Sports Stadiums Bring Few Economic Benefits

As Milwaukee debates the merits of a $160 million soccer stadium development that will likely require public funding, Graham Kilmer, writing in Urban Milwaukee, points out that “Academic economists almost universally agree that sports projects do not generate new jobs or income for a city.”

Furthering this point, a new report from the Center on Wisconsin Strategy (COWS) “relies on two studies that show the majority of economists agree that sports projects do not actually provide the benefits touted by developers and the report lays out five soccer stadium projects across the U.S. in the last five years, which together have received $500 million in public money.”

According to experts, sports venues don’t produce the expected economic benefits for two main reasons: the substitution effect, which holds that the money spent on sports would be spent on other entertainment in the area, and leakage, wherein public investment “leaks out of the community” via high salaries that are spent outside the local area.

“If public officials are looking for projects to stimulate growth, they should look to infrastructure and education, according to the St. Louis Fed paper [analyzed in the COWS study].” COWS and their collaborator, the Milwaukee Area Service and Hospitality Labor Organization (MASH), argue that “Milwaukee policy makers should look at what kind of benefits they can gain for the community if they consider financing the project.”