Economic Impacts of Professional Sports Teams
on New York’s Economy
The establishment of professional sports teams in New York provided improvement on the labor sector, household income, poverty, level of economic activity, and government tax revenue. On the other hand, one of the few negative things that establishing professional sports teams poses on New York’s local economy would be the increase on the amount of expenditures on the part of the local government specifically if the professional sports team is about to represent New York and compete with the sports teams of other states. Given this, at the end of the day, the overall economic impact of professional sports teams’ establishment in New York would still be positive despite of the fact that it poses as an added cost on the part of the local government of New York.
New York – one of the busiest cities in the nation and houses to large number of sports fanatics. From basketball to baseball, New Yorkers are always enthusiastic in supporting their sports teams. The New York Knicks and the New York Yankees are just to of the official professional sports teams of New York that competes with other sports team of other states. These teams serve as the symbolisms of New Yorkers to compete in the sports arena. The mere existence of such teams boosts the morale and pride of the state that they represent. But the question now would be – is the existence of this professional sports teams do have economic significance on New York? The social and cultural values of this team are more or less already clear to most New Yorkers in present, but it is also a must to determine the economic implications of forming such professional sports teams.
Given this, this paper aims to determine the economic significance of professional sports teams in New York as well as to know whether or not to continue forming sports teams.
Impacts on the Labor Market
The establishment of a given professional sports team, especially if the team is about to represent their state of origin, then, it would open for an additional job opportunity in the labor market of New York (Coates & Humphreys 2). In other words, the establishment of a professional sports team would lower down the unemployment rate of New York since it will hire and pay those players that will be joining a given sport team. In this regard, the poverty will also be minimized as those players start to earn reasonable amount of income and earn more if they start to become popular. Remember that those teams that are about to represent a given state in any kind of sports will hire players only from the residents of that given state. As for the case of New York, the formation of professional sports teams needs to hire New Yorker players. With this, the formation of professional sports in New York poses as a beneficial factor considering its effects on the labor market and employment rate.
Tax Revenues of the Local Government
Since there will be an increase in the number of employed people in New York after the establishment of a given professional sports team, then, the local government of New York will now be able to enjoy receiving relatively higher tax collections. Income taxes is also one of the major income generation tool of the local government in the country, and also New York, and given this large number of income tax payers available in New York as the consequence of higher employment rate due to the establishment of professional sports teams, income tax collection of the said state is expected to increase in the next coming tax payment period. These increase in the amount of taxes that the local government of New York can be used in order to finance difference government programs and projects that are helpful in the development of the infrastructures and the like.
Impacts on Government Spending
Given that some of the professional teams are built by the local government in order to compete to the sports teams of other states, all of the costs incurred of the sports teams are subsidized by the local government, thus, higher government spending (Utt 1). Instead of allotting the funds to other more important projects and programs, New York allots significant amount of financial resources to finance the costs of having a professional sports teams on their side. In other words, the establishment of professional sports teams in New York, as well as to other states, just adds up to the expenditures of the local government.
Impacts on the Economic Activity
Especially for the case of business establishments near a stadium or sports complex, once New York established a professional sports team and become popular and compete with other teams from other states, then, business activity within the perimeter of the sports complex and stadium will more likely to increase specifically during a game match. Moreover, advertising industry of New York also enjoy more ad projects as businesses tries to use these professional sports teams to endorse their products/services (Gerard 1). Other states with no professional sports teams, the tendency of businesses is to use the players of sports teams from other states and most probably the advertising agency of the state where the team is based. Construction sector also enjoys additional projects as these professional sports teams need stadiums that will serve as either “home court” or practice arena of the team. Owners of professional sports teams will also enjoy higher profits, which then reflects on the level of business agreements that they will execute in the local economy of New York, e.g. franchising (Wilson 1)
Based from the given impacts of establishing professional sports teams in New York’s local economy, it is therefore clear that the establishment of such sports teams is beneficial to the economy of New York. Though the local government will incur additional cost from doing so, but the social welfare of new Yorkers is the most priority at this case. If we are about to determine the overall social and economic impact of establishing professional sports teams in New York, at the end of the day, it would give us a positive result since the benefits out numbered the costs.
Given this, New York must continue establishing professional sports teams in the market in order to continue improving its economic condition especially on the side of the labor sector.
Coates, Dennis & Humphreys, Brad R. “The Effect of Professional Sports on earnings and Employment in the Service and Retail Sectors in U.S. Cities.” 4 September 2001. University of Maryland Baltimore Country. 23 July 2008 <http://userpages.umbc.edu/~coates/work/employment04.pdf>.
Gerard, Mark B. “New York’s Sports Economy.” 29 March 2004. Gotham Gazette. 23 July 2008 <http://www.gothamgazette.com/article/issueoftheweek/20040329/200/933>.
Utt, Ronald D. “Taxpayers Prop Up Sports Profits.” 30 July 2002. The Heritage Foundation. 23 July 2008 <http://www.heritage.org/Press/Commentary/ed073002.cfm>.
Wilson, Duff “Bill Would Raise Franchise Value of Sports Teams. 2 August 2004. The New York Times. 23 July 2008 <http://www.nytimes.com/2004/08/02/sports/02tax.final.html?ei=5090&en=f6742afcaacd3364&ex=1249099200&partner=rssuserland&pagewanted=all&position=>.