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

It's disturbing enough that two of the officials in charge of getting the best deal for the city are entering negotiations assuming that it's in their best interest to cut the deal. Such bias calls into question their resolve at the negotiating table.

Worse still, their presumptions are utter hogwash, economists say.
"There is simply no evidence that building a new stadium or refurbishing an old one has any economic payoff for a city whatsoever," Andrew Zimbalist says. "If I were mayor and DeBartolo came to me and asked for money for a new stadium, I'd tell him to go back to Kezar," the Golden Gate Park stadium the 49ers played in until they struck a Candlestick lease with the city in 1969.

The academics say teams rarely if ever bring in new spending to a city or metropolitan area. "They are realigning spending," says Robert Baade, who has published several studies on the economic myth of professional sports franchises. "They are taking from movies and restaurants."

What irks Baade is the "multipliers" arguments, in which hired consultants claim that new stadiums will have a yeasty effect on a city's economy. "They assume that all ballpark spending is new and therefore can have a multiplier effect," he says.

To create genuine new spending, Baade and his fellow economists say, a team would have to attract fans from distances of greater than 30 miles away. Only these far-flung fans, who may consider eating out or spending the night in the host city, would constitute new spending, and thus a net economic plus.

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."

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