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From bluejackets.nhl.com:
Columbus Blue Jackets and Nationwide Arena Represent More Than $2 Billion Economic Impact in Columbus
The Columbus Blue Jackets and Nationwide Arena have driven an economic impact in excess of $2 billion since 2000, according to a new study released April 22. Economic impact studies conducted by the John Glenn School of Public Affairs at The Ohio State University also reveal the significance of the National Hockey League franchise and arena as a catalyst for development of downtown Columbus and the Arena District, where 7,000 people are now employed.
I wonder if they’re still insisting for tax purposes that the arena is worth half of what it cost to build it. I remember some weak argument a few years ago that Nationwide Arena should only be taxed based on the income it generated, not on the actual building and land values.
I had nno clue that loosing was worth so much! ; )
I think this study is somewhat misleading. The study lumps together Nationwide Arena AND the Arena District. To say that the Blue Jackets brought this money to the local economy isn’t the complete picture. Sure, without the Blue Jackets there is no Arena, and likely no Arena District. So indirectly, yes, without the Blue Jackets there is no urban redevelopment. But the real catalyst is an investment in an urban area. Urban redevelopment could have happened without the Arena, and largely the same result would have occurred. The Arena merely put the wheels in motion for a greater plan/vision for the area.
Kind of disagree with you jeffz ….. the Blue Jackets bring in a large amount of people that would not have ever visited downtown without them.
Yep, totally agree with surb on this one. Sure, they could have had a cool, downtown district without the Bluejackets…and the people who are perfectly content at Easton would never go there. The reason those folks get pulled in is the games and concerts.
I LOVE sports, having sports in town, the Blue Jackets, and everything to do with them.
BUT… I also read The Journal of Sports Economics every month.
There is very little overall economic benefit to sports teams. The Blue Jackets actually do better than most because Nationwide Arena wasn’t subsidized by public money. Generally, though, the public’s entertainment budget isn’t very flexible, so money spent on sports would usually be spent elsewhere in town. Also, athletes and owners make lots of money (which means they save more than spend), and don’t live locally (which means what little they do spend doesn’t tend to be local). Money spent in smaller entertainment establishments goes further.
What sports teams/events/etc are very good for is focusing that investment in one area instead of spreading it around town. So we get concentrated activity like the Arena District. This can be beneficial, but it’s a geographic shift, not an overall emperical boost.
Studies like this tend to claim credit for money shifted, not generated. Places like Seattle see virtually no drop off in economic well being despite losing the Sonics, for example.
That said, I want my Blue Jackets, Clippers, and sports in general for personal purposes, not economic ones.
Good points, but I do think having another pro sports team does a lot of intangible heavy lifting for the city’s image as well, which in turn can indirectly have a positive effect on the economy.
If we didn’t have the Blue Jackets and we didn’t have The Arena District, then there would be a lot fewer articles written about both in national publications and a lot less national positive attention on our city. These things may not always be cited directly as reasons that people choose to live here, but they add up along with other things into the real reasons that people to want to be in Columbus.
I do agree with the attention. But it’s usually quite marginal when creating economic benefit. There are so many other things (schools, taxes, transportation, cost of living, etc.) that take primacy over sports. That’s not to say it’s nonexistent, though.
Plus, in most cases (although thank goodness not ours!), the marginal benefit is more than thrown away by local subsidies for things like stadia and arenas. We come out ahead since Nationwide put up so much money to get the Blue Jackets here. There’s nowhere near $2b created, though. Those studies are very common and always hyper inflated.
The Sports Economist does a good job of analyzing these issues, although not as thorough as the studies in The Journal of Sports Economics. Bottom line: if the public doesn’t pay for the stadium, you’re likely to win. We win… but it’s not at all a blowout.
+1 Jefe.
