Sports investments in the Magnolia State

*First appeared in the July 2 edition of the Laurel Chronicle

While the eyes of Mississippi have been watching the bloodsport known as politics, the rest of America has been watching the sport known domestically as soccer and internationally as futbol.

I note with irony some similarities between the two “sports.” Soccer is the only sport (besides elections) in which a tie is an acceptable outcome, at least until the next round (er, runoff). You can’t touch the ball with your hands (in politics, the smart athletes never get their hands dirty). Age – be it youthful vigor or maturity on the field – is always an issue. And apparently hairstyles matter, too (see: Trent Lott, Cristiano Ronaldo).

But let’s get beyond soccer, the sport no one really cares about until the World Cup. Mississippians love football – I’m talking shoulder pads, helmets, testosterone, and college jingles that bond generations of fraternity brothers.

We love basketball and baseball to a lesser extent, and I think there’s maybe one or two of us that even watch hockey. Because these sports are so woven into the fabric of our day-to-day lives, it makes sense, then, that policymakers would consider sports-related investments as part of comprehensive economic development efforts.

But, what do such investments get us? Regional Economic Models, Inc. (REMI) recently presented its findings on “the economic impact of professional sports.” They looked at the Big Four – NFL, NBA, MLB, and NHL. (Sorry, futbol fans; no soccer stats here.)

Total payroll for these leagues is astounding: NFL came in at $3.4 billion; followed by MLB at $3.39 billion. The NBA surprised me, coming in at $2 billion, and the National Hockey League came in at $1.6 billion.

Not so surprising is the professional football league (NFL) is the most lucrative in the world. Its most valuable franchises are, in descending order, the Dallas Cowboys ($2.3 billion), New England Patriots ($1.8 billion), and Washington Redskins ($1.7 billion).

Major League Baseball franchises have an average value of $744 million, a more than twenty percent increase from 2012 to 2013. That’s good news – or, you might say, a home run? – for baseball fans. Its most valuable franchises include the New York Yankees (at $2.3 billion) and the Boston Red Sox (at $1.3 billion).

On the courts, the National Basketball Association franchises raked in a 25 percent increase in value over the year, with the average around $634 million. Most valuable franchises are the New York Knicks at $1.4 billion, the Los Angeles Lakers at $1.35 billion, and the Chicago Bulls right at $1 billion.

Since my frame of reference for all things basketball centers around Michael Jordan, I’m thrilled to learn the Bulls have retained their hoops prestige.

The National Hockey League isn’t as weighty. I won’t go into details because Southerners don’t care about ice games (although I hear the Bandits, a hockey team formerly based in Jackson, were entertaining to watch).

More to the point, REMI looked at stadiums to determine their economic impact on cities and regions. Interestingly, taxpayers have absorbed 70 percent of the capital costs of stadiums, and at least 12 teams have turned profits on subsidies alone.

The core industries driven by professional sports (including stadiums) are retail trade, transportation, accommodations, food services and drinking places, and amusement, gambling, and recreation. While these industries typically see an uptick, it’s not clear whether this is new business or simply reallocation of existing patrons from one area to another.

The breadth of major league sports can generate a positive impact on communities and regions, but I assume the impact of minor league is murkier. Coincidentally, Mississippi must be careful when weighing fiscal responsibility with athletic expansions.

Mississippi assisted the Mississippi Braves Stadium through about $8 million in tax incentives in 2005. To date, the stadium seems to have had a positive economic impact on the area, which now includes a Sam’s Club, an outlet mall (which also received tax incentives from the state, by the way), and many restaurants.

Earlier this year, the Huntsville Stars announced they are relocating to a yet-to-be-built stadium in Biloxi. The cost of construction will include local bond funding as well as $15 million in money from the state, according to media reports.

On top of these professional venues, public institutions like Jackson State University continue to make plays at the State Capitol for taxpayer dollars to build a domed stadium in Jackson.

It’s easy to get excited about sports, and even easier to assume sports-related projects are smart investments. But the economic impact of these investments is a mixed bag and varies heavily by community, region, and state. The safest play is to let the private sector – not taxpayer funds – dictate who scores in the sports arena.