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Commentary: The entertainment bubble

In February, a few days after US Steel broke ground on its $3 billion facility in Osceola, the Virginia General Assembly passed legislation that brought a $3 billion NFL stadium closer to completion.

The similar dollar amount serves to show the vast difference between the two projects and their cultural and economic implications.

It’s hard to overstate the importance of steel as a fundamental component to, well, just about everything.

Try to imagine a world without it, and great aspects of life as we know it would fade away. Cars and trucks are mostly made of steel; so are the trains. Modern buildings, including schools, hospitals, and manufacturing facilities, require steel. Computers, telephones and the entire apparatus of the telecommunications network depend on steel, as do most public services. Agriculture is an industry saturated with steel, the armed forces even more so. Steel is an integral part of watches, appliances, utensils, faucets, cans, plumbing fixtures, and even bed frames.

A day without steel would be a day without function, literally and absolutely, for nearly every one of our 330 million residents.

The annual production of US Steel’s Osceola plant of three million tons of steel, when fully operational, will contribute to the national volume that supports the economic infrastructure of the US. All companies that manufacture everything related to steel . All the people who work for those companies. All consumers who benefit from the products they make. All associated tax revenue.

All the social, financial, and civic gains from all these combined and intertwined activities are incalculable.

The $3 billion invested in Osceola will generate transformational and generational returns in real, lasting and measurable assets. It will create more competition and cleaner steel production.

Now let’s take a look at the same $3 billion invested in an NFL stadium.

Try to imagine a world without professional football, and indeed it’s remarkably easy. Most Americans don’t watch the NFL, even when the Super Bowl rolls around. Total attendance at NFL regular season games was just over 18 million in 2021, with another 17 million tuning in weekly to watch games on television.

A large part of the cost of an NFL franchise is its roster, and despite the “grill” moniker, the players don’t build or produce anything material. They play a game, hoping fans will see them play either through physical attendance or on a screen somewhere.

But the fans who watch the matches also do not produce anything and furthermore they are not improved in any way during that time which has residual benefits. In fact, routine binge eating snacks and beer in a recliner or stadium seat can have detrimental effects. And no matter how many hours are spent cheering on a team, discussing stats, or reading game reviews, no one will be a “better” fan than the person who sees their first game.

Furthermore, the NFL players’ club is a wildly overpaid group driven by franchise valuations on a ridiculously steep trajectory. Basically, multi-billion dollar stadiums are built just to better pay the small cadre of players, staff and owners. Today’s top quarterbacks earn $50 million, compared to $6 million 20 years ago. The median value of franchises in 2000 was $423 million; in 2020 it was more than $3 billion, which is 500 percent more than the inflation-adjusted value.

It’s true that modern stadiums, like the one pictured in Virginia, are more like shopping malls and designed for year-round use. But in addition to hosting other sporting events, they often incorporate other entertainment elements, such as music and theater venues, restaurants and bars.

The two $3 billion stories paint very different pictures of not only investment and return, but also values ​​and sustainability associated with the entertainment industry in America.

The NFL is just one slice of a huge “show business” pie that includes everything from sports to movies to all kinds of mass media programming. The entire industry is built on giving consumers something interesting to see or do.

It is not something productive. It is not an educational thing. It is certainly not a profitable thing. Just something entertaining.

But while the durable goods sectors are trying to optimize efficiencies and processes (the US steel mill in Osceola plans to apply for LEED certification and is designed to have a zero carbon footprint by 2050), the entertainment segment is only look for an escalation of costs and price.

Entertainment is inherently based on disposable income, and its accelerated costs (the total media entertainment industry market has nearly doubled in a decade) far outstrip people’s pocket change.

When professional athletes earn more, prices for game day and television rights rise. When movie stars earn more, movie prices and subscriptions go up. When singers and bands earn more, concert prices skyrocket.

In essence, artists are rewarded for public attention in leisure rather than in any form of work or work improvement, such as education, innovation, or inventiveness.

Economic expansion in a free enterprise economy may not be limited or capitated, but the hours of the day are. The time spent on entertainment in all cases reduces the time spent on something else more instructive, productive or remunerative.

As a citizen, it is necessary to do some soul-searching about entertainment as a time-eater. Because as its unsustainable bubble expands, the worse the consequences will be when the inevitable happens.

Dana D. Kelley is a freelance writer from Jonesboro, Arkansas.

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