The Future Of Where is powered by readers like you. Become a free or paid subscriber today!

Subscribe now

In a stupendous example of poor travel planning, we wound up driving on the 405 past Sofi Stadium in Los Angeles (actually, in Inglewood) the afternoon of the first World Cup game between the United States and Paraguay.

Crawled past the stadium is more like It, because our trip from San Diego to my adopted hometown of Ventura for the weekend was the slowest and probably most miserable intercity driving trip I’ve ever undertaken.

And then when we got to Ventura, we battled crowds, high prices, and late-night noise from the “Boots and Brews” country music festival, which was taking place two blocks from our hotel.

That was last weekend. This weekend we’re back in San Diego navigating around 50,000 visitors who are in town for the first-ever San Diego NASCAR race, which is taking place across the bay in Coronado.

And all this came only two weeks after the San Diego Rock’n’Roll Marathon drew 20,000 people, filling up the hotels and restaurants in my neighborhood. (The finish line was about four blocks away from our place.)

Ok, you might say, quit complaining because it’s just summer. Fair enough. But there’s actually more to it: Big events have become more common in American cities – by the way, they’re getting bigger all the time – and they are becoming part of almost every city’s economic development strategy. Every city, it seems, wants to become a “Showtime City”.

Showtime City Is Big Business

That’s because events are now big business – a $1.2 trillion business annually, according to some sources. Almost half of that is sports. A significant chunk of it is music – meaning, as I have written in the past, that a Taylor Swift concert is almost an economic development play all by itself, generating almost as much economic activity as the Super Bowl. (Actually, her last tour was the equivalent of 53 Super Bowls.) Then there’s Burning Man and Coachella, both in the Southwestern desert, which are essentially pop-up cities.

And everywhere I go, I keep hearing about more and more economic development efforts focused around events of all kinds – everything from the Olympics in Los Angeles to youth sports tournaments, which have exploded and in so doing become their own kind of economic development play. Recently I’ve been doing work in Chattanooga (I’ll write more about that at a later time), which now has a whole separate tourism-based organization, The Sports And Events Corporation, devoted entirely to recruiting everything from youth sports to college basketball tournaments. TSEC also coordinates some of the venue logistics with everybody from the local convention center to parks and recreation departments.

The Strain On Host cities

Yet all this puts a strain on the host cities, as the World Cup is showing. A couple of years ago I was doing some economic development work in Ventura, and I proposed that part of the strategy should be to attract more big special events. Ventura’s already got a healthy special events economy for a city its size. It’s a beach town with a historic downtown, it hosted the X games for a couple of years, and big names play concerts at the Ventura County Fairgrounds on a regular basis.

The Boots & Brews Country Music Festival in Ventura

So I was a little surprised that I got some pushback. (To be fair, I proposed recruiting two additional big special events and some folks misinterpreted that as recruiting two additional events every year forever – two the first year, four the second, etc.) As the showtime economy has grown in Ventura, the locals are feeling a bit of strain. To many of them, it seems like they are losing their town to the visitors. As a former longtime resident, I feel a little of that myself – even though I am now a visitor.

So I think the question about Showtime Cities is not only whether they are sustainable but whether they are withstandable. Because the irony of Showtime Cities is that the very characteristics that make us want to live in them – character, charm, amenities, walkability – also make people want to visit them. And that makes for an uneasy relationship between the locals and the tourists.

Of course, the sustainability of a showtime economy requires a huge amount of local infrastructure – hard and soft – to accommodate it. As I learned when I was on the City Council in Ventura, you have to have not only a strategy but also a robust visitor office, aggressive marketing, and effective venue management. You also have to have a huge physical infrastructure: music venues and sports fields, probably a convention center, hotels and restaurants.

