"Professional sports teams have been relocating to new cities when they fail to acquire public funding for stadiums. Last year, the Rams stuck St. Louis with a $144 million bill after the team decided to move to Los Angeles. And earlier this year, San Diego taxpayers were left with a $50 million tab after the Chargers joined the Rams in L.A.
This time around is no different. The Oakland Raiders’ move to Las Vegas will leave Oakland taxpayers stuck with a $163 million bill. Teams constantly ask taxpayers for handouts despite generating vast revenues. Billionaire owners get publicly financed stadiums and the working-class citizens pick up the tab — corporate welfare at its worst.
It’s understandable that cities want to attract professional sports teams. People of all ages love sports, and teams often define a community’s identity. But local governments can’t abandon all logic and principle to secure a team. That’s what Oakland did, and it didn’t work out.
The San Francisco Chronicle reports that the original $200 million bond that brought the Raiders to Oakland will cost $350 million. When asked about the bond, Oakland City Council President Larry Reid acknowledged it was a bad deal. “The projections were off, but everyone was just caught up in the emotions of having the Raiders return.”"
"Proponents of taxpayer-funded stadiums insist that stadiums are economic engines for communities and a wise investment for taxpayers. But economists from around the country disagree. A 2015 study from the Mercatus Center at George Mason University found these projects provide little to no economic benefit for their communities.
Economist Victor Matheson of Holy Cross was more to the point: “Whatever number the sports promoter says, take it and move the decimal one place to the left. Divide it by 10, and that’s a pretty good estimate of the actual economic impact.”"
Here are the key findings from the Mercatus study:
- Professional sports can have some impact on the economy. Looking at all the sports variables, including presence of franchises, arrival and departure of clubs in a metropolitan area, and stadium and arena construction, the study finds that the presence of a franchise is a statistically significant factor in explaining personal income per capita, wage and salary disbursements, and wages per job.
- But this impact tends to be negative. Individual coefficients, such as stadium or arena construction, sometimes have no impact, but frequently indicate harmful effects of sports on per capita income, wage and salary disbursements, and wages per job. When the effect of these coefficients appears to be positive, it is generally so small as to be insignificant.
- At most, sports account for less than 5 percent of the local economy. Though sports are often perceived as a major economic force, sports at most account for less than 5 percent of the local economy, with the majority of estimates putting that number under 1.5 percent. Simply stated, sports teams are not the star players in local economies.