Soccernomics: Timbers Sponsor and MLS TV Ratings

Good and bad news on the soccer front:

First the good: the Timbers have just announced that Alaska Airlines will be their shirt sponsor (i.e. the company whose logo will grace the front of their shirts) when they become an MLS franchise.

Considering only about half of MLS teams have a shirt sponsor, this seems significant.  Obviously Alaska Airlines thinks that the team will garner enough media attention (especially in the Northwest) to warrant the investment.  This is in stark contrast to the new Philadelphia MLS franchise that still does not have such a sponsor.  The Timbers still have the stadium naming rights to sell as well, so economically speaking the Timbers are off to a pretty good start, which doesn't surprise me as from what I can tell Paulson has assembled a first-class front office.

Now the bad: according to the Sports Business Daily, MLS is struggling with TV ratings.

"MLS games on ESPN2 are averaging 257,000 viewers for 18 telecasts through Aug. 17, down 9.5% from 284,000 viewers through the same period last year (17 telecasts) and down 10.1% from the same period in '08 (16 telecasts)."

Given that attendances are up this year and another major TV market was added to the league, there is no way to sugarcoat this news.  It is terrible.  Modern professional sports are all about TV these days and you would hope that MLS would be making progress.  ESPN is doing better at promoting the games and even mentioning them once and a while on SportsCenter.  A big reason for the expansion push was to increase the TV footprint.  It is a work in progress but the movement is in the wrong direction.

Which brings up an interesting economics question: are domestic MLS games and the World Cup complements or substitutes? There was the thought that the World Cup would raise interest in soccer in general and that this would spill over to the MLS once it was over.  But this hasn't happened.  Perhaps then people got their soccer fix early in the summer and now have no use for more.  Or they saw what top class soccer looks like and noticed that MLS still has a ways to go to match that level of play.

And speaking of level of play, the NY Red Bulls with Rafa Marquez, Thierry Henry and Juan-Pablo Angel suddenly look like a top class and classy team.  Beautiful to watch.

Beeronomics: China Rising

Via John Foyston, The Economist reports on China becoming the world's biggest beer market and it is growing fast at a clip of 10% a year.  Now the Northwest breweries just need to get them hooked on craft beer.

Sellwood Bridge Update

A while back I blogged about the new Sellwood bridge design options and professed my fondness for the steel deck arch alternative.  Turns out my opinion was immensely persuasive common: it was the alternative that was the most popular in the opinion survey - good taste people! [Actually, I see now that the above is the steel deck 'tied arch' not he steel deck arch - why is tied better? I don't know, maybe it is cheaper but looks about the same so pretty much the same difference for me]

By the way, I imagine the steel structure being painted green as it is now - a nice nod to the old bridge - not brown as in this picture.

But however it looks in the end: I can't wait for the day I can actually take a bike ride over the bridge with my kids and not feel like I am putting their lives in peril.

Oregon's Doldrums

This isn't really new.  The Oregon Index of Leading Indicators for July came out a few days ago, but this picture from the Philadelphia Fed, that shows all states' leading indicators for July, does show pretty starkly how Oregon is doing relative to other states.  Not so good.  

Eco-nomics: Information and Behavior

Would people make more energy efficient decisions if they better understood the consequences of their choices?  The EPA thinks yes, and they are probably right.  The traditional MPG measure can be very misleading the difference between a 15 MPG can and a 10 MPG car is much greater than a 25 MPG car relative to a 20 MPG car even though in both cases it is a 5 MPG bump.  In fact many haver suggested that the ratio should be inverted to GPM.  This would give people a better way to make more meaningful relative comparisons.  To see what I mean, consider that moving from a 10 to a 15 MPG car yields a 33% gas savings for the same driving while a 20 to a 25 MPG car yields a 20% savings.

So now the EPA is going to give this information on the new car window stickers they mandate.  Notice that below the MPG is a figure of gallons per 100 miles.  Even better they are giving the average fuel costs for the car based on, in this case, 15,000 miles of driving and a $2.88 fuel price.   The actual and price matter less than the fact that if consistent, consumers can easily assess the differential cost of buying that big SUV relative to a minivan for example.

News reports seem to be focusing on the new letter grades for fuel economy stickers that will accompany the remade traditional sticker above, but I think the sticker above is a pretty powerful change for the better. Still no substitute for a carbon tax though...

Er...no.

I am a regular reader of Jack Bog's Blog.  It is a good place to get a handle on the local political scene as he seems to be well connected.  He is mostly a cranky dude however, full of criticism and bereft of constructive alternatives.  And when he ventures into economics, I cringe, as he is almost always confused and regularly wrong.  For a tax law professor, this surprises me, as I thought the law and economics nexus was pretty well established at this point.

Anyway, here is an example from today that I use as a teachable moment:

"...the public utility companies. These cash cows are regulated, at least to a degree, on the theory that their service is a matter of life and death, particularly to people of limited means, and their opportunities for profit-taking should be limited."

