Overview
Carpe Diem Consultants recently undertook research to
understand the general perceptions of residents of Orange County
as to whether or not their tax dollars should be spent to build a
new arena for the Orlando Magic basketball team. We undertook this
research in response to the public debate about the importance of
keeping the Magic in Central Florida and the general perception
that in order to do this the community will have to help fund a
new arena for the Magic to replace the TD Waterhouse Center. The
objective of building the new arena is to provide increased
revenue opportunities for the owners of the Magic through a significantly greater number of
better located luxury boxes and more concourse space for retail
outlets.
The voluntary, online survey was fielded in May/June 2005 and
119 Orange County residents completed the survey. The findings
from the research are both compelling and directionally
significant. They have serious implications for local government
and the Magic as they both attempt to gain popular support for
funding the renovation/construction of stadiums and arenas.
Respondents
In general, the 119 respondents were an affluent, well-educated
group. A profile of the respondents is as follows:
- Age
- 17% of the respondents were over 60 years old
- 58% were between the ages of 40 and 60
- 25% were under 40
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- Gender
- 67% of the respondents were male
- 33% of the respondents were female
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- Race
- Respondents were representative of overall population
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- Income
- 23% have a household income in excess of $100,000
- 19% have a household income between $75,000 and
$100,000
- 31% have a household income between $50,000 and
$75,000
- 27% have a household income between $25,000 and
$50,000
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- Education
- 32% have post graduate degrees
- 38% graduated from 4-year colleges
- 20% graduated from 2-year colleges
- 10% had high school degrees
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General
Impressions
The first set of questions focused on general impressions about
the importance of sports teams to a community and the impact of
spending on arena/stadiums. Respondents believed that revitalizing
downtown Orlando is an important local priority (rated 7.39 out of
10), however new arenas and stadiums are not necessarily perceived
by respondents to be part of the solution. Arenas and stadiums,
for example, are not seen as having a significant positive impact
on the surrounding community (4.49 out of 10) or benefiting the
local economy (4.92 out of 10).
Moreover, the respondents do not feel that the Magic are
important to the image of the community or Orlando’s quality of
life. Respondents rated all of the following questions under 5.0
out of 10:
- Having a major professional sports team is important for
Orlando’s image (4.81 out of 10)
- Having a major professional sports team improves the quality
of life in Orange County (4.15 out of 10)
- It would be a major loss to the city and county if the Magic
were to leave Orlando for another city (4.45 out of 10)
Furthermore, the respondents did not believe that local
government should take an active role in financing new arenas and
stadiums (3.27 out of 10). This is not surprising given the low
overall perceived value to the community in either economic or
quality of life terms.
To a certain extent, we believe these scores reflect the
failure of many professional sports teams to generate a sense of community that seems to exist in northern cities where
generations of fans have grown up with a rooting interest in the
local teams. When you add to this the uninspiring performance of
the Magic on the court, poor management of basketball operations
(e.g., losing Shaquille O’Neal, poor draft choices, player
personnel decisions being made by a hockey guy, etc.), absentee
ownership, and a community rich in both indoor and outdoor
entertainment options, there is very little civic pride associated
with being a Magic fan.
22% of respondents felt that having a major professional team
was important for Orlando’s image (rating it 8-10). These
respondents also rated the other questions significantly higher
than other respondents (see chart below). Of particular note is
the willingness of this segment to tolerate local government
having a role in financing stadiums and arenas. They also believe
that this spending is beneficial to the community and the areas
immediately surrounding the arena.
Question |
Overall |
"8-10 Segment" |
Difference |
Revitalizing downtown Orlando is an
important local priority |
7.39 |
8.38 |
+0.99 |
Spending on arenas and stadiums benefit
the local economy |
4.92 |
7.54 |
+2.62 |
Having a major professional sports team
improves the quality of life in Orange County |
4.15 |
7.73 |
+3.58 |
Local government should play a key role
in financing arenas and stadiums for sports teams |
3.27 |
6.15 |
+2.88 |
New arenas and stadiums have a positive
impact on the surrounding community |
4.49 |
7.81 |
+3.32 |
It would be a major loss to the city
and county if the Magic were to leave |
4.45 |
7.85 |
+3.40 |
No significant demographic differences exist between this group
and other responses. From a behavioral standpoint, however, this
group rated attending professional sporting events as their second
favorite leisure time activity (after going out to eat). This is
in stark contrast to the overall scores where attending
professional sporting events was only the 7th most popular leisure
time activity out of 8 possible choices.
