A New “Value Proposition”

As July nears its end, the 2020 Major League Baseball season has finally begun.  Teams are playing before empty ballparks to try to avoid further spreading the coronavirus.  Soon the NBA and the NHL will be playing, also with no fans in the arenas.  And if the NFL and college football start up, the teams will almost certainly be playing in front of thousands of empty seats.

471768148.jpgCOVID-19 has obviously affected our lives in more ways than we can count, but one of the interesting potential effects will be a changed perspective on the value of large, taxpayer-funded stadiums and arenas in towns with major league sports teams.  In the B.C. (“before coronavirus”) years, professional sports team owners argued that there was a significant “value proposition” in professional sports venues that made them worth the investment of tax dollars.  But the assumed presence of thousands of fans in the stands was a crucial element of the “value proposition” equation.

Fans were supposed to come in from out of town, fill up the hotel rooms, and pay the absurdly inflated hotel guest taxes into city and state coffers.  Fans were supposed to buy merchandise and food and beer — lots of beer — at the stadiums and arenas, paying sales taxes and creating jobs for hundreds of security guards and concession stand workers and parking lot attendants and fan entertainment teams, who would also pay taxes.  And, after the games were done, the happy fans were supposed to go out to restaurants in the city to celebrate their team’s victory, and the disappointed fans were supposed to drown their sorrows in a cold one — Keeping the city’s food and entertainment and hospitality sector healthy, and paying still more taxes.

Now games are being played with no fans, and who knows when fans will be permitted back to cheer on their teams.  None of those contemplated tax revenues are being paid.

COVID-19 might be a once-a-century pandemic, or it might be the harbinger of a new norm of social distancing and mask wearing and fewer fans in seats — if any are permitted at all.  The next time a professional sports team owner tries to convince a city to spring for a new, even more lavish venue, how receptive are city officials going to be to the “value proposition” message?

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