Hearne: Royals Making Playoffs a Financial Disaster for KC Businesses

At least reviled Royals owner David Glass will make some money tonight

At least reviled Royals owner David Glass will make some money tonight

Think modern mythology…

Somewhere along the line professional sports teams figured out how to con cities, politicians and the general public into doling out millions in tax dollar incentives because they thought it was a good investment.

Starting with taxpayer subsidized stadiums.

That despite countless studies indicating the opposite to be the case.

“According to leading sports economists, stadiums and arenas rarely bring about the promised prosperity, and instead leave cities and states mired in debt that they can’t pay back before the franchise comes calling for more,” according to a 2012 report by a pair of economics analysts in The Atlantic.

Futhermore, “Prospects for cutting sports subsidies are not good,” a 1997 Brookings Institute study concluded, adding, “Given the profound penetration and popularity of sports in American culture, it is hard to see an end to rising public subsidies of sports facilities.”

Even a Federal Reserve Bank of St, Louis report in 2001 began lead off with the following quote from former Chicago White Sox owner Bill Veek:

“We play the Star-Spangled Banner before every game—you want us to pay taxes, too?”

Are stadiums good investments for cities, the study queried?

“The short answer to this question is ‘No,’ ” it continued. “When studying this issue, almost all economists and development specialists -at least those who work independently and not for a chamber of commerce or similar organization- conclude that…cities and metro areas that have invested heavily in sports stadiums and arenas have, on average, experienced slower income growth than those that have not.”

Ditto for those much ballyhooed playoff games like tonight’s contest between the Kansas City Royals and California Angels, says restaurant and comedy club owner Craig Glazer.”

“Look, it was a big deal here Tuesday night because it was the first playoff game won by either the Royals or Chiefs in Kansas City in 20 years,” Glazer says.

UnknownUnfortunately, the dollars  just don’t make sense.

“The perception is, ‘Omigod, omigod, omigod, we’re going to make a bunch of money,” Glazer says. “This is great for the economy of Kansas City. But the truth of the matter is the opposite for most businesses, restaurants, movie theaters, etc. Because every evening event on a night like tonight will be pretty much destroyed unless you’re a neighborhood sports bar. People aren’t going to go out to eat dinner or go shopping because there going to stay home and watch the game.

“Nighttime in Kansas City is wiped out. I went to a Quik Trip to get something Tuesday around 7:45 p.m. and I was the only customer there. And the kid behind the counter was kinda stunned to see me, he said, ‘You’re the first person I’ve seen tonight. We have more people coming in here during blizzards.’ ”

Playoff games with local sports teams like the Royals, Chiefs or KU basketball are economy killers, Glazer says.

“The streets are empty, even the shopping malls and stores that are open tonight will be completely empty. Anything that’s open besides sports bars will be dead – business will be off 50 to 100 percent. It’s going to be a ghost town tonight.”

Not to be a killjoy but, “If you think the Royals playing in the playoffs is a financial benefit, it’s not,” Glazer says. “When you couple the Monday night Chiefs win at Arrowhead – where they went from looking like they were dead to winning their biggest regular season game in years – with the Royals winning one of the greatest comeback playoff games of all time, that’s great media for Kansas City.

“But how do you add that up in dollars and cents? Who benefits? The Glass family, that’s who. And I didn’t even see David Glass on TV during the game or afterwards. When Ewing Kauffman owned the Royals they had him on all the time. Maybe I missed it, but I didn’t see Glass. He was insignificant, yet he benefitted the most from the Royals winning that game. But who else is going to benefit? Are people going to fly to Kansas City because of that game?”

Fact is, the Royals playing in the playoffs hurts Kansas City, Glazer says.

“In the big picture Kansas City’s economy takes a huge hit because of these playoff games,” Glazer says. “I couldn’t even guess at the amount, but these games cost Kansas City businesses millions and millions of dollars.

“When KU plays basketball during March Madness our business at Stanford’s is cut in half and the entire Legends is a ghost town. And this is going to be even worse, because not everybody is a KU fan, but everybody’s a Royals fan.”

http://www.mb-kc.com/
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30 Responses to Hearne: Royals Making Playoffs a Financial Disaster for KC Businesses

  1. Mailing it In says:

    Well, duh, Captain Obvious.

    You’ve ran varying versions of this story time and time again, always using Craig Glazer as you source.

    But, yea, most people know it dies down when there are big games on TV. It makes it a good time to go shopping if you don’t care about sports. If you ever want to have Worlds of Fun yourself, go during a Chiefs home game.

