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Breaking New Ground: Public Attitude Towards New Sports Facilities

Protests in Brazil have heated up over the course of the summer as civilians continue to voice their outrage at the expenditure of $13 billion in public funds for renovating and building soccer stadiums to be used in the 2014 FIFA World Cup. Set off by an increase in the fare for public transportation, the protests call for putting public funds toward improving the condition of health care, the education system, and public transportation and ending political corruption before investing billions in stadiums for the World Cup and the upcoming 2016 Olympic games in Rio de Janeiro.  Brazil’s distaste for the country’s public spending is evident in the approval rating of President Dilma Rousseff’s government which has taken a dive in June, falling from 57% to 30% in three weeks.

Although not as severe in their reactions, U.S. citizens have held similarly negative views of using government money to build or renovate arenas in recent years. Sports franchises often rely heavily on public funding for new stadiums, which is made up mostly of government tax revenue and state grants. Between 2000 and 2008, 35 NFL, MLS, NBA, NHL, and MLB stadiums have been built costing in total over $10 billion, of which over $6 billion was publicly funded.

Even stadiums that are built entirely on private funds often come at some cost to fans. The entire cost of MetLife Stadium, home of both the New York Giants and Jets, was paid for from private funds, but they were funded by the sale of personal seating licenses and higher ticket prices.

The cost of building a sports franchise’s stadium is a significant obstacle for many teams. When the Atlanta Falcons and the Minnesota Vikings each proposed building new stadiums, a strong majority of Georgians (75%) and Minnesotans (61%) opposed the new publicly funded arenas. Minnesotans were so strongly opposed that 49% would rather see the Vikings move to California than have Minnesota tax payers fund a new stadium.  Although both the stadium plans for the Falcons and Vikings were eventually approved by their respective city governments despite public opinion, the backlash is indicative of the negative attitude taken by Americans towards public spending on stadiums since the beginning of the economic recession in 2008. While some stadiums have been built in the four years since the recession, negative public opinion combined with budget troubles in many cities and states have no doubt had an impact.  As can be seen in the chart below, local governments have promised about a fourth of the public funds devoted to stadium construction in the four years prior to the recession.

Figure-1-Public-Stadium-Financing-Pre-and-Post-Recession

Since the recession, there are still instances of a team successfully gaining a city’s support for the construction of a new stadium. The San Francisco 49ers created an effective campaign to garner Santa Clara residents’ support for building a new football stadium in the city. One strategy utilized by the 49ers was a direct mail campaign, including a brochure picturing 54 noteworthy Santa Clara stadium supporters. One of the most notable stadium advocates highlighted in the brochure is former women’s soccer star Brandi Chastain, a Santa Clara University graduate best known for this World Cup moment. The franchise also worked to create as many intimate relationships with residents as possible. Jed York, the CEO of the 49ers, remarked, “I probably did 50 different living room chats.” Additionally, to try and counteract post-recession wariness of government spending, the team emphasized the economic benefits of the stadium to Santa Clarans. The franchise commissioned a study that found the stadium would produce an estimated $249 million annual boost to the economy and create 2,650 game-day jobs as well as 2,230 jobs from additional economic activity. The San Francisco 49ers’ campaign paid off as a strong majority of Santa Clara voters (58%) approved the stadium plans in June 2010.

The results of the 49er’s campaign demonstrate that building public support for a publicly funded stadium is very possible, even after the 2008 recession. The success of the 49ers stadium demonstrates that sports franchise must develop a strategic plan centered on communicating the benefits to the local community in an effort to generate support. Last year, Global Strategy Group worked with MLS to build public support for a new professional soccer stadium in Queens. Justin Lapatine, a partner at GSG who headed the effort, attests to the importance of an extensive grassroots campaign, saying, “You’ve got to be willing to do the leg work.”  Whether it is having the team’s CEO sit down with local area residents or going door-to-door talking to small business, you must work closely with the local community. A grassroots campaign that generates support among a number of stakeholders will illustrate that the new sports stadium is not just about the team, it is about the community.

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