Christchurch priorities – stadium issues

By Sam Richardson 31/05/2012

Thamks to Eric @ Offsetting Behaviour for the post yesterday – it has motivated me to post a quick comment on what I believe to be the central issue surrounding sports and facilities today.

Stadiums and events as projects are all well and good, but when it comes to allocating scarce government funds towards these types of projects, one must really take stock of what is presently at hand and ask the question as to whether a new or upgraded facility is truly ‘worth it’. In the eathquake-ravaged Christchurch today, we see a classic case of assessing priorities, and it will be interesting to see what Christchurch ends up deciding. The proposal for a new/rebuilt AMI Stadium (Mark I) has gotten a lot of publicity in recent times, and the Chrictchurch City Council is actively considering its options when it comes to the new facility. The Christchurch Press asked readers for their thoughts on the Stadium – and they make for interesting reading.

For mine, the question the CCC needs to consider is whether the new stadium is (a) high on the list of priorities- which it doesn’t appear to be, and (b) if it was rebuilt or a new facility built, how much more value will it add to the city than what is presently there. There is already a new temporary stadium at Addington (AMI Stadium Mark II), and from what I hear and read, it seems to be doing the job perfectly well. As an economist, I am well aware of the nature of sunk costs, and how the temporary stadium is indeed a sunk cost when it comes to a new/refurbished alternative, but there has to be objective and common-sense analysis applied in this case. Is a new facility really worth the money that will be spent on it? Will it really pay its own way? Is this one such enterprise that private ownership should take reponsibility for?
As a traditionalist and lover of many things sport, one thing I have noticed in recent years has been the trend towards smaller, boutique-type facilities where atmosphere is considerably greater than large, cavernous edifices that are only filled once or twice a year. Will a smaller facility (i.e. AMI Mark II) generate more community interest due to its relatively smaller size (think scarcity of tickets, heightened atmosphere, closer sightlines, etc) than a larger facility (AMI Mark I)? Will a new, roofed, facility (sponsor name here Mark III) that looks likely to be closer to AMI Mark II than AMI Mark I actually generate the interest that will go a long way towards justifying its construction? Or is it a case of what Fred Dagg once said: we don’t know how lucky we are?

With my economist hat now firmly in place, while sports are an important part of the fabric of Christchurch and Canterbury, there are sure to be alternative areas in which scarce public funds can be put to use. Ideally what I’d like to see in the way of supporting evidence if a stadium was formally proposed would be an analysis that demonstrates how a stadium investment makes the local populace better off than an investment in an alternative. Any alternative. That would be a good start.