Arena Economics

[Renaissance]

Whoa whoa folks -

This discussion is based on the shaky premise that the BOk Center will lose money.  

Our arena is going to be run by SMG, a national event center management company.  They generally don't lose money on the venues they manage:

http://www.google.com/search?hl=en&q=SMG+arena+budgets

It is simply not a truism that municipal arenas run on a deficit.

A more sophisticated argument might be that the added economic impact of the arena to the area will not equal the cost of building it.  In other words, this won't be a revenue-generating infrastructure improvement (like, theoretically, a toll road that recoups the cost of its construction).

But that argument doesn't say the arena won't support its own overhead.  In fact, I can't find any new arenas (particuarly run by SMG) that are running on a yearly deficit.

Can someone prove me wrong?

[Renaissance]

Looks like I was wrong in at least one case: Corpus Christi operates their arena on a deficit.  http://www.courierpress.com/news/2008/jul/21/defining-success/

But here you can see that the new arena in Des Moines is profitable and in fact subsidizes the other event centers in that city:
http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=/20080711/NEWS05/807110382

[TulsaSooner]

quote:Originally posted by cannon_fodder

Yes, the direct economic of such things lose money.  The Tulsa Opera, the Symphony, and the PAC also lose money.   The convention center loses money.

Economics is necessarily a consideration, but it is not THE consideration.  Anyone who voted "yes" because they thought the city was going to get rich off of this is a fool.  It is a community amenity.  A subsidized luxury for those in the area to be sure.  The zoo, the aquarium.  But it also has positive impacts in many other ways.  Standard of living and amenities are serious considerations for companies and professionals moving to town.
I've read the studies.  The losses are no where near the doom and gloom opponents point to.  Go forth and research similar arenas in similar sized towns.  It's easy to do because they all have one by now (for better or worse).

And yes, many years too late on the argument.  Turns out we should have given huge tax incentives to Intel and Microsoft in the late 1980's.   But at this juncture that point is worthless.

Perhaps "how can we make this work best" would be a more worthwhile question.

This is about as dead-on of a post as I've seen in a long time.  Good job, c_f.

[TUalum0982]

The arena is a double edge sword.  A "damned if you do, damned if you don't type scenario".  You have the people who *****ed and *****ed and *****ed because they had to drive to Dallas, OKC, or KC to see a decent concert complaining "why do I have to drive that far" to see a good concert, etc etc.

And on the other hand you have people *****ing because it's a waste of money, you can't make any money, its an economic disaster.  You can't please everyone, so they brought it to a vote and it passed.  That's how it works in this country.  The people that voted against it, if you dont like it, move to another country.  I don't think cities build arena's and stadiums to make them profitable.  For example, when do you think Jerry Jones is going to see his return on the 1 BILLION DOLLAR stadium they are building for the cowboys? Probably not in his lifetime.  Will it be a good for the local economy when all those cowboy fans drive from OK and all across Texas, stay a night or two at a hotel, eat out, and go shopping? you bet it wlil be.

These types of venues are built for people's entertainment and for people to enjoy, not to make money on.