There Are No Good Reasons To Subsidize Sports Stadiums. Governments Keep Doing It Anyway.

“If we stop funding all sports stadiums tomorrow, then the world wouldn't change hardly at all," says one economist.

Alexandra Stinson of Reason. Excerpts:

""Almost all stadiums that were built at the beginning of the 20th century were private stadiums," economist J.C. Bradbury recently explained to Reason's Eric Boehm. Up until recently, "owners would have been laughed at if they went to the local city council or county commission and asked for money to help them build a stadium," Bradbury adds."

"In a 2022 paper, J.C. Bradbury, along with economists Dennis Coates and Brad Humphreys, noted that "nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local economic activity, and the level of venue subsidies typically provided far exceeds any observed economic benefits." As the Center for Economic Accountability points out: "Sports compete with other local businesses for consumers' entertainment dollars, rather than creating 'economic development' out of thin air.""

"This public spending comes with tradeoffs. "We see these people spending money in and around stadiums, but what we don't see is their foregone spending, that is, they'd be spending it elsewhere in the community," says Bradbury.

It also comes with corruption. "This pervasive lack of transparency in the planning and negotiation process around stadium subsidies also creates an environment where corruption can flourish," writes John C. Mozena, a senior fellow at Reason Foundation, the nonprofit that publishes Reason. In 2023, former Anaheim, California, Mayor Harish Sidhu "pled guilty to four federal felonies while the city was negotiating a stadium deal with the Los Angeles Angels baseball team" and admitted to "pass[ing] inside information to the team's negotiators and attempt[ing] to influence the city's decisions in favor of the Angels in return for an expected $1 million campaign contribution from the team," according to Mozena. This scandal ultimately led to the cancellation of the Angels' new stadium deal."

""If we stop funding all sports stadiums tomorrow, then the world wouldn't change hardly at all," says Bradbury. "Basically, just these wealthy owners would say, 'OK, I guess I gotta fund it myself.""