Management of Sports Organizations: 5-2 Short Paper: Strategic Planning – Assignment Example

Public Investment in Minor League Baseball Stadiums al Affiliation Public Investment in Minor League Baseball Stadiums While it is evident from the arguments presented for and against the construction of minor league baseball parks using public funds that there are two sides to the argument; question remains as to which argument outweighs the other. The business of running professional sport clubs is tricky as explained by Frank P. Jozsa Jr. in article assessing the risks of financing minor league stadiums. However, the article also acknowledges the cumulative economic impact of having such stadiums in a region. In support for the funding of minor league baseball parks, Bruce Schoenfeld recounts the development of the minor league business and the strides it has made since the 1990s to its current state marred by unprecedented profitability. Based on the arguments presented by both parties, and by Sean Pendergast, the overlying dilemma is whether or not to overlook the risks presented by Jozsa Jr. in order to reap the benefits associated with the presence of minor league parks as argued by both Schoenfeld and Pendergast. Financing of minor league stadiums presents its own share of risks; a situation present in every entrepreneurial startup. However, Jozsa Jr. is particularly worried by the use of public finances to accomplish these goals (Jozsa Jr., 2012). It is one thing to build a minor league stadium using private funds and another to use tax money. The use of public finances presents complex challenges considering that the money invested need to benefit the greater population. According to Jozsa Jr. (2012), the use of public funds to finance the construction of minor league stadiums poses the risk of benefiting “only a fraction of the population”. The revenues collection from these stadiums are mainly reliant on the support of the sport fans. In the absence or decline of the fan base, professional sport ceases to be a profitable venture. In regard to this, Jozsa Jr. states that a failure of the baseball teams to entertain the fans poses the risk of reducing the profitability of the minor league stadiums (Jozsa Jr., 2012). As such, the use of public funds to finance their construction could potentially be as a waste of the money. Other issues that Jozsa Jr. identifies in his argument against the subsidizing the construction of minor stadiums include occurrences of recession or increased unemployment rates that stand the potential of reducing ticket sales in preference of higher priority goods. Competition for fans among professional sports is also another issue. With other sports such as football and basketball enjoying a stronger fan base as compared to baseball in most part of the country, Jozsa Jr. feels this presents as challenge in securing steady revenue (Jozsa Jr., 2012). With the above arguments in mind, a look at the steady growth of the minor league baseball business shows promise. Schoenfeld (2014) looks at the increase in value of minor league teams from as little as half a million dollars to record $40 million dollars. With proper management, enhanced facilities and proper marketing as pointed out by Stuart Katzoff, minor league teams have the potential or posting enormous profits and benefits to the local economy (Schoenfeld, 2014). Such were the results acquired by John E. Connaughton in his independent study of the Charlotte metropolitan where an estimated 16000 jobs were created by local college and professional sport teams (Jozsa Jr., 2012). Construction of new and better stadiums increases the fan base and attendance as was the case with Dragons who have never played on unsold seat since moving to a new stadium in Dayton, Ohio (Schoenfeld, 2014). Due to the affordability of tickets, Pendergast states that minor league stadiums are highly profitable considering the fans look for more than just performance from the teams (Pendergast, 2013). As O’Conner puts it, minor league teams sell the sizzle; that is what keeps the fans coming back. In light of both side of the debate on whether or not to use public funds for the construction of minor league stadiums, it is apparent that it is a worthy investment. Such as stand is fuelled by the fact that the stadiums present the chance of creating numerous employment opportunities alongside high revenues. While Jozsa Jr. assessment of the risk present may be accurate, the success of the highly successful minor league teams has shown that it take proper marketing and streamlining of the process to achieve success. As a result, all the risks presented by Jozsa Jr. are manageable. That stated, the minor league business has transformed from the once unprofitable business to a blossoming enterprise with unlimited potential. The use of public funds in the construction of the minor league baseball parks is therefore warranted. References Jozsa Jr., P. (2012). Public financing of minor league stadium a risky investment. Retrieved from http://www.sportsbusinessdaily.com/Journal/Issues/2012/09/10/Opinion/Frank-Jozsa.aspx?hl=minor%20league%20economic%20impact&sc=0 on 11th June 1, 2015. Pendergast, S. (2013). Not So Minor League: The Wild World of Minor League Baseball in Texas. Retrieved from http://www.houstonpress.com/news/not-so-minor-league-the-wild-world-of-minor-league-baseball-in-texas-6598641 on 11th June 1, 2015. Schoenfeld, B. (2014). Minor league teams, but mighty big numbers as franchise values soar. Retrieved from http://www.sportsbusinessdaily.com/Journal/Issues/2014/08/04/Franchises/Minor-league-teams.aspx?hl=minor%20league%20baseball%20stadiums&sc=0 on 11th June 1, 2015.