like Shane warned, they could
• 16:30
  Speaker 1: wear a Nike earring. That's all pretty recent and in fact,
• 16:35
  Speaker 1: I'm not exaggerating. In the era when the national team
• 16:39
  Speaker 1: was pretty much the only way to go, you would
• 16:42
  Speaker 1: have star cricketers who would actually be on the doll
• 16:45
  Speaker 1: between gamesable now it's unbelievable now, but you know this
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  Speaker 1: was as recent as late seventies, early eighties that would
• 16:57
  Speaker 1: be inconceivable here. So when you I mean, I'm sure
• 17:02
  Speaker 1: you've been to it what you call a cricket match
• 17:04
  Speaker 1: or as a crookeet game, they could be both. Okay,
• 17:07
  Speaker 1: so a cricket match slash game. So you've been to one,
• 17:09
  Speaker 1: I imagine of course, oh yes, and it was it
• 17:14
  Speaker 1: is it similar to going to see a Yankees game.
• 17:16
  Speaker 1: Is it like you know, you have all the amazing
• 17:18
  Speaker 1: food and the seats and the expensive beer and the
• 17:20
  Speaker 1: Johnny Waker. Is it like that? Well, I mean there
• 17:23
  Speaker 1: are different levels of the game. If you take the
• 17:25
  Speaker 1: most recent one I've been to, which was the Cricket
• 17:28
  Speaker 1: World Cup Final in Melbourne in March of last year,
• 17:33
  Speaker 1: I mean, the Melbourne Cricket Ground is a stadium structure
• 17:36
  Speaker 1: that most people would recognize it dates back to the
• 17:39
  Speaker 1: nineteenth century, but there've been add ons and sure, you
• 17:42
  Speaker 1: take your break and you work your way down to
• 17:45
  Speaker 1: the food concession area and you can get a meat
• 17:48
  Speaker 1: pie with sauce and a beer or a Bunderberg rum
• 17:52
  Speaker 1: and coke. It's not that different from sitting at National Stadium.
• 17:57
  Speaker 1: But there is a lot more razmatazz. There's a lot
• 18:01
  Speaker 1: more neon lights flashing saying Delta United or whatever it is,
• 18:05
  Speaker 1: which are all that's all just money. But way catching
• 18:08
  Speaker 1: up fast with the corporate structure for sure. Interesting. I mean,
• 18:13
  Speaker 1: I think where I'm always confused about the stadium question
• 18:16
  Speaker 1: in the US is that you know, we have all
• 18:19
  Speaker 1: these leagues. We have the NFL, we have Baseball, we
• 18:22
  Speaker 1: have basketball, and even within baseball, there are several leagues.
• 18:25
  Speaker 1: Yes there are, there's the whole minor league system, which
• 18:27
  Speaker 1: I mean its completely takes advantage of public money too.
• 18:31
  Speaker 1: So you just you have hundreds of teams, but in
• 18:34
  Speaker 1: my eyes as a Bloomberg reporter, that means hundreds of
• 18:36
  Speaker 1: stadiums that are getting built. And yet even though you know,
• 18:40
  Speaker 1: Neil is telling us that virtually every sports economist agrees
• 18:44
  Speaker 1: on the lack of empirical evidence that would say that
• 18:47
  Speaker 1: these really do benefit the towns that they're in, they
• 18:51
  Speaker 1: make the same mistake every single time. So, I mean, Neil,
• 18:55
  Speaker 1: I want to throw this back to you, how is
• 18:57
  Speaker 1: it that politicians, despite all of that, it is, how
• 19:00
  Speaker 1: do they keep making the same mistake over and over
• 19:03
  Speaker 1: and over again. Well, there's a bunch of different incentives
• 19:07
  Speaker 1: that that politicians have for for doing this. The most
• 19:10
  Speaker 1: obvious one, I think might be the most overblown one,
• 19:12
  Speaker 1: which is that you know, they're afraid of losing their teams. Right.
• 19:15
  Speaker 1: Everybody always says, well, you know, the team might leave
• 19:18
  Speaker 1: if you don't give them what they want. So if
• 19:20
  Speaker 1: you're a mayor, that's gonna be the worst case scenario,
• 19:23
  Speaker 1: because you know, people angry sports fans will vote you
• 19:25
  Speaker 1: out of office if your team leaves if you don't
• 19:27
  Speaker 1: give them a new building. The problem with that is
• 19:30
  Speaker 1: that it's never actually happened. There are zero mayors in
• 19:34
  Speaker 1: the US who have been voted out of office for
• 19:38
  Speaker 1: refusing to spend public money on a sports facility. That
• 19:41
  Speaker 1: The one possible counter example is Greg Nichols in Seattle,
• 19:46
  Speaker 1: who after the Sonics left, did get voted out as mayor,
• 19:50
  Speaker 1: but from all accounts it was much more because he
• 19:53
  Speaker 1: refused to salt the roads before it snowed, and it
• 19:56
  Speaker 1: was a complete gridlock in the city. Um, and that
• 19:59
  Speaker 1: was the sort of the the proximate cause of him getting
• 20:01
  Speaker 1: getting booted out. UM. On the other hand, we've got,
• 20:04
  Speaker 1: you know, multiple examples of local officials who have gotten
• 20:09
  Speaker 1: kicked out after approving unpopular stadium deals. UM. You have
• 20:13
  Speaker 1: UM George P. Tack, who was a state senator in
• 20:16
  Speaker 1: Wisconsin over the Brewers deal, who actually got was the
• 20:19
  Speaker 1: first state official to get recalled. UM. You had um
• 20:24
  Speaker 1: the mayor of Miami after the Marlins deal. And just
• 20:29
  Speaker 1: recently we just had Tim Lee, the Cobb County commissioner
• 20:32
  Speaker 1: who negotiated the Braves stadium deal to move them from
• 20:36
  Speaker 1: the city to the suburbs, and you know, very proudly
• 20:39
  Speaker 1: did it, you know, in secret, without going before a
• 20:41
  Speaker 1: public vote. And the public then told him what they
• 20:44
  Speaker 1: thought of him by kicking him out of office overwhelmingly.
