Sports Economics and Regional Prosperity: Exploring the Economic Impacts of Success of “Big Four” Teams

Recent years have seen massive increases in government spending on sports stadiums and overall sports investments. The justification for this trend is that sports create positive externalities that can boost the overall economy of a region that the team resides in. However, economists cannot come to a unified conclusion about whether a single team can positively impact economic growth. Therefore, this study looks at the effects of a region's largest sports teams, collectively known as the “Big 4.” This includes teams in the MLB, NBA, NFL, and NHL. An econometric economic model is used to estimate the relationship between economic variables and measures of sports team success. Results indicate that the NBA, NFL, and MLB all have potential significant positive relationships between different metrics of success and economic growth. However, the NHL’s results indicate no significant results, positive or negative, making it an outlier. This indicates that it is logical for the “Big 4” sports, minus the NHL, to be subject to some level of public investment.