Economics Of Veterans Stadium Essay, Research Paper
Veterans Stadium was opened in 1971 and is the home of both the Philadelphia Phillies of the National League and the Philadelphia Eagles of the National Football Conference. It is located on 74 acres in South Philadelphia and is located near the First Union Complex. First Union Complex is home to the Flyers of the National Hockey League and the 76’s of the National Basketball Association among other Philadelphia sports teams. Before Veterans Stadium was built the Phillies played in Shibe Park also known as Connie Mack Stadium (Website #2). In 1994 the Philadelphia Phillies took over management of the stadium and conducted many much needed repairs. Veterans Stadium cost approximately $50 million to build. At the time that it was built it was considered one of the most expensive ballparks in baseball history. When Veterans Stadium was built the Phillies had strong community support allowing the stadium to be financed by the city with no major complaints by the taxpayers (Website #2).
Recently the city of Philadelphia has been contemplating a proposal to build a downtown baseball stadium for the Phillies and a South Philadelphia stadium for the Eagles. The two stadiums would cost approximately $1.29 billion combined. It is estimated that the construction of just the baseball stadium will cost $331 million. This is not including land acquisition, demolition and other costs related to prepping the site. The city of Philadelphia has started collecting a 2 percent tax on short-term car rental, which is projected to bring in $3 million per year. This money is being set aside until the city decides on the proposal. If the city decides not to build the stadiums the money can be used to repair Veterans Stadium. The city is also negotiating with the teams to place a
surcharge on tickets and a personal seat tax to help cover the costs. The state Legislature has set aside $170 million to go toward the two stadiums. The Eagles planned on paying for $300 million of the stadium. The deadline for the proposal is November 30th of this year. If the proposal is accepted the Phillies will move into their new stadium on April 2004 and the Eagles will move into their stadium on August 2003. (Website #1).
Due to the deteriorating condition of Veterans Stadium the city of Philadelphia has been able to get many people to support the idea of new stadiums. Some of the defects of Veterans Stadium are broken elevators, the field is wearing out, and the ceilings need to be repaired. If the stadium proposal deadline is not met the city will have to spend over $80 million in repairs on Veterans Stadium over the next two years. Many people believe that it doesn’t make sense to spend the money on repairs when a new stadium would be so much more profitable (Website #3).
Some of the people that oppose the plan are the residents and business owners of Chinatown. This is the proposed sight of the new ballpark. They do not want the stadium in their neighborhood and believe that the money would be better spent on schools and other public needs. Developer Bart Blastein, who is a former member of the committee that recommended the stadium sites to the mayor, bought a warehouse across from the Eagles proposed stadium site. It has been talked about as a potential stadium site. Some people believe that this sight would be a better location for the new ballpark due to the support of the
community and the fact that it would be much cheaper to build it there (Lexis-Nexus).
Currently the average ticket price at Veterans Stadium is $13.60, which did not change from the previous season. The fan cost index is $126.85 which is slightly up from the 1999 season (Website #4). The value of the team in 1999 was $150 million according to Forbes magazine, with total revenues of $68.1 million and an operating profit of $3 million. In 1998 the team was worth $145 million, and they had total revenues of $66 million, and an operating profit of $4.5 million. In 1997 the team was worth $131 million, they had total revenues of $57.1 million, and an operating loss of $2.5 million. Venue revenues for the 1997 season were $6.8 million, media revenues were $26.6 million, and the remaining $23.7 million of the total revenues were from other sources (Ozanian 100).
Philadelphia is a large city with over $4.9 million potential Philly fans living within its limits. However they are a team fighting to stay at the mid-market level. Many of the large-market teams of baseball today are drawing from a substantially lower population. Cleveland for example has a population of $2.9 million yet they are ranked second of the thirty teams in total revenues. Atlanta, with a population of $3.8 million has the fourth highest operating profit of $16.4 million and third highest total revenues of $142.7 million. Both the teams mentioned above moved into new stadiums in recent years causing a drastic increase in revenues for the teams. This would be a great tool to convince the city of Philadelphia to build the Phillies a new stadium. With the extra money
collected the team could afford to field a better team increasing the interest of the community.
1.Rovell, Darn, “Eagles Blitz Mayor Over New Stadium,” October 6, 2000.
Internet: ESPN: http://espn.go.com/nfl/s/2000/1005/802148.html
2.Associated Press, “Veterans Stadium,” March 2000.
3.Associated Press, “Ballpark News,” October 6, 2000. Internet: Phillies: http://wwww.phillies.com/newb_news.html
4.Associated Press, “Baseball Ticket Prices,” October 8, 2000. Internet: CNN and Sports Illustrated: http://www.sportsillustrated.cnn.com/baseball
5.Ozanian, Michael K. “Too Much to Lose.” Forbes Magazine. 12 June 2000: 94-100.
6.Lexis-Nexus (Not sure how to cite this).