The biggest Showtime Cities – Las Vegas and Orlando, which have different types of showtime economies – have built their entire city around this hard and soft infrastructure. The locals understand this – know they are economically dependent on it – and learn to live with it. (I’ve always been amused at Las Vegas’s neighborhood casinos, where the local go to gamble without having to deal with the tourists.) But in other cities with a more mixed economy – showtime and other components – withstandability is more difficult because not everybody in town is bought into the idea that showtime is part of their town. You see this in Ventura, a midsized city that’s a county seat which has traditionally had lots of government employees who don’t care one way or the other about the visitors.

Pedestrians walking on the Las Vegas Strip

Of course, in many cities, the showtime economy is concentrated in a particular part of town – the French Quarter in New Orleans, Manhattan in New York, and here in San Diego my general Downtown neighborhood, which has Petco Park, the convention center, music venues, and the cruise ship terminal. So most people are not affected by it.

At least for now. Because whatever the withstandability issues we see in Showtime Cities, their sustainability is hardly in doubt. Three-quarters of millennials say they’d rather spend money on an experience than on goods – even though goods are getting cheaper and experiences are getting more expensive. And the vast information available on the internet is only fueling this further, as there’s evidence that even searches for travel opportunities are, more and more, tied to events. And, as the Chattanooga example suggests, the Showtime City is likely to spill over from downtowns and tourist areas to other parts of town, as youth sports tournaments take over local recreational venues and visitors seek out authentic local experiences (like maybe neighborhood gambling casinos).

So urban planners and economic development practitioners are going to have to figure out how to navigate the tensions between the visitors and the locals in almost every city across the country. The Showtime City is here, and it’s not going away.

The riverfront district West Sacramento hopes to create around an expanded baseball stadium.

The Future Of Where depends on your to support our efforts and spread the word. Become a paid or free subscriber today. Founding members get a free copy of Bill Fulton’s book Place And Prosperity.

Subscribe now

A generation ago, Oklahoma City – a small metropolitan area in a state best known for football – took in a homeless basketball team (the post-Katrina New Orleans Hornets) and proved to the National Basketball Association that it could support a team.

Now, Sacramento – with a million more people than OKC and already home to an NBA team – is trying to prove the same thing to Major League Baseball, which is getting ready to expand from 30 to 32 teams. Specifically, West Sacramento – just across the river from Downtown Sacramento – has committed $1 billion in expected future revenue for a team and a stadium expansion.

The A’s attendance is a bit higher than it was in Oakland, which isn’t saying much, so the OKC idea may or may not work this time around. Sacramento’s got tough competition from fast-growing cities like Charlotte, Nashville, and Columbus (which is now bigger than the two legacy cities in Ohio that have MLB teams) and also from Salt Lake City, which appears to be well organized to make a bid.

From a competitive point of view, 32 teams makes sense – not only for MLB but also for other major professional sports as well. Being able to divide by four allows even distribution of teams within divisions and makes year-end playoffs easier to organize. The National Football League and the National Hockey League have 32 teams, while the NBA has 30 and Major League Soccer has 29.

But that creates a scarcity of franchises that professional sports owners like – a lot. It may be that 32 teams is the ideal number. But there are are 35 metro areas in the United States and 3 in Canada with a population of at least 2 million, which is widely regarded as the floor for a viable professional franchise.

Buffalo, one of the smallest markets in the NFL, is building a billion-dollar stadium.

Most metros with a population of 3 million and up have teams. And there are several legacy locations like Buffalo and Green Bay in the NFL and some Canadian hockey locations that are smaller than 2 million. (OKC’s population is only 1.5 million.)

So, especially for metros in the 2-3 million range, competition for professional sports franchises is fierce, and the team owners take advantage of that by setting up an Amazon HQ2-like competition for new teams.

That scarcity part of the reason (but not the only reason) why franchise values have increased 12-fold since the turn of the century, from an average of $200 million in 1998 to an average of $2.4 billion in 2024.

