Sports Stadiums a Net Loss for Cities, Subsidizing Wealthy Sports Franchises is a Waste of Taxpayer Dollars

Throughout the period of the 20th century to present day cities and the citizens within them have been asked by their local governments to subsidize sports stadiums usually at a net loss. The arguments brought forth on job creation increased revenues and the overall benefit to the local populace are extremely dubious yet still these behemoths are built.

However they are built at the taxpayer’s expense who never fully realize any true economic benefit only the athletes and the sports owners see a benefit.

Typically a sports stadium does give a cut of certain sales related to the franchise to the host city. Yet with all the host city provides in the way of a multitude of services along with lost tax revenue literally millions of dollars per year flow out of each and every cities coffers rather than in as taxpayers were told they would in the beginning.

Job creation is minimal at best as the funding provided by the city could easily be put to better use for the development of business and entertainment districts along with services that would in fact provide real and greater employment for the population along with increased tax revenue where the city would actually receive an economic benefit.

During the period of the 1990’s Major League Baseball has opened 22 new stadiums. The National Football league has opened has opened 20 new stadiums with others receiving major renovations. Followed by the National Basketball Association with 30 teams total has built two-thirds of their stadiums since 1990 a very phenomenol growth spurt costing local citizens hundreds of millions of taxpayer dollars. Imagine opening your own multi-million dollar business with almost all of the costs paid for by taxpayers, well that’s how American sports franchises operate.

The local & state bonds brought forth to assist in design, development and construction are exempt from federal income taxes too, a net loss for the federal government as well as the citizens of America. Well that’s how the cookie crumbles stadiums need to be built no one has that much money so bonds are floated to pay the costs. The cities are left holding the bag full of debt and the stadium gets built, free of charge to the sports team.

One stadium which opened in 2004 with a capacity of 65,535, each seat cost almost $3000 or almost $2 million dollars almost all financed by the public. It has clearly been shown across the U.S. that these stadiums would never have been built by any private entity because they clearly could not produce enough profit to offset the cost. Between the period of 2000-2006 the taxpayers were on the hook for anywhere from $249 to $280 million dollars plus interest compounded yearly.

When cities are studied from the period before until after a sports franchise is built on the economic benefit to the local citizens an extremely high percentage if not all studies report that cities do not see enough of an economic benefit to offset all the associated costs. And these costs continue and increase for the entire life of the stadium which is subsidized by the local taxpayer. Also stadiums have been shown to create an actual net loss of income and employment in studies done in the 1990 period.

The revenue generated by the stadiums only takes away from other businesse’s income and those they employ. As sports enthusiasts redirect their game expenses away from other local entertainment and restaurant businesses in order to fund their expenses at taxpayer funded stadiums other businesses are cut out of the profit pie.

Monies generated are normally paid to wealthy players and team owners who generally do not live in the teams home city and even if they do their spending is small in comparison to the local populace. So with few if any of these taxpayer subsidized dollars flowing back into the local economy another net loss is realized.

While local taxes rise and other services are cut who gains, yes some hotels do see some income. However large organizers of events and conventions will often choose a comparable city that does not add additional taxes so as to fund a sports franchise which for them is a wise financial decision. Again a net loss for the city and it’s citizens along with those hopeful of finding employment in the service industry. Also the reduced revenue that would be generated by these local entertainment, hotel and restaurants (Real-Taxpayers) is forever lost as long as the sports franchise exists. When all the studies done on economic impacts are put together (rather than those cherry picked by local newspapers, politicians or franchise owners) and are  studied no real gain is realized from all of the cumulative data available.

So why do already wealthy sports franchises and the players in the respected leagues receive Corporate Welfare at the citizen’s expense. There just really is not any empirical data that shows a positive economic impact rather a Negative impact is felt by the local hosting city. Development, employment and businesses would in the end be better served without the taxpayers bailing out national sports teams. Low and middle income employees would see an actual rise in their income if the local stadium was never built.

99% of American businesses build and fund their operations some are given financial incentives to relocate to a geographic area. However those Real-Businesses unlike sports teams create year round jobs with much better incomes for their employees than sports franchises. They also contribute to the local economy year round via tangible taxes that they pay and contribute to development of local economies.

Sports franchises on the other hand come to town with an empty wallet paint rosy pictures and demand taxpayer funded stadiums, why should they pay for it. Then they sign multi-year ironclad contracts that they claim they will comply with to the local city. Yet few if any do with 10 or 20 years left on their contracts they then begin to make their threats known. Either build us another Taxpayer Funded stadium or they will go elsewhere to them the contract was nothing more than a napkin to be thrown in the garbage can.

If national sports franchises want to operate let them, only they need to pay for it and I mean all of it and not ask Americans to give Corporate Welfare to wealthy athletes and sports teams.

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About Slowdecline's articles on current issues facing us today
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