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03-24-2013, 02:20 PM
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Join Date: Sep 2011
Location: Brossard, QC
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Originally Posted by Alexdaman View Post
The reason why public funds are used to pay for sporting events is because they will generate as much tax income for the government on a long-term basis.

Just think of the bell center. Let's say each home game totals an average of 5K of tourists for 41 games a year, who spend in average 500$ per person in the duration of their visit to Montreal.

So 5000 x 41 x 500 = 102 500 000

Sale tax in Quebec for the provincial government is 9.975% so out of 102.5M$ it's 10 224 375$ per year. So the Bell centre which costed 270M$ originally to build (368M$ with inflation) 17 years ago, could already have generated more than 180M$ in tax revenue from tourists to the government on hockey games alone.

Yeah those numbers are pretty vague, but it's in my opinion a very good thing to see government $ spent on sporting infrastructure, because not only does the money invested gets reimbursed but because it eventually makes a profit.

That't the theory, but the problem is that in reality, after you go back and do an economic analysis after the fact, nearly every instance of public sports financing is pure corporate welfare and does nothing to help the economy. The idea is simply false.

This recent CBC report summarizes the research well:

For a more acedemic overview see this:

Local political and community leaders and the owners of professional sports teams frequently claim that professional sports facilities and franchises are important engines of economic development in urban areas. These structures and teams allegedly contribute millions of dollars of net new spending annually and create hundreds of new jobs, and provide justification for hundreds of millions of dollars of public subsidies for the construction of many new professional sports facilities in the United Sates over the past decade. Despite these claims, economists have found no evidence of positive economic impact of professional sports teams and facilities on urban economies. We critically review the debate on the economic effects of professional sports and their role as an engine of urban economic redevelopment, with an emphasis on recent economic research

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