Waiting for the phone to ring

Mickey Hepner
The Edmond Sun

EDMOND March 09, 2008 12:53 am

— Sometimes a single phone call can change your life. Whether it is an actress receiving a call telling her that she has been nominated for an Oscar, a student being told she has been accepted to Harvard or a ballplayer being called up to the big leagues, a single phone call can represent the culmination of a lifetime of hard work and big dreams. Such a phone call can confirm that you are one of the best.
Sadly though, many people will never receive such a call. After all, not everyone can be among the best. However, thanks to the voters in Oklahoma City last week, all Oklahomans soon might have a chance to experience the feeling such a call can bring.
On March 4, Oklahoma City voters overwhelmingly approved a 15-month extension of a penny sales tax that originally was enacted to fund the MAPS projects. The revenue from the extension will fund $121 million in improvements to the Ford Center in order to make the arena suitable for a viable NBA franchise.
Since the NBA will decide in the next few months whether to approve the move of the Seattle Supersonics basketball team to Oklahoma City, the March 4 vote (and the magnitude of the victory) only can reinforce to league officials the idea that Oklahoma City is ready for the NBA. Consequently, we soon can expect a call from league officials informing us that the NBA is ready for Oklahoma City, too.
While few Oklahomans object to the NBA coming to Oklahoma City, there are some who object to spending taxpayer dollars to make it happen. It is true that economists generally are leery about the idea of government subsidies supporting a business enterprise — economists typically prefer that market forces alone prevail. However, economists also recognize there is a justification for subsidizing businesses that provide benefits for society as a whole. Generally, economic research finds that arena subsidies do provide important benefits for cities trying to attract and retain professional sports teams.
Interestingly though, the benefits to cities are not in the form of tangible financial benefits, but in the intangible benefits like enhanced civic pride. It turns out that the direct financial benefits of stadium subsidies are quite small. Yes, with an NBA team people will spend money attending the games, buying merchandise and dining out before and after games. Yet this just means that people will spend less money elsewhere.
Even the $121 million in construction spending does little to stimulate the local economy. Yes, there will be an additional $121 million spent on construction, but that just means that taxpayers have $121 million less to spend elsewhere. The net effect of this spending on the city and state will be relatively small.
But economists long have recognized that non-financial benefits matter just as much as the financial ones. In fact, economic studies of similar decisions made in cities like Baltimore and Indianapolis find that the non-financial benefits of stadium subsidies far outweigh the direct financial benefits.
For Oklahoma, the situation is similar. Having an NBA team is our chance to show the world that we can compete with world-class cities like New York, Los Angeles, Chicago and Dallas. This is our chance to show everyone that Oklahoma is more than OK — and that is worth a lot.
Just like the day a ballplayer is first called to the big leagues is one of the most important days in his life, the day Oklahoma City is called to join the NBA will be one of the most important days in Oklahoma’s history. As a state we have shown that we can support an NBA team during the short-term. With the vote last week, Oklahoma showed we are willing to make the investment needed to support a team during the long-term as well. We have done all we can to show we are a big league city worthy of a big league team. Now all that is left, is to wait for the phone to ring.

MICKEY HEPNER is an associate professor of economics at the University of Central Oklahoma.