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1 1 (January 17, 2024)

handle is hein.crs/goveoan0001 and id is 1 raw text is: Congressional Research Service Inforrning the legislatave debate sinc 1914 Can Sports Drive Economic Development? January 17, 2024 Sports in the United States generate significant revenues. For example, one source estimates the combined value of all franchises in the National Football League (NFL) at $163 billion in 2023, while also reporting that league revenue was $11.9 billion in 2022, a new high and a 7% increase from 2021. That followed news that Major League Baseball (MLB) franchises also set a revenue record in 2022, earning $10.8 billion that year. The large followings and substantial amounts of money generated by sports-primarily at the professional but also at the collegiate level-have sometimes led federal, state, and local policymakers to consider the potential economic effects that sports can have on a particular region. For example, following the December 2023 announcement that the ownership group of the National Basketball Association's Washington Wizards and the National Hockey League's (NHL's) Washington Capitals had reached a preliminary agreement to relocate both teams' home venue from downtown Washington, DC, to suburban Alexandria, VA, Governor Glenn Youngkin stated a new arena and the redevelopment of the surrounding area would generate a combined $12 billion in economic impact for the Commonwealth and City of Alexandria and create approximately 30,000 jobs over the next several decades. Congress and the federal government have expressed interest in the potential connection between sports and economic development. For example, in the 118th Congress, the Senate Committee on Commerce, Science, and Transportation's Subcommittee on Tourism, Trade, and Export Promotion held an August 2023 hearing on the economic impacts of the U.S. sports and entertainment economy, specifically focusing on Las Vegas. One of the four strategies to increase international tourism to the United States identified in the National Travel and Tourism Strategy, published by the Department of Commerce in June 2022, was to leverage large-scale events, such as the 2026 FIFA World Cup ... and the 2028 Olympics in Los Angeles ... to promote the United States as a travel destination. The document noted that coordinating international marketing campaigns with professional sports leagues was one tool to try to accomplish that goal. The federal government also subsidizes the cost of building new stadiums (and of stadium renovations) by allowing tax- exempt municipal bonds to be used to finance those activities. Congress has examined this issue periodically and introduced legislation-including in the 118th Congress-to ensure that interest earned on such bonds is subject to federal taxation. This In Focus summarizes some of the research on the economic impact of sports and presents considerations for Congress. Assessing the Economic Evidence Economists have studied the connection between sports and economic development for decades. Much of this work has examined whether public funding for new or renovated stadiums (either in the form of tax-exempt bonds or funds provided directly for the project) generate worthwhile returns on investment. One influential 1997 study from the Brookings Institution summarized the arguments usually made in favor of providing such financing: building or renovating a stadium will create construction jobs; increased game attendance will generate new spending in the area, thus boosting local employment and wages; tourists (and companies) will be attracted by the new venue, bringing in out-of-town revenue and further adding to the local economy; and the additional spending generated by the new or renovated stadium will have a multiplier effect, creating further spending and jobs. Research has mostly found that public funding for stadiums has minor economic impacts. As the Federal Reserve Bank of St. Louis explained, the arguments described above generally do not materialize in real world examples. For example, any jobs created by a new or renovated stadium usually poach workers from other area businesses and do not result in a net increase in jobs. Further, many stadium jobs are low-paying and part-time. Figure 1 shows the cyclical nature of some sports-related jobs. Figure I. Jobs in U.S. Spectator Sports Number of jobs typically peaks in August, reaches nadir in January TE - -t 2000 Au 193 n 020 4% 1 1 Atg 2i a 22 Aug 22 a2 2 Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages, Employment and Wages Data Viewer, https://data.bls.gov/cew/apps/data views/dataviews.htm#tab=Tables.

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