Government Flashcards
What are the two conditions that define a public good?
Accessibility and non-rival consumption
Explain accessibility and non rivalry.
Accessibility means that individuals who have not contributed to the production of the good cannot be prevented from consuming it.
Non-rivalry means that if one individual consumes the good, this does not reduce the utility other individuals can derive from it.
Define a merit good.
Private goods that have been endowed with public interest
What do fans, taxpayers, and community leaders want regarding sports teams? List four key points.
Think about merit goods.
- Adequate supply of teams
- Lowest possible ticket prices for competitive games
- Absence of public subsidies
- A team in each community that wants one
What is the general stance of the federal government towards league affairs?
Wants to stay out unless it is in the public’s interest
What was the purpose of the Mills Report (1998)?
To aid small market Canadian franchises with tax credits and tax breaks for corporate buyers
What was the outcome of the Mills Report in 1999?
Rejected by Canadian government
Reintroduced in 2000 and rejected after 3 days.
What tax plan was implemented by the provincial/state government in Alberta?
Players taxed based on proportion of games played in Alberta, with money given directly to teams
NHLPA disputed but overruled.
List three forms of municipal government support for sports teams.
- Property tax breaks on land
- Sharing or providing arena revenues
- Low or free rent for facility usage
What are the reasons for municipal support of sports teams? List four.
- Increased community visibility
- Enhanced community image
- Stimulation of other development
- Psychic income
What is the CVM approach in measuring psychic income?
Places dollar value on goods and services not exchanged in the marketplace
Explain the CVM approach and psychic income.
Psychic Income: feeling good in your community (due to your team doing well?)
Contingent Valuation Method: creating a survey to put a dollar value on psychic income
Define the ‘Stadium Game’.
The process whereby local governments interact with sports franchises to provide subsidies
What negotiating leverage do sports teams often have?
Scarcity of franchises and threat of relocation
What was the significant event involving Nashville and the NJ Devils in 1995?
Negotiations for the Devils to stay in NJ after winning the Cup
1993: $120 mil arena in Nashville proposed
How many new stadiums and arenas were built with public funds in the US between 1990 and 2000?
68 new stadiums and arenas
What was the total cost of public contributions for new stadiums and arenas built in the US from 1990 to 2000?
Over US$9 billion
Canada not as accepting of “corporate welfare” as a result, recent arena construction has been funded primarily through private $.
What was the average cost of new arenas in 2006 dollars?
US$234.6 million
What was the average public subsidy for new arenas in 2006 dollars?
US$110.5 million
True or False: Canadians are more willing to spend public money on teams compared to Americans.
False
Canada not as accepting of “corporate welfare” as a result, recent arena construction has been funded primarily through private $
What was the combined property and capital taxes paid by the six Canadian teams in 1997?
$21.8 million
What was the total property and capital taxes paid by all 21 US teams combined in 1997?
$4.1 million
