Brianna A. Martinez

Senior Comprehensive Evaluation

Individual Presentation

March 6th, 2015

ESS 405: Topics in Sport Management

SPORTING ORGANIZATIONS & ECONOMIC OPPORTUNITY

INTRODUCTION

• Purpose:

• To put a career in the sporting industry in a broader perspective to show economic impacts

• To demonstrate why the presence of professional sporting organizations in a city is a controversial topic

• To present possible solutions to the cons of this controversy

• To emphasize the benefits of promoting youth & community development through sports

GETTING IN THE MINDSET

To Receive Maximum Benefit:

I strongly encourage all of you to use this presentation as a springboard to look at the sporting industry from the perspective of a policymaker, GM, Institutional Administrator, or other executive authority. The more we – as new entrants to the industry – see the big picture and see how all components of a organization or city affect other areas, the more we will be able to give ourselves a competitive advantage by offering innovation and vision to our future employers and cities of residence.

CONTROVERSIAL ISSUE

• Argument: Construction/Maintenance of professional sporting facilities is very expensive for the city’s public expenditure

• Costs

• Football/Baseball Stadium = Approx. $325 million

• Basketball/Hockey Arena = Approx. $200 million

• The public’s share of the costs for these types of venues averages from 50-60% of the total costs

FACTORS IMPACTED

• Economic impacts of venue construction/maintenance typically affects four major areas

• Outcome

• Personal Income

• JOBS

• TAX REVENUE

METHODS FOR EVALUATION

• Method #1: Compare growth rates in these categories in metro areas with major sporting organizations (1 or more) to those metro areas without a team presence

• Method #2: Measure the subsequent growth of a city after acquiring a major team

• Method #3: Examine specific economic factors created by a specific team within a specific location

PROBLEM #1: POTENTIAL JOB LOSS

• The estimation of how many real jobs are made available as a result of hosting a major team

• Gross job creation

• Net job creation

• How would a negative relationship be so?

• Disposable income spent at athletic events lowers the income available to be used at local smaller businesses

• Spending money on major team-related expenses would eventually push other businesses to fail

SOLUTION TO NET JOB CREATION

• Create more meaningful connections between venue/team and local businesses

• Host joint events – connecting the target market of local struggling businesses to team fan base to help meet mutual goals

• Generate publicity (FREE advertisement) for businesses through athlete/community relationships

• Host team events at local businesses instead of traditional facility

• Packages developed by Sales Departments incorporating products/services of local businesses

PROBLEM #2: TAX REVENUE AT CITY EXPENSE

• Ideally, sales tax revenue from team-related expenditures should help the city, but does it?

• A higher sales tax does not benefit the city if its own residents are the only ones paying it

• Large home crowds at games and their spending on off-site parking, food, and other goods/services do not generate additional sales revenue from OUTSIDE the city

SOLUTION TO NET TAX REVENUE

• Increase attendance from out-of-town visitors

• Strengthen partnerships with the next closest competitor and create joint ticket sales packages

• Create incentives for visitors to make unplanned purchases

• Example: Free children’s tickets to local zoo for the Sunday following a Saturday game for visiting fans

• Example: Restaurant discount coupons to higher end dining that may have been opted out of for cheaper alternatives

• Host non-sporting events near home game dates

• Give visitors multiple reasons to come to another city

CRITICAL QUALITY COMPONENT

• Most studies do not consider the presence of a major sporting team’s effect on quality of life

• Quality of life = satisfaction/happiness

• Indicators?

• Game attendance

• Fan loyal

• Sense of Community

• Opportunity Cost

• Surveys

VALUING QUALITY OF LIFE IN A CITY

• Surveys! (JUST ASK)

• Housing costs (value of real estate)

• Population Retention

• Comparison with happiness of residents of a city who have lost a major sports team

• Example: Seattle Super Sonics

• Sonicsgate: A passionate documentary highlighting political and social impacts of a city’s loss of a major NBA team in 2008

FROM STATISTICS TO APPLICATION

• Who has the power to create ideal city conditions?• The residents of the city

• What does each resident want in their hometown?• Assurance, encouragement, and security quality of life for the future

of a city• Where should they look for these desires?

• Within the city and its venues, business, and institutions• How can this be put into practice?

• By starting from the ground up: investing in the youth of the community

• When is a good time to begin?• NOW

DRIVING ECONOMIC FORCE

• It is extremely difficult to implement a policy that sustains desired levels of economic prosperity (ex. job creation)

• Enormity of scale overshadows the individual

• But…

HERE’S THE KEY

• “Individuals are the global economy. Every individual is an economic engine. All decisions people make every day are the economy. All the decisions and choices – yours and mine and everyone else’s – are the economy. An economy rises and falls on people’s combined consciousness. America’s economic future isn’t huge and vague; it starts with every individual. It’s connected. It’s changeable.”

• The Coming Jobs War: What Every Leader Must Know About the Future of Job Creation by Jim Clifton, Chairman of the Gallup Poll

DUTY OF MAJORING SPORTING ORGANIZATIONS

• Use sports as a tool to cater to the next generation of fans, professionals, athletes and leaders

• Create programs within the community focusing on teaching transferrable skills to children and teens through sport

• Invest in the athletic, academic, and social potential of youth

• Inequality in metro areas may be unavoidable, but equal opportunities is possible

YOUTH SPORTS = SUCCESSFUL ADULTS

• 2012 LA84 Foundation Summit:

• “There is a strong, well-documented correlation between youth sports participation and academic success as well as success in other walks of life.”

• The Serious Power of Fun by Chris Brady:

• “We are never more fully alive, more completely ourselves, or more deeply engrossed in anything than when we are at play.”

• Psychologist Charles Schaefer

BENEFITS

• Life-long fan base

• Community/city pride starting in childhood

• Self-confidence developed early

• Athletic skills resulting in college scholarships

• Opportunities for low-income, minority youth

• Family involvement

• Population Retention

ATHLETIC EXPERIENCE

• Passive

• Natural learning and development through impact of sports

• Active

• Guided through community events

• Educated by successful leaders/mentors/professionals

• Protected by their community connections

CONCLUSION

• The presence of major sports teams in a city is controversial because of tax and job implications

• Solutions are possible for both factors

• Quality of Life may be more important than cold statistics

• Investment in development of youth athletics by professional sporting organizations and college athletic teams will help create long-term city prosperity

QUESTIONS?

WORKS CITED

• Clifton, Jim. The Coming Jobs War: What Every Leader Must Know about the Future of Job Creation. New York, NY: Gallup, 2011. Print.

• Rappaport, Jordan, and Chad Wilkerson. What Are the Benefits of Hosting a Major League Sports Franchise? Place of Publication Not Identified: Federal Reserve Bank of Kansas City, 2001. First Quarter 2001. Economic Review. 2001. Web. 1 Mar. 2015. <http://kansascityfed.com/publicat/econrev/PDF/1q01rapp.pdf>.

• Thaler, Richard H., and Cass R. Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness. Revised and Expanded ed. London: Penguin, 2009. Print.

• La84, 2012. "Summit Report: Youth Sports & Academic Achievement." SUMMIT REPORT (2012): 1-13. LA84 Foundation, 8 Nov. 2012. Web. 02 Mar. 2015. <http://library.la84.org/9arr/ResearchReports/LA84_2012_Summit.pdf>

• "UCLA Early Academic Outreach Program." UCLA Early Academic Outreach Program. N.p., 2015. Web. 02 Mar. 2015. <http://www.eaop.ucla.edu/activities/summer.html>.