CLOSER LOOK AT STADIUM SUBSIDIES
May 9, 2008
Since 1990, construction of stadiums and arenas for professional sports franchises has occurred at an incredible pace, says Dennis Coates, a professor at the University of Maryland, Baltimore County.
- Major League Baseball (30 teams) has opened 18 new stadiums and has four more currently under construction.
- The National Football League (32 teams) has opened 17 new stadiums; done major renovations to four others; has three under construction; and has four more projects at various stages of planning and negotiations.
- The National Basketball Association (30 teams) has opened more than two-thirds of its 30 arenas since 1990, and at least three NBA franchises are actively seeking new arenas.
In most cases, state and local governments have been closely involved in the financing, design, construction, and management or ownership of professional sports facilities.
- Depending on how one measures the public share of stadium costs, it ranges from 58 percent to 63 percent after 2000.
- The average public contribution to the total of capital and operating cost is between $149 million and $161 million in 1995-99, and between $249 and $280 million in 2000-06.
The most basic question about stadiums, arenas and sports franchises is the extent to which they contribute to the vitality of the local economy. Professional sports environments -- which includes the presence of franchises in multiple sports, the arrival or departure of teams, and stadium construction -- may actually reduce local incomes, says Coates:
- The overall sports environment reduced per capita personal income, a finding that was new in the economic literature at the time we published it (1999).
- In many local economies, wages and employment in the retail and services sectors have dropped because of professional sports.
Source: Dennis Coates, "Closer Look at Stadium Subsidies," The American, Tuesday 29, 2008.
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