Football in Greater Manchester: Tax effects of premiership status teams

An extensive body of economic literature suggests that, in the United States, there is little gain to a city from using tax revenues to subsidize or in other ways support professional sports franchises. These studies usually measure gains in terms of income growth or employment changes. Some studies examine contingent values and few look at tax effects. One of the difficulties with these studies is the relative stability of professional team location; another is the general lack of within league rivalry. Manchester, England provides an opportunity to examine the tax effects associated with adding and subtracting top tier teams from a single sport in a single area over the course of several decades. Five different Manchester area teams have been in the Premiership with as few as one and as many as 4 in any given year since the founding of the Premiership. The prevailing view of proponents is that specific types of activity are increased with professional sports teams, generally tourist associated. Using Manchester borough level tax data from 1991 through 2013 we look for changes in tax revenues in multiple distinct categories associated with changes in the number of Premier League teams located in Manchester. We look for tax revenue changes overall and in the retail, accommodation, food and beverage, and sports and amusements categories. Using a variety of economic control variables and allowing for cross-borough effects as well as within borough effects we find no significant relationship between tax revenues and the introduction or removal of a premiership team.