• 20:47
  Speaker 1: You know, other kiss Neil where it does create a
• 20:52
  Speaker 1: certain s breed to call and sense of community in
• 20:57
  Speaker 1: some urban Saintists where they have a power, full team
• 21:01
  Speaker 1: and a stadium and all the infrastructure. I'm thinking of Denver,
• 21:04
  Speaker 1: where my fiance grew up. Now, there are multiple sports
• 21:08
  Speaker 1: teams in Denver, but let's be real, there is only one.
• 21:12
  Speaker 1: And it hits you from the second you depart the plane,
• 21:16
  Speaker 1: you walk past Always restaurant, you get on the subway
• 21:21
  Speaker 1: car to take you to the main terminal, and there's
• 21:24
  Speaker 1: John Elway's voice, and you know, the last couple of winters.
• 21:29
  Speaker 1: Downtown area in Denver, everything is colored orange, and you know,
• 21:33
  Speaker 1: there is a real sense of community there. I mean,
• 21:38
  Speaker 1: isn't there something intangible about it as well that just
• 21:41
  Speaker 1: can't be measured by traditional commercial, macro economic yardsticks. There's
• 21:46
  Speaker 1: absolutely something intangible, and that's you know, there's something tangible
• 21:49
  Speaker 1: as well, you know, I mean there is a value to,
• 21:52
  Speaker 1: like I said, to having a sports team to to
• 21:55
  Speaker 1: cheer on. Economist have even tried to put a number
• 21:59
  Speaker 1: on what that tangible value is, right, you know, there's
• 22:01
  Speaker 1: there's all sorts of economic um metrics that you can
• 22:05
  Speaker 1: use to try and measure things like clean water or
• 22:08
  Speaker 1: anything else like that that's uh sort of doesn't have
• 22:12
  Speaker 1: a dollar value on it. And the best study I
• 22:15
  Speaker 1: saw this was a guy named Bruce Johnston in Kentucky
• 22:18
  Speaker 1: and the figure that he came up with after pulling
• 22:20
  Speaker 1: you know, sports fans non sports fans, was that the
• 22:23
  Speaker 1: value of a pro sports team was around forty million dollars.
• 22:27
  Speaker 1: You know, that's about how much it was worth to
• 22:29
  Speaker 1: have a have a team in your in your city.
• 22:31
  Speaker 1: And this is a while back, so maybe you know
• 22:33
  Speaker 1: it's sixty even a hundred million dollars. Now that you know,
• 22:36
  Speaker 1: that's what you feel like, is is worth giving up
• 22:39
  Speaker 1: in order to have the presence of a team if
• 22:41
  Speaker 1: that's really the threat on the table. But you know,
• 22:44
  Speaker 1: you almost never get a stadium for that price. It's
• 22:46
  Speaker 1: usually three hundred four five, six hundred million dollars. You know,
• 22:49
  Speaker 1: the question isn't should cities ever put public money into
• 22:54
  Speaker 1: sports stadiums. You know, sure, there's always a price point
• 22:56
  Speaker 1: where it makes sense. And I think when you have
• 22:58
  Speaker 1: something like the San Francisco Giants Stadium right where there
• 23:01
  Speaker 1: was a very minimal amount of money was about thirty
• 23:04
  Speaker 1: million dollars, the team put up most of the money. Um,
• 23:07
  Speaker 1: the site worked really well, you know, in conjunction with
• 23:11
  Speaker 1: other development that was going on. Um. You know, that's
• 23:13
  Speaker 1: something that I think everybody is happy about. But for
• 23:17
  Speaker 1: every deal like that, there are forty deals where it's
• 23:21
  Speaker 1: just a matter of you know, the team owner saying, hey,
• 23:24
  Speaker 1: write me a big check and you know, somehow I'll
• 23:27
  Speaker 1: make it worth your while later on, and they get
• 23:29
  Speaker 1: the check and you know, the worth your worth your
• 23:32
  Speaker 1: while never comes to pass. So, given this is such
• 23:34
  Speaker 1: a difficult cycle to break, I'm sure we're going to
• 23:37
  Speaker 1: be hearing much more about this in the future. So
• 23:40
  Speaker 1: we kind of thank you enough for joining us. Neil
• 23:43
  Speaker 1: bench Mike will be back next week and until then,
• 23:45
  Speaker 1: you can find us on the Bloomberg terminal and Bloomberg
• 23:48
  Speaker 1: dot com, as well as iTunes, pocket cast, and Stitcher.
• 23:52
  Speaker 1: Why are they take a minute to rate and review
• 23:55
  Speaker 1: the show so that more listeners can find us and
• 23:57
  Speaker 1: let us know what you thought. You can talk to
• 23:59
  Speaker 1: us and follow us on Twitter. You can find Dan
• 24:01
  Speaker 1: at Daniel Moss d C. And you can find me
• 24:04
  Speaker 1: at by Kate Smith. And our guest Neil was on
• 24:06
  Speaker 1: Twitter at Neil de Moss. We'll see you next week.
• 24:13
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