No.  They are regulated because the very high fixed costs of their operation make them natural monopolists  and monopolists have long been known to be subject to the incentive to limit output to increase profits, which reduces overall social welfare.  For people of limited means the government does many other things like earned income tax credits and specific residential energy tax credits.

Corporate Kicker Update

The Oregon Office of Economic Analysis has a nice follow-up post on corporate taxes and points out something I had neglected to mention but that often is a source of confusion:

"...the boom in corporate income taxes is actually reflective of the national picture – it is not specific to Oregon-based company profits. For the large multi-state companies (where most of the taxes come from), the state collects corporate income taxes by applying the percentage of a company’s national sales that occur in Oregon to its national taxable income."

Which is why the kicker refunds will go largely to out-of-state corporations:

"Finally, Oregon’s current corporate income tax kicker situation is a direct result of increased profits nationally and locally. However, there are very few large, profitable corporations located in Oregon, so it is exceedingly likely that the kicker – should one occur – will be “created” by, and ultimately returned to, mostly large out-of-state corporations."

You should go and read the entire post.

Portland Home Values: Case-Shiller June Numbers

Once again, farmed out to the Wall Street Journal, after all nothing much is happening in Portland to make a specific graph worthwhile - we have pretty much been holding steady since the beginning of 2009.  The sobering fact here is that this represents the tail end of sales influenced by the government tax credit, we may start to see another wholesale decline soon given the current moribund state of residential real estate transactions.

Home Prices, by Metro Area

Metro Area	June 2010	Change from May	Year-over-year change
Atlanta	109.74	1.7%	2.0%
Boston	157.83	1.2%	3.4%
Charlotte	117.24	0.7%	-2.7%
Chicago	124.9	2.5%	-0.1%
Cleveland	107.26	1.3%	0.8%
Dallas	121.14	1.0%	1.2%
Denver	129.19	0.7%	1.8%
Detroit	70.04	2.5%	0.8%
Las Vegas	101.77	-0.6%	-5.2%
Los Angeles	175.66	0.6%	9.2%
Miami	146.92	0.4%	1.1%
Minneapolis	125.91	2.5%	10.7%
New York	172.76	1.3%	0.2%
Phoenix	110.98	0.0%	6.0%
Portland	148.73	0.5%	0.2%
San Diego	163.82	0.4%	11.2%
San Francisco	142.55	0.3%	14.3%
Seattle	146.83	0.0%	-1.8%
Tampa	138.58	0.2%	-1.6%
Washington	185.77	1.7%	7.3%

Source: Standard & Poor’s and FiservData

New Oregon State On-Line Economics Degree Program!

When I used to work for the University of Colorado, CU Online, the distance ed arm of the university bought space on a gigantic billboard on Colfax Avenue, one of the busiest streets in Denver.  In big bold letters they wrote "No Time for an Education? CU Online"  Cringe.

Unfortunately, this is often how on-line learning is: a lot of work and not much education.  Though I think that there are a lot of people out there for whom on-line or distance education is no substitute for in class learning, I think that there are also a lot of people out there for whom on-line learning can be effective and who could use the flexibility that distance education provides.  And for those people on-line degree options are often limited.

Well, after a lot of work and planning, I am very pleased to announce that you can now get an Oregon State BA or BS in Economics completely through on-line coursework.  You will take the same classes that on-campus students take and be expected to perform at the same level.  But in the end you will possess the same OSU degree as on-campus students receive and you will also possess one of the most marketable and useful degrees around.

We also offer a couple of options within the major: Managerial Economics which incorporates Business, and the Law, Economics and Policy option which incorporates Political Science and Philosophy and is ideal for those interested in careers in law, politics or policy.  It is also designed to be less mathematically intense for those who see this as a barrier to an economics degree.

I am the E-Campus Coordinator for the OSU Economics department - I designed it and have been working hard to get it up and running (so you know it has to be good!).  Over the next two years we will roll out a full complement of economics courses on-line.  Click on this link to find out more abut the program and OSU E-Campus.

Graph of the Day: Federal Funding to States

Another Economix graph which shows Oregon doing relatively poorly in the receipt of federal tax dollars. Senators Merkeley and Wyden, what's up?

Graph of the Day: Corporate Profits

So, you may be wondering why Oregon might be on a position to refund $40 million to corporations while at the same time slash spending on state services like education?  Well here is the picture worth a thousand words: corporate profits are back a pre-recession levels while personal incomes, thanks to persistent and high unemployment, are still very depressed.

This graph is from the NY Times' Economix Blog.

PS: Is a question mark the appropriate stop after the first sentence?  I think so...

UPDATE: A commentator asked if this is the same for Oregon - yes.  Here you go (from the Office of Economic Analysis)

Back in Action

I'm am finally back and happy to report that me Mum is doing well, thanks for the support.  Turned out she had a double/simultaneous whammy of pulmonary embolisms and whooping cough.  Not fun, but a full recovery is well underway.