    • the dude says:

      We need Leftezzz’s comments and that chick from Hobb’s opinions stat!
      Hearny must complete the holy comment trifecta!

    • admin says:

      Aye, Aye, Captain Anonymous…

      Good to know you’re on top of all things obvious

      • kansas karl says:

        It is about discretionary income, if all the family’s extra bucks are spent for the tax subsidized, non-profit sports team (no taxes paid other than those spent by fans), then are no extra bucks for stuff that makes real life pleasant every other day of the year. An extra treat for the kiddo’s, a trip to see grandma, the stuff real life is made of, not just steroid cases leaping around beating their families, killing their family……….seems like the Hunger games are real and we call it “professional” sports.

  2. Jim a.k.a. BWH says:

    Tuesday night. Traditionally, one of the worst nights for business anyways. Doubt anyone saw a 100% reduction in business. Anecdotal evidence from a cashier at QT? Serious? OK.

    Seems statistically impossible given the actual number of people in KC watching the game on TV according to the ratings. If only 25% to 30% of the population was watching the game in KC, how could that have a 100% impact on other businesses. Seems that it would take a 100-share to have a 100% impact on other businesses.

    You are right about one thing. Sports bars absolutely KILL IT on games like these. But, that also includes a large number of chain restaurants, too.

    • admin says:

      I think he’s referring to the games this weekend, Jim.

      You’re right to an extent about Tuesday being slow – certainly for bars and clubs – but it doesn’t come close to ghost town levels

      • harley says:

        70% of kc are watching the royals. even the criminals laid
        down their guns to watch the game.

  3. husbanddadesq says:

    News flash, competing entertainment venues suck wind during exciting local sporting events. I have heard very few, if any, people laud the Royals success because it has some grand economic benefit to KC. It is nice for a variety of reasons, such as; having shared common experiences with fellow Kansas Citians (water cooler talk with strangers); having KC be the talk of the nation, as opposed to flyover land; sharing historical perspective and traditions about you (where you were when they won is last) and KC (what is was like here when they won it last); and finally, it can be a fun game to watch and experience. No municipalities keep (pay for) local sports just because of expected economic success. That equation is more like social media, it is hard to measure, but everyone is doing it and it can be a heck of a lot of fun when it works right. Shut up about some economic balancing act and enjoy the ride.

  4. Loyal Subscriber says:

    I’m sure it’s good news for the athletic apparel stores. Dick’s and Rally House sell lots of jerseys, hats and t-shirts.

  5. b12 says:

    Ugh. You don’t measure this stuff by retail sales on Tuesday the 23rd of September vs. Tuesday the 30th of September.

    Kansas City got put front and center on national broadcasts on consecutive nights, first with Monday Night Football on ESPN, and then the wild card play in game on TBS.

    Television crews were in town spending money; fans were tailgating with something they bought somewhere…and Kansas City showed up tremendously with the teams’ performances and crowd noise both nights. Positive perceptions both nights, and lead stories on national broadcasts the days after. It was a Chamber of Commerce’s dream come true.

    You and CG are off the mark here.

    • KCMonarch says:

      To the owner of a mom and pop comedy club it probably is a net negative. Opportunity dollars from the night of the game probably will not be recoverable.
      Glaze is not the best source to interview on the subject as he is definitely one of the few the post-season success hurts. Which explains why he always refers to the teams and players as “losers.” Why spend your money watching those losers when you could come out and see JJ Walker and Carrottop?

      For most of the city’s businesses the infusion of $ is very much a positive.

    • admin says:

      Because Craig operates an entertainment business, he’s talking mostly about weekend nights

  6. chuck says:

    Hearne is dead on the money. I am surprised he didn’t quote the Cato Institute also.

    http://www.cato.org/publications/commentary/surprise-stadiums-dont-pay-after-all

    Professional sports teams are a financial loser for the taxpayer. That said, I still like pro sports in the city, for exactly the reasons that husbanddadesq stated so eloquently.

    “It is nice for a variety of reasons, such as; having shared common experiences with fellow Kansas Citians (water cooler talk with strangers); having KC be the talk of the nation, as opposed to flyover land; sharing historical perspective and traditions about you (where you were when they won is last) and KC (what is was like here when they won it last); and finally, it can be a fun game to watch and experience. No municipalities keep (pay for) local sports just because of expected economic success. That equation is more like social media, it is hard to measure, but everyone is doing it and it can be a heck of a lot of fun when it works right.”

