Inglewood – one of poorest neighborhoods in LA — projects a football stadium would generate more than $800 million dollars worth of economic activity a year.
But Victor Matheson, a sports economist at College of the Holy Cross, is dubious.
“A good rule of thumb that economists use is to take what stadium boosters are telling you and move that one decimal place to the left, and that’s usually a good estimate of what you’re going to get,” Matheson says.
Economists say the biggest reason sports teams don’t have much impact is that they don’t tend to spur new spending. Most people have a limited entertainment budget, so the dollars they are spending when they go to a game is money they would have spent elsewhere, maybe even at a restaurant or small businesses where more money would have stayed in the community. Plus, Matheson says, rather than draw people to a neighborhood, games can actually repel them.
“Sporting events can cause significant crowds and congestion that can cause people to stop going to other events in the area,” he says.
That’s part of the reason why a 2003 analysis on Staples Center commissioned by the Los Angeles City Controller included a surprising finding.
“Economic activity in Inglewood actually increased when the Lakers left town,” says Matheson.
That is, sales tax revenue went up when the Lakers and Kings moved to Staples Center in 1999.