Florida's leading economist on sporting events isn't an economist

10Investigates found the author of so many economic impact reports that support public sports subsidies may not be the expert economist state leaders believe he is.

Money is being spent on baseball in Florida, but is it happening at the expense of our beaches? None

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The state of Florida spends nearly as much money every year on professional sports stadiums as it does maintaining the state's top tourist attraction, its beaches. However, 10Investigates found the author of so many economic impact reports that support public sports subsidies may not be the expert economist state leaders believe he is.

The resume of Mark Bonn, Ph.D., a professor at Florida State University’s Dedman School of Hospitality, boasts of dozens of reports compiled for municipalities all across Florida, including some statewide organizations. 

Bonn’s side company, Bonn Marketing Inc., recently received $23,000 from just one study, commissioned by the Toronto Blue Jays and city of Dunedin to show the economic impact of spring training.

But 10Investigates uncovered emails suggesting Bonn encouraged the gaming of numbers to help justify a large public stadium renovation project. And several established economists call Bonn’s work deeply-flawed, resembling marketing propaganda more than an economic analysis; which may be appropriate, since Bonn’s background is in marketing, not economics. 

Fuzzy Math

Bonn’s economic impact estimates have become the go-to statistic for politicians who either don’t know better or don’t care. But it doesn’t take an expert economist to recognize his reports often make unfair assumptions to get to a rosy conclusion about his clients’ projects.

Bonn’s recent report that claimed the Blue Jays created $70.6 million in economic impact for Pinellas County each year failed to take into account the fact that many out-of-town visitors who came for baseball attended multiple games; Bonn’s report considered every ticket-holder for every game a unique visitor to the county.  He also seemed to forget in his initial draft to take into account that many spring training ticket-holders were Pinellas County residents.

Bonn’s Blue Jays report also failed to take into account some basic economic principles, such as substitution (where one business, such as baseball, cannibalizes economy from other local businesses, such as movie theaters or restaurants, rather than create new economy) as well as “leakage” (where money spent locally, such as at Dunedin’s stadium, doesn’t stay locally because out-of-state businesses get much of the revenue).

Public records obtained by 10Investigates revealed Bonn was encouraging his clients to use inflated numbers to make their case for taxpayer subsidies stronger.

Emails sent by the Blue Jays revealed apparent frustrations at time with their consultant, including a suggestion on Dec. 17, 2016 that Bonn use more realistic numbers in one of his calculations.

Bonn responded, “This is your call, but as your consultant, I do not recommend going down this path, as it generates only a negative outcome and provides a good argument to defeat your proposal.”

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Emails also indicate that Bonn was concerned with preserving robust estimates and he suggested removing the methodology from his report to reduce the number of questions county leaders might ask.

Several economists told 10Investigates they saw Bonn’s reports as flawed and inflated.

“Almost unanimously, economists say spending money on sports stadiums is a very poor use of public funds,” said Victor Matheson, a Holy Cross professor of economics who is an expert on sports and environmental issues.

Matheson suggested a more accurate way to interpret a marketing consultant’s economic estimates:

“Move the decimal place one place to the left,” Matheson said. “That’s actually a pretty good estimate of what you get from facilities like (a Blue Jays spring training stadium).”

USF Economics Professor Philip Porter echoed Matheson’s “move the decimal place” interpretation and says the projection model Bonn used should not be used to estimate the economic impact of sporting events.

“(These reports) have no value whatsoever,” Porter said.  “They give such a bad picture of what actually happens that they can only be used if they promoted somebody’s idea.”

In 2008, Matheson joined fellow economists Robert Baade and Robert Baumann to author a paper, "Selling the Game: Estimating the Impact of professional sports through taxable sales."  By analyzing taxable sales in Florida cities, they found “none of the six new franchises or eight new stadiums and arenas in the state since 1980 have resulted in a statistically significant increase in taxable sales in the host metropolitan area. In addition, using the numerous work stoppages in professional sports as test cases, again no statistically significant effect on taxable sales is found from the sudden absence of professional sports due to strikes and lockouts.”

Matheson and Porter are far from alone. When Florida’s top state economists studied return on investment, they found beaches return $5.40 on every tax dollar invested. Pro sports stadiums, however, returned just 30 cents on every tax dollars. And spring training stadiums returned just 11 cents on the dollar.

Florida’s Beaches Don’t Have Private Consultants

Despite the overwhelming support from economists, Florida’s beaches don’t get the attention from lawmakers than many advocates feel that a top tourist draw deserves - even though beaches are largely responsible for Florida’s lack of an income tax.

