Saturday, October 22, 2011

The value of postseason games

One recurring argument in the seemingly unending debate over public subsidies of professional sports is if they have any real financial benefit to the hosting city/county.

Hosting the World Series has been a blessing
for St. Louis' city budget.
There is little doubt that the games trigger economic activity; the question is if that activity would occur anyway, just in a different direction, without the games.

On Friday we had a minor data point: The mayor of St. Louis dropped his plan for mandatory furloughs for city workers because the Cardinals had made the World Series. The seven postseason games played so far in the Gateway City brought in an unanticipated $2 million in sales tax revenue; should the Series go the full seven games, the city stands to pull in another $900,000. The furloughs would have saved the city some $2.7 million.

As the linked-to item from the St. Louis Post-Dispatch makes clear, there are city officials who didn't think the furloughs were ever necessary, but that's not the point here. The point is that St. Louis has gotten $2 million in revenue from seven games -- revenue it didn't expect because it didn't expect the games to be played. Nobody seems to be disputing that assessment.

Now, I wouldn't assume that the math (one game = $285,000 in tax receipts) would hold true for the regular season. Postseason tickets are pricier than regular season tickets, for one thing, and it's likely that fan enthusiasm brings more memorabilia sales as well. And extrapolating this to the Twins is dicey as well; I have no idea how Missouri/St. Louis sales taxes compare to Minnesota/Minneapolis.

But if we cut the per-game tax receipts to a third, we get about $95,000 per game. Multiply that by 81 (the number of regular season home games) and we get a bit less than $7.7 million a year in added public revenue.

Does that justify hundreds of millions in public investment in a stadium? Not by itself. But it doesn't hurt.

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