Economic relations at the micro and macro levels solve the problem of goods and services production, distribution, and consumption among the consumers. Various branches of a country’s economy are related and they have to cooperate for the benefits of whole society. However, in practice, there is no level welfare within a community. A sports market is closely connected with health, education, tourism, and construction spheres. The essay presents the analysis of the economic impact of sports stadium building. The benefits and disadvantages of such big investment projects are evaluated as well. Traits, main participants, and concerned persons of sports facilities and prognoses for market development are defined.
Economics studies the production, allocation, and consumption of deficient resources in relation with demands of a person, organizations, or governments. The macroeconomics is concerned with the interactions of the economy of the entire planet, and microeconomics applies to individuals of a particular community. There are different branches of the economy that are connected with one another. For example, the sphere of sports is related with tourism, fitness, and education and it can bring profits through the interrelation with these fields.
The purpose of the economic analysis is the business processes and its social, economic effectiveness together with ultimate financial results. Objective and subjective factors influence these processes through a system of economic activities and indices.
Comprehensive analysis can increase the scientific validity of business plans, procedures, and standards during their development. Likewise, it is helpful in the overall evaluation of business plans implementation, the effectiveness of material and manpower resources usage and optimal management decisions monitoring. Consequently, the economy analysis is an important element of an enterprise management. The features of economic analysis are the detection and estimation of objective factors that characterize business, their hierarchy, and correlation. All events and processes in business are interrelated directly and indirectly. The positive analysis gives a description of the issue and explains it through the relations of causes and effects.
The national economy is divided into branches, and it receives revenues from producing goods and services for the local and foreign demands. The sports sector of both amateur and professional levels contributes to the state budget through stadium building, providing new work places, hotel reservation, food service, or transportation. However, building a sports stadium is sufficiently controversial project for investments and it depends on seasons, guest teams, and service for tourists. A common question exists in the professional sports: it receives public funds to build private facilities and promise significant financial benefits in return. However, in general, expenses are greater that the income.
The sports industry as a branch of the economy cannot be discussed only within one city or state. Of course, it influences microeconomics rates as it provides new jobs and raises the local revenue. This market links states and nations because of the tourism, transportation, or capital investments affecting the economy as a whole.
Thus, a number of advantages make the sports industry a sphere of profit. Thus, sports industry is an important sector of the economy and it has the tendency of growth within North America and the European Union. For example, in 2010, it contributed 20,3 billion euro to the English economy (AMION, 2013). The sports market provides the additional employment. Thus, 440,000 of jobs in England are provided by the sports sector. Likewise, it increases the connection within the neighboring states and cross the Atlantic as well. Countries that have lower income will develop the sports industry faster than countries with higher revenue, which leads to the economic balance (SpEA, 2012, p. 5). Moreover, athletics is related to others sectors like fitness and health consultancy, tourism (hotels, restaurants) and media entertainment. Owing to this connection, these niche sectors can benefit by supplying sports demands. For instance, the United Kingdom has a specialization at professional sports, Austria in tourism, and countries of Northern Europe emphasize on sports education (SpEA, 2012, p. 5).
Participation in different kinds of sport has individual and community advantages. Thus, a person can improve one’s health, increase the emotional well-being, and improve self-discipline and self-esteem (AMION, 2013). Moreover, interest in a sport among the young people can reduce crime and deviant behavior within the community. The popularization of walking and cycling can reduce the air pollution, which also benefits the environment. Volunteering has a significant effect not only on the economy (2,7 billion euro in 2011 in England) but also on the moral values together with national pride in sports achievements (AMION, 2013). Thus, athletic activity is beneficial at every level of society and it unites individuals and international organizations under common goals of health and entertainment. However, the sports market has to provide the high spending rates for contribution to the microeconomics. In reality, it only realigns money within a region.
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A sports construction activity can be estimated with a help of economic theories. A modern free-market is based on the competition between producers; therefore, the better product will be in demand. Moreover, the local sports related goods and services production has more preferences because of employment, earnings, profits, or taxes. The attention has to be on the variety of products and services that a city or country can provide. Thus, it will reduce risks, dependence on import and increase the local economic indices.