When Florida’s Office of Economic and Demographics Research conducted a survey on what features of Florida drew the most out-of-state visitors, beaches (26%) ranked first.  Sports ranked sixth (6%), behind theme parks (24%), retail/dining/nightlife (22%), outdoor recreation (7%), and access to international ports/airports (7%).

“Certainly a lot more people come to Florida for the beaches than for Spring Training baseball,” Matheson said.

But last year, the state allocated just $32 million for beach nourishment, an important process of restoring sand and shorelines to protect the state’s natural attractions. State experts requested $97 million, but lawmakers didn’t meet the request. Meanwhile, Florida spent $23 million on sports stadiums during the same fiscal year.

The numbers are similar at the local level, where many counties – including Pinellas and Sarasota – budget a bigger share of their tourist tax revenues for stadiums than beaches.  Those dollars are often restricted, but beach nourishment is almost always one of the allowable expenditures.

For instance, half of Pinellas County's bed tax revenues are eligible for beach and shoreline projects, but the county has spent much more over the years on Tropicana Field and a pair of spring training parks.

“Everyone knows that Florida’s economy starts at the beach,” said Bruno Faulkenstein, a 40 year resident of St. Pete Beach and owner of the Hurricane Seafood Restaruant on Pass-a-Grille. “It’s the biggest economy-driver in the state of Florida.”

But Faulkenstein said he’s “fearful” the state isn’t properly funding beaches.  And when sand isn’t regularly replenished, beach quality suffers.  The problem gets compounded by severe storms, which can wash entire beaches away into the ocean, and the prospect of rising sea levels, which some scientists predict will threaten Florida’s beaches within a decade.

This budget year, both Governor Rick Scott and the Florida Senate recommended a boost to the beach budget, increasing their recommendations to the $50 million state environmental experts requested (see the projects, starting on pg. 5 here).  

But the Florida House proposed budget included just $30 million for beach nourishment. The House also did not include the $50 million additional for beach recovery from hurricanes Matthew and Hermine that the Senate proposal included.

House Speaker Richard Corcoran (R-Land O'Lakes) has taken a hard line against sports spending as well, but most of the 2017-2018 stadium dollars have already been allocated and guaranteed to more than a dozen teams across the state.

The legislature is expected to finalize its 2017-2018 budget by the first week of May.

Dr. Bonn’s qualifications

After initially agreeing to talk to 10Investigates about his reports, Dr. Bonn reneged on his offer, ignoring several follow-up phone calls and emails.

So 10Investigates caught up with him when he was lobbying for more baseball bucks in front of a local county board, where the tug-of-war over beach and stadium dollars can be even more pronounced. Introduced at a recent Pinellas County tourism funding workshop as the City of Dunedin’s “economics” expert, Bonn said the Blue Jays bring $70.6 million in economic impact to the county every year. Nobody on the committee questioned Bonn’s qualifications.

But 10Investigates did, asking if Bonn considered himself an economist.

“I’m a Ph.D. in resource development,” Bonn replied.

When asked why he thought economists take such issue with his work, Bonn said, “well, I have economics classes... it’s basically a fine line.”

But Bonn’s background is light on economy experience and heavy on service industry and tourism-boosting experience. He’s even in the Florida State Tourism Hall of Fame.  

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Bonn’s teaching isn’t limited to just marketing at FSU, however; he also teaches wine-tasting classes. But 10Investigates found no evidence of any experience teaching economics.

When he presented his draft report to the Blue Jays, the team had to make several corrections – both to Bonn’s inflated assumptions and his arithmetic.  Bonn encouraged the team to stick with the inflated numbers at one point.

When asked how he could suggest using bigger numbers to get to a desired result, Bonn said “it’s natural, I’m a consultant.”

When asked if being a consultant is different than being an economist, Bonn responded, “no; I consider myself an economics background.”

Protecting Florida’s Spring Training

Florida leaders have become increasingly concerned about losing spring training teams to Arizona, where six teams have switched from the Grapefruit League to the Cactus League in the last 20 years.

Gov. Scott helped bolster state spring training retention by signing a pair of laws into the books in 2013 and 2014 that increase state funding for spring stadiums.

But the governor justified those efforts by quoting numbers from Bonn reports on spring training economic impact; reports that economists called “inflated.”

In addition to the state’s funding, Hillsborough, Pinellas, West Palm, and Sarasota counties pour tens of millions of tax dollars each into baseball stadiums.  And the economic numbers used to justify those projects are typically inflated too.

In some cases, the numbers were made up out of nowhere.

When the Yankees negotiated nearly $27 million in new tax dollars to renovate Steinbrenner Field in Tampa, the team created its own methodology based off a 2009 Bonn report, claiming $162 million in economic impact from just 17 spring training games in 2016. That breaks down to more than $1,000 in economic impact for every spring training ticket sold.

