The Union-Tribune admitted this morning (January 14) that those "pointy-headed, sissy" economists were right all along: the San Diego economy remained strong during the year that the Chargers were gone.
From the mid-1990s to last year, the U-T, radio and television stations, the hotel lobbyists, and others vehemently argued that the Chargers and Padres were big stimulants to the local economy and deserved huge public subsidies. In my U-T and Reader columns, I regularly interviewed economists who said that was a bunch of hooey.
This morning, the U-T, tail wagging between its legs, admitted it was a bunch of hooey. Hotel occupancy has risen in the year the Chargers were gone. Economists always said that few people came from out of town to watch games. There were a few exceptions: Los Angelenos who came down to watch the Dodgers play, got drunk, and stayed overnight.
Also, in 2016 when Dean Spanos and Mark Fabiani were doing their darnedest to alienate San Diegans so they would lose the election and be free to move to L.A., out-of-towners came to San Diego to see their teams play the Chargers because they could get cheap tickets in good seats at the then-named Qualcomm Stadium.
The U-T noted this morning that 2017 hotel occupancy on the weekends the Chargers played in 2016 dropped. Of course. That’s because 2016 numbers were artificially inflated because of those out-of-towners taking advantage of local hostility against the Chargers.
The U-T wept for certain restaurants and bars that lost business because the Chargers departed. But the U-T admitted that other restaurants and bars made up the difference. The economists were saying all along that the money spent before, during, and after sports events was money that would have been spent elsewhere in the absence of games. It’s called the substitution effect. The spending of local money is just rearranged.
The Federal Reserve Bank of St. Louis published a poll of economists in May 2017. A whopping 86 percent of economists said that local and state governments in the U.S. should eliminate subsidies of professional sports franchises.
In every city considering a subsidy for a pro sports team, there is one big problem: the media. Newspapers, TV, and radio stations almost always honk their horns in favor of the subsidy. That’s because the media make a bundle of money from sports. I will bet that advertising in the U-T sports section has declined, perhaps sharply, since the Chargers left. In short, mainstream media have a vested interest in government subsidizing pro sports teams. The media noise drowns out common sense and economists’ intelligent analyses.