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Hook, Line, & Stinker 

Everyone loves the 49ers. But even love has its limits. Are taxpayers willing to subsidize millionaire owner Eddie DeBartolo Jr.'s dreams of a new stadium when economists say it's a bad deal

Wednesday, May 1 1996
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Roger Noll rushes to support Baade. He says his studies show that teams simply don't draw outside their immediate area anymore. Used to be, he says, when most teams were located in the Northeast, that people would travel long distances to see them. But that was in the '60s. With the advent of more teams in more cities, and the ever growing reach of televised sports -- ESPN Nation -- sports travel has all but ended.

Even if the 49ers could draw new visitors from outlying areas, how many of those fans would visit the city and drop more cash after watching a game, downing dogs, and guzzling beers? Remember, Candlestick is in the boonies.

Economically speaking, sports franchises compete for a finite number of disposable entertainment dollars that residents spend. In other words: What goes into DeBartolo's pockets doesn't go into the pockets of the proprietor of the Red Vic Theater, the Purple Onion nightclub, the Red Room bar, the Abandoned Planet bookstore, or Sam Jordan's BBQ.

"What goes on typically," Zimbalist says, "is that when someone goes to the ballpark, they spend money they would be spending elsewhere."

But theory only counts for so much. San Francisco has a real-life indicator of a ballclub's economic impact on its surrounding area. Just look at Bayview-Hunters Point, the nabe nearest Candlestick. Any 49er-generated spending hit Third Street lately?

Cities go into a frenzy attempting to lure a sports team. Look at San Jose. Without a team in mind, they erected a $135.6 million arena -- all with city money. But cities go absolutely bonkers when a team threatens to leave. The specter of losing economic benefits -- no matter how mythical or distorted -- has more emotional and political punch than missing out on something you've never had. Of course, San Francisco finds itself in the position of losing a team, and a Super Bowl dynasty team at that, all of which diminishes the city's bargaining power.

But again, the critics from academe come to the rescue with empirical data to stiffen the city's resolve. Namely John Zipp, who saw a rare research opportunity when the crybaby millionaires of summer went on strike in 1994.

The seven-week Major League Baseball strike of 1994 afforded Zipp the perfect statistical laboratory to test his theory that the loss of a ballclub would have no economic impact on a city. The strike banished all of the teams from all of the cities all at once. "What were the effects?" Zipp thought.

He set about measuring retail sales, expenditures of disposable entertainment income, and hotel stays in the months prior to, during, and after the strike. He also set up two control cities, non-baseball towns where economic activity would serve as the benchmark.

His study, to be published in Urban Affairs Review in November, found that while hotel stays dropped ever so slightly in 10 of the 24 cities with major league teams, they dropped in non-baseball cities at the same rate at the same time. Also, more home games were canceled in September than August, but the drop in hotel stays was greater in August, also indicating that the decline in room stays was disconnected from the strike. Finally, five baseball cities experienced an increase in hotel stays during the strike.

But Zipp's most compelling findings were in the area of disposable spending, the outlays on food, drink, and other nondurable goods that pro-sports team advocates always measure to support publicly subsidized stadiums.

Zipp found that sales of nondurable goods were higher than average for 13 of 17 baseball cities during the strike. "These results indicate little impact from the strike [on the local economy]," Zipp writes in his study. "[The] baseball strike had no substantial impact on non-durable goods in cities hosting major league teams."

Since some cities did not provide specific data on nondurable goods, Zipp further tested his thesis by measuring overall retail sales in struck cities.

At the same time that non-baseball control cities experienced retail sales declines during the strike, six of the seven baseball cities posted greater than average gains in retail sales during the strike. Only one baseball city, St. Louis, showed an extremely small downturn in September, 6.8 percent to 6.6 percent.

Moreover, Zipp showed that "all ten of the cities thought to be most vulnerable to the strike (those with more games missed and more fans per capita lost) did better than expected in both strike months, while four of the cit-ies least susceptible showed some relative losses," further supporting his argument that ball teams are not a determining factor in an area's fiscal health.

Zipp's study is surely limited in its scope. Seven weeks is hardly enough time to properly assess a metropolitan economy and make conclusive statements about it.

Baade, on the other hand, has made similar studies of cities with professional sports teams from the mid-'60s until the late '80s and come to the same conclusion.

Zipp cites a 1990 study co-authored by Baade that "looked at nine cities between 1965-83 and found no significant relationship between adding a sports team or a new stadium and the city's economic growth," Zipp writes in his study. "In fact they found that in seven of the nine cities, the city's share of regional income declined after the addition of a sports team or the construction of a new stadium."

Baade updated and expanded this study in 1994, including 48 metropolitan areas that hosted professional sports teams over the 30 years between 1958 and 1987. Again, Zipp writes, Baade "found that in no cases did a new stadium have a statistically significant, positive economic impact on the city's growth and in three cases it had a negative impact."

If the point isn't money, what is it? That's where club owners and their attendant sycophants start talking about "the intangibles." This amorphous realm deals with the psychological health of a city. It's a pride thing, a civic thing, a sense of being a world-class, major league town. But it's also about sticking your chest out and doing the strutting bloated-neck-sack, my city do or die, your city sucks thang. So, you see, it has a lot to do with the sports mentality.

About The Author

George Cothran

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