Expansion end zone isn't lined with riches NFL EXPANSION THE FINAL COUNTDOWN


Unless you're lucky enough to own a sports bar across the street from the new stadium or land the hot dog concession for the games, don't look for riches to flow if Baltimore is awarded a new NFL team.

Certain industries, such as tourism, would prosper, but many would not. Restaurants near the stadium will pick up business before and after games, but those farther away could lose as families redirect spending. Newspapers would gain as fans drink up coverage of the team, but the Orioles and Spirit would find themselves in new competition for season tickets.

In fact, a number of economists say landing a team is hardly the economic Super Bowl that often is presumed. A team will be good for a local economy, they say, but the benefits often are exaggerated.

"Civic pride and fan loyalty aside, evidence suggests that the value of a sports franchise to a city is more myth than reality," said the credit-rating firm Standard & Poor's Corp. in a recent report.

But that hasn't kept Baltimore and the other four cities contending for a pair of NFL expansion teams to be awarded this week from pledging millions of public and private dollars, and publicly humbling themselves, in frenzied efforts usually reserved for the "smokestack chasing" of car factories or other economic development plums.

St. Louis' politicians, for example, put aside a century-old tradition of bickering to unite behind a stadium lease that one study estimated will cost the local stadium commission almost $100,000 more in game-day costs than the team will pay in rent. In Memphis, Tenn., an NFL organizer who pledged to "do anything" to land a team proved it by bungee jumping in New Zealand.

The city leaders of Charlotte, N.C., carved out a hole for a stadium downtown, moving the county jail and a nursing home to make way without any assurance a team would go there. In Jacksonville, Fla., the groveling became so acute that the mayor at one point effectively took the city out of the running before being pressured back into talks for a $120 million retooling of the Gator Bowl.

Baltimore has offered a new, $165 million stadium. In addition, planners have thrown in $4.5 million worth of renovations to the old Colts training facility in Owings Mills, outfitting it with indoor and outdoor, natural and artificial grass fields so the team could duplicate the playing conditions of each of its opponents.

Toss in a $500,000 face-lift for Memorial Stadium -- where the team would play a season while waiting for its new home to be built -- and other assorted expenditures, and the Maryland Stadium Authority estimates it would spend about $185 million in the first four years of a franchise.

Include interest and expenses related to Oriole Park, and that number approaches $260 million over four years for the city's major-league sports, paid for with a combination of lottery proceeds, borrowing, team rent and a $1 million-a-year payment from the city. Operating costs for an NFL franchise would be borne by the team, which directly will employ a few hundred workers.

Cost of doing business

Stadium Authority Chairman Herbert J. Belgrad, who assembled the package, says it is the cost of rejoining the NFL. And the investment will be rewarded with $100 million a year in new economic activity for the state and $15 million in new tax receipts, more than offsetting the city's $1 million-a-year contribution, according to a state study.

But increasingly, experts dispute claims of instant economic impact.

"I'm very skeptical, because when you're talking football, you're talking 10 dates a year," said Robert Baade, a professor of economics at Lake Forest College in Illinois who has gained notoriety as an opponent of public subsidies to sports teams. With two preseason games, NFL teams play at home 10 times a year.

"If the fan base is primarily from Baltimore, when you're talking about a realignment of leisure dollars, the idea that the team could generate $100 million in new spending strikes me as not likely," Mr. Baade said.

As for a team acting as a magnet for other employers, he said other factors, such as the availability of trained workers, local tax policies and utility costs, are more important.

Mr. Baade performed a study on the subject, to be published next month, for the Heartland Institute, an economic think tank based in Detroit that has been critical of claims that a new Tigers baseball stadium is needed. In the study, Mr. Baade charted the economic performance of 47 U.S. cities between 1958 and 1988, equalized for local and national economic trends.

Except for a handful of exceptions, he found no evidence that the acquisition or loss of a sports team had a significant impact. ++ In Baltimore, for example, he found no indication that the arrival of the Orioles in 1954, shortly before his study period, or the departure of the Colts in 1984 had any significant impact.

Post-Colts era thrived

In fact, the years immediately after the Colts' departure represent some of the best years in the region's post-World War II economic history.

"In general, they just don't do for a city's economy what those who support public funding of stadiums say they will do," Mr. Baade said.

One city that showed growth attributable to a franchise was Indianapolis, the new home of the Colts. But the pursuit of the Colts was part of a comprehensive economic development strategy based on becoming a national headquarters for pro and amateur athletics, he said.

David R. Frick, the chief negotiator for Indianapolis in luring the Colts, said the community is happy with its investment.

"We as a community are viewed very differently," he said. "There's nothing better than getting to be known on the sports page."

But in terms of dollars and cents, economists point to several reasons why sports teams may not have the expected impact. Most of the money spent on food and tickets, for example, would have been spent in the community anyway, at, say, movie theaters, restaurants or bowling alleys.

