Selling the Game: Estimating the Economic Impact of Professional Sports through Taxable Sales

Abstract

Sports leagues, franchises, and civic boosters tout the economic benefits of professional sports as an incentive for host cities to construct new stadiums or arenas at considerable public expense. Past league‐sponsored studies have estimated that new stadiums, franchises, and mega‐events such as the Super Bowl increase economic activity by potentially hundreds of millions of dollars in host cities. A detailed regression analysis of taxable sales in Florida over the period extending from 1980 to 2005 fails to support these claims. New stadiums, arenas, and franchises, as well as mega‐events, appear to be as likely to reduce taxable sales as increase them. Similarly, strikes and lockouts in professional sports have not systematically lead to reductions in local taxable sales.