Hotels Among the Favored Few in the Corporate State (Along with Sports Teams, Taxi Owners, and Farmers)
The various cities in the Phoenix metropolitan area have spent a fortune renovating ten spring training fields for 15 major league teams. I have seen a number like $500 million for the total, but this seems low as Scottsdale spent $100 million for just one complex and Glendale may have spent as much as $200 million for theirs. Never-the-less, its a lot of taxpayer money.
The primary subsidy, of course, is for major league teams that get lovely facilities that they use for about one month in twelve.
But these subsidies always get sold on their community impact. But that economic impact turns out to be really narrow. For in-town visitors, the economic impact is typically a wash, as money spent on going to sports games just substitutes for other local spending. But these stadiums are held up as great economic engines because they attract out of town visitors:
Cactus League baseball and year-round use of its ballparks and training facilities add an estimated $632 million to Arizona economy, according to a study released Monday by the Cactus League Baseball Association.
The study found that 56 percent of the 1.7 million fans attending games this past spring were out-of-state visitors and the median stay in metro Phoenix was 5.3 nights.
Spring training accounted for $422 million in economic impact in 2012, up 36 percent from the previous study in 2007. Both were done by FMR Associates of Tucson.
One of the flaws of such studies is they never, ever look at what the business displaces. For example, for local visitors, they never look at local spending sports customers might have made if they had not gone to the game. All spending on the sports-related businesses are treated as incremental. For out-of-town visitors, no one ever considers other visitors coming for non-sports reasons who are displaced (March was already, without all the baseball, the busiest hotel month in Phoenix) or considers that some of the visitors might have come to the area anyway.
However, let's for one moment of excessive credulity accept these numbers, and look at the out of town visitors. 56 percent of 1.7 million people times 5.3 nights divided by 2 people per room is 2.52 million room nights, or at $150 each a total of $378 million. So most of their spring training economic impact is hotel room nights. This by the way is the same logic that supports various public subsidies of local college bowl games.
Which begs the question, why are we spending upwards of a billion dollars in taxpayer money to subsidize sports teams and hotel chains? If the vast majority of the economic impact of these stadium investments is for hotels, why don't they pay for them, or split the cost with the teams?
PS- as an aside, it seems that to be successful in the corporate state, one needs ready access to consultants who will put absurdly high numbers on the positive impact of one's government subsidies. It's like money laundering, but with talking points. Take your self-serving spin, hand it with a bunch of money to a consultant, and out comes a laundered "study". In this case, the "study" architects are FMR Associates, which bills itself as specializing "in strategic research for the communications industry." The communications industry means "PR flacks". So they specialize in making your talking points sound like they have real research behind them. Probably a growing business in our corporate state.