sports stadiums and money

Sports Walks

by Elaine Schwartz    •    Aug 31, 2012    •    416 Views

Whenever I go to a Philly’s baseball game, the walk from the car to my seat takes awhile. Located in a “stand alone” sports complex off of Route 95, the stadium is one of several and the parking lots extend for acres.

I’ve discovered that there is a reason for my long walk.

It all relates to how the owners and occupants of sports arenas make money. First, it helps to use the arena a lot. If a football team has just 5 or 6 games a year, the arena could be in trouble unless they schedule other events like concerts. Baseball is a little better because you could have approximately 81 games a season. But still, fans have to spend money there. At a stadium like Fenway Park, because of its location, Red Sox fans can take their dollars outside to a local bar or restaurant.

And that takes me back to the Phillies and my long walks.

If a stadium is sufficiently isolated, you have to spend your food, drink and memorabilia money there. The “cost” in time and energy–the transaction cost–is just too great for fans to take their demand elsewhere. Consequently, as sports economist Roger Nolls says, “…the modern version of a baseball stadium essentially is a baseball field, the stands, a shopping center, and then acres of parking to make certain that no one can ever go anywhere else.”

An econtalk discussion with Roger Nolls started me thinking about how the acres of parking lots surrounding the Phillies’ arena complex affect where fans spend their money. Then, for more about stadium economics, I looked to this paper on sports facilities and their communities. And finally, although it is from 2008, this Forbes article says a lot when it discusses the most lucrative stadiums. (#1 was the Los Angeles Staples Center.) Also, here and here, there is more at econlife on the economic impracticalities of sports stadiums.

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