The Economic Impact of the Nashville, TN LP Field - Literature review Example

The Economic Impact of the Nashville, TN LP Field The Economic Impact of Nashville, TN LP Field The purpose of this paper is to explore the economic impact and contribution of the LP Field, which is a football stadium situated in Nashville, Tennessee. Established in 1999 as the Adelphia Coliseum and renamed in 2002 as the LP Field after the naming filing for bankruptcy, the football stadium is home to The Tennessee Titans (Plunkett and Plunkett Research Limited, 2009). Moreover, the stadium also serves as a host for the football games of Tennessee State University Tigers in addition to concerts and other high-profile events for the local public. The comprehensive discussion which has been conducted in paper comprises of utilizing the information of scholarly works and books to research the topic in a critical and systematic manner. The key points which have been explored in this examination encompass an assessment of fundamentals of stadium development and redevelopment, the economic considerations of approving sports development at the expense of public costs, comparing the economic costs and benefits of the stadium and understanding the economic contribution of the LP Field to the economy of the city of Nashville. Plunketts Sports Industry Almanac which has been developed by Plunkett and Plunkett Research Limited (2009), provides initial data for commencing research on the Tennessee Titans as an NFL team and also briefly sheds light on the key features of the LP Field as the team’s home stadium. The resource offers information regarding the financial prospects and current position of the team and links this data with the team’s devoted fan base to suggest that the construction of the LP Field is appreciated by the city’s citizens because of their devotion to the Tennessee Titans. As stated in the source, the team’s ticket sales stood at number fifth in the list of NFL teams which boost of the maximum amounts collected through sell-out games as of 2009 (Plunkett and Plunkett Research Limited, 2009). This observation implies that the revenues which are generated by home games that are played at the LP Field which has the ability to seat 68, 798 fans are substantial therefore; this aspect of consideration is favorable with regard to comprehending the economic impact of the stadium. The economic impact of the LP Field on cannot be critically examined without the incorporation of studies on developmental costs and financing for the structure. In Financing economic development in the 21st century, White, Bingham and Hill (2003) outline the construction of NFL stadiums including the LP Field in the period succeeding 1990 and identify the total cost which was incurred for their construction so as to distinguish the percentage of public cost as a percentage of the total cost. The source suggests that for the construction of the LP Field, 76% of the funding was gathered through public channels (White, Bingham and Hill, 2003). In undertaking their analysis of the contribution of public investment in large-scale infrastructural projects White, Bingham and Hill (2003) suggest that the decision of settling upon a specific level of public spending depends upon the degree to which the sports has a capability to advance the economic prospects of the city and its population. This point highlights that the staggering 76% approval for commencing with the construction of the LP Field is essentially reflective of the project’s ability to boost local economy. Financing economic development in the 21st century is a valuable source for determining the local government and community’s motivation for signaling the approval of a large-scale development project as it is expected that the project would be able to provide more economic benefits than the cost of construction and development. In The Economics of the National Football League: The State of the Art, Quinn (2012) explores the process of collecting funds for undertaking large-scale sporting infrastructure ventures and understands the future implications of using a range of sources to achieve at the desired target of fund compilation. The book highlights the various funding channels which were utilized for the purposes of constructing the LP Field, therefore, the text documents private and public sources of monetary contribution during the process in addition with any endowments from non-government sources. The implications of incorporating this discussion to understanding the economic impact of the LP Field are rooted in evaluating monetary channels, their respective drawbacks and benefits and understanding whether it is desirable to demonstrate preference for a particular source of funds generation over the others. Moreover, in his discussion of the Titan’s relocation to their new stadium the author incorporates the analysis of how the team paid for its relocation. This cost can also be integrated as a part of the overall expenditure for establishing the LP Field as the team’s home ground. The Economics of the National Football League: The State of the Art is a beneficial resource for establishing a broad understanding of how local governments and bodies undertake the funding process of large-scale projects. In their book titled Beyond the scoreboard: An insiders guide to the business of sport, Horrow and Swatek (2011) highlight the economic benefits of undertaking successful large-scale projects in the sports industry, specifically football stadiums and baseball parks to the local community. The source is highly helpful towards comprehensively exploring the topic of the economic impact of the LP Field because it defines the spectrums that can be assessed with regard to the discussion to arrive at viable and objective conclusions. For example, the book outlines the example of stadium construction across the United States has positively impacted the local community through several ways by aiding supplementary business operations such as restaurants, souvenir shops and sporting goods retailers amongst others, creating infrastructural development zones, boosting property values around the stadium and increasing the amount which is gathered by the local government via sales tax revenue (Horrow and Swatek, 2011). Another significant economic benefit of stadium development is assessed in terms of the locals’ and tourists’ perception of the city and its image depending upon the presence of an impressive sporting facility. As noted by Horrow and Swatek (2011), this aspect is associated with the creation of value difference because sports development essentially reflects the state of the location and therefore, can be viewed as the ultimate point of reference for observing the location from a contemporary standpoint. The third benefit of maintaining sporting facilities and promoting sports development through the construction of stadiums such as the LP Field is that such projects have the