Leisure Time Preferences
We asked respondents to force rank 8 activities with the lowest
score being their favorite leisure time activity and the highest
score being their least favorite activity. The results are as
follows:
Most
Favorite |
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1 - Going out to eat |
2 - Going to the movies |
3 - Going to a live concert |
4 - Going to an arts event |
5 - Boating |
6 - Going to a college sporting
event |
7 - Going to a professional
sporting event |
8 - Playing golf |
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Least
Favorite |
Respondents who listed attending professional sports events in
their top three leisure preferences also rated the general
impressions questions significantly higher than the overall
scores.
This is football country! We asked respondents what major
professional sports team they would prefer to have in Orlando if
they could only have one team. By almost a two to one margin,
respondents chose football (57 mentions) over basketball (30) and
baseball (27).
When it came to purchase intent, two-thirds of the respondents
indicated that they would be unwilling to purchase season tickets
for any professional sports team. Only 12 respondents indicated a
willingness to purchase season tickets for basketball games; 2.5
times more people indicated a willingness to purchase season
tickets for football games.
What professional sports teams would you purchase season tickets for? |
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For individual game tickets, football was the clear preference
with basketball finishing third after baseball.
What professional sports teams would
you purchase individual game tickets for? |
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Purchase intent seems to have a strong positive relationship
with a respondent’s belief in the value of a professional sports
team to the community and the impact that the construction of the
arenas and stadiums has on the surrounding area. The stronger a
respondent’s interest in the team as indicated by willingness to
purchase tickets, the higher the scores to the general impression
questions.
Question |
Overall |
No Tickets |
Buy Game Tickets |
Buy Season Tickets |
Having a major professional sports team
is important for Orlando's Image |
4.81 |
3.68 |
6.55 |
8.58 |
Revitalizing downtown Orlando is an
important local priority |
7.39 |
6.44 |
8.31 |
9.52 |
Spending on arenas and stadiums benefit
the local economy |
4.92 |
3.99 |
6.31 |
8.17 |
Having a major professional sports team
improves the quality of life in Orange County |
4.15 |
3.15 |
5.56 |
8.58 |
Local government should play a key role
in financing arenas and stadiums for sports teams |
3.27 |
2.44 |
4.50 |
7.42 |
New arenas and stadiums have a positive
impact on the surrounding community |
4.49 |
3.62 |
5.69 |
8.33 |
It would be a major loss to the city
and county if the Magic were to leave |
4.45 |
3.25 |
6.41 |
8.67 |
Attendance
The TD Waterhouse Center is not perceived as a great place to
see an event. Respondents rated it a 6.34 out of 10. The major
complaints about the facility are the quality/size of seats. The
viewpoint on the adequacy of the facility is consistent across all
cuts of the data. The facility, while a factor in the consumer’s
decision making, is not a deal breaker when it comes to
attendance.
We asked respondents to rate the importance of a number of
items in terms of getting them to attend events at the TD
Waterhouse Center. The most important item was the quality of the
event/team performing at the arena followed by quality of the
seats. Other items such as location of arena, convenient dining
and entertainment options before/after the event, and variety of
concession stands and shops at the arena are significantly less
important.
What are the most important factors
in getting you to attend an event at the TD Waterhouse
Center? |
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Not surprisingly, when push comes to shove, the public’s future
attendance at arena events is driven primarily by the quality and
variety of the events themselves, not the quality of the arena.
The score on this item (7.85 out of 10) was over 2.5 points higher
than responses to other questions in this category. Renovating the
TD Waterhouse Center to include up-to-date amenities (4.50 out of
10) or building a new arena (3.93 out of 10) were rated as
unlikely to influence future attendance at events. The four most
frequently mentioned actions that would get people to attend more
events are: lower event prices, variety of cultural/entertainment
options, and quality of Magic, and quality/size of seats.
