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Do New Major League Ballparks Pay for Themselves?

Author

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  • Marc Poitras

    (University of Dayton)

Abstract

In recent decades local governments have allocated billions of dollars to subsidizing construction of facilities for major league baseball. We use panel data that cover all major league baseball teams from 1989–2001 to estimate the impact of ballpark construction on team revenue. Our estimates imply that a typical new ballpark generates additional revenue sufficient to cover most or all of its capital cost. It follows that any external benefits of ballpark construction are likely to be inframarginal and that continuance of large public subsidies cannot be justified on economic grounds.

Suggested Citation

  • Marc Poitras, 2006. "Do New Major League Ballparks Pay for Themselves?," The Journal of Business, University of Chicago Press, vol. 79(5), pages 2275-2300, September.
    • Handle: RePEc:ucp:jnlbus:v:79:y:2006:i:5:p:2275-2300
    DOI: 10.1086/505235
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Stadium renovations and cost overruns - further recent evidence
      by Sam Richardson in Fair Play and Forward Passes on 2013-01-08 07:00:00

    Citations

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    Cited by:

    1. Dong C. Won & Young H. Lee, 2008. "Optimal dynamic pricing for sports games with habitual attendance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(8), pages 639-655.
    2. Rodney Fort & Young Hoon Lee & Taeyeon Oh, 2019. "Quantile Insights on Market Structure and Worker Salaries: The Case of Major League Baseball," Journal of Sports Economics, , vol. 20(8), pages 1066-1087, December.
    3. Young Hoon Lee, 2013. "Estimation of temporal variations in fan loyalty: application of multi-factor models," Chapters, in: Plácido Rodríguez & Stefan Késenne & Jaume García (ed.), The Econometrics of Sport, chapter 8, pages 135-153, Edward Elgar Publishing.
    4. Young Hoon Lee, 2009. "The Impact of Postseason Restructuring on the Competitive Balance and Fan Demand in Major League Baseball," Journal of Sports Economics, , vol. 10(3), pages 219-235, June.
    5. Trenton Smith & Young H. Lee, 2006. "Why are Americans Addicted to Baseball? An Empirical Analysis of Fandom in Korea and the U.S," Working Papers 2006-05, School of Economic Sciences, Washington State University.
    6. John Charles Bradbury, 2019. "Determinants Of Revenue In Sports Leagues: An Empirical Assessment," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 121-140, January.
    7. Stefan Szymanski, 2023. "Anticipating the honeymoon: Event study estimation of new stadium effects in Major League Baseball using the imputation method," Economic Inquiry, Western Economic Association International, vol. 61(4), pages 1077-1102, October.
    8. Joseph P. McGarrity & Brian Linnen, 2010. "Pass or Run: An Empirical Test of the Matching Pennies Game Using Data from the National Football League," Southern Economic Journal, John Wiley & Sons, vol. 76(3), pages 791-810, January.
    9. Seung C. Ahn & Young H. Lee, 2014. "Major League Baseball Attendance," Journal of Sports Economics, , vol. 15(5), pages 451-477, October.
    10. John Charles Bradbury, 2021. "Financial Returns in Major League Soccer," Journal of Sports Economics, , vol. 22(8), pages 921-945, December.
    11. Elizabeth Gustafson & Lawrence Hadley, 2007. "Revenue, Population, And Competitive Balance In Major League Baseball," Contemporary Economic Policy, Western Economic Association International, vol. 25(2), pages 250-261, April.
    12. Young H. Lee & Trenton G. Smith, 2008. "Why Are Americans Addicted To Baseball? An Empirical Analysis Of Fandom In Korea And The United States," Contemporary Economic Policy, Western Economic Association International, vol. 26(1), pages 32-48, January.
    13. John Charles Bradbury, 2022. "The impact of sports stadiums on localized commercial activity: Evidence from a Business Improvement District," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 194-217, January.
    14. Stefan Szymanski, 2006. "Tilting the Playing Field: Why a sports league planner would choose less, not more, competitive balance," Working Papers 0620, International Association of Sports Economists;North American Association of Sports Economists.

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