Philly Inc: Gathering looks at sports, local economy

The Columbus Crews’ Eddie Gaven (left) reaches around the Philadelphia Union’s Freddy Adu at a game in Chester. TOM MIHALEK / Associated Press
The Columbus Crews’ Eddie Gaven (left) reaches around the Philadelphia Union’s Freddy Adu at a game in Chester. TOM MIHALEK / Associated Press
Posted: April 20, 2012

The Business page would not be my first choice to learn about the fanaticism displayed by supporters of Philadelphia’s sports teams.

After all, you can see people wearing Flyers jerseys or driving cars with the Phillies’ “P” on the front license plate. Team names are painted into lawns. I pass a custom minibus emblazoned with the “Eagles” logo sitting in a driveway when I take one of the younger Armstrongs to his violin lesson each week.

But Philadelphia’s deep identification as a rabid sports town brought about 120 businesspeople to the Four Seasons Hotel on Thursday to hear a panel of experts make the case that it’s not all fun and games. Think demographics and customer service, for example.

During what has been a weak economy, said Nick Sakiewicz, the CEO of the company behind the Philadelphia Union, his team, his sport have been flourishing.

“What happened over the last 20 years, all those kids growing up playing soccer on the Main Line ain’t kids anymore,” he said. “We had to wait for a market to grow up.”

Now, those fans of Major League Soccer, who helped the Union sell out 15 of their 18 home games in Chester in 2011, have kids of their own who are wearing shin guards on Saturday mornings.

Millennials are “a scary group of kids,” Sakiewicz said. “Some of them know who the starting lineup for Barcelona was yesterday when they played against Chelsea and lost. These are American kids. They’re growing up with a sport now that can be called truly American.”

The Union has a waiting list for season tickets that now tops about 2,000 names. Once that list grows to about 8,000 and 9,000, the team will begin to explore expanding the 19,000-seat stadium that opened in 2010, Sakiewicz said.

The Philadelphia Phillies have also benefited from some seat scarcity, with more than 200 consecutive games sold out at Citizens Bank Park. But what gives Phils president and general partner David Montgomery fits is not the team’s slow start to the season, but the traffic tie-ups around the Sports Complex in South Philadelphia.

With the Walt Whitman Bridge and the Platt Bridge both under construction, the trip to and from the ballpark is taking much longer for fans than it did last year. Montgomery said he appreciates the fact that fans commit both money and time to their teams, and he worries about the effect sitting in traffic will have on that commitment.

As for drawing any major conclusions about the impact of big-time sports on the local economy, there were no sweeping generalizations from the team executives or from Kenneth L. Shropshire, a Wharton professor who also concentrates on sports and business law at Duane Morris L.L.P. in Philadelphia.

Though there is big money in sports, as evidenced by the recent sale of the Los Angeles Dodgers for $2 billion, Shropshire called it “dangerous” to tout sports teams, stadiums, and major events such as the Olympics as economic engines for regions. He prefers to focus on the hard numbers, such as tax revenue generated, rather than delving into multipliers that tend to inflate the impact.

In that vein, we can look at the City of Philadelphia’s 5 percent amusement tax, which is levied on admission fees to movies, concerts, and sporting events. Since the fiscal year ending June 30, 2008, the amount of revenue generated by the tax has been steady: $21.5 million annually, on average. While I find that remarkably resilient, given the slow economic recovery, the City Controller’s Office credited the Phillies’ recent postseason success for producing an extra $4.5 million in revenue in each of the last three years.

With the Union now in its third season and, like the Phillies, starting out slowly, Sakiewicz said he’s very aware of the passion shown by fans here:

“What’s great about Philly fans is they don’t go to the theater like they do in New York when a team is doing poorly. They actually come and boo.”

Contact Mike Armstrong at 215-854-2980 or marmstrong@phillynews.com, or @PhillyInc on Twitter. Read his blog, “PhillyInc,” at www.phillyinc.biz.

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