Monday, October 07, 2002
Indy weighs what NFL team is worth
The Associated Press
INDIANAPOLIS — With the Indianapolis Colts hinting they might leave the city if they do not receive a greater public subsidy, city officials and sports experts continue to ask: Are they worth it?
Is it worth an additional $10 million annually from the city — the lowest number the Colts suggest is needed — to keep them financially viable in Indianapolis?
“It's problematic because they play so infrequently and employ so few people,” said Stanford University economist Roger Noll, considered a founder in the study of sports economics. “The right debate in Indianapolis is how much is it worth to you just to have the team.”
The Colts receive about $12 million a year in public funding, including $6.7 million in luxury suite sales. The city also pays about $1.2 million to the Colts to offset game-day expenses.
David Swindell, an economist and associate professor of political science at Clemson University, said such deals could not be justified for most other businesses.
In addition, Swindell said, sports proponents tend to inflate the economic power of sports franchises. For instance, although Colts player salaries average more than $1 million apiece, many of the 1,130 jobs attributed to the Colts, are low-wage service jobs.
Those jobs are not new to the economy, Swindell said. They have been redirected from businesses such as theaters, museums and restaurants.
“People aren't taking money out of savings (to attend Colts games). So the movie theaters lay people off, while people get hired at the stadium,” said Swindell, who received his doctorate from Indiana University.
In the final analysis, Swindell said, football teams are relatively minor players in large-city economies.
“The magnitude of their budgets are equal to a couple of Wal-Marts,” he told The Indianapolis Star for a story published Sunday.
Mark Pratt disagrees. The owner of Denison Parking, the largest private parking company in downtown Indianapolis, Pratt sees the Colts as an important cog in the city's economic engine.
His business increases dramatically on game days, when parking rates typically rise from $6 to $8 a day, to a flat rate of $10.
“I think people need to understand the importance of our teams,” he said. “Indianapolis is a town that for its size has an incredible amount of things to do. And the professional sports teams are a part of that.”
Pete Ward, senior executive vice president of the Colts, said academicians downplay other benefits from having a football franchise.
“If you have a Monday night broadcast and, let's say the city gets during the broadcast five minutes of exposure,” Ward said. “If you were to buy five minutes of ad time, it would cost $3 million.”
Ted Bulthaup, owner of Hollywood Bar & Filmworks in downtown Indianapolis, doesn't think spending more money on the Colts is the right investment. His business suffers on game days, he said, because of higher parking prices and congestion by football fans who typically do not patronize his business.
“As far as restaurants are concerned it's not this big windfall of income to us,” he said. “It's only a few days a year.”
Many Colts proponents remain convinced that businesses benefit directly and indirectly from the team's presence, in large part from something economists cannot measure: community pride and national attention gained by being a major-league sports town.
“I think we know that our reputation, our ability to recruit new employees, all of those have to do with the type of amenities our city offers,” said Tamara Zahn, president of Downtown Indianapolis Inc.
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Indy weighs what NFL team is worth
