NCPA - National Center for Policy Analysis


November 3, 2004

Not too long ago, cities were willing to put up sales tax increases in order to build new stadium venues and lure sports teams, but the willingness of taxpayers to fund wealthy team owners may becoming a thing of the past.

Stadium advocates claim that taxpayer-subsidized stadiums benefit local communities by providing jobs and attracting potential sales revenue from out-of-towners attending games. Indeed, governments have ponied up about $20 billion over recent decades toward financing sports ventures. But studies reveal that public benefits have not materialized:

  • A Heartland Institute study found that in 12 metropolitan areas, sports team venues did not contribute to net employment.
  • Economist Roger Knoll discovered that only 5 to 10 percent of attendees attending a local sports event lived elsewhere, and that game attendance merely substituted for other local leisure activities.
  • University of Maryland economists Dennis Coates and Brad Humphreys tax revenues and personal earnings from sports were well below a percent of total revenues for Baltimore and Maryland.

Furthermore, taxpayers are growing weary of publicly financing stadiums and have indicated so to city representatives who promise to take from the poor and give to the rich:

  • In Washington, D.C., voters in the two poorest wards voted out their pro-stadium councilmen, who had supported the mayor's offer of $200 million from taxpayers to build a stadium.
  • The Missouri legislature rejected most of the subsidies requested by the St. Louis Cardinals.

Team owners have privately funded stadiums in the past, but will be reluctant to do so in the future as long as cities have willing taxpayers.

Sources: Joseph L. Bast, "Sports Stadium Madness," Heartland Policy Study 85, February 1, 1998, Heartland Institute; and Dennis Coates and Brad R. Humphreys, "The Growth Effects of Sports Franchises, Stadia and Arenas," University of Maryland, June 11, 1998


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