Welcome back. In this session, we're going to continue
our discussion of revenue drivers and we'll discuss stadiums and arenas.
So, media is the biggest source of revenues, but stadiums and arenas have an
interesting role in this sports business as well.
And many of you have seen the motion picture Field of Dreams.
This statement, if you build it they will come, that's part of what we'll look
into. The idea of building these facilities and
whether or not that does increase revenue substantially and justify the expenditure
that is being made on many of these facilities.
So, in this first session, what we'll look at, is the history of these
facilities. And then we'll also look at the financial
models. That is, how these facilities are paid
for. You've got available to you,
electronically, a couple of chapters from the sports franchise game, which explains
some of the history of this space. And I'll walk through some of what that
book discusses. So probably, in your minds, the original
sports facility is the Roman Colosseum. And, if you think of the most modern
facility, it's the nearly $2 billion Dallas Cowboy stadium in Dallas Texas.
We got these two juxtaposed here. But it's also a good place to think about
the evolution of spending, the evolution of who paid for these facilities.
Originally, the facilities like the Roman Colosseum were thought to be good for
society. And were built largely, if you think of
correlation, on the government doll, government money paid for this, that pay
for these facilities. But many of you live in cities were there
are facilities that still exist, whether they're used or not, that are named after
people. there's Forbes Field, Shibe Park Wrigley
Field. So, these are historic facilities that
were built privately. And the owners of these franchises felt
strongly enough that these facilities are needed that they built them themselves.
The next era in stadium development came about when publics dollars were spent for
these facilities, and you think of the Los Angeles Memorial Colleseum as a great
example. built in time for the 1932 Olympics.
Public dollars spent for a facility because the thought was this was great
for southern California. Where you got a lot of other facilities
like that War Memorial stadium Memorial stadium in other cities, municipal
stadiums, these were built in the same manner.
Part of what we're seeing now, part of what we'll talk about is, is an evolution
away from that when the question began to be asked by the public, why are we paying
for these facilities? What's the point?
And, and that's really what the, the Dallas facility brings us up to is, is
the public, private kind of venture that we've seen in most recent years.
And we're going to talk about the value of that.
So, who pays for these facilities? Who is it that pays for these facilities?
Where do the dollars come from? And as I discussed, it's, it's public
dollars. some instances it's private.
And then in the best instances from the viewpoint of, of the public, at least.
If it's not all private, there's a partnership in terms of where the dollars
come from. So, should cities subsidize these
facilities? Tha, that's really the key issue around
the world that people are confronted with.
Not just in team sports we also see this question asked with the Olympics and the
World Cup. Whose going to pay for these facilities
that if you think of NFL football that may be used eight times a year.
If you think about the Olympic Games, they're used for two weeks.
The World Cup, maybe four a month. So, does that justify the big dollars
that we're about to talk about for a city to, or for a city or for some government
entity to make that kind of expenditure. So, where have we come from?
What's the spinning that's taken place in the past and where are we today?
Well, the big break point in terms of innovation, in terms of something that
was truly new and unique, was the Houston Astrodome.
And you think about the mid 1960s, you think about around the world of this idea
of who's going to get to the moon first? The space race.
And the center of this for the United States was Houston, Texas.
And the thought was, let's do something really innovative, and Judge Roy
Hofheinz, the owner of the then Houston Astros baseball team, decided to build
something unique. The first dome stadium, the first dome
stadium for a professional team at a large level.
This thing only cost $35 million, which will strike you as, truly ironic when you
think about right up the road. The Dallas Cowboys facility, again,
topped a billion dollars and maybe overall, in terms of dollars spent
connected with it, is closer to $2 billion.
the theme was so heavily ridden with space that the, the guys that did the
work on the field there to your right were called earth men.
That then they wore uniforms, and all kinds of, of play was made, but this was
known as the eight wonder of the world. This was a truly unique facility and one
that we haven't seen such hype about before since and, and maybe the Dallas
Cowboys facility a little bit but this was really a turning point.
And one where cities began to think again, this may not be a bad place for us
to spend funds. So, here's some of the numbers that you
see in terms of modern spending. And the, the latest on the board in the
United States is that American football facility for the San Francisco 49ers up
there at $1.2 billion. But you see there's some big numbers
around the world, as well. this, this facility in St., Petersburg
is, is at 1.2 as well. A variety of facilities being constructed
in Brazil for the World Cup, and then I've got one number in there to give you
an idea of college football facilities in the United States.
one of the big sports spending spaces that takes place in the United States
but, but not around the world. So, so this gives you an idea of how far
we've come from that $35 million filla, figure.
and even further back from the governmental spending where the, the
dollars spent for facilities were, were nominal in terms of what else was going
on at the time. So, this is giving you an overview of
where these facilities began, and also the basic cost of these facilities.
So, we're going to move on next to look at the benefits that these facilities
bring about.