Article from Policy Perspectives ()
May 29, 2008
More on Stadium Funding
A Response from a Reader
by Jim Oshust

Ms. Wilhelm:

I just finished reading your excellent report and policy statement on the public Funding of Sports Stadiums. As a veteran of forty-five years in the major sports, entertainment and conference facility including more than forty consulting projects in the genre I must congratulate you an a comprehensive and realistic appraisal of the public funding for stadiums frenzy over the years.

I have written on this subject in our industry journals, too often criticized by starry eyed local municipal politicians and planning departments. From my experience I know the math of customer attendance, the many revenue streams that are controlled by the professional teams and/or operators, money that usually doesn't automatically flow into public tax coffers. From my viewpoint the major problem lies in the rush of local sports aficionados in the guise of political leaders and excessively testosterone laden locals believing that putting so much of the public's money is such projects is the best way to develop and enhance the quality of living in many communities. The tragedy of this thinking is that many cities cannot bear the increasing cost for such facilities. What is needed is preparatory evaluation by those who have the managerial and operational experience to calculate the eventual revenue flow - in whose pocket the flow ends and what will be the ultimate cost to the local taxpayers. There are systems of public involvement that can drastically reduce the inevitable burden on the local community. The RSL stadium is an excellent example of a local community getting starry eyed and immediately giving in to the demands of a venture that in my opinion is destined to fail. I am an avid international soccer fan but I think I know something about the market. Fortunately the country administration put a brief halt to the runaway looting of current tourism & development funds.

Years ago there were massive infusion of federal funds in the name of urban development. That philosophy also proved misleading and ill conceived when such stadiums and arenas remained in the midst of urban blight and did not create the added development projected. Additionally, count the number of such facilities that are demolished after only 20 to 25 years. All due to the desire of professional sports to demand greater control over the five principal revenue sources - not necessarily in this order - ticket sales, concessions, VIP suites, parking, including VIP service, naming rights and advertising, both external and internal.

I've managed facilities with pro basketball, hockey and have been the Exec. VP of a professional soccer club in the early days of the late 1960s. Your piece was clear and hopefully might be a wake up call for those smaller cities still chasing the sports team pot at the end of the illusionary rainbow of public benefit.

Thank you for your presentation.
Jim Oshust

See the full report here.

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