Funding Sources
We asked respondents for their views on the best way to fund
the renovation and construction of arenas and stadiums. The
results were as follows:
What do you think is the best way to
fund the renovation and construction of arenas and stadiums? |
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We then asked if the deciding factor in keeping the Magic in
Orlando were the building of a new arena, which form of tax would
be the most acceptable way to fund the construction. 90% of
respondents selected the Tourist Tax as the most acceptable way to
fund the construction. Given the low scores reported on the
importance of the Magic to the community, it is not surprising
that the public does not have any interest in paying to keep the
team here.
If an increase of 1% in the Tourist Tax were put in place,
respondents did not perceive that this increase would have a
negative impact on tourism in Orange County. Furthermore, there
was a high level of agreement that a portion of the funds raised
through the Tourist Tax should be used for initiatives designed to
improve the quality of life in Orange County (7.79 out of 10).
Local leaders need to determine whether or not it is appropriate
to use some of these funds for arena construction/renovation. As
in most primary tourist destinations, the amount of local taxes
levied on tourists, regardless of how the monies are used, has no
diminishing impact on the numbers of tourists who come here,
whatsoever.
Despite this potentially acceptable funding source, the Magic
may not be perceived as a worthy recipient of the funds because of
the quality of the product and the public’s perception that the
Magic are a “nice to have” but not a necessity or a positive
contributor to the community’s image. If the Magic are to make
headway in getting public financial support with a public that
thinks this way, they need to demonstrate the value of Magic to
the community (e.g., charitable activities, youth programs, etc.).
In essence, the Magic need to demonstrate that they are worthy
recipients of the funding based on their contributions to the
community because the quality of the product and apathy of the
community work against getting public support.
In terms of the use of tax funds, 57% of respondents think that
renovating the Citrus Bowl is a better use of funds. As we’ve
already seen, this is football country, so it’s not surprising
that those people who indicated a willingness to buy Magic tickets
also felt that renovating the Citrus Bowl was a better use of
funds.
As it relates to private funding, participants were told that
the Magic would use the facility about 50 days per year. We then
asked them what percentage of the renovation/construction costs
should be paid by the Magic as the primary tenant of the arena.
80% of the participants responded that the Magic should pay more
than 25%; 45% felt the Magic should pay over 50% of the costs. As
it relates to private funding, participants were told that the
Magic would use the facility about 50 days per year. We then asked
them what percentage of the renovation/construction costs should
be paid by the Magic as the primary tenant of the arena. 80% of
the participants responded that the Magic should pay more than
25%; 45% felt the Magic should pay over 50% of the costs.
Conclusions
Using tax dollars for stadiums and arenas will never be popular
given other local priorities. So the challenge for local
government and the Magic is to make the amount and source of local
government funding palatable.
Despite general dissatisfaction with the arena across all
segments, the quality of the arena is not an important factor in a
respondent’s decision to attend an event. Much of the public
discussion about the need for a new arena has been on the need for
increased revenue sources for the Magic from luxury boxes and
retail outlets—these are not drivers for getting fans to the
arena.
While the TD Waterhouse Center is the second oldest arena in
the NBA, Magic fans that responded to the survey generally believe
that renovating the Citrus Bowl is a better use of funds than
renovating the TD Waterhouse Center. Ironically, the oldest arena
in the league, the Palace of Auburn Hills where the Detroit
Pistons play, does not have many empty seats on game nights. The
data are clear that team performance impacts attendance more than
anything else.
Given perception that stadiums do not benefit the local economy
or positively impact the surrounding community, getting popular
support for spending tax dollars on an arena that is seen to
principally benefit the Magic will be difficult. Would this be
different if the Magic were a winning team? Probably not, given
the issues we mentioned previously.
If tax dollars are required for the renovation/construction of
an arena, it would be wise to emphasize the multi-use nature of the
facility to appeal to a broader segment of the population and
explore increasing the Tourist Tax to fund the costs. And the
Magic must pay at least their fair share of the costs—the greater
the multi-use benefits of a new/renovated facility are positioned,
the lower the dollar amount required to meet public perception of
fairness.
Add Your Comment
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Comments
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Gerald
Monday 19th of September 2005
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This is an excellent and timely analysis. It ought to contribute greatly to a more clear-headed examination of whether, when, and what type of public funding of sports franchises' arena/stadium wishes makes public policy sense. Carpe Diem should do these analyses all over the country! Nice job.
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Tuesday 26th of February 2008
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