"People are going to be doing something on Sunday. The question is, how does going to a game compare with what they would be doing?" said Robert E. McCormick, an economics professor at Clemson University in South Carolina who has studied the impact of sports teams.

Ultimately, coming up with an estimate of economic impact is more art than science, Mr. McCormick said. But it's hard to justify the public expenditures, which are driven more by politics and the psychological competition among cities than a strict cost-benefit analysis, he said.

"We've turned this whole thing into a pig-in-the-trough state of affairs. I know that these things generate economic spillover benefits -- I just don't have the confidence of the distribution of those benefits. I just don't know if it's going to accrue in downtown Baltimore," he said.

Much of the money spent on games may flow to out-of-town suppliers or families and homes of players and coaches based elsewhere. And many of the jobs created are low wage and part time, such as stadium vendors or security guards.

"Most of the things people talk about, the T-shirts, soda and beer, most of that is made somewhere else," Mr. McCormick said. Studies may show this money as locally spent, but the dollars quickly exit the community, he said.

The key is the team's ability to draw tourists and visitors from other cities, or to keep local residents from spending their money another city.

"It will have an impact. But every city and every region is different," said Tom H. Regan, an assistant professor of sports business at the University of South Carolina. "The key is the number of out-of-town people who would attend or the people coming from other areas. The people that are already there and are already spending that money, that just redistributes it.

"But the counterargument is that is money that could be spent in Washington or Philadelphia. I think it would be important."

Other projects blocked

Robert Durante, the associate director of municipal finance at Standard & Poor's, says public funding of stadiums can damage a city's ability to fund other needed improvements. On the other hand, having a largely state-funded stadium built in the city should funnel money from around the state into Baltimore, helping the city, he said.

"Generally, sports franchises do have an economic impact. But the greatest benefits are the intangibles. A metropolitan area's quality of life improves. You will have a presence in the national media, which can have a spillover, definitely in tourism," Mr. Durante said.

"If a stadium is located downtown, with a spillover establishment of restaurants and other things, then the economic impact tends to be a little greater," he said.

A Standard & Poor's study of nine cities found that professional sports provided no significant economic benefit to all but one community: Seattle, a city whose teams readily drew fans from outside the area.

All of the cities in the expansion race have performed studies of the potential economic impact, and their estimates of the impact not related to stadium construction vary from $58 million to more than $400 million a year.

The Maryland Department of Economic and Employment Development (DEED) said a Baltimore team would generate $86 million a year for the state's $108 billion-a-year economy and the equivalent of 1,170 full-time jobs. Of this, 261 people would be employed by the team, and the rest of the jobs indirectly created by demand for extra police, vendors, advertising, and other goods and services.

$100 million for Maryland

DEED says the economic impact figures translate into $100 million in 1995 dollars, when the team would take the field.

A similar study by the Chamber of Commerce in Memphis came up with two figures: a "conservative" estimate of $58.8 million and an optimistic one of $111.8 million. In St. Louis, where the new stadium is doubling as a convention center, a study claimed $450 million a year in new economic activity and 4,400 new jobs from the facility.

A professor with the University of North Florida told boosters in Jacksonville to expect 2,900 new jobs and $130 million in net annual impact. And a researcher at the University of North Carolina at Charlotte said that city could expect a whopping $320 million a year in new benefits from the team.

"Any time you get $80 million to $100 million in any area, that's not insignificant," Mr. Regan said. "But what's $100 million to a multibillion economy? Statistically, that's not a very big deal. But $100 million deals over and over can really build."

'Modest, yet welcome addition'

Charles McMillion of MBG Information Services in Washington, who has studied Maryland's economy, said building a new stadium would provide an immediate shot in the arm to the

construction industry. But the continuing impact of the team is harder to quantify, he said.

"I would guess it would be a very modest, yet welcome addition," he said.

He predicts gaining a new team would have a bigger impact than losing the Colts, because in the 1980s the city was faced with a shortage of workers -- the opposite of today's situation.

"The question is, are you getting the largest benefit you might get with the spending of public money?" he said. Seeking a "marquee business anchor," such as a pharmaceutical company that would lure related businesses, for example, might be more useful, he said.

By comparison, Alabama recently dangled a package of tax breaks and other incentives worth an estimated $300 million to beat out several other states for a Mercedes-Benz AG factory and its estimated 1,500 jobs.

But Joseph M. Perry, an economics professor at the University of North Florida, said a football team is still a good investment. "This is one of the biggest businesses in the country, and if you have a local branch of that business, you are going to have a tremendous impact."

Mr. Perry, the author of the study projecting $130 million in benefits for Jacksonville, acknowledges the difficulties inherent in making such estimates. But, he said, "The spinoffs are tremendous.

"This is something that is big league with a big 'B' and a big 'L,' " he said.

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