A-Rod's Dollars Make Sense for Yankees

It is the largest deal in professional sports history, and both A-Rod and the Yankees stand to get significantly richer because of it. A-Rod is likely to generate $450 million of "value" for the Yanks. Assuming they will exceed the luxury-tax threshold in each 10 years and face the 40% tax, the total cost for Rodriguez will be $427 million. The true economic value of A-Rod is based on the Yankee's growth and his Marginal Revenue Product. The article talks about other places the Yankees could have spent their money, broadcast revenues, increased ticket prices and demand for games. All of these topics are because of Rodriguez. After our class discussions, what is everyone's opinions on one of the biggest sports contract to ever exist.

Tampa Bay to Get New Ballpark?

Despite money woes that have lawmakers scrambling to pay for state programs, Florida Govenor Charlie Crist said that he thinks the state should try to figure out a way to help the Tampa Bay Rays build a new waterfront ballpark in St. Petersburg. But how?
Earlier this month the Devil Rays announced plans for their $450 million open-air, waterfront, downtown stadium. Crist has stated that he will do whatever he can to help the process move along smoothly. He claims that the new stadium will result in economic growth for Florida and create "jobs, jobs, jobs for a lot of people." It seems that argument of new jobs is always used, but as we have learned, not as many jobs are created as people may think.
Currently, the Devil Rays play in Tropicana Field which does have a roof. However, they envision a 35,000 seat stadium on the current site of their spring training facility.
What do you think would be an appropriate way to fund the new stadium? Should they tax cruise-ship passengers and try to put the tax on out-of-town visitors (rental cars, etc) or should they simply just have the citizens pay for it? What about Crist's argument of the new stadium resulting in economic growth and jobs?

Teams bring more than money to a city...

Taking an Economics of Sports class and learning about the various financial effects of a sports team on the city they represent has got me to thinking. I know that a real Economist is only concerned with the bottom line, the final number, but I think that the effects of sports teams go beyond what can actually be measured by a calculation or number. Last night I attended the Pittsburgh Steelers vs. Baltimore Ravens game in Pittsburgh. I have attended many of the games at Heinz Field this season but each time have been more crucial of the economics side of the business (or team) that I was rooting for. Could they cut costs there? Should they make a bigger stadium? Why don’t they charge more for that? The list goes on. Last night however when I was standing in the parking lot 4 hours before the game drinking the legal beverage of my choice I realized that, at least in Pittsburgh, Steelers are about so much more than just a business. The effects of the team’s winning percentage are irrelevant to the atmosphere before the games, people from all walks of life come together to have a great time, to relieve the pressures of day to day life and the 64,546 people that packed Heinz Field last night experienced a type of emotion that is difficult to describe. Now last night’s game was an exceptional example considering the Ravens served the Steelers the win on a silver platter, but the effects are still the same. As I stopped at a rest area during my trip from Pittsburgh to Marietta at about one o’clock in the morning I realized that nearly every car in the Ohio rest stop were full of Steeler fans. Terrible towels, Steeler flags, logos, jerseys and more colored the rest area black and gold. I just think that to say that a few quick calculations could measure the true financial effects of a team on a city would be ignorant. Now of course, I am obviously a Steeler fan, and a Economics minor should I be able to separate emotion and passion for a team apart from the business side of the game? Maybe I should be able to, but I simple don’t think that it’s possible to do.

Baseball Stats Inspire Sports Economists

How do you become a sports economists? What 9 year old says I want to be a sports economists when I grow up? Most say I want to be a baseball player or football player, but not very many people get to make it professional. True sports fans have a numerical obsession that gages how well a player is hitting, throwing, or shooting. These stats are looked over and talked about every season, but unfortunately there aren’t too many careers that involve memorizing stats and analyzing. However there is an alternative career that involves numbers and sports and it is being a sports economist.

http://www.usatoday.com/money/2006-07-27-sports-econ-usat_x.htm

Former Former Federal Reserve chairman Alan Greenspan admits learning mathematics using baseball stats and current chairman Ben Bernake isn’t any different. The link above discusses more about why there is an increase in interest and the new audiences sports economics is grabbing the attention of.

Smaller Stadiums; are they good or bad for the viewers?

It is obvious that stadiums are getting smaller these days. In fact, in the past decade, the Seattle Mariners are the only team to have built a larger stadium than the one before it. At www.foxbusiness.com, they say that the reason for this is to be more like a nightclub. If the club is full, more people will come, even if it is full only because it is small. The owners want the stands to be full, because they don’t want the people at home watching the game to see the empty seats. The smaller stadiums are good to the fans, because they have larger seats that are closer to the field, wireless internet available, and more concessions available with smaller lines. All of these facts look good to the consumers, except for the fact that because of less seats, the price of seats will go up. Fans will also have the disadvantage if they like to decide to go to games the day before, or the day of, because tickets might be sold out. So, is it better for the fans to have smaller stadiums? I think it is better because if you plan ahead and pay a slight increase in ticket costs, the advantages of having smaller lines for food and larger seats will be worth it.

Teams pack up and leave (is that bad?)

It would be logical to think that a lockout by team would be bad for the local area around stadiums. With no games consumers would have less reason to visit the area. Also that a team leaving the city (for any reason, like lack of a new staduim) would have a heavy impact on the cities economy. However, its seems to be quite the opposite. During the strike of the NBA from 1998-1999 there was almost no impact at all. In fact a team leaving a city didn't even impact the economy the next year. This suggest that consumers will spend their dollars on something else, perhaps a different form of entertainment or maybe some other luxury. So does the threat of leaving if a city won't back the creation of a new stadium carry any weight, or is it the empty threat of desperate entity?