Economics Writing Assignment
Stadium Financing Public Private Mix
You have been asked by a partner in your financial firm to come up with a plan to build public support for a newly proposed arena and / or stadium. The partner wants you to especially focus on the financial side of the issue because that is where the most "push back" is coming from. (You can choose a stadium OR an arena.)
The partner wants you to address the following points specifically:
ØHow should the stadium / arena be financed?
o What is your justification?
o Why did you choose this option over other options?
ØHow much should public pay, if any? (use percentage and a whole number)
o What method(s) should be used?
ØHow much should private owner / operator pay, if any? (use percentage and a whole number)
o What method(s) should be used?
ØHow should stadium / arena revenues be distributed?
ØWho will you sell naming rights to?
o Why?
o Who should get revenue from naming rights?
o How long and for how much?
ØWill there be any "sub-naming" rights?
o Of What?
o To Who?
o For how much and how long?
o Who keeps revenue?
He also says that the state is considering a jock tax on players who play at the facility.
ØCalculate the jock tax on an NBA player coming into play a game who is earning $5M per season and a local tax rate of 7%.
Please put your responses in memo format. A sample format is included below.