Economics of professional franchises

Another article from Athletic Business examines the economic impact of professional sport franchises on the local economy.

The debate revolves around whether states should subsidize the costs for professional teams. Different studies have been performed that assess the return on investment  and numbers have not been positive. According to the state  of Florida, the amount of money returned was less than the money invested into the professional teams.

Different teams and different communities say otherwise; they claim that the impact to the communities are well worth the money since they bring in outside fans and increase exposure through nationalized televised media.

I think the larger questions are how are each of the studies performed? Is there a uniform process that these studies are being conducted? If every study is looking at the same data in a different way and weighting the variables differently they will have drastically different results.

For studies moving forwards each state should determine their own criteria to analyze the effect of their investment on the communities, tax revenues and total return to really understand whether continued state funding of often wealthy professional franchises is better than money spent elsewhere.