Monday, 14 May 2012

Stadiums again

Sam Richardson's been watching the developing financial mess at Otago's Forsyth Barr Stadium. The stadium's been earning reasonably large losses. So Dunedin Council will be on the hook not only for servicing the debt costs of buildign the stadium but likely also for the stadium's ongoing annual failures to cover their costs.

Meanwhile, Prime Minister John Key suggests that Christchurch might want to spend its money on a nice covered stadium.
Key told The Press yesterday he supported the idea of a covered stadium in the city.
"There's a long and proud sporting history in Canterbury, and Christchurch needs a stadium that reflects that.
"I really believe that Christchurch can support a world-class covered stadium."
Key said the insurance payout from AMI Stadium would "help the replacement fund", but was unlikely to fund the whole project.
There had not been any talk of government funding for the stadium, and Christchurch residents would need to decide whether the cost of a roof was worthwhile.
"In the end, what's built and how it's paid for is largely a matter for Cantabrians."
That's an odd call from Key.

I'd thought that Cabinet was terrified that Christchurch Council would wind up blowing the recovery and leaving central government on the hook for a big Christchurch bailout. I'm not sure that Christchurch Council dumping a pile of money into a stadium would make Cabinet less likely to need to bail the city out.

There is absolutely no evidence that stadiums help broader city economies; what evidence we have points in the opposite direction. Spending a pile of money on a stadium is best seen as providing a  consumption good for sports fans and a transfer to sports teams. Maybe a rich city that isn't trying to rebuild a substantial portion of its base infrastructure after an earthquake for which it was under-insured could consider it. Encouraging Christchurch to do it now is reckless.

1 comment:

  1. The last two sentences of this post are precisely my thoughts.