    Really well put.

    That said, the politicians lies their fu*kin asses off about the benefits and they KNOW they are lying when they are lying. I guess we must be ok with that too. I can remember getting so emotional when I heard, “Me love you long time no sh*t”.

    • Homongo says:

      How could you post that and not tie in Muslims and blacks, Looney Tunes?

      Also it’s Veeck…as in wreck…as in “chuck lowe is a wreck of a human being.”

  7. SteelyDanMan says:

    I second what you and Chuck said about stadiums, Hearne. Professional sports facilities are nothing but a money pit for the taxpayer, particularly Jackson County folks in our case. I don’t mind the fervor or communal spirit hoopla when it comes to sports. But fans/lemmings need to educate themselves on what their sales and property taxes go towards: A private enterprise bar none.

    Pro sports are becoming way out of hand when we have a decaying infrastructure and other under funded public services. (Not a Democrat, either BTW.)

    For those still unfamiliar on private investment at the taxpayers’ expense, I highly recommend the book “Free Lunch” by David Cay Johnston.

    • tiad says:

      “For those still unfamiliar on private investment at the taxpayers’ expense, I highly recommend the book “Free Lunch” by David Cay Johnston.”

      Do they have free copies of this at the libraries?

  8. Harry Balczak says:

    Should we start calling Glazer the Mustache of Understanding? Or would Doughy Pantload be a more appropriate moniker?

  9. Jack Springer says:

    What’s the purpose of this article other than to slam people.

    Can’t you just enjoy life.

    Hearne … you bellyache all the time about the KC Star … it’s about time to stop that. We all have difficult times in our lives and feel that we were wronged — get over it.

  10. Garch says:

    Seinfeld at the Midland next Saturday, Oct 11.

    Got tix — hope the Royals still in the playoffs..

    just not playing on that Saturday nite.

  11. JOCO soccer mom says:

    people don’t go out on school nights to begin with

  12. JB says:

    This is ridiculous.. The national exposure and THOUSANDS of people that drive into the metro from out of town and spend money far outweigh business maybe being slower on a weeknight where its already slow.

    If you want to discuss the stadiums being funded by taxpayers and helping the billionaire owners out with that.. I’m all ears and think billionaires get way too much credit and breaks for business and incentives.

  13. harley says:

    glaze uses the same old tired arguments year after year.
    If its not the jayhawks its the t bones…if its not the chiefs…its the royals.
    zzzzzzzzzzzzzzzz….boring…..truthfully…I’d rather read about cobblers
    in Lawrence than read this retread crap about sports teams hurting local
    businesses….do they say the same thing in Denver/Chicago/ny/l.a.?????????????
    he’s right…no one was on the street during the games…but stop pretending to
    blame someone else..put some TV’s in your joint…give ‘$1 beers and lets have
    a party!!!! seriously theres 360 days for you to make a buck….you’ll make it
    back hopefully. Tonight….expect nothing…we’re headed to tanner s to see rouyals
    go 2-0……to us that is true entertainment.

  14. Late Breaking says:

    Two different conversations between Stadiums and the impact of playoff games. Obviously there is tons of data in regards to stadiums. Some have worked, some havnen’t. Cleveland is the interesting case. The arena where Lebron played before he left for Miami, built a huge and successful area around it with bars/restaurnts etc. Many succesful buisness, that the failed when he left. Interesting to see if his impact brings those business (or their replacements) back to a success level. I imagine they would. Same with Denver, LODO was really not a hot place, until the Stadium was built there. All that being said, I’m sure there are also a ton of examples of the failure of stadiums.

    On the other front, what would be interesting anecdotally would be to ask the Hotels if there numbers were up last weekend and through Tuesday… same with this weekend. If they are up, then you can see financial impact. You can’t tell me the NASCAR race doesn’t bring people in this weekend?

    Additionally, competing entertainment tickets like a comedy club will be down, because people adjust where there $$ are going to be spent. CG freely admits that sports bars and restaurants (same with pizza and store that sell Royals gear) will reap the rewards. I’m sure CG out draws many sports bars on Fr/Sa, that will out draw him on playoff game nights.

    Isn’t that just a reallocation of the dollars, and not an indictment that people aren’t spending?

  15. Snappietom says:

    We in the hotel business get a bump in revenue when there are high profile games from out of town guests and media. It’s all good, unless your business is open at the same time the game is being played.

    Here is a idea, make a management decision and reduce your operating hours or close all together during game time.

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