The Minister of the Economy, Pierre Fitzgibbon, may try to be reassuring, taxpayers are right to be afraid when he talks about subsidizing the return of baseball.
Contrary to what the wealthy businessmen at the origin of the project will assert, this is not an economic hit. Rather, for experts in the field, this is a huge waste.
When polled on the question, 83% of economists say subsidies to major league sports teams are a waste of taxpayers’ money.
Professor Allen Sanderson of the University of Chicago goes even further, saying: “If the goal is to inject money into the local economy, it would be more efficient to throw it out the door. ‘a helicopter than to invest it in a new stadium. “
The first problem is that, when doing their calculations of economic benefits, promoters tend to inflate their importance.
Take the issue of tourism for example. The calculations made to estimate the economic impact of a stadium consider that if a traveler walks through the stadium’s front door, every dollar they spend in town is a direct consequence of the fact that there is a stadium.
So if a traveler is in Montreal to attend a conference, but decides to go see a baseball game one night, the team would take credit for every dollar they spent in town.
His stay at the hotel, every meal he ate, his plane ticket, his conference ticket, etc., would be considered a direct consequence of the fact that he attended a game in the fallout calculations. economic and tourist. It helps a lot to make the numbers bigger. It is also misleading.
An independent analysis done on the development of Camden Yards in Baltimore found the Orioles’ net positive impact of the stadium to be around $ 3 million per year. In the same year, the interest charges on the debt associated with the construction of the stadium alone cost $ 14 million per year.
The second problem is that the positive impact of a team for local businesses is greatly overestimated.
While a modern stadium attracts a lot of people to the city on game night, it is also designed so that its spectators spend the majority of their money within these walls.
The infrastructure required for a major league baseball team is very expensive. Stadiums built over the past ten years have cost between $ 800 million and $ 1.5 billion each.
To make them profitable, teams have no choice but to encourage their customers to spend as much money as possible inside the stadium. The ideal customer for them is the one who parks at the stadium, buys his jersey in the official team store, watches the game in person and buys his meal and his beer in the concessions there.
In the scientific papers written on the subject, there is near unanimity that there is no substantial evidence that these subsidies lead to economic gains.
The third issue to be raised is that of the opportunity cost. The money the government would spend to subsidize the return of baseball is money it cannot invest elsewhere.
For it to be worth risking hundreds of millions of taxpayer dollars in such a project, one would have to be able to show that the benefits would be greater than if the government were to use it elsewhere.
In a context where the health care system is in crisis, where the government is running into debt with billions, and where Quebec taxpayers remain the most taxed in North America, this is a rather difficult proposition to defend.
That the government fund the return of baseball is not a winning proposition for Quebec taxpayers. It is time for Fitzgibbon to put his foot down and say a straightforward no to the use of Quebecers’ tax dollars to finance professional sport.
