The Economics of Spring Training
Cities in Arizona and Florida spend millions to host baseball teams during spring training. Is it worth it?
Last summer, Florida’s Lee County was tasked with closing a massive budget deficit. Hit hard by the housing bubble and facing an unemployment rate that’s more than 40 percent higher than the national average, the county cut millions from its emergency medical services budget, approved employee pay cuts and furloughs, and took $75 million from the reserve fund.
Yet in the midst of the penny pinching, the county still decided to sell $81 million in bonds to fund a new baseball stadium where the Boston Red Sox would play just 18 to 20 spring training exhibition games per year.
To some, the deal represents a giveaway to a team that doesn’t need a handout -- the Red Sox franchise is worth an estimated $870 million. But to elected officials in Arizona and Florida, facilities like the one in Lee County represent investments that pay for themselves many times over.
The spring training Cactus League in Arizona and Grapefruit League in Florida, they argue, contribute millions to state economies -- more than $350 million in Arizona, and $753 million in annual sales in Florida, including $385 million from out-of-state visitors. "It’s a proven economic driver," says Nick Gandy of the nonprofit Florida Sports Foundation, adding that the stadiums also host minor league teams and college baseball tournaments that likely make the facilities’ impact even greater.
Officials also highlight the intangible benefits: Cities that might otherwise be obscure get cachet and name recognition by serving as spring training hosts. That, in turn, can result in businesses’ investing in the community.
Economists, on the other hand, have a different outlook. Since the teams change spring training locations so frequently -- half a dozen, for example, have moved their spring sites from Florida to Arizona since 2003 -- there’s ample data to determine whether a city suffers when its team leaves. Philip Porter, a sports economist at the University of South Florida in Tampa, says "nothing changes" when a team skips town. Sales tax, property values and the size of the tax base remains at comparable levels, undermining the argument that the stadiums pose a vast economic benefit.
A study by University of Akron professor John Zipp examined the amount of taxable sales in Florida communities that hosted spring training in 1995, when the baseball strike caused a 60 percent drop in attendance. If spring training had a major financial impact on those communities, they should have suffered tremendously. That didn’t happen, and in fact, their taxable sales increased. Those findings, Zipp wrote, "may indicate that spring training is not the major tourist draw that many claim."
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