The Yankees' figures were easily debunked

But no Hillsborough commissioners questioned the numbers before agreeing to subsidize the billion-dollar franchise’s renovations.

The Blue Jays chose not to provide comment on this story, but Dunedin Mayor Julie Bujalski told 10Investigates her city has relied on Bonn to preserve spring training in the tiny city since it has been one of Dunedin’s biggest tourist draws over the last 40 years. And she says the real risk of losing the team to Arizona would be a crushing blow to her city’s economy. 

Bujalski said the city turned to Bonn because of his experience doing similar studies for the Florida Sports Foundation, a non-profit arm of Enterprise Florida.

The foundation describes one of its missions as: “assist Florida’s communities with securing, hosting and retaining Sporting events and sports related business.”  So even though Enterprise Florida is funded by the state, considering taxpayer ROI on stadium spending is not necessary one of its goals.

Right now, both Florida and Arizona have 15 spring training teams, with each state trying to lure more teams across the country.  But proponents of Florida’s beaches say they’d rather the two states stop fighting and re-allocate resources to needs far greater than baseball.

How to Contact Your Legislators

Find your elected officials, by address, with this useful tool.  Then, find their contact info below.
 
Senator Party Address Social

Brandes, Jeff

Parts of Pinellas
Republican District Of fice:
9800 4th Street North
Suite 200
St. Petersburg, FL 33702
(727) 563-2100
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Galvano, Bill

Parts of Hillsborough, Manatee
Republican District Office:
1023 Manatee Avenue West
Suite 201
Bradenton, FL 34205
(941) 741-3401

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Grimsley, Denise
Parts of Hillsborough, Manatee, Pinellas
Republican District Office:
295 E. Interlake Boulevard
Lake Placid, FL 33852
(863) 465-2626
(813) 233-4277
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Latvala, Jack

Parts of Pinellas
Republican District Office:
26133 U.S. Highway 19 North
Suite 201
Clearwater, FL 33763
(727) 793-2797
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Lee, Tom

Parts of Hillsborough, Pasco, Polk
Republican District Office:
915 Oakfield Drive
Suite D
Brandon, FL 33511
(813) 653-7061
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Rouson, Darryl
Parts of Hillsborough, Pasco
Democrat District Office:
535 Central Avenue
Suite 302
St. Petersburg, FL 33701
(727) 822-6828
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Simpson, Wilton

Parts of Citrus, Hernando, Pasco
Republican District Office:
4076 Commercial Way
Spring Hill, FL 34606
(352) 540-6074
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Stargel, Kelli
Parts of Lake, Polk
Republican District Office:
2033 East Edgewood Drive
Suite 1
Lakeland, FL 33803
(863) 668-3028
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Steube, Greg
Parts of Charlotte, Sarasota
Republican

District Office:
722 Apex Road
Unit A
Sarasota, FL 34240
(941) 342-9162

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Young, Dana
Parts of Hillsborough
Republican District Office:
1211 N. Westshore Blvd.
Suite 409
Tampa, FL 33607
(813) 281-5507

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State Rep. County(s) Represented Social
Ahern, Larry Pinellas Facebook
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Albritton, Ben DeSoto, Hardee, Polk Facebook
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Boyd, Jim Manatee, Sarasota Facebook
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Burgess Jr., Danny Pasco Facebook
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Burton, Coleen Polk Facebook
Combee, Neil Polk, Osceola Facebook
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Corcoran, Richard Pasco Facebook
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Cruz, Janet Hillsborough Facebook
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Diamond, Ben Pinellas Facebook
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Gonzalez, Julio Sarasota Facebook
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Grant, James "Jamie" Hillsborough, Pinellas Facebook
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Gruters, Joe Sarasota, Manatee Facebook
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Harrison, Shawn Hillsborough Facebook
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Ingoglia, Blaise Hernando Facebook
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Killebrew, Sam Polk Facebook
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La Rosa, Mike Polk, Osceola Facebook
Latvala, Chris Pinellas Facebook
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Mariano, Amber Pasco Facebook
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Massullo, Ralph Hillsborough Facebook
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Miller, Alex Sarasota Facebook
Newton, Wengay Hillsborough, Manatee, Pinellas, Sarasota Facebook
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Peters, Kathleen Pinellas Facebook
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Raburn, Jake Hillsborough Facebook
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Raulerson, Dan Hillsborough Facebook
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Shaw, Sean Hillsborough Facebook
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Spano, Ross Hillsborough Facebook
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Sprowls, Chris Pinellas Facebook
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Toledo, Jackie Hillsborough Facebook
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Find 10Investigates reporter Noah Pransky on Facebook or follow his updates on Twitter. Read his Sports Business Blog at Shadow of the Stadium.

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