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Nice Super Bowl parade for the Ravens; now Baltimore says show me the money
Question of the Day
Baltimore Ravens quarterback Joe Flacco is set for a huge payday after leading his team to a Super Bowl victory, but the same cannot be said for his team’s adoring hometown fans.
Now that the Lombardi Trophy has been paraded through the streets of Baltimore and the confetti has long been swept up, it turns out that the win probably won’t provide the city with much more than a temporary morale boost.
Ravens players will get six-figure bonuses and the organization could gain marketability, but studies show that the city and state aren’t in for much more than a small jump in income and an offseason of bragging rights.
“In the final analysis, it’s not that much,” said Dennis Coates, an economics professor at the University of Maryland, Baltimore County, who has studied the economic impact of Super Bowl victories on local economies. “It doesn’t boil down to enough to finance the sorts of subsidies that local governments would give to franchises.”
Mr. Coates co-authored a 2002 study that found a $140 increase in income for residents — about $180 in today’s dollars — in the year after their team hoisted the Lombardi Trophy, a “negligible” increase of about 50 cents a day brought on mostly by increased work productivity as a result of happiness.
A 2008 study by economists Michael Davis and Christian End found that a winning NFL team has a direct positive — yet modest — impact on average income.
The economists pointed to other studies that show fans spend more freely when basking in their favorite team’s glory, and that such fans perform better on mental, social and motor skills tests and report higher levels of well-being after a victory than they do after a defeat.
“I think it puts people in a better mood and can lead to an upward kick in economic activity,” said Maryland Comptroller Peter V.R. Franchot, a Democrat.
Although conventional wisdom says winning teams give little economic benefit, it has long been asserted that success can give a boost to a city.
Recent winning seasons by Major League Baseball’s Detroit Tigers and the NFL’s Detroit Lions gave way to numerous stories about how the teams provided their city — long plagued by high crime, a dwindling population and a struggling automobile industry — with a much-needed shot of confidence.
The New Orleans Saints’ success in the years after Hurricane Katrina in 2005 was widely credited with boosting the city’s morale and improving its image after the storm’s immense destruction, and the team’s 2010 Super Bowl win was celebrated as one of the defining moments in the history of a city whose professional football team had been associated with decades of futility.
Such teams are often thought to be economic engines that employ local residents and pay hefty sales and property taxes in return, but many economists disagree.
Many of the Ravens players live and pay taxes in Baltimore or its surrounding suburbs for at least part of the year, and Mr. Franchot estimated last year that state and local governments make about $2 million in tax revenue from each Ravens home game. This year, the team got an extra home first-round playoff game but had no direct benefit from their two road playoff games or the Super Bowl, which is played at a neutral site.
State and local tax revenues are unlikely to increase much next year, as the Ravens already routinely sell out their home games. Their stadium was built in 1998 at a cost of $220 million — a present-day value of $310 million — 90 percent of which was paid from tax coffers.
Some cities have received economic boosts from their teams’ successes. The District reaped major benefits last year when the Washington Nationals made the baseball playoffs and had their best attendance since 2005.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
David Hill joined The Washington Times in February 2011 as a Maryland political reporter. He can be reached at email@example.com.
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