Publicly-Funded Stadiums Bad Deal for Cities

Sports teams often coerce cities into contributing public funds toward the building of new stadiums. Numerous reports indicate that it's a bad deal for cities with little to no positive economic impact, writes Neal DeMause.
August 21, 2011, 7am PDT | Tim Halbur
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Cities have been contributing public funds to sports stadiums with promises that the stadiums will revitalize areas and be an economic boon, but the data doesn't back up those claims.

"Studies demonstrating pro sports stadiums' slight economic impact go back to 1984, the year Lake Forest College economist Robert Baade examined thirty cities that had recently constructed new facilities. His finding: in twenty-seven of them, there had been no measurable economic impact; in the other three, economic activity appeared to have decreased."

It seems that fear of losing sports teams will drive most cities to do just about anything to keep a team. In addition to funding a stadium, the perks for teams include subsidies, tax breaks, and loans: "they added an average of 40 percent to sports facilities' public sticker price."

In addition to all the obvious deals, cities are often out-maneuvered by team lawyers that sweeten the deal with outrageous perks that are to the detriment of the city including clauses that require a stadium to remain "state-of-the-art" or else a team could break its lease.

Until cities decide to work together and not compete for teams, the stadium blitzes will likely continue, says DeMause.

Thanks to Cathie Pagano

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Published on Monday, August 15, 2011 in The Nation
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