ability to contribute towards the economy even during the off-season. With regard to the economic contribution of the LP Field to Nashville’s economy, Horrow and Swatek (2011) suggest that the Tennessee Titans produce a staggering $85 million of individual earnings while, sustaining more than 2000 jobs as a consequence of the team’s presence and affiliation to the city. Other figures which present a comprehensive picture of the economic contribution of sporting facilities and development are associated with the results of a study which revealed that an average NFL fan spends approximately $28 during a trip to a single game (Horrow and Swatek, 2011). Sports Economics by Blair (2012) is a significant source for the purposes of this research because it specifically examines a single element of the monetary facet of sports and its associated activities which is that of advertising. Blair’s (2012) understanding of the significance of advertising in sports is comprehensive because the author does not limit his discussion to the assessment of how branding, sponsorship, public relations and endorsements operate in the industry to represent the extent of advertisement. Nonetheless, the author integrates the concept of the practice of naming rights into his discussion so as to highlight the factor of how sports teams can transform their sporting facility or stadium as a source of obtaining revenues. Blair (2012) notes that amongst several high-profile NFL teams the Tennessee Titans have also adhered to the practice of securing a naming rights charge for their stadium. This notion further highlights another source of revenue generation for the LP Field. Zimbalist and Noll’s (1997) scholarly work titled Sports, Jobs & Taxes: Are New Stadiums Worth the Cost? is a critical source for aiding the evaluation of the discussion which has been conducted regarding the topic. The basis of the argument which has been presented in this resource is rooted in the asserting that the majority of economic rationales which are provided by advocates of sports development such as the one’s related to employment creation and growth of business activity are not entirely supported by the frameworks of economic theory (Zimbalist and Noll, 1997). For example, it is argued in the scholarly work that for ensuring the achievement of economic growth it is important to understand that this outcome can only be attained once the economy’s resources are being utilized in the most efficient and best manner possible. This notion implies that if through the construction of a stadium, the local government believes that it has put its resources into the best possible use then only in this particular scenario would the decision be considered as economically sound and favorable. However, as noted by Zimbalist and Noll (1997) this aspect of consideration if often ignored by decision makers when they choose to utilize public funding for undertaking such large-scale projects. The arguments which have been put forward in this work are suitable for advancing insightful debate on the topic because it raises questions regarding whether the local government undertook necessary case studies and research to establish if granting approval to the LP Field project by using $220 million of public funding was the best possible use of the economy’s resources. Crompton’s (2004) study titled Beyond Economic Impact: An Alternative Rationale for the Public Subsidy of Major League Sports Facilities presents similar evaluations with regards to subsidization of sporting facilities and the substantial utilization of public funds to build projects such as the LP Field. The research postulates that the supposed economic benefits of the construction of stadiums cannot be termed as being economically reasonable for they are largely linked with psychic income or the perceived benefits of the projects such as the betterment of the city’s image and representation in the media which do not hold economic credibility (Crompton, 2004). Another evaluative resource which can be integrated within the broader discussion regarding the economic impact of the LP Field is titled Why Do Some Stadium Redevelopment Projects Succeed Where Others Fail? An Analysis Using Macro-Level Trends in Stadium Building and has been authored by Koehler (2012). The resource is informative and very thorough because it undertakes a macro-level study of 55 stadiums that were constructed through the injection of at least 25 per cent of total project costs via public expenditure. On the basis of the conclusions of this research, it can be derived whether the location of the LP Field meets the requirements and set standards for boosting economic development in surrounding areas. The resource distinguishes and defines a range of individual factors which can be used to assess the stadium’s favorable location as a critical cause of achieving economic growth. The analysis of scholarly works and books which has been conducted for the purposes of this research suggests that while the economic impact of the LP Field on the local community has been favorable, the evaluation of these economic consequences is important for distinguishing between psychic incomes and perceived benefits which do not have a credible impact on the state of the community’s economic affairs. This notion postulates that for achieving the objective of arriving at plausible conclusions regarding the stadium’s contribution on the city’s economy it is important to develop an alternate approach which is able to quantify the real economic impact of factors such as better community image and the influx of tourism opportunities as a consequence of the sporting facility construction. However, if these elements are ignored from the discussion it can still be suggested that the LP Field has positively impacted the economic growth of the community by boosting the growth of local businesses and creating employment opportunities. References Blair, R. D. (2012). Sports economics. New York: Cambridge University Press. Crompton, J. (2004). Beyond Economic Impact: An Alternative Rationale for the Public Subsidy of Major League Sports Facilities. Journal of Sport Management, 18(1). Horrow, R. B., & Swatek, K. (2011). Beyond the scoreboard: An insiders guide to the business of sport. Champaign, IL: Human Kinetics. Koehler, P. (2012). Why Do Some Stadium Redevelopment Projects Succeed Where Others Fail? An Analysis Using Macro-Level Trends in Stadium Building. Plunkett, J. W., & Plunkett Research, Ltd. (2009). Plunketts sports industry almanac. Houston, Tex: Plunkett Research. Quinn, K. G. (2012). The Economics of the National Football League: The State of the Art. New York, NY: Springer New York. White, S. B., Bingham, R. D., & Hill, E. W. (2003). Financing economic development in the 21st century. Armonk, N.Y: M.E. Sharpe. Zimbalist, A., & Noll, R. G. (1997). Sports, Jobs & Taxes: Are New Stadiums Worth the Cost?. Washington, DC: Brookings Institution. Read More