NCPA - National Center for Policy Analysis

Not So Fast! Taxpayers May Not Want to Pay for A New Football Stadium

May 20, 2015

Recently, DC mayor Muriel Bowser announced that she has reached out to Dan Snyder, owner of the DC-area NFL team, about returning the team to the Nation's Capital from its current location in suburban Maryland. Maryland Governor Larry Hogan has made clear that he wants the team to stay, and Virginia Governor Terry McAuliffe is aggressively courting the team to move to Virginia. This setup makes a bidding war likely, with each location promising a newer and fancier replacement stadium for the team's current home. 

Wherever the Washington team winds up, there is little doubt that taxpayers - both locally and across the nation - will be on the hook for much of the stadium's bill.

Despite the fact that new stadiums are often thought to boost local economic growth and job creation, these benefits are often overstated.

  • In the mid-1990s, the state of Maryland projected that a new football stadium in downtown Baltimore (now the home of the Baltimore Ravens) would create 534 jobs at $331,000 per job.
  • The projected economic benefits of $33 million were only a fraction of the projected $177 million investment. It is therefore no surprise that economists overwhelmingly oppose sports subsidies.

Even if one buys the argument that local taxpayers win from subsidizing a team to locate in their area, there is no reason that federal taxpayers should be part of this bidding war. While local football fans will undoubtedly be intensely interested in where the DC-area team will end up, there is no reason why fans and nonfans alike across the country should help subsidize the new stadium.

Source: Alex Gold and Ted Gayer, "Taxpayers Beware: Bidding Wars for NFL Teams Are Losing Bets," Brookings Institute, May 18, 2015. 

 

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