The trend we’ve seen over the past 20-30 years is that smaller cities are much more willing to subsidize professional sports than big cities – presumably because the payoff for becoming “big league” is greater. OKC built a basketball arena without a team, then upgraded it when the Thunder arrived from Seattle, and is now spending close to $1 billion on a new arena. Tennessee is taking the lead on a new NFL stadium in Nashville. Other cities, beginning with San Diego, have sweetened the pot by giving the team the right to develop an entertainment district in the neighborhood of the ballpark. At the same time, suburban cities in big metro areas have also been willing to do the subsidizing. Arlington, Texas, used a sales tax to subsidize new venues for both the Cowboys and the Rangers/

Meanwhile, big cities have been reluctant to pull the trigger on big subsidies. Los Angeles had no NFL team for more than 20 years because the city wasn’t willing to pay big bucks for a new stadium and tried to force the NFL into the 100-year-old Coliseum. (NFL owners kind of liked this situation because they could always threaten to move their team to L.A.) Finally, it took billionaire Stan Kroenke to build Sofi Stadium privately, though suburban Inglewood did provide some tax rebates and paid for some infrastructure improvements.

But all this begs the question: Is it all worth it?

And this question is becoming more urgent as the stadiums and ballparks from the construction boom of the 1990s and 2000s continue to age and franchise owners demand upgrades and replacement facilities.

Already, voters in Kansas City – a small market of only 2 million people, but with a huge hinterland of fans – have said no. Both the MLB Royals and the NFL Chiefs want new or upgraded venues – their current adjacent venues are 50 years old – but voters in Jackson County, Missouri, where KC is located, turned down a sales-tax extension that would have helped both teams. They probably won’t leave the area – the Chiefs at least are likely to find a home in an affluent suburb – but the failure of the tax tells you something about the tolerance of taxpayers to subsidize billion-dollar businesses.

Kansas City’s billion-dollar stadium complex, complete with endless surface parking.

For decades, franchise owners and civic boosters have claimed all kinds of economic benefits from professional sports franchises. Endless economic impact studies have supposedly proven huge economic benefit, though they often assume that money spent on sports is all a net-plus to the local economy, when it fact much of it is diverted from other entertainment activities. (I go see the Padres at Petco Park and therefore I don’t go to a concert or out to dinner.) More recently, leveraging stadiums and ballparks for urban revitalization has been a powerful economic argument – though the net economic (and tax) benefit all depends on how much the city gives away to the team.

The billion-dollar West Sacramento pitch is based on the idea that revenue will be generated by the stadium, by development of a surrounding district along the Sacramento River, by hotels serving people coming to the games, and by lots of other potentially tax-producing developments and activities that don’t currently exist but presumably would be leveraged into existence if a baseball team is there.

And despite the vast increase in franchise value, the teams are not huge businesses in most of the metro areas where they are located. Only in Green Bay, population 300,000, is the team the most valuable business in town. In Buffalo, the Bills’ $6 billion value places it fourth in the region, dwarfed by M&T Bank and exceeded in value even by Moog Inc., a precision motion control device manufacturer. In Cincinnati, where the population has been shrinking for decades, the Bengals are worth $5 billion. But Procter & Gamble is worth more than $300 mbllion.

In other words, a few billion doesn’t put you at the top of the business heap anywhere.

Nor are the teams big employers. Remember that half the revenue goes to a very small number of extremely highly paid employees. There are a few administrative jobs and then a large number of low-paid seasonal and service jobs. If you pitched an economic development office with any other business that had this kind of employment structure, they’d tell you to get out of town.

I suppose there is some kind of intangible economic development benefit with associated with being “major league”. The mayor can point to the stadium and the team. CEOs can entertain their customers and clients in skybox suites. The economic development boss can drive past the venue and boast.

But in the end, as is so often the case, the professional sports game boils down to civic ego. We like having teams to root for and it helps us identify with our city and region more deeply. And we’re willing to pay billionaires a lot of money in order to be able to do that. It may be worth it in intangibles, but it’s certainly not worth it in actual money.