As soon as the news broke that the Portland Pirates were leaving Portland for Springfield, Massachusetts, speculation began about what other hockey teams, or other sports, could replace them.
Being home to an American Hockey League team, with a guaranteed 38 home games bringing in thousands of fans, sounds like a good financial deal.
But sports economists warn that it may not be, which should prompt Portland officials and the management of the Cross Insurance Arena to consider a broad range of options for the facility’s future.
“If you ever had a consensus in economics, this would be it,” Michael Leeds, a sports economist at Temple University, told Marketplace last year. “There is no impact.”
“If every sports team in Chicago were to suddenly disappear, the impact on the Chicago economy would be a fraction of 1 percent,” said Leeds, who has studied the Chicago sports market, home to five professional teams. “A baseball team has about the same impact on a community as a midsize department store.”
Spending on sports isn’t new spending, it is money that isn’t spent elsewhere in the economy. In other words, money spent to buy tickets to and food at a Pirates game is money that could have been spent to attend a concert or eat at a downtown restaurant, for example.
When the Pirates leave Portland, and if no sports club takes their place, “people won’t just hunker down in the dark. They’ll find other places to spend their entertainment dollars,” Victor Matheson, a sports economist at The College Of Holy Cross, said in an interview with the BDN. The impact, however, is uneven. For example, while restaurants and bars near the arena may lose business without a hockey team, those in other parts of the city may gain.
Congestion and crowds also can drive people away from the areas near sports venues. Matheson found that economic activity increased in Inglewood, California, after the Lakers basketball team left the suburb for downtown Los Angeles.
At the same time, Matheson said, a venue like the Cross Insurance Arena, which recently underwent $33 million in taxpayer-funded renovations, is a strong asset, and it should be used as much as possible. An anchor tenant, such as a minor league hockey team, can provide a needed foundation to keep the venue booked, Matheson said.
But there are lots of acts and events that can fill the arena. In fact, trustees of the then-Cumberland County Civic Center said the facility would do fine without the Pirates when the team decided, in the midst of a lease dispute in 2013, to play its games in Lewiston. Trustees ultimately reached a deal with Pirates management, which gave the team a larger share of concession revenue, and the team returned to Portland.
Since the team’s return, attendance at Pirates’ games has slumped to about 3,000 per game, the second lowest level in the league. Team officials say they weren’t making money in Portland.
The Pirates’ departure is compounded by the fact that team officials didn’t notify the city of their plans. Management of the Cross Insurance Arena, which is owned by the county and managed by a nine-member board appointed by county commissioners, didn’t tell the city either.
This highlights the need for better communication and collaboration, especially when so much taxpayer money is involved — Portland supports the county with a $5.4 million allocation each year. Surrounding communities chip in lesser amounts.
The arena’s board of directors, which appears dangerously disengaged, also needs to negotiate a much more favorable agreement with its next tenant. The Pirates have to pay only $100,000 for breaking their lease three years early. “That’s a joke,” Portland Mayor Ethan Strimling told the Portland Press Herald. “That should have been negotiated much more strongly.”
The Pirates’ departure, although unexpected, gives Portland and Cumberland County time to consider the arena’s role in the region and all available options for filling its schedule. It might be tempting to attract another minor league sports club, but Portland could be better off with an entirely different plan for its arena. It should do a thorough economic analysis to find out.
