My hometown of New York City, where a rigorous political process weeds out all but the nuttiest ideas, is considering building a $1.4 billion stadium to bring the Jets back across the river from New Jersey, where they share quarters with the Giants. New York city and state would ante up $300 million each even though NFL football teams only play eight home games a year. Are communities crazy to do this kind of thing?
Not necessarily, according to economists Jerry Carlino and Ed Coulson, whose highly readable recent paper on the subject tries to take account of the intangible value people derive from sports teams. "We found that once quality of life benefits are included in the calculus," they write, "the seemingly large public expenditure on new stadiums appears to be a good investment for cities and their residents." The authors liken having an NFL team to having an old-growth forest–it’s something people enjoy even if they never visit. This is to say nothing of the pleasure and unity they derive from rooting, discussing, etc.
That would account for why these stadium deals are politically popular; Pittsburgh area households, for instance, said in a survey they’d pay an extra $5.57 annually each to keep the NHL Penguins–which works out to a present value of $66 million at 8% over the presumed 30 year life of a stadium. Carlino and Coulson worked from their estimate of the effect NFL teams have on local rents (for some reason football seems to raise them) to determine that teams bestow an amenity value of $184 per person. In metro New York, this could be huge. Then again, the Jets are already *in* metro New York.
My take: I’m not qualified to comment on the researchers’ methodology, but broadly speaking I think they’re onto something. My sons and I get great pleasure following the Yankees, for instance, and would gladly pay some small annual tax to keep them. But my guess is that the intangible value of an NFL team would be inversely proportionate to the importance of a city. You can’t take the Packers out of Green Bay, but Los Angeles doesn’t seem to mind having no team at all. Then again, maybe it’s just the weather.