Revenue and Wealth Maximization in the National Football League: The Impact of Stadia

Sport Marketing Quarterly, Vol. 13, No. 4, December 2004

9 Pages Posted: 24 Aug 2006  

Matthew T. Brown

University of South Carolina

Mark Nagel

University of South Carolina

Chad D. McEvoy

Syracuse University - David B. Falk College of Sport and Human Dynamics; Illinois State University

Daniel A. Rascher

University of San Francisco - Sport Management Program; SportsEconomics

Abstract

The opening of the Palace of Auburn Hills, the SkyDome, and Oriole Park at Camden Yards led to the beginning of a construction boom in professional sport. In the National Football League (NFL) alone, 26 stadiums have been built or renovated in the past 10 years. Due to the additional revenue generated by these facilities and the NFL's current revenue sharing system, professional football franchises are building new stadia for economic reasons rather than to replace unusable or unsafe facilities. The purpose of this study was to determine if a significant difference in net revenue change existed for NFL teams that moved into a new facility and to determine if there was a significant change in valuation for these franchises. The findings indicated that new stadia significantly increase revenue and franchise value in the NFL; therefore, the primary goal of every firm, wealth maximization, is met for teams after opening a new facility.

Keywords: Public Finance, Stadiums, National Football League, Revenue

JEL Classification: L11, L83

Suggested Citation

Brown, Matthew T. and Nagel, Mark and McEvoy, Chad D. and Rascher, Daniel A., Revenue and Wealth Maximization in the National Football League: The Impact of Stadia. Sport Marketing Quarterly, Vol. 13, No. 4, December 2004. Available at SSRN: https://ssrn.com/abstract=926210

Matthew T. Brown (Contact Author)

University of South Carolina ( email )

701 Main Street
Columbia, SC 29208
United States

Mark Nagel

University of South Carolina ( email )

701 Main Street
Columbia, SC 29208
United States

Chad D. McEvoy

Syracuse University - David B. Falk College of Sport and Human Dynamics ( email )

900 S. Crouse Avenue
Syracuse, NY 13244-2130
United States

Illinois State University ( email )

Normal, IL 61790
United States

Daniel A. Rascher

University of San Francisco - Sport Management Program ( email )

San Francisco, CA 94117
United States

SportsEconomics ( email )

2200 Powell St.
Emeryville, CA 94608
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
684
rank
33,219
Abstract Views
2,990
PlumX