The theory of the stadium benefits for a city characterizes the tax increase by ticket sales and business traffic. However, it requires approximately $200 million to build a new stadium (Schwartz, 2000). The ticket and related revenues are spent in cinemas and restaurants. The players rarely spend their salary in a city because they seldom live where they play. For more evidence of the little stadium advantage, it is worth to mention about the anticipation and real outcome. In the middle of the 1990s in Baltimore, Maryland, a new football stadium investments were $177 million and only $33 million of benefit; therefore, experts contrasted the sports subsidies (Gold, 2015).
The sport stadium is a big project that requires a large sum of investments and that has several types of economic impact. Thus, there are direct, indirect expenditures and psychological effects; still, it remains to be controversial project about the influence on the local economy. For example, the jobs in stadium service are mostly low waged and seasonal. However, 2000 craft workers were employed to build the $100 million stadium for the Chicago Cubs in Phoenix, Arizona (Rentilly, 2013). Opinions about the stadium advantages differ, but they mostly remain negative. Nevertheless, the professional sport can be interesting for the taxpayers who will pay for sports facilities to keep the home team in a city or take a new one for residence (Schwartz, 2000).
The government interest in sport-related constructions still increases. President Obama proposes the finance of stadiums between 2016 and 2015 by $542 from taxes (Gold, 2015). However, these projects have been provided by taxpayers and not by the team owners or sponsors who have funds. In other words, common citizens pay for the controversial projects that will give benefits for them mostly during seasons. A stadium will not function all the year round, and benefits do not compensate for its financing and maintenance. Therefore, teams interested only in earnings do not want to invest in such unprofitable business. Moreover, there is a competition between the cities for sport franchises, and every team wants a stadium only for themselves. Thus, there is no difference for the fans and spectators who will share the stadium. They simply want a comfortable place to view the game or support their favorite team.
The United States public has financed 101 new facilities for sports over the last 20 years (Gordon, 2013). In the Hamilton County, Ohio, the budgets of the police and education were curtailed, and baseball and football stadiums for $805 million were built. In addition, one out of seven citizens of Hamilton County lives below a living minimum rate. Why are the unprofitable projects still financed by the government through the taxpayers? The politicians speak about public benefits; the team owners want their stadium that will increase the franchise cost. The local authorities subside finance of construction for keeping a team in its home city. However, this advance cannot hold it from leaving and the team uses a stadium mostly occasionally.
The stadium becomes a private property; therefore, it has limits for access even though it is built with public money. However, people are so much engaged in athletics that they will pay for the team facilities despite infringement of other social spheres. Moreover, the city stadium increases the citizens’ pride and brings the national or international attention (Gordon, 2013). People are so much engaged to have the stadium for their team or attract the new players of monopoly league that they are willing to finance this controversial affair. The illusion that if a city builds a stadium that attracts popular sport teams still supports the promises of benefits in future. The filling of pride for a city and national attention are more attractive for people and they will eagerly pay to maintain new facility for entertainment.
In conclusion, a sports market is a fast growing and beneficial sector of local and international economy. It has the connection with various sectors contributing to the development of tourism, education, transportation, health care, employment, and construction. Experts have different opinions about the benefits that sports facilities, their construction, and reconstruction can provide; however, most of them are negative. Such big projects as stadiums and arenas that are mostly built on the public taxes become the teams’ property. The expenses on the building maintenance that give profits mostly occasionally are incomparably bigger than the sums of investments. The promises of employment increasing and tourists revenue for local economy have seasonal character and they are mainly exaggerated. Thus, only teams and their owners gain the preferences of the private stadium by increasing their franchise appeal. However, the sports facilities development by means of public funds does not lose pace, even despite the finance reduction of social and municipal expenses. Pride, attention from others, and desire for entertainment draw people to pay for such unprofitable projects for the community. The public remain indifference to governments’ changes and does not influence the decisions.