In this case, I’m not sure I agree with Jefe. While those studies may be true of other cities, I’m not sure it is an apples to apples comparison. Columbus doesn’t have a pro basketball team or pro football team, the Blue Jackets have created a niche here. I also think that hockey provides a regional draw with people coming from Newark, Marion, and smaller towns in central Ohio, who wouldn’t be in Columbus otherwise… not to mention drawing people from other cities like Detroit, Chicago, Toronto, etc. Those are hockey dollars being spent here. I also suspect there may be a difference between simply building a new arena to replace an old arena as opposed to building a new arena for a new team, in terms of development dollars.
Like many issues dealing with city and regional development, it’s kind of like baking a cake. I don’t necessarily think that the hockey in and of itself has “created” development, but I do think that, lacking that ingredient, the other elements would not have combined with such positive results.
Could the same thing be said about Canada? (probably not, but I still thought this was interesting):
When Mexico Thinks of America, They Think Of Columbus Crew Stadium
So if it’s difficult to demonstrate an arena’s or franchise’s generation of wealth, I wonder if there’s a way to quantify the impact of the location of such a development on shaping a metropolitan area. Kind of a centralizing “gravitational” force that helps concentrate development.
Even if it is *just* redistributing a fixed amount of wealth to a neighborhood, it is more effective concentrated than it is spread out. So if you have *any* mechanism to concentrate wealth and people, it would seem this is the first step needed towards justifying connecting it to mass transit, mixed use development, etc.
My frame of reference is Detroit, where at one point the Lions played in Pontiac, 30 miles from downtown. Admittedly, when it was built it was closer to the game-going population than a downtown stadium would have been. But there’s no doubt that two Pontiac arenas for Detroit franchises assisted in Detroit’s suburbs’ continued sprawl northward (of course, at the expense of a rotting downtown core). That’s 70k fans who necessarily drove to the game without a chance for having taken public transportation.
So point being, perhaps the CBJ/Arena can’t faithfully demonstrate the numbers quoted in the study. But I don’t think that’s nearly as important as it’s potential ability to catalyze the shaping of this city.
HeySquare, most mid-market teams have similar profiles. Regional folks normally have a certain number of nights out “in the city” per year anyway. Plus, when they spend their money on sports instead of other entertainment venues, the local economic multipliers are much less since the profits go to owners and players who are richer (save more, spend less), and usually live out-of-town (spend less locally). And in terms of folks coming from out of town, the economists take that into account. They’re just such a minority that it doesn’t amount to much. That includes the sportswriters, teams from out of town, etc. There’s money there, but not much when push comes to shove. Sports follow economic development, they generally don’t cause it.
mellotron has a good point. When planned well, focusing the development into one area can be very benefitial. I won’t deny that in the slightest. Nationwide did a great job with the Arena District. From what mellotron describes, it sounds like Detroit did an awful job–and probably at the expense of local taxpayers (although I haven’t looked that up). Again, I think we come out ahead with the Blue Jackets. I just don’t think it’s anywhere near $2b ahead. Places that subsidize sports are those that lose. There are better things to subsidize. Like research and education.
Walker, I have absolutely no idea about Canada. My initial thought would be that they’re a bit better at planning in general and would avoid public subsidies of stadia and sports franchises. But that’s totally and entirely a guess.
Again, this is all economic. SOCIAL benefit is different. I personally will always want more sports as close as possible. I’m just not willing to have my fellow taxpayers foot the bill, nor do I think we should sell sports as an economic engine.
Well, the owners of CBJ certainly live here, as do most of the players. And I believe players pay income tax on money earned in the city in which the game is played. If the average NHL payroll is around $40 million, that’s at least $800k directly to the city coffers. Add in coaching staff, management, administration and all other staff of Nationwide Arena, and that’s another big chunk of tax revenue. Property taxes on the Arena too. Don’t forget all the other events held at the Arena like concerts, political rallies, Disney on Ice, Columbus Destroyers games, NHL Draft (2007 in Columbus), NCAA tournament games, etc. These last 2 events brought a lot of out-of-towners.
Finally, there would be no Arena District and all that development without this franchise. Condos, restaurants, bars, offices, Huntington Park, the LC Pavillion, etc. I don’t think $2 Billion is too high an estimate for money added to the local economy since 2000.