Lots to comment on, so I'll start with the big state news: another horrendous budget report which mimics what we are seeing nationally - a recovery which has stalled.  This is exactly what I and many other economists had predicted: without a real driver of growth to pick up for the slack in consumer activity fueled by the homes-as-ATMs craze it was hard to see where robust growth would come from.  It still seems like the only good news is in Asia, which helps us a lot, but not enough.

In Oregon it appears more and more people are on board with kicker reform (though the devil will be in the details), but the prospect of returning $40 million to corporations (mostly out of state) whole at the same time slashing schools and other state services sets the table for getting it done.  Let's hope so.

I have a lot of things to catch up on - journal editors wondering where there referee reports are, an external review for a tenure case, preparing for the Fall term to start and even getting ready to coach for youth soccer this fall - but I will try and get the blog back up to speed post-haste.  There will be a lot to talk about this fall.

Seattle Supersonics

Jeepers.  There I am relaxing in my mothers Bainbridge Island yard when suddenly comes an enormous, thunderous boom along with a shock wave you can feel.  Then, after about 5 seconds, another one.  We sat in stunned silence wondering just how it came to pass that someone was given a permit to blow up the northern half of the island when I see a fighter jet high in the sky.  That's when I figured they must have been sonic booms.  I don't remember them being quite that loud.  But still, why?  Sea Fair was a couple of weeks ago...

Turns out it was courtesy of the Oregon Air National Guard.  Man, that has gotta be the highlight of the year for those pilots: full afterburners from takeoff at PDX all the way to Seattle.  Takes about 5 minutes.

So now, just like if you miss the Sonics NBA team, you have to get your real sonic fix from Portland.

Oregon July Unemployment: Holding Steady at 10.6%

The Oregon Employment Department has just released the July employment numbers.  This is a one-tenth of a percentage point gain from the revised June numbers, but is essentially stuck and has been for nine months.  The jobs number is bad: 3,000 jobs lost in July, but the revised June number is now 1,800 new jobs added, so the net effect is minimal.

Manufacturing and construction actually added 4,000 jobs while government shed 3,500 jobs including, but not limited to, census workers.

Once again, we appear to be stuck, stuck, stuck (as does the US economy) and there is no real reason to believe it will get better soon.  One hopes the federal government will come through with more aid to the states in the form of block grants, but there does not seem to be much momentum for this on Capital Hill.

Hiatus

Another trip to Seattle will curtail my blogging for the next two weeks.  I'll do what I can but it'll probably be paltry.

Sorry.

Oregon Exports

The Oregon Office of Economic Analysis has a nice new post on Oregon's exports. Here is the key graph:

The blue line is the total exports and the red is the year-over-year percentage change.  As you can see, the recession had a huge impact but exports have recovered nicely and the trend is pretty strongly positive.

Read the rest of the interesting analysis at the OEA blog.

Comments

I am going to have to moderate comments for a while, the comments are being over-run with spam. Sorry.  For right now, I will only moderate comments on posts over a day old.  I wish Google would have an option to exclude comments with html links, that would help a lot I think.

Also, there have been a number of good, thoughtful comments recently that I never got a chance to respond to due to some unforeseen circumstances, and for that I apologize. Please don't stop, I value your comments!

Beeronomics: iPad Tap

Timbers and Spencer

Through a serendipitous twist of fate I found myself attending the press conference to unveil John Spencer as the new Timbers manger at the Adidas HQ today.  I went more to witness the spectacle than anything else and it was fun to witness a little part of the birth of the team.  It was also fun to check out the Adidas HQ a little bit.  Pretty snazzy as you might imagine.  My favorite bit was the elevator that had 1 and G.  At the end a few people got off on 1 and immediately realized their error.  "Ah, of course, a European style elevator!" one person then said.  Funny.

The little conference room and hospitality area has the entire collection of Adidas world cup balls, starting with one of the most iconic sports designs ever: the hexagonal, black-and-white, Telstar.  It remains the look of soccer balls in any graphic you'll find, including the MLS logo.

Anyway, here is the press conference if you are interested.  No news content at all, just nice platitudes and vague language about playing hard and attractive soccer.  The best bit is when Spencer was asked about flipping off fans who insulted Brian Ching when he was cut from the US World Cup squad.  And you got to love Spencer's Glaswegian brogue.

I think he'll be a great manager.

Portland Timbers introduce John Spencer

Beeronomics: Consolidation, Eh?

Via Beervana I learn about the purchase of Pyramid and MacTarnahans by Labatt.

Nothing much to add to my previous post about this type of consolidation when Widhook announced the purchase of Kona: it is all about the economies of scale.

Now, when I used to spend my summers with the Canadian side of my family outside of Smiths Falls, Ontario, there were no two ways about it: you were either Molson people or Labatt people.  My family were Molson people.  So I guess I will continue to not purchase Macs and Pyramid.

Apparently there is no plan to change the current breweries. This is startlingly similar to the previous era of big brewery consolidation whereby popular regional brands were snapped up by big breweries with national ambitions.  Interesting to see it all happen again.  It is also a good example of what economics is all about relative to business.  Economics is all about understanding the fundamental forces behind market interactions.