Great little article out of Pittsburgh that is looking at the revenue generated from the three sports venues to the city. The study shows that the direct financial impact has been 102 million dollars over 5 years. But does that tell the full story?
As is usually the case with numbers, economics and projections, the answer is not really. The study was commissioned by the city to assess to revenue generated from the facilities. The study did not address a return of investment of the city’s direct contribution to the projects or the opportunity costs of the facilities.
When the picture is enlarged, it tells a different story. The direct impact is 102 million. But the facilities are subsidized by tax dollars. The real estate that they sit on is tax exempt, so there is no property tax being collected, the opportunity costs of previously existing structures or other tax paying entities is also not discussed. So, what is the actual net financial impact to the city for these facilities? We don’t have that answer.
The point to remember with numbers is that they can be used to reinforce one perspective, which seldom gives the global picture. Ask questions and dig deeper to get the real answers.
http://www.athleticbusiness.
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