UncommonSense – you’re right that the Arena District wouldn’t be there. That’s what I talk about when I mean focused development. However, this development tends to be substituted, not new. Also, most of the concerts, etc. have other venues (in fact, there was an article a couple months back in the Dispatch about Value City Arena and Nationwide Arena being in direct competition). A quick and dirty example of the substitution effect is to look at the Brewery District. Arena District bars opened and substituted Brewery District bars, which closed.
Since local entertainment money is also mostly substitution, not new, the admin jobs, etc. are also substitutes for other entertainment jobs (possibly of a different nature) that would exist around town if the Blue Jackets weren’t here. Indeed, the best way to find out the economic impact of a sports franchise is to look at places that lose their franchise. Seattle’s economy hasn’t been affected since losing the Sonics; Vancouver wasn’t affected when the Grizzlies left. The list goes on. It’s a complete bummer, but the economic situation left behind is usually just fine.
In terms of salaries, I doubt most of them have permanent residence here since they probably don’t stay in the off season. Most athletes will have a permanent residence in a state without income tax. Plus, again, the money they make would be made elsewhere around town if they weren’t here by people who spend a higher percentage of their income, meaning more money for other local businesses and a higher economic multiplier. Also, they only pay local income tax for home games. Athletes “earn income” for away games in away cities. Accounting nightmare for them.
$2b is very very high. Most numbers are not actually attributable to the Jackets. It’s entertainment money that would be made around town anyway. Again, I personally prefer it go to the Jackets since I’m a sports guy. But it should not be sold as something it’s not. You simply cannot attribute any kind of economic boom to an NHL franchise. It’s modest at best. Only the concentrated development argument holds any water… and Nationwide did that exceptionally well in Columbus.
From Richard Florida:
“The real question is what these expensive, publicly bankrolled behemoths add to their local economies. The consensus across every, single serious study ever done of the economic impact of sports stadia is ‘absolutely nothing.’ As the old song goes, ‘say it again.’”
Thank you, Mr Jones.
In that recent Urbanophile article, the idea was mentioned that professional sports teams to some extent act act as if cities are their naming-rights sponsors. Sure, hearing Nationwide Arena and Huntington Park might not make you switch your insurance provider or banking services, but you can’t help but know who those companies are or the fact that they are a major player in our city.
I agree that with the Urbanophile that the same could be said with the association that goes along with our MLS and NHL franchises in town (and to a lesser extent OSU since “Columbus” is not in the name of their team). I can’t tell how many times I saw “Columbus vs Detroit” tweeted about (by people outside of the city) during the NHL playoffs. Of course, they’re talking about the teams, but they’re constantly reinforcing the name of the city.
Hard to measure what that is worth, but I’ve got to imagine it’s at least worth considering in these types of things.
I won’t deny that they’re good marketing tools insomuch as people will have heard the Columbus name and maybe not think it’s entirely a remote town. I just think in terms of actual economic benefit, that’s pretty minor. Any business that’s going to open, large investment going to be made, trip going to be taken, etc. are probably based on much larger and more quantifiable metrics. Having sports teams is great all-around. I would never argue against it. Plus, we’re set up OK here. Nationwide Arena was fully-private and Huntington is actually owned by the county, so we’re not subsidizing someone else, but have an asset of our own. It’s that subsidizing of sports teams and their stadia that is a poor idea. The money can better be spent better elsewhere (or a tax abatement better allocated).
A good example that would probably never work but stays just in the entertainment world: Huntington cost $56m to build. Let’s say it had been built privately, but half the tab picked up by taxpayers. Such agreements aren’t uncommon. That’s $28m the city would have to spend elsewhere. Now, think if the city held a $1m contest every year for 28 years to find the best band or musical act in the city. I know it wouldn’t happen, but think of how many people would move here, how much activity it would generate among bars and clubs and music venues. Austin eat your heart out. An entirely exaggerated idea, but it’s a way to have public money multiply within the city, something pro sports doesn’t do very well.