Tackling the economics of empty stadiums as the NFL season gets underway
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The NFL season kicks off Thursday. The Wall Street Journal reports that NFL revenue could fall as much as $4 billion in 2020, depending on how many fans eventually attend games.
That’s the reality in Los Angeles, where developers built a grand, new stadium with room for 70,000 people to watch the Rams and Chargers play football — but until things change, there will be no fans.
We take a look at how the current fan-less reality could change future stadium projects.
SoFi Stadium in LA cost almost $5 billion in private money, and there were promises of $100 million in tax breaks and reimbursements to lighten the bill. The sell to local authorities was that new stadiums create jobs and increase tourism spending. But with no fans, “unquestionably it’s a tougher sell,” said Andrew Zimbalist, professor of economics at Smith College.
He said many cities and states are in a budget crisis. Tax revenue to pay for local services is down across the nation.
“A situation that was already very difficult financially for cities and states to help out with the construction of new stadiums now is an impossible one,” Zimbalist said.
And he said that will be the case for a while. Which Michael Leeds, professor of economics at Temple University, called a positive development because stadium construction is “very limited economically. There are only a small number of agents who benefit from this.”
Like sports bars and souvenir shops located near stadiums. But for a city’s overall economy, Leeds said, there’s little to gain.
COVID-19 Economy FAQs
What does the unemployment picture look like?
It depends on where you live. The national unemployment rate has fallen from nearly 15% in April down to 8.4% percent last month. That number, however, masks some big differences in how states are recovering from the huge job losses resulting from the pandemic. Nevada, Hawaii, California and New York have unemployment rates ranging from 11% to more than 13%. Unemployment rates in Idaho, Nebraska, South Dakota and Vermont have now fallen below 5%.
Will it work to fine people who refuse to wear a mask?
Travelers in the New York City transit system are subject to $50 fines for not wearing masks. It’s one of many jurisdictions imposing financial penalties: It’s $220 in Singapore, $130 in the United Kingdom and a whopping $400 in Glendale, California. And losses loom larger than gains, behavioral scientists say. So that principle suggests that for policymakers trying to nudge people’s public behavior, it may be better to take away than to give.
How are restaurants recovering?
Nearly 100,000 restaurants are closed either permanently or for the long term — nearly 1 in 6, according to a new survey by the National Restaurant Association. Almost 4.5 million jobs still haven’t come back. Some restaurants have been able to get by on innovation, focusing on delivery, selling meal or cocktail kits, dining outside — though that option that will disappear in northern states as temperatures fall. But however you slice it, one analyst said, the United States will end the year with fewer restaurants than it began with. And it’s the larger chains that are more likely to survive.
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