Moving the National Football League team to the city of Omaha, Nebraska, will have a positive financial influence on the citizens residing within its boundaries.
Sports franchises prioritize the maximum profit as any other profit-making company. Therefore, it is highly improbable that an out-of-state move will prevail. Relocation appears to be a financial benefit for a club. Municipalities may be strongly armed by the threat of relocation of a team and, therefore, make concessions to the locals that they would not otherwise make (Noonan, 2016). To either improve or build a new facility for the team, they have to invest the same funds in other essential services, including education (Oates, 2016). The more expensive stadiums are to build, install and maintain, the more city and teams recognize that protecting such large investments is essential. This comment works to enhance a parliamentary reform agenda that gives municipalities sufficient protection against the transfer of professional football teams for their tax investments.
Financing the project (Opperman, 2017):
- Team owners often use tax money to create new stadiums due to the positive economic impact associated.
- As the new guidelines put forward by the Financial Accounting Standards Board (FASB) for financial reporting and leases take precedence, tax and accounting experts in the sporting industry feel the pressure.
- The local government’s budgeting system will need to set aside a significant amount of their limited financial resources to facilitate the project.
- The ticket revenues after the relocation of the sports team will fund the regular maintenances required for the sustainability of the facilities.
Franchise relocation has a positive influence on the local economy (Groothuis & Rotthoff, 2016):
- It is easy for customers to splurge locally instead of traveling to a foreign market in a local facility.
- Professional sports in a region offer an opportunity for the talented locals and guarantee that they have additional sources of income to sustain their existence.
- The increased income for the locals will result in more spending promoting the much-needed money circulation within the local economy.
- Professional sports attract new investors into the city, hence, boosting the regional economy.
- The facility will create new employment opportunities for the locals and other foreigners within the American locality.
- Sport-related memorabilia are available from the local store for the team fans to shop them.
- The local team fans attending the various team events to show support for their club tend to display improved mental status, which is key to an economically productive individual.
Handling potential externalities that might undermine the economic benefits of the relocated sports team (Baker, 2018):
- The local government needs to enact and introduce new laws that would help address the probable externalities.
- In the sector, performance measurement customarily concentrates on sports results, with the aim that sports clubs have to gain greater ground for commercial success.
- The key players evaluate the financial statements to ascertain the economic significance of the investment.
- Economists need to enlighten society members about potential market failures and alternative approaches to safeguard the economy against undesirable consequences.
Although relocating the National Football League team to the city will have a beneficial influence on the livelihood of the people residing within Omaha, Nebraska, the financial stakeholders need to consider the economic impacts it might have on the residents. All stakeholders, including the public, team owners, government, and international parties, finance the project. For instance, the responsible project implementers will use the taxes collected to establish the sports facility. Consequently, although a section of the society members claims that the initiative will have “hidden” costs on the public, the investment benefits will have more positives economic significance than negative.
References
Baker, N. (2018). Playing a man down: professional sports and stadium finance-how leagues and franchises extract favorable terms from American cities. Boston College Law School Review, 59(1), 281. Web.
Groothuis, P. A., & Rotthoff, K. W. (2016). The economic impact and civic pride effects of sports teams and mega-events: Do the public and the professionals agree? Economic Affairs, 36(1), 21-32.
Noonan, J. (2016). The boom in franchise relocations: Moving cities no matter what the cost. Mississippi Sports Law Review, 6(2), 223.
Oates, T. P. (2016). Race, economics, and the shifting politics of sport media: The case of Jimmy the Greek. Radical History Review, 2016(125), 159-167.
Opperman, E. (2017). An analysis of sports markets: Franchise relocation, league expansion, and fan bases. (Publication No, 1512). [CMC Senior Thesis, Claremont McKenna College]. Claremont Colleges Scholarship @ Claremont.