The Public Should Never Finance a Professional Sports Stadium/Arena

Since the first use of public money for sports stadiums began in 1909, public financing for private sports stadiums has become a default, accepted practice.  When a stadium or arena’s lease comes up or the team’s owner decides its time for a new/upgraded home for its team, the public will almost always end up on the hook for 45-68% of the costs, with NFL teams typically getting more.

Why should private sports teams get public money?

1. When the time comes for an already existing team to get a stadium, the team’s owner threatens to take the team and relocate in another city.  The theme is give us money or else we will take your pride & joy and leave.

2. Whether it’s an existing team or a potential incoming team, the proponents can’t stop shouting what it’ll mean for the city’s economy, what with the job creation and money swirling around everywhere.

Just Say No!

As for the first reason, your beloved sports team is getting tens, if not hundreds of millions in free money from you.  In other words, you’re handing over money to millionaires and billionaires so they can make even more money?  How does that make you feel?

As for the second reason, numerous studies have shown new stadiums have little, if not negative impact on local economies.

But what about the jobs?

What jobs?  Of the few jobs created by sports teams, the vast majority of them are temporary, low paid, hourly wage jobs.

On that note, how come we never examine additional metrics when it comes to job creation?  What about identifying and measuring job type – and its subcategories – and job pay?

Just generally saying “job creation” speaks very little to the meaningfulness of the impact.

To illustrate, there’s a monumental difference between Microsoft opening up a regional corporate office and a proposed new stadium from the Dallas Cowboys creating new jobs: One will create meaningful, relatively high paying jobs, and attract talent to the city and the other will not.  Try and guess which is which.

Moreover, no additional wealth is created from new stadiums.  Studies have found that money is simply redistributed from other entertainment venues (movies, bars, etc.) to the sports teams.

But Out-of-Towners are Footing the Bill

One way politicians and team advocates persuade the good citizens to ok financing is to say, “Don’t worry, you’ll only pay 25% of this.  We’ll just tax the hotels and taxis and that way other people will pay it.”

Problem solved, right?

First, even if the money does come from visitors, that’s still money that could be going to the good citizenry and not the team owners.  In other words, it’s still taking money that could be put to public use and redirecting it to the team owner.

Second, if you keep taxing out-of-towners, they’re going to stop visiting the city and then you’ll really lose money (also, guess who will make up the difference — you).

Imagine a company planning an out of town conference:

“We could go to this city but we’ll pay $2,000 more in hotel costs.  We’ll have just as much fun in this other city and we’ll pocket $2,000.  Let’s go to the non-sports team city.”

Don’t Let the Full Court Press Fool You

If you’ll notice, in the month or two before a vote is put into place, certain key politicians who stand to benefit financially from a new stadium and the team owners get very forceful about the public financing getting approved.  Tensions are high.  The threat of leaving is continually pushed.  And anybody that opposes subsidizing the team gets a nasty reaction.

The reason is hundreds of millions of dollars in free money are at stake and the key players you see on TV speaking about how important it is to have a new stadium get a slice of the pie, with of course the team owners getting the lion’s share.

You may hear them resort to saying, “This is how business is done now.  We need public funding to stay competitive.”

DO NOT GIVE THEM YOUR MONEY.

These are private companies and they need to be funded privately or die.

However much money they are making or not making is irrelevant.  Private companies must survive without public money or perish.

This is the case for any other company (without a government superhero) so why should it be different for sports teams?

And guess what, if you stop funding them, sports won’t go away.  A few franchises might act on their threat to move but the problem is if too many cities call to many teams’ bluff, the teams will run out of viable locations to move to.

When this happens, they’ll be forced to adapt to the new landscape where they don’t get a complete windfall on the backs of the public and somehow they’ll manage.

Information Source

To see the information and studies I’ve referenced as well as a sea of real life examples of sports team owners bilking the public out of billions of dollars over and over and over again, read this awesome collection of stadium financing articles by Deadspin.com.

 

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