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For decades, the National Football League, and other professional sports organizations such as Major League Baseball, have claimed that a new sports facility generates huge economic activity for a community. Making this claim has been one essential part of the strategy to get governments to subsidize the stadiums, ballparks or arenas. All along, economists have said it isn't so: if people don't spend money on a game, they will spend it elsewhere -- the substitution effect. Pro games don't bring in much money from the outside. Now, a brilliant article by Bill Briggs of MSNBC reveals that NFL owners have finally confessed: their claims were bogus.

The confession emerged from the NFL's current lockout of players. The National Football League Players Association, the players' union, took the owners' own estimates -- generated while begging for subsidies -- and stated that a city will lose $20 million per game and $160 million per season if the 2011 games aren't played. NFL spokesman Greg Aiello denounced the union's figures as "fairy tales" and "unattributed research," and emailed to MSNBC.com an article from the Atlanta Journal Constitution that concluded "there will be little economic impact if there is no NFL action next season...[P]eople will find other ways to spend their money." That's the substitution effect.

Economist Victor Matheson, who has long debunked mendicant sports teams' claims that a stadium will generate huge economic activity, says, "For years, [NFL owners] have commissioned bogus economic-impact studies that produce inflated claims...in order to justify taxpayer subsidies for new and improved stadiums. Now that [the players association] is using these same studies to put public pressure on the owners and league, the owners and league are now disavowing their own impact studies as unreliable." Matheson figures that the economic impact of losing a season would be $16 million for a city -- one-tenth of what the union, using the NFL's own studies, claims.

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Comments

Don Bauder June 30, 2011 @ 1:31 p.m.

But the teams seeking taxpayer largesse will probably, disingenuously, deny the league ever said it -- or they will try to explain it away. Best, Don Bauder

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Visduh July 2, 2011 @ 8:37 p.m.

This should have been one of the most massively provocative blogs in Reader history. I've been waiting now for two days for the deluge of comments and . . . one one-word comment from SurfPup. T-t-t-that's all folks!

Where are the howls of outrage/anguish/protest from the die-hard Charger fans? Are they all on vacation? Do they not frequent the Reader website? (Probably.) If we are to believe this, the entire justification for the existence of the NFL is now in question. Isn't it? What is it that keeps those guys and gals hanging on every word from the sportswriters and sportscasters on ESPN? Oh, they like the game? OK, now I understand. But there's still the problem of getting the indifferent taxpayers to pay for a stadium and to subsidize the billionaire team owner. Hence the economic argument which is now blown.

Where do we go from here? Let's see a few dozen comments, and soon.

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Don Bauder July 3, 2011 @ 7:16 a.m.

I, too, expected much more response than this one has received. One pro sports facility after another -- in football, baseball, basketball, hockey -- has been constructed on a premise that the NFL now admits is false. I can remember, beginning back in 1996/ 1997, writing numerous columns (then for the U-T) pointing out that billionaire pro sports owners were bilking the public on a blatantly false assumption: that a new subsidized stadium stimulates the economy. Through the years, reputable economists studying this claim have refuted it. Now, billions of wasted taxpayer dollars later, the NFL finally admits it has been perpetrating a fraud. Those who have promoted this fraud through the years, including most of the mainstream media, are going through denial. Hence the silence. Best, Don Bauder

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Twister July 2, 2011 @ 8:51 p.m.

There's no substitute for maximum feasible deniability.

Trouble is, it WORKS!

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Don Bauder July 3, 2011 @ 7:21 a.m.

One reason the deniability works in this case is that most of the media across the country, and certainly in San Diego, have promoted this idea that subsidized pro sports facilities pump up economies, now recognized as false. These media promoted the idea for selfish reasons: they made bundles of money from advertising in their sports sections. For some publications, this has been a joke: the Union-Tribune, for example, has historically opposed use of public money for social welfare, but vigorously applauded use of public money for corporate welfare, particularly when it was a beneficiary. Best, Don Bauder

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Twister July 3, 2011 @ 10:45 p.m.

The U-T doesn't even rate the (sometimes affectionate?) term, "rag."

Such conflicts of interest are (or used to be) unacceptable in the newspaper business--at least the nearest competition (e.g. the LA Times) should do an investigative piece.

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Don Bauder July 4, 2011 @ 9:09 a.m.

The LA Times has problems of its own -- big, big financial woes. Best, Don Bauder

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JustWondering July 4, 2011 @ 9:30 a.m.

I believe most already knew this, but chose not to say it out loud.

This would be especially true for our politician and so called city leaders who, in San Diego's case, have been out maneuvered, out negotiated and just plain out lawyered by sophisticated businessmen. You certainly don't become multi-millionaires, mini-billionaires by spending your money, you do it by using other peoples money for your advantage.

It's too bad Redevelopment Agencies didn't die with the Gov. Browns budget. Maybe San Diegans will wake up and realized they've wasted millions on millionaire players and owners.

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Don Bauder July 5, 2011 @ 1:36 p.m.

Millionaire players and billionaire owners. Agreed: it's too bad redevelopment agencies aren't dead. But unless lawsuits by the corporate welfare crowd succeed, redevelopment will be severely crimped. Best, Don Bauder

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Visduh July 5, 2011 @ 5:26 p.m.

The bread and circuses of the new century. Or is it of the new millennium?

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Don Bauder July 6, 2011 @ 8:32 a.m.

Yes, the Roman leadership had it right: give the populace food and games, and the people will shut up. This mentality is behind the pro sports corporate welfare. But remember: the Roman empire collapsed. Best, Don Bauder

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Fred Williams July 21, 2011 @ 2:42 a.m.

"History Repeating" Updated...watch carefully for some clever highjinx.


Yes, the Roman Colosseum still stands, but not the Roman Empire.

It was Gibbons who coined the phrase "bread and circuses", and the founders of our republic grew up on his analysis of ancient history. Gibbons has gone out of style, as have the virtues he recommended to future legislators.

So instead of infrastructure, we got football and baseball fields, hockey rinks and basketball hoops. Schadenfreude makes me want to put out my tongue and say, "I told you so" to San Diego. But it's far to tragic and senseless for that.

Oh well. Life will go on, but it won't be so great as it could have been, since we've already squandered so much for so very little...investing in private sports entertainment businesses rather than our kids' futures.

Now the billionaires finally admit they've been lying about the economic "benefits" all along. Too late. We're already pretty much wrung out, with no more left to give away to these crooks.

Someone who grew up reading about the Fall of the Roman Empire would both punish these charlatans and prevent it from happening again. Sadly, you'll find few in a position of real power who could even tell you who Gibbons was, much less what he wrote.

No intelligent man can both love professional sports entertainment and claim to care about America too.

Fred

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